Final Results

JPMorgan Fleming Emerge Mkts IT PLC 01 October 2004 JPMORGAN FLEMING EMERGING MARKETS INVESTMENT TRUST PLC STOCK EXCHANGE ANNOUNCEMENT The Board today announces the preliminary results of the Company for the year ended 30th June 2004. Chairman's Statement We have had a good year both in absolute and relative terms. Our NAV rose by 28.0% and we comfortably outperformed our benchmark, the MSCI Emerging Markets Free Index, which rose by 21.1%. Moreover, Emerging Markets in general outperformed traditional markets, where the MSCI World Index was up by only 12.8%. The Board is particularly pleased with our significant out-performance against the Index and the positive contributions from both stock selection and asset allocation. This followed on from discussions with the Manager in the 4th Quarter 2003 on ways to improve our results. The Manager suggested, and the Board agreed, that the portfolio should be more concentrated, taking more active money positions and that the investment decisions should be driven by greater conviction making full use of the extensive and unique JPMorgan Fleming on the ground country knowledge. This was combined with a more structured central overview of sector and country allocation. We believe that this approach plays to the Manager's strengths and we are confident that it will allow us, on average, to beat our benchmark. One of the issues that still concerns us is the market discount to NAV. The monthly average discount has however reduced somewhat this year to 14.1% as against 17.2% last year. It was in fact as low as 10.9% in September 2003, but it had widened to 16.2% at the end of June. We continually monitor the position but, particularly in the light of the discounts on other trusts in our peer group, there was no occasion when the Board felt that it was in the shareholders' interest to buy back shares. Nevertheless, at the Annual General Meeting we will be requesting a renewal of the buyback mandate to maintain this option to control the discount. The Board now follows fully the recommendations in the AITC Code regarding Corporate Governance and there is a section in the Annual Report on the measures being taken. You will see that we now have separate committees for Board Nominations and for Remuneration, as well as for Audit. Also, we have introduced the position of Deputy Chairman, which is filled by Roy Peters. Whilst we actively monitor the Managers' performance as a priority over the year, we formally carried out a detailed review process at the end of June. This concluded that they are now delivering results in terms of investment performance and responding positively and quickly to on-going issues as they arise. Your Board has therefore concluded that their continued appointment is in the best interests of shareholders as a whole. The Management Agreement was reviewed and in doing so the notice period was reduced to six months except in the case where a decision is taken for reconstruction or amalgamation when it will remain at 12 months. As you will be aware, the management fee structure was reviewed last year and the 1.25% fixed fee was replaced by a 1% fixed fee and a bonus element for out-performance. As a result of the excellent performance this year the performance fee payable will amount to 0.75% of the total assets at the year end, all of which will be paid with £nil carried forward. The Board has also formally reviewed its own performance and my position as Chairman was considered separately by the Board under the chairmanship of the Deputy Chairman. The review concluded that the Board is functioning well and there are no issues of concern. With five Non-Executive Directors we believe it is the correct size with a good balance of knowledge and experience. We do, however, feel that it is important that we continue to renew ourselves, and hence whilst Patrick Gifford is up for re-election at the Annual General Meeting, the intention is that after 14 years on the Board he will retire in the first half of 2005. Replacing Patrick with all his experience will not be easy and with the increased time requirements for Non-Executive Directors it is important that the level of fees paid to Directors is at least comparable with those of other Trusts of comparable size and investment objective. Accordingly, the Remuneration Committee carried out a review of Directors fees in April (previously increased in January 2002) and agreed that they would be increased from 1st July 2004 to £15,000 for Directors, £17,500 for the Chairman of the Audit Committee and £22,500 for the Chairman. Whilst the aggregate Directors fees remain within the £100,000 per annum specified in the Company's Articles, you will see that at the Annual General Meeting we are asking that this aggregate figure be increased to £150,000 to allow some flexibility in appointment of Directors. Despite inevitable uncertainty, Emerging Markets are in general seen to be areas of higher growth, with China and India in particular now starting to have a significant impact on the world economy. Moreover, the risks relative to the developed countries are much lower than a few years ago. Therefore the Board is positive about the opportunities for investments in Emerging Markets over the next few years. We also believe that JPMorgan Fleming as Manager are equipped to outperform the sector, and they themselves are looking at our Trust to be their flagship global Emerging Markets fund. At the Annual General Meeting the Board will be very positive in recommending that you vote in favour of the continuation of the Company as an investment trust for a further three years. Finally, I would like to stress how we as a Board believe it is important to communicate with our shareholders and potential shareholders and I would urge you to keep in contact with your investment through our web site www.jpmfemergingmarkets.com. Roy Reynolds Chairman, 1st October 2004 For further information, please contact: Philip Jones J.P. Morgan Fleming Asset Management (UK) Limited, 020 7742 7214 Secretary to the Company JPMorgan Fleming Emerging Markets Investment Trust plc Unaudited figures for the year ended 30 June 2004 Statement of Total Return (Unaudited) Year ended 30 June 2004 Year ended 30 June 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains/(losses) on investments - 6,359 6,359 - (5,140) (5,140) Net unrealised gains/(losses) on investments - 25,330 25,330 - (259) (259) Currency losses on cash and short-term deposits held during the year - (285) (285) - (465) (465) Realised gain on repayment of US Dollar loan - - - - 729 729 Other capital charges - (12) (12) - (16) (16) Income from investments 4,446 - 4,446 2,950 - 2,950 Other income 28 - 28 63 - 63 _______ ________ _______ _______ ________ _______ Gross return/(loss) 4,474 31,392 35,866 3,013 (5,151) (2,138) Management fee (1,385) - (1,385) (1,423) - (1,423) Other administrative expenses (471) - (471) (437) - (437) Performance fee - (1,119) (1,119) - - - Interest payable (2) - (2) (229) - (229) _______ _______ _______ _______ _______ _______ Net return/(loss) before taxation 2,616 30,273 32,889 924 (5,151) (4,227) Taxation (390) - (390) (297) - (297) _______ _______ _______ _______ _______ _______ Transfer to/(from) reserves 2,226 30,273 32,499 627 (5,151) (4,524) Return/(loss) per ordinary share 2.47p 33.56p 36.03p 0.69p (5.71)p (5.02)p JPMorgan Fleming Emerging Markets Investment Trust plc Unaudited figures for the year ended 30 June 2004 BALANCE SHEET 30 June 30 June 2004 2003 £'000 £'000 Investments at valuation 142,071 115,549 Net current assets 6,284 307 _______ _______ Total net assets 148,355 115,856 ===== ===== Net asset value per share 164.5p 128.5p CASH FLOW STATEMENT 2004 2003 £'000 £'000 Net cash inflow from operating activities 1,915 474 Net cash outflow from returns on investments and servicing of finance (2) (229) Net tax recovered - 1 Net cash inflow from capital expenditure and financial investment 5,608 8,401 Net cash outflow from financing (2,967) (12,049) _______ _______ Increase/(decrease) in cash in the year 4,554 (3,402) ===== ===== The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory accounts for the year ended 30th June 2003. These accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. J.P. MORGAN FLEMING ASSET MANAGEMENT (UK) LIMITED 1st October 2004 This information is provided by RNS The company news service from the London Stock Exchange LSESS
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