Information  X 
Enter a valid email address

JP Morgan Asian Inv (JAI)

  Print      Mail a friend       Annual reports

Friday 23 May, 2008

JP Morgan Asian Inv

Interim Results

RNS Number : 2022V
JPMorgan Asian Investment Tst PLC
23 May 2008
 





LONDON STOCK EXCHANGE ANNOUNCEMENT


JPMORGAN ASIAN INVESTMENT TRUST PLC


UNAUDITED HALF YEAR RESULTS FOR THE PERIOD ENDED 31ST MARCH 2008



Chairman's Statement


Performance

A turbulent six month period in the Asian ex-Japan markets, was fully reflected in the Company's portfolio returns. The net asset value total return was -13.7%, compared with a return of -11.6% for the benchmark, the MSCI AC Asia ex Japan (in sterling terms) Index. The discount at which the ordinary shares traded to the net asset value of the Company widened over the period, resulting in a share price total return of -15.3%.


Discount Volatility

The Board monitors via its advisers the discount at which the Company's shares trade to net asset value on a regular basis. Despite the discount being volatile over the period under review, it has averaged around 10%. The Company has the power to buy back shares and the Board will carefully consider the use of share buybacks to control the discount should it be deemed necessary.


Gearing

Due to volatile market conditions the Investment Managers prudently reduced gearing over the period to 97% geared at 31st March 2008. The Board has established a policy to keep gearing within the range of 90-120% invested under normal market conditions. The Investment Managers have the full support of the Board to re-gear the Company should buying opportunities present themselves brought about by the recent market falls.


Continuation Vote

It was pleasing that shareholders voted to continue the life of the Company at the last annual general meeting. The Company's next continuation vote will be laid before shareholders at the annual general meeting to be held in 2011.


Directors

As explained in the last Annual Report & Accounts, Christopher Penn retired as a Director during the period on the conclusion of the Annual General Meeting. Following his retirement the Chairmanship of the Audit Committee has been placed in the capable hands of Andrew Sykes. In due course the Nomination Committee will complete an evaluation of the balance of skills, knowledge and experience of the Board, in order to assess the required qualities of a new director.


Outlook

The underperformance of the benchmark over the period is inherent in the nature of the conviction approach followed by the Investment Managers since 2006. As I stated in my last annual statement, the conviction investment approach is likely to result in greater deviations from the benchmark both positive and negative, as has proved to be the case for the Company's portfolio since the change in investment style. As a Board we fully support the Investment Managers in sticking to their convictions in these difficult times and focus on the long term performance of the Company.


for and on behalf of the Board

James M Long

Chairman 

23rd May 2008

Investment Manager's Report


Market Review

Over the last six months, global markets continued to be hit by the financial crisis which began with the bursting of the housing market bubble in the US. A few months into the crisis, and having had the luxury of understanding the nature of the problem, few disagreed that Asian economies would weather this storm much better than the rest of the world and that the two pillars of Asia's growth, China and India, would continue to provide the main thrust of economic activity for the whole region. Yet, in spite of that optimistic assessment, markets spiralled downwards and continue to do so. Investors across the globe have taken risk off the table. Asian markets were perceived, rightly or wrongly as riskier and hence foreign investors rushed to the exit. In the 1st quarter of 2008, almost USD10bn were taken out of Asian equities, the highest withdrawal since the Asian crisis in 1997. The problem is compounded by the de-leveraging of hedge funds' books as banks that funded them reduced their exposure.


The exodus of investment funds in such a short time exaggerated the fall in share prices, irrespective of companies' fundamentals or valuations. This is especially true for the smaller cap stocks where the perceived risk is higher, and again, regardless of the underlying value of the companies. Just as the US market is deemed to be less risky than Asian markets, big cap stocks within Asia are seen as safer stocks than smaller companies.


Performance

The current perception of risk has gone directly against our investment approach. We look to buy stocks that deliver sustainable growth and returns to shareholders at a reasonable price. The parameters we use to measure risk are earnings volatility, business cycles, cashflow and solvency (not necessarily in order of importance).We do not classify risk of stocks into small caps, big caps, ChinaIndonesia, or Singapore. Hence, due to the difference in risk perception and classification, your Company underperformed versus the benchmark. Our approach to investment (growth bias, non-benchmark, reasonable price, and high concentration bet) has not worked well in this volatile period.


While we are not seeking excuses for bad performance, we do ask for your patience. We still believe that Asia's growth will not be derailed by the financial crisis in the US. The much talked about inflation fear will ease as we enter the second half of this year and with selected growth stocks being priced at a discount to the market, the risk reward is increasingly in our favour. Hence, unless we alter our broader views on Asia, we are unlikely to change our investment style just to capture short term performance.


Market Outlook

In our long careers as fund managers, we have had the benefit of experiencing several market cycles. Compared to the Asian financial crisis and the SARS crisis in 2003, the current market correction is perhaps the least fearful of them all. Yet, it is the most frustrating this time around, as good companies are being sold at distressed valuation levels without fundamental justification. However, as in all previous crises, this is the time when real money is made. We just have to remain calm, patient, and stick to stocks with strong fundamentals.


Joshua Tay

Michael Koh

Investment Managers 

23rd May 2008

 

JPMorgan Asian Investment Trust plc

Unaudited figures for the six months ended 31st March 2008


Income Statement  

 

 
 
(Unaudited)
Six months ended
31st March 2008
 
(Unaudited)
Six months ended
 31st March 2007
 
(Audited)
Year ended
 30th September 2007
 
 
Revenue
£’000
 
 
Capital
£’000
 
Total
£’000
 
Revenue
£’000
 
Capital
£’000
 
Total
£’000
 
Revenue
£’000
 
Capital
£’000
 
Total
£’000
(Losses)/gains from investments held at fair value through profit or loss
 
 
 
-
 
 
 
(56,472)
 
 
 
(56,472)
 
 
 
-
 
 
 
41,792
 
 
 
41,792
 
 
 
-
 
 
 
137,955
 
 
 
137,955
Net foreign currency gains
 
-
 
1,253
 
1,253
 
-
 
461
 
461
 
-
 
1,040
 
1,040
Income from investments
 
1,877
 
-
 
1,877
 
1,536
 
-
 
1,536
 
6,557
 
-
 
6,557
Other interest receivable and similar income
 
 
397
 
 
-
 
 
397
 
 
50
 
 
-
 
 
50
 
 
229
 
 
-
 
 
229
 
_______
________
_______
_______
________
_______
_______
_______
_______
Gross return/(loss)
2,274
(55,219)
(52,945)
1,586
42,253
43,839
6,786
138,995
145,781
 
 
 
 
 
 
 
 
 
 
 
Management fee
 
(1,163)
 
-
 
(1,163)
 
(823)
 
-
 
(823)
 
(1,799)
 
-
 
(1,799)
Performance fee writeback / (charge) (note 3)
 
-
 
2,501
 
2,501
 
-
 
(1,987)
 
(1,987)
 
-
 
(4,893)
 
(4,893)
 
Other administrative expenses
 
 
 
(313)
 
 
-
 
 
(313)
 
 
(265)
 
 
-
 
 
(265)
 
 
(560)
 
 
-
 
 
 (560)
 
_______
_______
_______
_______
_______
_______
_______
_______
_______
Net return /(loss) on ordinary activities before finance costs and taxation
 
 
 
798
 
 
 
(52,718)
 
 
 
(51,920)
 
 
 
498
 
 
 
40,266
 
 
 
40,764
 
 
 
4,427
 
 
 
134,102
 
 
 
138,529
 
 
 
 
 
 
 
 
 
 
Finance costs
(803)
-
(803)
(502)
-
(502)
(1,526)
-
(1,526)
 
_______
_______
_______
_______
_______
_______
_______
_______
_______
Net (loss)/return on ordinary activitiesbefore taxation
 
 
(5)
 
 
(52,718)
 
 
(52,723)
 
 
(4)
 
 
40,266
 
 
40,262
 
 
2,901
 
 
134,102
 
 
137,003
 
 
 
 
 
 
 
 
 
 
Taxation
(127)
-
(127)
(138)
-
(138)
(755)
317
(438)
 
______
_______
_______
______
_______
_______
_______
_______
_______
Net (loss)/return on ordinary activities after taxation
 
 
(132)
 
 
(52,718)
 
 
(52,850)
 
 
(142)
 
 
40,266
 
 
40,124
 
 
2,146
 
 
134,419
 
 
136,565
 
=====
=====
=====
=====
=====
=====
=====
=====
=====
(Loss) /return per share
(note 5)
 
 
(0.08)p
 
 
(32.95)p
 
 
(33.03)p
 
 
(0.09)p
 
 
24.94p
 
 
24.85p
 
 
1.33p
 
 
83.40p
 
 
84.73p



All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

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 Asian Investment Trust plc
                   
Reconciliation of Movements in Shareholders’ Funds (Unaudited)

 


Unaudited figures for the six months ended 31st March 2008



Called up

Share Capital

£'000


Share premium

£'000

Exercised

warrant

reserve

£'000

Capital redemption

reserve

£'000


Other

reserve

£'000


Capital reserve 

£'000



Revenue reserve

£'000



Total

£'000

At 30th September 2007

40,002

4,347

977

3,009

106,481

217,084

2,506

374,406

Total loss from ordinary activities


-


-


-


-


-


(52,718)


(132)


(52,850)

Dividends appropriated in the period 


-


-


-


-


-


-


(2,080)


(2,080)


_______

_______

_______

________

_______

_______

_______

________

At 31st March 2008

40,002

4,347

977

3,009

106,481

164,366

294

319,476


=====

=====

=====

=====

=====

=====

=====

=====



Unaudited figures for the six months ended 31st March 2007



Called up

Share Capital

£'000


Share premium

£'000

Exercised

warrant

reserve

£'000

Capital redemption

reserve

£'000


Other

reserve

£'000


Capital reserve 

£'000



Revenue reserve

£'000



Total

£'000

At 30th September 2006

40,364

4,347

977

2,647

108,902

82,665

2,378

242,280

Total return /(loss) from ordinary activities


-


-


-


-


-


40,266


(142)


40,124

Dividends appropriated in the period 


-


-


-


-


-


-


(2,018)


(2,018)


_______

_______

_______

________

_______

_______

_______

________

At 31st March 2007

40,364

4,347

977

2,647

108,902

122,931

218

280,386


=====

=====

=====

=====

=====

=====

=====

=====



Audited figures for the year ended 30th September 2007



Called up

Share Capital

£'000


Share premium

£'000

Exercised

warrant

reserve

£'000

Capital redemption

reserve

£'000


Other

reserve

£'000


Capital reserve 

£'000



Revenue reserve

£'000



Total

£'000

At 30th September 2006

40,364

4,347

977

2,647

108,902

82,665

2,378

242,280

Repurchase of shares for cancellation


(362)


-


-


362


(2,421)


-


-


(2,421)

Total return from ordinary activities


-


-


-


-


-


134,419


2,146


136,565

Dividends appropriated in the year 


-


-


-


-


-


-


(2,018)


(2,018)


_______

_______

_______

________

_______

_______

_______

________

At 30th September 2007

40,002

4,347

977

3,009

106,481

217,084

2,506

374,406


=====

=====

=====

=====

=====

=====

=====

=====


 

JPMorgan Asian Investment Trust plc
Unaudited figures for the six months ended 31st  March 2008


Balance Sheet

(Unaudited)

31st March 2008

(Unaudited)

31st March 2007

(Audited)

30th September 2007





Fixed assets

£'000

£'000

£'000





Investments at fair value through profit or loss

308,556

300,194

407,137





Current assets




Debtors

612

3,888

644

Cash at bank and in hand

41,134

4,254

20,283

Derivative financial instruments

1

-

-


_______

_______

_______


41,747

8,142

20,927





Creditors : amounts falling due within one year

(5,670)

(7,518)

(26,447)

Derivative financial instruments

-

-

(1)


_______

_______

_______

Net current assets/(liabilities)

36,077

624

(5,521)


_______

_______

_______

Total assets less current liabilities

344,633

300,818

401,616





Creditors : amounts falling due after more than one year




Bank loans

(25,157)

(20,394)

(24,709)





Provisions for liabilities and charges




Deferred tax

-

(38)

-

Performance fee

-

-

(2,501)


_______

_______

_______

Total net assets

319,476

280,386

374,406


=====

=====

=====

Capital and reserves




Called up share capital

40,002

40,364

40,002

Share premium

4,347

4,347

4,347

Exercised warrant reserve

977

977

977

Capital redemption reserve

3,009

2,647

3,009

Other reserve

106,481

108,902

106,481

Capital reserve

164,366

122,931

217,084

Revenue reserve

294

218

2,506


_______

_______

_______

Shareholders' funds

319,476

280,386

374,406


      =====

      =====

=====





Net asset value per share (note 6)

199.7p

173.7p

234.0p









  


JPMorgan Asian Investment Trust plc
Unaudited figures for the six months ended 31st  March 2008
 
Cash Flow Statement
 
 
(Unaudited)
(Unaudited)
(Audited)
 
Six months ended
Six months ended
Year ended
 
31st March
31st March
30th September
 
2008
2007
2007
 
£’000
£’000
£’000
 
 
 
 
Net cash (outflow)/inflow from operating activities (note 7)
(1,824)
(28)
3,474
 
 
 
 
Net cash outflow from returns on investments and servicing of finance
 
(807)
 
(462)
 
(1,500)
 
 
 
 
Taxation recovered
-
-
195
 
 
 
 
Net cash inflow /(outflow) from capital expenditure and financial investment
 
40,089
 
(3,478)
 
(8,755)
 
 
 
 
Dividends paid
(2,080)
(2,018)
(2,018)
 
 
 
 
Net cash (outflow)/inflow from financing
(16,393)
9,243
28,369
 
_______
_______
______
Increase in cash for the period
18,985
3,257
19,765
 
=====
=====
====
 
 
 
 
Reconciliation of net cash flow to movement in net funds
 
 
 
Increase in cash for the period
18,985
3,257
19,765
Exchange movements
1,866
(380)
(859)
 
_______
_______
______
Changes in net funds arising from cash flows
20,851
2,877
18,906
Net funds at the beginning of the period
20,283
1,377
1,377
 
_______
_______
______
Net funds at the end of the period
41,134
4,254
20,283
 
=====
=====
====
 
 
 
 
Represented by:
 
 
 
Cash at bank and in hand
41,134
4,254
20,283
 
=====
=====
====



 

Notes to the Accounts


1Financial Statements

The information contained within the Financial Statements in this preliminary announcement has not been audited or reviewed by the Company's auditors.


The figures and financial information for the year ended 30th September 2007 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or 237(3) of the Companies Act 1985. 


2. Accounting policies 

The accounts have been prepared in accordance with 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.

The accounting policies applied to these interim accounts are consistent with those applied in the accounts for the year ended 30th September 2007.


3. Performance fee writeback/(charge)

At the beginning of the period there was a £2.5m liability in the accounts for performance fees earned by the Manager but

unpaid due to the 0.75% cap restriction. Under the terms of the performance fee agreement any amount in excess of the

cap will be carried forward and will either be paid or offset against future underperformance at the earliest opportunity. In

the current period, the Company's NAV total return has underperformed the benchmark and as a result the whole of this

£2.5m has been written back in the Income Statement.


4. Dividends




(Unaudited)

   

  (Unaudited)

   

 (Audited)


Six months ended

Six months ended

Year ended


31st March 2008

31st March 2007

30th September 2007


£'000

£'000

£'000





Final dividend in respect of the year ended 30th September 2007 of 1.30p (20061.25p)



2,080 


2,018


2,018


======

======

=====

No interim dividend has been declared in respect of the six months ended 31st March 2008 (2007: nil).


5(Loss)/return per share





(Unaudited)

   

  (Unaudited)

   

 (Audited)


Six months ended

Six months ended

Year ended


31st March 2008

31st March 2007

30th September 2007

(Loss)/return per share is based on the following:


£'000

£'000

£'000





Revenue (loss)/return

(132)

(142)

2,146

Capital (loss)/return

(52,718)

40,266

134,419


_______

_______

______

Total (loss)/return

(52,850)

40,124

136,565


======

======

=====





Weighted average number of shares in issue



160,007,154



161,457,154



161,181,192

Revenue (loss)/return per share



(0.08)p


(0.09)p


1.33p

Capital (loss)/return per share



(32.95)p

24.94p

83.40p


_______

_______

______

Total (loss) /return per share


(33.03)p

24.85p

84.73p


======

======

=====


6. Net asset value per share

Net asset value per share is based on the net assets attributable to ordinary shareholders of £319,476,000 (31st March 2007: £280,386,000 and 30th September 2007: £374,406,000) and on the 160,007,154 (31st March 2007161,457,154 and 30th September 2007160,007,154) shares in issue at the period end.


7. Reconciliation of net (loss)/return before finance costs and taxation to net cash (outflow)/ inflow from operating activities



(Unaudited)

Six months ended

31st March 2008


£'000


  (Unaudited)

Six months ended

31st March 2007


£'000


(Audited)

Year ended

30th September 2007

£'000





Net (loss)/return before finance costs and taxation

(51,920)

40,764

138,529

Capital loss/(return) before finance costs and taxation

52,718

(40,266)

(134,102)

Scrip dividends received as income

(84)

-

(78)

Increase in accrued income

(44)

(269)

(311)

Decrease/(increase) in other debtors

76

(29)

(27)

Decrease in accrued expenses

(51)

(90)

(50)

Overseas taxation

(127)

(138)

(487)

Performance fee 

(2,392)

-

-


_______

_______

______

Net cash (outflow)/ inflow from operating activities

(1,824)

(28)

3,474


=====

=====

====


JPMORGAN ASSET MANAGEMENT (UK) LIMITED

      23RD MAY 2008













This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR ILFLSESIVFIT

a d v e r t i s e m e n t