Final Results

JP Morgan Mid Cap Invest Trust PLC 25 September 2007 The following replaces the 'Final Results' announcement released today at 9.48 a.m. under RNS number 4264E. LONDON STOCK EXCHANGE ANNOUNCEMENT JPMORGAN MID CAP INVESTMENT TRUST PLC UNAUDITED FINAL RESULTS FOR THE YEAR ENDED 30TH JUNE 2007 RESULTS + 27.3% Return to shareholders (2006: + 48.9%) + 25.9% Return on net assets (2006: + 41.3%) + 25.9% Benchmark return (2006: + 31.8%) + 16.0% Dividend 14.50p (2006: 12.50p) CHAIRMAN'S STATEMENT Investment Performance The year under review has seen considerable further gains for mid cap stocks and for the Company. Over the twelve months to 30th June 2007, the Company achieved a total return on net assets per share of 25.9%, exactly mirroring the benchmark's return. This result continues the sequence of strong gains achieved over the last four years which has seen the Company's NAV increase by 93.8%, whilst the benchmark rose by 62.7%. The Company's return to shareholders (i.e. share price plus net dividends) was 27.3%, and the discount, taking debt at fair value, finished the year at 12.4%. The objective we set our Manager is to achieve capital growth through investing in medium-sized UK companies. The main measurement of the Managers' performance we take as the FTSE 250 Index (excluding investment trusts). The major positive contributor to performance this year was gearing, with share buybacks also adding to returns. The Board thoroughly and regularly reviews the Managers' investment strategy and process. Revenue and Dividends Net revenue after taxation for the year was £4,689,000 (2006: £4,380,000) and earnings per share were 15.53p (2006: 13.15p). The Board has established a policy to increase dividends annually at least in line with inflation, as long as normal market conditions prevail, and also undertook to rebalance the split between the interim and final dividends. To this end, the Company paid an interim dividend of 5.00p per share (2006: 4.00p) in April 2007. Having increased the interim dividend in this way, the Board is pleased to recommend an increased final dividend of 9.50p per share making a total of 14.50p (2006: 12.50p) which is an increase in the total dividend of 16.0% on last year. This dividend is payable on 8th November 2007 to shareholders on the close of business on 3rd October 2007. Gearing The Managers successfully employed gearing of up to 117% during the first half of the financial year. After trimming it back tactically to 108%, to moderate the impact of the market volatility witnessed towards the end of the year, the Managers are now prepared to increase it again to take advantage of buying opportunities. Discount Management It is the present intention of the board to continue its policy of buying back shares, where appropriate, to enhance net asset value per share. This policy will be reviewed regularly in the light of market conditions. The Company repurchased a total of 1,876,000 shares, representing 6.0% of the issued share capital, since the renewal of the Board's authority to repurchase up to 14.99% of the Company's shares for cancellation on 7th November 2006. This process added 0.8% to the net asset value of the remaining shares. Since 30th June 2007 the Company has repurchased a further 1,229,120 shares representing 4.2% of the issued share capital. This process has added 0.6% to the net asset value of the remaining shares. The Directors continue to believe that this mechanism is of benefit to shareholders and therefore propose and recommend that powers to repurchase up to 14.99% of the Company's shares for cancellation be renewed for a further period. The Board has for some time considered the use of treasury shares to further improve the liquidity of the Company's shares. The ability to repurchase up to 10% of the Company's issued shares into treasury and then reissue them at a limited discount to net asset value would give greater flexibility in the management of imbalances between supply and demand, minimise volatility and enhance the net asset value by issuing shares at a narrower discount than that at which they were purchased. Whilst we recognise that the reissue of shares from treasury is a controversial matter for some shareholders, the Board considers that by specifying clear criteria on which such reissues would be made, such concerns should be minimised. Shares held in treasury could be reissued at a price that is below the then NAV, but would not be reissued at a wider discount than the size-weighted average buying-in level or at below the prevailing bid price at that time. The aggregate dilution associated with any reissues will not exceed 0.5% of the net asset value over the full period of the authority. The Board recommends that shareholders grant the Company authority to reissue shares from treasury at a discount. Board of Directors The Board has put procedures in place to ensure that the Company complies fully with the revised Combined Code and the AIC Code on Corporate Governance. In accordance with the Company's Articles of Association, the Director retiring by rotation at this year's Annual General Meeting is Gordon McQueen. In addition, John Emly and Alexander Scott retire on grounds of tenure (both have served as Directors for ten years). The Nomination Committee has met to consider the attributes and contributions of the individuals concerned and, following this review, have no hesitation in recommending their re-election at the forthcoming Annual General Meeting. Investment Manager The Board has reviewed the investment management, secretarial and marketing services provided to the Company by JPMorgan Asset Management (UK) Limited (' JPMAM'). This annual review has included their performance record, management processes, investment approach, resources and risk control mechanisms. The Board was satisfied with the results of the review and therefore in the opinion of the Directors, the continuing appointment of JPMAM for the provision of these services is in the best interests of shareholders. VAT Case In 2004 the AIC lodged a joint appeal, with JPMorgan Claverhouse Investment Trust plc, for the payment of investment trust management fees to be exempt from VAT. The European Court of Justice (ECJ) has found in favour of the AIC in declaring that the management fees of investment trusts are eligible for exemption from VAT. We now await the Government's response to this ruling. On the basis of the ECJ ruling it seems that a refund of some past payments of VAT is probable. However, in the absence of a final outcome on the AIC appeal and a definitive agreement with the Manager as to the basis of the calculation of any refund, it is not practical at this stage to quantify the amount of any VAT recoverable. Annual General Meeting This year's Annual General Meeting will be held on 7th November 2007 at 12.00 noon at The Armourers' Hall, 81 Coleman Street, London EC2R 5BJ. 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. Prospects The recent weakness and volatility in global markets was sparked by concerns over the state of the US sub-prime mortgage and global capital and credit markets. However, our Managers believe that the UK mid cap market, with its strong domestic bias, should avoid much of the fallout from these problems and that earnings and profits growth will continue into 2008. With interest rates near their peak and valuations at attractive levels our Managers have been looking for opportunities selectively to increase their market exposure. Andrew Barker Chairman 25th September 2007 For further information please contact: Andrew Norman, JPMorgan Asset Management (UK) Limited ............ 020 7742 6000 INVESTMENT MANAGERS' REPORT In the twelve months to 30th June 2007, the Company's net asset value per share ('NAV') rose to 799.30p, giving a total return with net income reinvested of 25.9%, in line with the total return on the FTSE 250 Index (excluding investment trusts) of 25.9%. Over the same period the Company's shares rose from a mid price of 558.00p to 695.50p and with dividends gave a total return to shareholders of 27.3%. Market Background In the financial year to 30th June 2007, the Company has again delivered a very strong return to investors. In headline price terms, the FTSE All Share Index rose from 2,968 in June 2006 to 3,404 by June 2007, a gain of 14.7% in capital only terms, whilst with income included the FTSE All Share delivered a total return of 18.4%. As has been the case in each of the preceding three financial years, in the latest period the mid cap market in the UK delivered higher returns to investors than the All Share. In index price terms the FTSE 250 Index rose from 9,422 to 11,528, a capital only gain of 22.4%. The benchmark for the Company, the FTSE 250 Index (ex Investment Trusts), delivered a total return for the period of 25.9%. Looking behind the headline numbers, much of the gain within the mid cap market came in the last six months of 2006. So far in 2007 the mid cap index has been treading water, advancing just 3.1% in capital terms in the six months to 30th June 2007. Over this same period, the mid cap index has for the time being surrendered market leadership to the FTSE 100 Index, which gained 6.2% in capital terms in the first six months. As 2007 has evolved, investor sentiment has progressively become more cautious towards the mid cap universe as bid activity has dried up from debt funded private equity funds, and as the Bank of England has continued to edge interest rates higher. With mid cap stocks in general trading at a healthy premium to large cap stocks, this switch in sentiment was not unexpected. Portfolio It is our investment philosophy that cheap companies, and fast growing companies, with improving fundamentals, will outperform the overall market over the long term. We therefore aim consistently to build a portfolio for the Company that is overweight in both the best of value companies and the best of growth companies, whilst also ensuring that the management of the companies selected for the portfolio demonstrate capital discipline. The portfolio should therefore represent better value than the FTSE 250 Index, have more growth expected of it and have better fundamentals. In the twelve months to 30th June 2007, the Company's NAV rose to 799.3p, giving a total return with net income reinvested of 25.9%, in line with the total return on the FTSE 250 Index (excluding investment trusts) of 25.9%. Over the same period, the Company's shares rose from a mid price of 558.0p to 695.5p and with dividends gave a total return to shareholders of 27.3%. Positive absolute returns for investors in the Company were boosted by the decision to maintain a reasonable level of gearing for both strategic and tactical purposes, a decision that has been restated and reconfirmed at each of the last two annual general meetings. Tactically, gearing was held fairly constant in the first half of the period, before being gently reined in by net selling within the portfolio from December onwards. Over the period as a whole, £11.3 million was raised from the portfolio, equivalent to approximately 5% of the underlying portfolio. Gearing decisions overall added 2.6% to shareholder returns and helped to offset a more disappointing stock selection return within the portfolio, with an impact of - 2.8%, giving an overall net management effect of -0.2% in the latest financial year. The investment management approach of the managers is to target performance at the stock level, and predominantly to use sector exposure to mitigate risk within the portfolio. Among the stocks held in the portfolio that benefited stock selection in the last financial year, the top five were Aggreko, Michael Page International, easyJet, Petrofac and Great Portland Estates. Amongst these names, Michael Page International, the recruitment company, also featured last year, and continued to enjoy buoyant market conditions and deliver very strong year on year profits growth. Buoyant trading conditions in the mobile power generation market also saw Aggreko repeatedly delivering better than expected trading results, propelling the shares higher. easyJet performed strongly, particularly in the first part of the period, as the low cost airline was able to project year on year profits growth of 40-50% as the company continues to win market share from full service airlines. Petrofac, the oil services company, benefited from very busy end markets, as oil exploration companies stepped up their activity, benefiting both Petrofac's sales and margins. Great Portland Estates also delivered its outperformance in the first six months, as strong rental growth and positive valuation shifts on its West End property portfolio pushed the shares to all time highs. Among the stocks held which cost the portfolio performance, the worst five were the Paragon Group of Companies, VT Group, Carpetright, Kensington, and Barratt Developments. Of these, the Paragon Group of Companies and Kensington, both specialist buy to let mortgage providers, were both adversely affected by the Bank of England's steady increase in interest rates, which put a degree of financial strain on their end customers, and ultimately saw Kensington drop out of the Mid Cap index after a profits warning. Both VT Group, the defence support services company, and Carpetright, the retailer, reported disappointing figures during the period. Barratt Developments, in contrast, continued throughout the period to trade well, and acquired its smaller house building rival,Wilson Bowden, in Spring 2007 in an accretive deal, but suffered a share price derating as investor sentiment turned against house builders in general. Future Outlook There is an old stock market adage 'sell in May and go away, and don't come back until St. Leger's Day', after the famous horse race held annually in mid September. The adage has currency, because a common feature of the UK stock market is listless and directionless conditions over the late spring and summer months, and in some years more marked setbacks. Last year May and June were particularly nervous months for investors, although the setback then proved short lived. This year investor risk aversion appears to have stepped up a little earlier, with confidence in the broad spread of mid cap names generally ebbing from April onwards. Investors and pundits have taken the view that stubborn inflation, and the Bank of England's response of raising interest rates, will inevitably squeeze UK consumers and UK companies exposed to the domestic economy, especially amongst mid caps. On the whole there is little evidence of this so far. Recent UK economic growth figures remain around trend, with inflation beginning to fall back, and the UK housing market gently decelerating after five interest rate hikes in the last year. UK companies continue to deliver profit growth in line with or ahead of expectations, with accompanying strong dividend growth. UK interest rates are now close to their expected peak and the focus will soon switch to when the Bank will cut rates. Recent weak mid cap market conditions, which have now taken the mid cap index below the level it started 2007, have therefore improved the fundamental attractions of the mid cap market. Based on consensus market estimates of 13.6% earnings growth in 2008, the mid cap market currently trades on a price earnings multiple of 13.5 times for 2008. On anything other than a very short term perspective, this represents an attractive level, and we have been responding to this opportunity by moderately increasing gearing. Jeremy Wells Christopher Llewelyn Investment Managers 25th September 2007 For further information please contact: Andrew Norman, JPMorgan Asset Management (UK) Limited ............ 020 7742 6000 JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2007 Income Statement (Unaudited) (Audited) year ended 30th June 2007 year ended 30th June 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains from investments held at fair value through profit or loss - 46,400 46,400 - 58,752 58,752 Income from investments 5,984 - 5,984 5,557 - 5,557 Other interest receivable and similar 19 - 19 54 - 54 income _______ ________ _______ _______ ________ _______ Gross return 6,003 46,400 52,403 5,611 58,752 64,363 Management fee (360) (840) (1,200) (293) (684) (977) Other administrative expenses (298) - (298) (311) - (311) _______ ________ _______ _______ ________ _______ Net return on ordinary activities before finance costs and taxation 5,345 45,560 50,905 5,007 58,068 63,075 Finance costs (656) (1,530) (2,186) (627) (1,851) (2,478) _______ _______ _______ _______ _______ _______ Net return on ordinary activities before taxation 4,689 44,030 48,719 4,380 56,217 60,597 Taxation - - - - - - _______ _______ _______ _______ _______ _______ Net return on ordinary activities after taxation 4,689 44,030 48,719 4,380 56,217 60,597 _______ _______ _______ _______ _______ _______ Return per share 15.53p 145.85p 161.38p 13.15p 168.72p 181.87p 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. JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2007 Statement of Total Recognised Gains and losses (Unaudited) (Audited) year ended 30th June 2007 year ended 30th June 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Movement in fair value of cash flow hedge during the year - - - - 356 356 Net return on ordinary activities after taxation 4,689 44,030 48,719 4,380 56,217 60,597 _______ ________ ________ _______ ________ ________ Total recognised gains for the year 4,689 44,030 48,719 4,380 56,573 60,953 _______ ________ ________ _______ ________ ________ JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2007 Reconciliation of Movements in Shareholders' Funds Called up Capital redemption share reserve Capital Other Revenue capital reserve £'000 reserve reserve Total £'000 £'000 £'000 £'000 £'000 At 30th June 2005 8,759 1,241 148,902 - 6,995 165,897 Adjustment to opening shareholders funds at 1st July 2005 to reflect the adoption of bid prices - - (659) - - (659) Adjustment to opening shareholders funds at 1st July 2005 to reflect value of cash flow hedge - - - (356) - (356) Change in fair value of cash flow - - - 356 - 356 hedge Shares bought back and cancelled (982) 982 (20,295) - - (20,295) Net return on ordinary activities - - 56,217 - 4,380 60,597 Dividends appropriated in the year - - - - (4,144) (4,144) _______ ________ ________ _______ _______ _______ At 30th June 2006 7,777 2,223 184,165 - 7,231 201,396 Shares bought back and cancelled (469) 469 (12,385) - - (12,385) Net return on ordinary activities - - 44,030 - 4,689 48,719 Dividends appropriated in the year - - - - (4,079) (4,079) _______ ________ ________ _______ _______ ________ At 30th June 2007 7,308 2,692 215,810 - 7,841 233,651 _______ ________ ________ _______ _______ _______ JPMorgan Mid Cap Investment Trust plc Unaudited figures for the year ended 30th June 2007 Balance sheet (Unaudited) (Audited) 30th June 2007 30th June 2006 £'000 £'000 Fixed assets Investments at fair value through profit or loss 263,923 229,649 Current assets Debtors 983 757 Cash and short term deposits 292 1,798 _______ _______ 1,275 2,555 Current liabilities Creditors : amounts falling due within one year (22,081) (21,349) _______ _______ Net current liabilities (20,806) (18,794) _______ _______ Total assets less current liabilities 243,117 210,855 Creditors : amounts falling after more than one year (9,466) (9,459) _______ _______ Total net assets 233,651 201,396 ===== ===== Capital and reserves Share capital 7,308 7,777 Capital redemption reserve 2,692 2,223 Capital reserve 215,810 184,165 Revenue reserve 7,841 7,231 _______ _______ Shareholders' funds 233,651 201,396 ===== ===== Net asset value per share (note 3) 799.3p 647.4p Cash flow statement (Unaudited) (Audited) 2007 2006 £'000 £'000 Net cash inflow from operating activities 4,890 4,138 Net cash outflow from returns on investments and servicing of finance (2,214) (2,559) Net cash inflow from capital expenditure and financial investment 11,288 12,470 Dividends paid (4,079) (4,144) Net cash outflow from financing (11,391) (11,041) _______ ______ Decrease in cash and cash equivalents (1,506) (1,136) ===== ==== Notes 1. Accounting policies The accounts are prepared in accordance with the Companies Act 1985, 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. The preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts. All of the Company's operations are of a continuing nature. 2. Dividends 2007 2006 £'000 £'000 2006 Final dividend of 8.5p (2005: 8.3p)(1) 2,587 2,861 Interim of 5.0p (2006: 4.0p) 1,492 1,283 _______ ______ Total dividends paid in the year 4,079 4,144 _______ ______ Final dividend payable of 9.5p (2006: 8.5p) 2,777 2,644 1 The final dividend declared in respect of the year ended 30th June 2006 amounted to £2,644,000 (2005:£2,908,000), however the amount paid amounted to £2,587,000 (2006: £2,861,000) due to share repurchases after the balance sheet data but prior to the record date. The final dividend has been proposed in respect of the year ended 30th June 2007 and is subject to approval at the Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the accounts for the year ended 30th June 2008. 3. Net asset value per share Net asset value per ordinary share is based on total shareholders' funds attributable to ordinary shareholders of £233,651,000 (2006: £201,396,000) and on the 29,232,000 ordinary shares in issue at the year end (2006: 31,108,000). 4. Comparative figures The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information is an extract from the statutory accounts for the year ended 30th June 2006. Those accounts, upon which the auditors issued an unqualified opinion and which contained no statement under section 237(2) and Section 237(3) of the Companies Act 1985, have been delivered to the Registrar of Companies. JPMORGAN ASSET MANAGEMENT (UK) LIMITED This information is provided by RNS The company news service from the London Stock Exchange

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