Final Results

JPMorgan Japanese Inv. Trust PLC 21 November 2007 LONDON STOCK EXCHANGE ANNOUNCEMENT JPMORGAN JAPANESE INVESTMENT TRUST PLC FINAL RESULTS Investment Performance 2007 has proved to be another challenging year for investors in the Japanese market and, disappointingly, the Company has again struggled to generate positive returns for shareholders. Over the year to 30th September 2007 the Company saw a decline in net assets of 11.4%, underperforming our benchmark, the TOPIX Index, which fell 4.5%. The return to shareholders was a fall of 15.7%, as the discount on the Company's shares widened from 7.7% to 12.2% at the end of the financial year. Revenue and Dividends Net revenue after taxation for the year was £5,436,000 (2006: £6,692,000) and earnings per share were 2.96p (2006: 3.60p). As I indicated in my interim statement, the Company is now in a position to pay a dividend and the Board proposes, subject to shareholders' approval at the AGM, to pay a final dividend of 2.80p per share (2006: Nil). The dividend would be payable on 21st December 2007 to shareholders on the register at the close of business on 30th November 2007. I would again stress that dividend streams from Japan remain unpredictable and depend to a considerable degree on the construction of the portfolio at any given time. I would emphasize therefore, that this year's payment should not be taken as any indication of future dividend payments and forecasts provided to the Board indicate that, based on the current portfolio, a reduction is likely in the year to September 2008. Investment Manager The Company's objective is to provide shareholders with capital growth from a portfolio of investments in Japanese companies. The Board, in common with shareholders, is concerned that the Investment Manager has failed to generate outperformance of the Company's benchmark in recent years and, most particularly, during the year to 30th September 2007. These concerns resulted in the Board conducting a detailed review of the investment management process being pursued by JPMorgan Asset Management (UK) Limited and, following that review, it has been agreed with the Manager that there is a requirement to improve and strengthen the investment process and that this would be best achieved by relocating the day-to-day management of the portfolio assets from London to Tokyo. The head of the Jardine Fleming office there, James Elliot, together with Nicholas Weindling, part of the Tokyo investment management team, will be taking responsibility for the portfolio effective 1st December 2007. JPMorgan Asset Management (UK) Limited has also agreed a reduction in the notice period provisions in the management agreement from one year to six months as part of this review. The Board has also assessed the overall capabilities of the Investment Manager, in order to assess whether JPMorgan Asset Management (UK) Limited remains the most appropriate manager of the Company's assets. The Board is conscious of the resources devoted by JPMorgan to Japanese investment management throughout the Group and the Manager's longer term track record. Nevertheless, the Board is acutely aware of the need to achieve a material improvement in performance if it is not to further consider its options and have communicated this to the Manager. Board of Directors During the year, the Board carried out an evaluation of the Directors, the Chairman, the Board's operations and its Committees. Three Directors are seeking re-election at this year's Annual General Meeting. The Directors retiring by rotation are Andrew Fleming and Keith Percy, who being eligible offers themselves for re-election. In addition, I, having served as a Director for in excess of nine years, therefore also retire and will seek re-election. The Board does not believe that length of service in itself should disqualify a Director from seeking re-election and, in proposing my re-election, it has taken into account the ongoing requirements of the Combined Code, including the need to refresh the Board and its Committees. Both Andrew and Keith have proved invaluable in the Board's deliberations and I have no hesitation in recommending their re-election. Authority to Repurchase the Company's Shares At last year's AGM, shareholders granted the Directors authority to repurchase up to 14.99% of the company's shares for cancellation. The Company repurchased 4.8% of the Company's issued share capital (8,818,000 shares) for cancellation during the year, adding 0.5% to performance, and the Directors believe that the power to buyback shares is of ongoing benefit to shareholders. It is therefore proposed that the authority be renewed for a further period. Annual General Meeting This year's Annual General Meeting will be held on 20th December 2oo7 at 2.00 pm in JPMorgan's offices at 6o Victoria Embankment, London EC4Y 0JP. As in previous years, in addition to the formal part of the meeting, there will be a presentation from the Investment Managers who will answer questions on the portfolio and performance. There will also be an opportunity to meet the Board, the Investment Managers and representatives of JPMorgan after the meeting. I look forward to welcoming as many of you as possible to this meeting. If you have any detailed or technical questions, it would be helpful if you could raise these in advance of the meeting with the Company Secretary at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ. Shareholders who are unable to attend the AGM are encouraged to use their proxy votes. Prospects The Japanese economy has enjoyed a relatively benign period with modest growth and low interest rates. The fact that both stock market performance and the returns generated by the Company have been below expectation is a matter of concern for us all. For the markets to move ahead, a change in outlook from Japanese investors and consumers alike is required. Investors need to recognise the fact that many Japanese companies are attractively valued, growing profits and investing in the future, whilst consumers need to throw off their caution and dip into their ample savings. From the Company's point of view, the Board and the Managers have instituted a number of measures designed to improve the investment process. Jeremy Paulson-Ellis Chairman 21st November 2007 For further information, please contact: Andrew Norman For and on behalf of JPMorgan Asset Management (UK) Limited - Secretary 020 7742 6000 JPMorgan Japanese Investment Trust plc Unaudited figures for the year ended 30th September 2007 Income Statement (Unaudited) (Audited) Year ended 30th September 2007 Year ended 30th September 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 (Losses)/gains from investments held at fair value - (67,960) (67,960) - 996 996 Net foreign currency gain - 4,878 4,878 - 4,901 4,901 Income from investments 6,648 - 6,648 7,245 - 7,245 Other interest receivable and similar income 420 - 420 1,205 - 1,205 Gross return/(loss) 7,068 (63,082) (56,014) 8,450 5,897 14,347 Management fee (621) (2,483) (3,104) (702) (2,808) (3,510) Other administrative expenses (415) - (415) (460) - (460) Net return/(loss) on ordinary activities before finance costs and taxation 6,032 (65,565) (59,533) 7,288 3,089 10,377 Finance costs (131) (524) (655) (89) (358) (447) Net return/(loss) on ordinary activities before taxation 5,901 (66,089) (60,188) 7,199 2,731 9,930 Taxation (465) - (465) (507) - (507) Net return/(loss) on ordinary activities after taxation 5,436 (66,089) (60,653) 6,692 2,731 9,423 Return/(loss) per share 2.96p (35.97)p (33.01)p 3.60p 1.47p 5.07p All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information. The 'Total' column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ('STRGL'). For this reason a STRGL has not been presented. JPMorgan Japanese Investment Trust plc Unaudited figures for the year ended 30th September 2007 Reconciliation of Movements in Shareholders' Funds (Unaudited) Called up Capital redemption Share Other Capital Revenue capital reserve reserve reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 At 30th September 2005 46,450 166,791 2,512 295,299 (6,763) 504,289 Adjustment to opening shareholders' funds at 1st October 2005 to reflect the adoption of bid prices - - - (1,209) - (1,209) Shares bought back and cancelled (70) - 70 (762) - (762) Total return from ordinary activities - - - 2,731 6,692 9,423 Unclaimed dividends returned in the - - - - 7 7 year At 30th September 2006 46,380 166,791 2,582 296,059 (64) 511,748 Shares bought back and cancelled (2,204) - 2,204 (19,325) - (19,325) Total (loss)/return from ordinary - - - (66,089) 5,436 (60,653) activities At 30th September 2007 44,176 166,791 4,786 210,645 5,372 431,770 JPMorgan Japanese Investment Trust plc Unaudited figures for the year ended 30th September 2007 Balance Sheet (Unaudited) (Audited) 30th September 2007 30th September 2006 £'000 £'000 Fixed assets Investments at fair value 485,058 575,721 Current assets Debtors 26,976 2,224 Derivative financial instrument 1 - Cash at bank and in hand 203 879 _______ _______ 27,180 3,103 Creditors: amounts falling due within one year (80,468) (67,076) Net current liabilities (53,288) (63,973) _______ _______ Total assets less current liabilities 431,770 511,748 _______ _______ Total net assets 431,770 511,748 ======= ======= Capital and reserves Called up share capital 44,176 46,380 Other reserve 166,791 166,791 Capital redemption reserve 4,786 2,582 Capital reserve 210,645 296,059 Revenue reserve 5,372 (64) _______ _______ Shareholders' funds 431,770 511,748 ======= ======= Net asset value per share 244.3p 275.8p Cash Flow Statement (Unaudited) (Audited) 30th September 2007 30th September 2006 £'000 £'000 Net cash inflow from operating activities 3,030 3,660 Returns on investments and servicing of finance (663) (478) Net cash inflow from capital expenditure and financial 14,624 4,573 investment Unclaimed dividends returned - 7 Net cash outflow from financing (18,378) (6,703) _______ _______ (Decrease)/increase in cash and cash equivalents (1,387) 1,059 ======= ======= Notes to the Accounts 1. Accounting policies The accounts are prepared in accordance with the Companies Act 1985 and 2006 where applicable, United Kingdom Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' dated 31st December 2005. All of the Company's operations are of a continuing nature. 2. Return /(loss)per share (Unaudited) (Audited) 30th September 2007 30th September 2006 £'000 £'000 Return per share is based on the following: Revenue return 5,436 6,692 Capital (loss)/return (66,089) 2,731 Total (loss)/return (60,653) 9,423 Weighted average number of shares in issue 183,714,823 185,699,611 Revenue return per ordinary share 2.96p 3.60p Capital (loss)/return per ordinary share (35.97)p 1.47p Total (loss)/return per ordinary share (33.01)p 5.07p 3. Net asset value per share The net asset value per share is based on the net assets attributable to the ordinary shareholders of £431,770,000 (2006: £511,748,000) and on the 176,703,919 (2006: 185,521,919) shares in issue at the year end. 4. Status of preliminary announcement The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 30th September 2007 or 2006. The statutory accounts for the year ended 30th September 2007 have not been delivered to the Registrar of Companies, nor have the auditors yet reported on them. The statutory accounts for the year ended 30th September 2007 will be finalised on the basis of the information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the approval of the accounts by the Board of Directors. JPMORGAN ASSET MANAGEMENT (UK) LIMITED 21ST NOVEMBER 2007 This information is provided by RNS The company news service from the London Stock Exchange
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