JCH Jpmorgan Claverhouse Investment Trust Plc

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN CLAVERHOUSE INVESTMENT TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2023

Legal Entity Identifier: 549300NFZYYFSCD52W53

Information disclosed in accordance with the DTR 4.1.3

The Directors of JPMorgan Claverhouse Investment Trust plc (the "Company") announce the Company's results for the year ended 31st December 2023.

CHAIRMAN'S STATEMENT

Performance and Manager Review

Conditions underpinning the UK market improved considerably in the second half of the Company's financial year ended 31st December 2023, with its benchmark, the FTSE All-Share index (the 'Benchmark'), generating a total return of 7.9% over the 12-month period. Supportive factors over the latter six months of the year included a marked easing in inflation pressures, which raised hopes that the Bank of England will begin to cut rates this year. Despite this, the UK economy dipped into a shallow recession at the end of 2023, although consumer and business confidence had been showing tentative signs of improvement and this has continued into 2024.

This more favourable environment, together with the changes that the Portfolio Managers made to the portfolio in the first half of the Company's financial year, in particular its cyclical investments, contributed to an out- performance against the Benchmark in the second half of the year and, overall to the Company's 7.3% return on a net asset value ('NAV'), with debt at par value for the year ended 31st December 2023, which was marginally below its Benchmark. The share price total return was 2.9%, reflecting the widening of the discount at which the Company's shares traded relative to its NAV. As noted in the Company's Half Year Report, the discount widening occurred at the start of the financial year, partially as a result of JPMorgan Elect plc divesting its holding in the Company following its combination with JPMorgan Global Growth & Income plc. The Company has been active with its share buyback authority. Please see below for further details.  

Whilst the Company's NAV has marginally underperformed its Benchmark over the year to 31st December 2023, the Board assesses the performance of the Investment Manager over the medium and long term. In regard to the performance, on NAV with debt at par the Company has been slightly behind the Benchmark over five and ten years. With debt at fair value, the Company is slightly ahead of the Benchmark over five and ten years' performance. Your Board reviews the strategy and performance at every Board meeting and continues to remain fully supportive of the strategy, the Portfolio Managers, and the investment process.

The Investment Manager's Report below provides more detail on performance during 2023 and discusses the outlook for 2024.

As at 19th March 2024, the Company's NAV per share (with debt at fair value) was 713.4p and the share price was 672.0p.

Revenue and Dividends

The Directors declared a fourth quarterly interim dividend of 10.5p per share for the year ended 31st December 2023, paid on 1st March 2024, which brought the total dividend per share for the year to 34.5p (2022 total: 33.0p), an increase of 4.5% on the prior year. I am pleased to say that this is the 51st successive year in which the dividend has been raised, a record which only very few investment trusts have attained, and at a time with elevated core inflation and a stagnated UK economy.

The Board's dividend policy remains to seek to increase the dividend each year and, taking a run of years together, to increase dividends at a rate close to, or above, inflation. Following the payment of the fourth interim dividend for 2023, the Company will have continued to have paid dividends in excess of inflation over the past five years. Although UK inflation has now fallen sharply from its recent, 30-year high, the Board will, as always, carefully monitor the outlook for dividend income, to ensure it can continue to fulfil its dividend policy objectives.

The Company has a significant level of revenue reserves, accumulated over a number of years, and as an investment trust, it has the ability to utilise these reserves if necessary to support its long-term dividend policy. After the payment of the fourth interim dividend for 2023, revenue reserves will represent 25.35p per share¹. The Board intends to raise the first three quarterly interim dividends in 2024 to 8.25p per share, from 8.0p per share in the previous financial year, subject to any unforeseen factors and the financial position and performance of the Company at the relevant time.

¹     Based on the number of shares in issue as at 19th March 2024.

Premium/Discount and Share Issuance/Repurchases

During the year, the discount at which the Company's shares traded relative to its NAV with debt at fair value ranged from a high of 6.84% to a low of 0.46%, excluding on 2nd January 2023 when the Company's share price peaked and traded at a premium of 0.27%. The Board's objective is to use the Company's repurchase and allotment authorities to actively manage short-term imbalances between the supply and demand of the Company's shares, with the intention of reducing the volatility of the discount or premium, in normal market conditions. To this end, over the past year, the Company repurchased 2,360,513 of its own shares, at a total cost of £15.7 million.

As at 31st December 2023, the Company's discount (to its cum-income, debt at fair value, NAV) was 4.6%, Since then, the discount has widened slightly and the Board has continued to utilise targeted repurchases to cap the discount, buying in a total of 331,883 shares as at the date of this report.

At the time of writing, the discount stands at 5.80%¹. The Board intends to continue to actively manage the Company's discount in its commitment to seek a stable discount or premium over the long-term, whilst recognising that consistent and strong investment performance remains a core focus for the Company's shares to trade close to NAV over the long-term. Please see the full Annual Report for the Board's discount and premium management policy.

At this year's Annual General Meeting in April 2024, the Company will be seeking renewed authorities from shareholders to sell shares from Treasury at a discount, to issue new shares and to repurchase its own shares.

¹     As at 19th March 2024

Gearing/Long Term Borrowing

The Portfolio Managers can use FTSE 100 index futures to effect increases and reductions in the level of gearing by changing the portfolio's market exposure. The Company's gearing policy (excluding the effect of any futures) is to operate within a range of 5% net cash and 20% geared in normal market conditions. The Portfolio Managers have discretion to vary the gearing level between 5% net cash and 17.5% geared (including the effect of any futures). The Board believes that over the long-term a moderate level of gearing is an efficient way to enhance shareholder returns.

Taking borrowings into account, net of cash balances held and the effect of futures, the Company ended 2023 approximately 6.3% geared. During the year, gearing varied between 0.6% net cash and 8.9% geared. Excluding the effect of the futures, the maximum gearing reached during the year was 10.9%. Gearing is currently 6.8%¹. The Company has a £30 million 3.22% private placement note, maturing in March 2045. In addition, £10 million of the revolving credit facility with Mizuho Bank was drawn down as at 31st December 2023. See note 13 in the full Annual Report. The facility with Mizuho Bank will mature in May 2024 and the Manager has identified a preferred option for a new facility with attractive margins.

¹     As at 19th March 2024

Environmental, Social and Governance

Financially material Environmental, Social and Governance ('ESG') factors have been integrated into the Investment Manager's investment process over recent years, and these issues are considered as part of the decision making in whether to invest in a stock. The Board receives regular ESG updates from the Investment Manager.

The Annual Report includes a separate Environmental, Social and Governance Report from the Investment Manager in the full Annual Report which provides information on these issues and how they have been developed and integrated into the Investment Manager's investment process.

Investment Management Fees and Manager Evaluation

As reported in the Company's Half Year Report, the investment management fee is charged on a tiered basis at an annual rate of 0.45% of the Company's net assets on the first £400 million and at 0.40% of net assets above that amount, having been reduced with effect from 1st July 2023.

During the year under review, the Management Engagement Committee undertook a formal review of the Manager and Investment Manager, covering the investment management, company secretarial, administrative and marketing services provided to the Company. The review took account of the Investment Manager's investment performance record, management processes, investment style, resources and risk control mechanisms. I am pleased to report that the Board agreed with the Committee's recommendation that the continued appointment of the Manager is in the interests of shareholders.

Board Succession

I have served as a member of the Company's Board since 2015, and I had the honour to be appointed Chairman of your Board in April 2022. I plan to stand down from the Board at the time of next year's Annual General Meeting. The Nomination Committee of the Company chaired by the Senior Independent Director, excluding me, has been considering the Company's succession plan and I am pleased to report that Victoria Stewart, a Director of the Company since February 2020, has been appointed to succeed me as Chair of the Board in April 2025. Work has begun to identify a further suitable candidate to join the Board, and announcements on the result of this search, and the appointment of an additional new Director, will be made in late 2024.

Shareholder Engagement

The Board and the Portfolio Managers are keen to increase dialogue with the Company's existing shareholders, particularly as the Board believes that shareholder interactions are very helpful in assisting with the management of the Company. During the past year, the Portfolio Managers held regular calls with shareholders where requested and also presented periodic webinars, replays of which are available on the Company's website. Portfolio and market updates are available on the Company's website.

Investors holding their shares through online platforms will shortly receive a letter inviting them to sign up to receive email updates from the Company. These updates will deliver regular news and views, as well as the latest performance statistics. If you have not already signed up to receive these quarterly communications and you wish to do so, you can opt in via https://tinyurl.com/JCH-Sign-Up or by scanning the QR code on the contents page in the full Annual Report.

Annual General Meeting

We are delighted that once again we will be holding this year's Annual General Meeting in person at JPMorgan's offices at 60 Victoria Embankment, London EC4Y 0JP, on Monday, 29th April 2024, at 12 noon. The Company's Portfolio Managers, William Meadon and Callum Abbot, will give a presentation to shareholders, reviewing the past year and commenting on the outlook for the current year. The meeting will be followed by a sandwich lunch, providing shareholders with the opportunity to meet the Directors and representatives of the Manager. We look forward to welcoming as many shareholders as possible at the Annual General Meeting.

For shareholders wishing to follow the Annual General Meeting proceedings, but choosing not to attend in person, we will be able to welcome you through conferencing software where you can follow the proceedings but not vote on the business of the meeting. Details on how to register, together with access details, will be available on the Company's website: www.jpmclaverhouse.co.uk, or by contacting the Company Secretary at invtrusts.cosec@jpmorgan.com.

As is normal practice, all voting on the resolutions will be conducted by a poll. Shareholders viewing the meeting via conferencing software will not be able to vote on the poll and we therefore encourage all shareholders, and particularly those who cannot physically attend, to exercise their votes in advance of the meeting by completing and submitting their form of proxy.

If you have any detailed or technical questions, it would be helpful if you could raise them in advance with the Company Secretary either in writing to 60 Victoria Embankment, London EC4Y 0JP, via email at invtrusts.cosec@jpmorgan.com or via the 'Ask a Question' link on the Company's website. Shareholders who are unable to attend the Annual General Meeting are encouraged to use their proxy votes. Proxy votes can be lodged in advance of the Annual General Meeting either by post or electronically, detailed instructions are included in the Notes to the Notice of Annual General Meeting in the full Annual Report. Completion of a proxy card and its return will not preclude you from attending the meeting and voting in person.

If there are any changes to the arrangements for the Annual General Meeting, the Company will update shareholders through the Company's website and, if appropriate, through an announcement on the London Stock Exchange.

Outlook

The good news is that the UK economy seems to be over the worst of its inflation and cost-of-living crisis. The Board therefore shares the Portfolio Managers' cautious optimism about the outlook for the market and the Company in 2024 and beyond. There are several reasons for our optimism. For one, the Portfolio Managers have been actively positioning the portfolio to take greater advantage of better times ahead. For example, they have increased exposure to rising demand for entertainment and travel, and added several holdings within the real estate sector, which they expect to benefit from lower interest rates.

UK equity valuations still remain extremely attractive in absolute terms and relative to other markets. This provides investors, both in the UK and abroad, with what the Portfolio Managers believe is a rare opportunity to enter this market at historically low valuations, with attractive dividend yields. This suggests that there is scope for significant market gains as and when investors' confidence in this market returns, and their focus shifts back to long-term company fundamentals.

The geopolitical outlook remains worrying, with the conflict in Ukraine seemingly no closer to resolution and the conflict in the Middle East threatening to spread across the region. November's US presidential election has potentially broader implications than usual for the global order and there are also elections taking place in several other countries and regions this year, including the UK and Europe. Whilst all these factors are well known, any dramatic or unexpected developments in any of these situations will likely spark an increase in market volatility.

We have experienced Portfolio Managers who are working hard to preserve and grow shareholders' assets. We believe their continuing efforts, combined with a diversified portfolio of high-quality stocks and a disciplined investment approach, mean the Company is well-positioned to continue delivering attractive returns and a growing income to shareholders over the long term.

On behalf of the Board, I thank you, our shareholders, for your continued support.

David Fletcher

Chairman                                                                                                                                    20^th March 2024

INVESTMENT MANAGER'S REPORT

Investment Approach

Claverhouse is a diversified portfolio of our best UK ideas, comprising both quality, growth and value stocks. For the patient investor, we believe that this approach will produce outperformance of the Benchmark in a steady, consistent manner, irrespective of market conditions. We aim to maintain Claverhouse's multi-decade dividend growth record.

Market Review

The start of the year saw a cloud of rapidly rising inflation and interest rates hanging over UK equities. However, the second half of the year saw inflationary fears abate slightly, causing equities and gilts to rally. By the end of the year the Benchmark, while lagging most overseas markets, showed a positive total return over the 12 months of 7.9%.

Both the rapid demise of Credit Suisse and the collapse of the west coast American bank, Silicon Valley Bank ('SVB') in the spring rattled global markets. However, investors soon concluded that another systemic banking crisis was unlikely causing a relief rally in equities.

Despite a further fall in oil and gas prices, UK inflation continued to disappoint, peaking in February at 10.4%. Core inflation (i.e. inflation excluding food and energy) peaked at 7.1% in May, the highest since 1992. By August, the Bank of England had raised interest rates from 3.0% to 5.25%, where they remained for the rest of the year. The latter part of the year saw an improvement in inflation, fuelling a year end rally in the stock market as investors anticipated material cuts in interest rates in 2024.

The end of year rally was characterised by a significant broadening of the equity market, which prior to October had been remarkably narrow in its leadership.

Political turmoil was a feature of the year and created a challenging back drop for investors. By the end of the year, investors were focusing on impending elections in both the UK and the US. Opinion polls suggested that Labour was on course for a landslide victory in the UK. In the US, Donald Trump was the early favourite to be returned to the White House. The Ukraine war remained locked in a bloody stalemate whilst events in the Middle East in October added a significant further layer of geo-political concerns for investors.

Throughout the year, equity markets were highly sensitive to macro data points, particularly inflation and central bank announcements. At times, new data points drove significant changes in market leadership, which meant that the market did not trend but was instead erratic during the year.

A volatile year concluded with the Benchmark rising 7.9% over the 12 months. The UK market continues to present exceptional value and while a catalyst is difficult to predict we believe patient investors will eventually be rewarded.

Performance Review

The portfolio performed steadily throughout the year and turnover was lower than 2022. Your Company's risk-controlled approach to sizing positions at both a stock and sector level helped the portfolio navigate its way through challenging times, whilst delivering a dividend increase for the 51st consecutive year.

In the year to 31st December 2023, Claverhouse delivered a total return on net assets (capital plus dividends re-invested) of 7.3% compared to the Benchmark's return of 7.9%. With the Company's shares ranging from a premium of 0.27%¹ on 2nd January 2023 to end the year at a discount of 4.6%¹, the total annual return for shareholders was 2.9%. With the improving prospects for both falling inflation and interest rates as the year progressed, the portfolio's cyclical holdings performed particularly well.

¹      Share price discount to net asset value with debt at fair value.

3i was again the star performer, rising 85% over the year (see later for a more detailed update). The shares of the housebuilders Taylor Wimpey and Barratt Developments each rose by more than 50% as the long awaited improvement in the housing market appeared to draw closer.

The utility service provider, Telecom Plus was a beneficiary, earlier in the year, of elevated energy prices, allowing it to offer their customers discounted prices to market rates. However, as energy prices receded, so did the customer acquisition growth of Telecom Plus, which was reflected in a share price fall of 30% over the period.

Further detail of Claverhouse's performance over the year is given in the below performance attribution table.

Performance attribution

Year ended 31st December 2023

Source: JPMAM/Morningstar. All figures are on a total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its Benchmark.

¹     Reflects the effect of fair value of the 3.22% £30 million private placement loan. The fair value has been calculated using discounted cash flow techniques, using the yield from similar dated gilt plus a margin based on the five year average for the AA Barclays Sterling Aggregate Corporate Bond spread.

^A     Alternative Performance Measure ('APM').

A list of APMs, with explanations and calculations, and a glossary of terms are provided on pages 100 to 102 of the full Annual Report.

The Company delivered a dividend increase for the 51st consecutive year, a notable milestone. Dividends in respect of the financial year ended 31st December 2023 totalled 34.5p per share, a 4.5% rise on the previous year's dividend of 33.0p per share. The dividend yield in respect of the year is 5.1% (based on the share price of 672.0p as at 19th March 2024).

The Company benefitted from its holdings in Financials, particularly 3i Group, which was the stand-out performer. Utilities and Housebuilders also performed well. By contrast, Tobacco, Travel & Leisure and Life Assurance performed relatively poorly. There was little difference between the overall performance of large FTSE100 stocks and mid/small cap stocks. More detail is given in the table below:

Top Contributors and Detractors to Performance vs FTSE All-Share Index

Source: JPMAM, as at 31st December 2023.

Shell again performed well as the ongoing conflict in Ukraine continued to expose the fragility of global energy markets. BP, by contrast, was shaken by a series of management missteps and scandals which led to the departure of its CEO. The shocking events in the Middle East added further to global conflict concerns. Against such a backdrop, the UK's leading defence contractor, BAE Systems, benefitted from the expectation of further orders for its equipment.

Glencore is a diversified mining company with substantial exposure to metals which are essential for the electrification of vehicles e.g. copper, zinc and nickel. Its shares performed poorly as the economic data coming out of China pointed to continuing weak demand from the world's largest commodity consumer.

Tobacco stocks (British American Tobacco and Imperial Brands) sold off on weaker North American cigarette volumes with investors still not attracted to historically very low valuations.

JPMorgan UK Small Cap Growth & Income plc (formerly JPMorgan UK Smaller Companies Investment Trust plc), run by JPMAM's in-house small companies' team, performed well. Over the years, this trust has not only contributed materially to the performance of Claverhouse, but as stocks have grown out of the smaller companies' index and into the FTSE 350, it has also provided a rich source of many new ideas for us to invest in directly.

Portfolio Review

The portfolio held 65 stocks at the end of the year, which was towards the lower end of our normal range. The portfolio was geared throughout the year but less than historically was the case. We are bottom-up stock pickers; sector and macro views have less influence on the portfolio. This said, in 2023, geopolitical and macro issues were of much more concern to investors than usual. Whilst we are stock-focused we do run a sector-diversified portfolio.

We used FTSE 100 futures to manage gearing. At the year-end, your Company was 6.3% geared.

Top Over and Under-Weight Positions vs FTSE All Share Index

Source: JPMAM, as at 31st December 2023.

Purchases

As consumer confidence continued to improve post Covid, the Company increased its exposure to the travel industry through purchases of Premier Inn owner Whitbread, and packaged holiday provider JET2, both of which are now well placed to take advantage of the resultant supply shortage. Surging demand has led to a very favourable pricing environment for airlines and hotels which we expect to continue, especially in the budget part of the market where these two companies operate, as consumers become more price sensitive.

Georgia has benefitted from a huge influx of affluent Ukrainians and Russians fleeing the war. This has led to a surge in the Georgian economy and a thriving banking sector as deposits have grown. Bank of Georgia and TBC Bank, both of which are listed on the UK stock market, operate a duopoly in this market, which lends itself to very favourable economics for both banks. As a result, both earn returns on equity of between 20% to 30% and have consistently created value for shareholders. Their balance sheets are in strong positions, with core equity tier 1 ratios in the high teens, which should allow them to continue to return substantial capital to shareholders. Both positions were bought at under five times of the price earning ratio. The purchases were funded by sales of other banks in the sector; NatWest and Barclays.

We added new positions in the technology sector. Bytes Technology Group is an IT services company and is a direct peer of another Claverhouse holding, Softcat. It is a highly fragmented market and both Softcat and Bytes have a strong track record of acquiring market share. Their asset light business models lead to strong returns on incremental capital and superb cash generation. Technology being more deeply integrated in businesses of all shapes and sizes should be a structural tailwind for these companies for decades to come.

Games Workshop is the producer of miniature figurines for the table-top game, Warhammer. We have re-purchased the stock after we identified some positive catalysts for the business. Recently, it has begun licensing their intellectual property for video games and movies which is extremely high margin business for Games Workshop. Growth is also set to re-accelerate as they release the next iteration of their bestselling video wargame; Warhammer 40k collection.

Dividends are a key consideration for portfolio holdings and M&G's near 10% dividend yield was viewed as very attractive. M&G is an asset manager and closed book life insurance company. The yield is covered by its with-profits business with potential upside to the dividend from a turnaround elsewhere in its business. As a result, we believe it looks too cheap.

We made two new purchases on the back of new management changes delivering much improved operational performance in these two companies. Rolls-Royce, an aerospace & defence company, specialises in turbines for aircrafts and power systems for a range of industrial end markets. Rolls-Royce shareholders have suffered over the last decade due to serial mismanagement and poor capital allocation. The new management team have made demonstrable changes to the business and the cyclical recovery in aerospace is a strong tailwind. However, given the chequered history, the jury is still out as to whether the turnaround will work. Marks & Spencer is undergoing a strategic overhaul which aims to make it more relevant for a broader range of consumers. Progress has been slow, but it now appears that Marks & Spencer has made significant headway with the end consumer. This has led to several large upgrades to management's guidance in quick succession and we think there could be more to come.

One of the key themes in the second half of 2023 was improving (falling) inflation data, which led to central banks signalling that further rate hikes may not be required. As the economic data began to suggest that we were approaching peak rates, we looked to close our successful underweight in real estate investment trusts (REITs). REITs' property valuations have been under pressure as property yields have been forced upwards with the increase in interest rates. This led to extremely negative sentiment towards the sector and discounts to net asset values not seen in the last decade. We started new holdings in Land Securities, British Land, Shaftesbury Capital and Workspace, funded by the sale of the position in the less cyclical Safestore.

Admiral is a UK motor insurer with an impressive long term track record of value creation for shareholders. The UK motor insurance sector has been battling with repair/replacement cost inflation but finally appears to have sufficiently offset this with price increases which should lead to a period of elevated profitability.

We topped up several existing positions which are continuing to deliver operationally. For example, Centrica is benefitting from the benign competitive environment for British Gas, after many of its competitors went bust in 2022, while the high volatility in energy prices is a prime environment for Centrica's energy trading division. Ashtead is an equipment rental business which looks extremely well placed to capitalise on the wave of the so called 'mega-projects' which are taking place in the US to facilitate, among other themes, onshoring and the energy transition. 3i Group announced that its portfolio company, discount retailer Action, continues to take market share as price sensitive consumers look for cheaper places to shop. Historically this environment has been ideal for discounters and customers have been surprisingly loyal once the backdrop improves.

Please see the full annual report for highlighted companies in the portfolio.

Sales

Bunzl is a distributor of single use products, which can pass through all cost inflation to its end customers, leaving it well placed in the current inflationary environment. However, price deflation would be a significant headwind for earnings and the stock is trading at close to peak multiples, so we decided to exit our holding in response to evidence that inflation may have peaked.

Serica, an oil and gas explorer and producer, announced a large acquisition of another oil and gas explorer and producer which called into question the capital discipline of the management team. Therefore, after collecting the quarterly dividend, we sold the stock.

The New York Stock Exchange became CRH's primary listing venue during the year. Whilst it remains listed on the London Stock Exchange, we exited the position due to this change in primary listing to the USA as our investment restrictions and guidelines prohibited us from holding the shares once CRH had changed its primary listing from the UK.

Positions in both Telecom Plus and Drax were sold as each struggled to cope with falling power prices in the second half of the year. Drax is a self-titled 'renewable energy company'. It predominantly generates electricity by burning biomass pellets, which are produced in Drax's pellet plants in the US, and then shipped to the UK. It is also a leader in carbon capture technology. Drax has benefitted from elevated power prices in the UK, but it has struggled to secure Government approval for its carbon capture plans. While it is optically cheap, the reinvestment risk remains high and fraught with regulatory risk. Telecom Plus, was a beneficiary of elevated energy prices as it was able to offer prices at a discount to market rates. However, as energy prices have receded, so has the customer acquisition growth of Telecom Plus. The story has shifted to being about diversifying the business into adjacent areas (e.g. broadband and mobile) and we no longer feel the growth prospects are as strong.

A number of management teams at the luxury goods retailer, Burberry have failed to reinvigorate the brand and without a strong tailwind from the Chinese consumer, it looks like it will take a while for signs of success to emerge. We therefore sold the stock.

We have exited the small position in Balfour Beatty, the construction contractor. It quickly re-rated after our initial purchase in August 2022, so we never got a chance to add to the position. We are less convinced on the outlook.

Please see the full annual report for highlighted companies in the portfolio.

Environmental, Social, and Governance ('ESG')

Whilst Claverhouse holds stocks based primarily on companies' fundamentals, we also consider the potential impact of financially material ESG factors on a company's ability to deliver shareholder value. We assess each company's strategy for dealing with these important matters and the consequent risks arising from them. Our analysis helps determine whether relevant ESG factors are financially material and, if so, whether they are reflected in the valuation of the company. Such analysis may influence not only our decision to own a stock but also, if we do, the size of that position in the portfolio.

Company meetings continue to be an important opportunity to engage with our portfolio companies on ESG issues. Examples of our engagement with companies during the year and details of our voting record are set out in the ESG Report in the full Annual report.

Market Outlook

Whilst there remain significant geopolitical challenges for investors to consider (such as the ongoing conflict in the Ukraine and the Middle East tensions), there are some reasons for cautious optimism in 2024. The global economy, driven by the US, continues to expand. Inflation in the developed world is now falling with the consequent prospect that central banks will soon start to cut interest rates. Despite the improved economic outlook, the UK equity market remains exceptionally attractively valued.

Against such a gently improving economic backdrop, your Company remains a modestly-geared portfolio that uses a barbell approach of owning both attractively valued, high yielding stocks, as well as growth stocks. Our barbell approach is naturally diversifying, and our portfolio is currently focused on robust, liquid, globally-diversified blue-chip, UK listed stocks. After a challenging period, which has reflected the variable macro environment, a more benign outlook should suit our bottom up investment process. We remain confident that such an approach will deliver both growth of capital and income in a consistent manner for our shareholders.

For and on behalf of the Investment Manager

William Meadon

Callum Abbot

Portfolio Managers                                                                                                                     20^th March 2024

PRINCIPAL AND EMERGING RISKS

The Board, through delegation to the Audit Committee, has undertaken a robust assessment and review of the principal risks facing the Company, together with a review of any new and emerging risks that may have arisen during the year to 31st December 2023, including those that would threaten its business model, future performance, solvency or liquidity.

With the assistance of the Manager, the Audit Committee has drawn up a risk matrix, which identifies the key risks to the Company, as well as emerging risks. The risk matrix, including emerging risks, are reviewed formally by the Audit Committee every six months or more regularly as appropriate. During the year under review, the Audit Committee worked extensively with the Manager to review and update the risk matrix. At each meeting, the Board considers emerging risks which it defines as potential trends, sudden events or changing risks which are characterised by a high degree of uncertainty in terms of occurrence probability and possible effects on the Company. As the impact of emerging risks is understood, they may be entered on the Company's risk matrix and mitigating actions considered as necessary. In assessing the risks and how they can be mitigated, the Board has given particular attention to those risks that might threaten the viability of the Company. These key and emerging risks are listed below:

EMERGING RISKS

The Board has considered and kept under review emerging risks. The sole emerging risk has been identified:

Artificial Intelligence ('AI')

While it might be deemed a great opportunity and force for good, there is an increasing risk to business and society more widely from AI. Advances in computing power means that AI has become a powerful tool that will impact a huge range of areas and with a wide range of applications that include the potential to disrupt and even to harm. In addition, the use of AI could be a significant disrupter leading to added uncertainty in corporate valuations.

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

Details of the management contract are set out in the Directors' Report in the full Annual Report. The management fee payable to the Manager for the year was £1,979,000 (2022: £2,222,000) of which £nil (2022: £nil) was outstanding at the year end.

Included in administration expenses in note 6 in the full Annual Report are safe custody fees amounting to £8,000 (2022: £8,000) payable to JPMorgan Chase Bank N.A. of which £3,000 (2022: £2,000) was outstanding at the year end.

The Manager may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm's length. The commission payable to JPMorgan Securities Limited for the year was £nil (2022: £31,000) of which £nil (2022: £nil) was outstanding at the year end.

The Company holds an investment in JPMorgan UK Small Cap Growth & Income plc (formerly JPMorgan UK Smaller Companies Investment Trust plc) which is also managed by the Investment Manager. At the year end this was valued at £13.6 million (2022: £13.3 million) and represented 3.1% (2022: 3.0%) of the Company's investment portfolio. During the year, the Company made £nil (2022: £nil) purchases of this investment and sales with a total value of £501,000 (2022: £811,000). Dividend income amounting to £357,000 (2022: £334,000) was receivable during the year, of which £nil (2022: £nil) was outstanding at the year end.

The Company also holds cash in the JPMorgan Sterling Liquidity Fund, which is managed by JPMorgan. At the year end this was valued at £7.7 million (2022: £9.4 million). Interest amounting to £662,000 (2022: £325,000) was receivable during the year, of which £nil (2022: £nil) was outstanding at the year end.

At the year end, total cash of £611,000 (2022: £157,000) was held with JPMorgan Chase Bank N.A. A net amount of interest of £32,000 (2022: £14,000) was receivable by the Company during the year from JPMorgan Chase Bank N.A. of which £nil (2022: £nil) was outstanding at the year end.

Handling charges on dealing transactions amounting to £4,000 (2022: £8,000) were payable to JPMorgan Chase Bank N.A. during the year of which £1,000 (2022: £1,000) was outstanding at the year end.

Full details of Directors' remuneration and shareholdings can be found in the full Annual Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law).

Under company law, directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to:

•   select suitable accounting policies and then apply them consistently;

•   state whether applicable United Kingdom Accounting Standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements;

•   make judgements and accounting estimates that are reasonable and prudent; and

•   prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Financial Statements are published on the www.jpmclaverhouse.co.uk website, which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditor accepts no responsibility for any changes that have occurred to the Financial Statements since they were initially presented on the website. The financial statements are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

The Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces.

Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report and Directors' Remuneration Report that comply with that law and those regulations.

Each of the directors, whose names and functions are listed in the full Annual Report, confirm that to the best of their knowledge:

•   the Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 102, give a true and fair view of the assets, liabilities, financial position and return of the Company; and

•   the Strategic Report and Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The Board confirms that it is satisfied that the Annual Report and Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for shareholders to assess the performance, business model and strategy of the Company.

For and on behalf of the Board

David Fletcher

Chairman

20^th March 2024

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31st December 2023

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 prepared under guidance issued by the Association of Investment Companies.

Net return/(loss) after taxation represents the return/(loss) for the year and also Total Comprehensive Income/(Expense).

STATEMENT OF CHANGES IN EQUITY

For the year ended 31st December 2023

¹     These reserves form the distributable reserves of the Company and may be used to fund distributions to investors.

STATEMENT OF FINANCIAL POSITION

At 31st December 2023

For the 2023 year end, the 'Fixed Assets' sub-heading was changed to 'Non-Current Assets' to align to the adapted format under FRS 102. This change did not result in any measurement changes.

STATEMENT OF CASH FLOWS

For the year ended 31st December 2023

¹     The presentation of the Statement of Cash Flow, as permitted under FRS 102, has been changed so as to present the reconciliation of 'net return/(loss) before finance costs and taxation' to 'net cash inflow from operating activities' on the face of the Statement of Cash Flow. Previously, this was shown by way of note. Interest paid has also been reclassified to financing activities, previously shown under operating activities, as this relates to bank loan and private placement loan notes. Other than changes in the presentation of certain cash flow items, there is no change to the cash flows as presented in previous periods.

Analysis of net debt

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31st December 2023.

1.  Accounting policies

The Company is a listed public limited company incorporated in England and Wales. The registered office is detailed in the full Annual Report.

(a)     Basis of accounting

The financial statements are prepared under historical cost convention, modified to include fixed asset investments and derivatives at fair value, and in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in July 2022.

All of the Company's operations are of a continuing nature.

The financial statements have been prepared on a going concern basis. In making their assessment, the Directors have reviewed income and expense projections, the liquidly of the investment portfolio and considered the impact of stressed conditions on the portfolio liquidity and income. In addition, the Directors have also considered the measures in place with key service providers, including the Manager, to maintain operational resilience. The disclosures on going concern in the full Annual Report form part of these financial statements.

The policies applied in these financial statements are consistent with those applied in the preceding year.

2.  Dividends

(a)     Dividends paid and declared

All dividends paid and declared in the financial year have been funded from the Revenue Reserve.

The fourth quarterly dividend proposed in respect of the year ended 31st December 2022 amounted to £6,315,000. However, the amount paid amounted to £6,308,000 due to shares redeemed after the balance sheet date but prior to the record date.

The fourth quarterly dividend has been declared and paid in respect of the year ended 31st December 2023. This dividend will be reflected in the financial statements for the year ending 31st December 2024.

(b)    Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year, shown below.

The revenue available for distribution by way of dividend for the year is £18,176,000 (2022: £20,536,000). Brought forward revenue reserves amounting to £22,940,000 (2022: £21,560,000) have been partially utilised in order to finance the dividend in respect of the year.

The revenue reserve after payment of the fourth dividend will amount to £14,558,000 (2022: £16,625,000).

3.  Return/(loss) per share

4.  Net asset value per share

The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year end follow. These were calculated using 57,785,140 (2022: 60,145,653) Ordinary shares in issue at the year end (excluding Treasury shares).

5. Non-statutory accounts

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2023 but is derived from those accounts. Statutory accounts for the year ended 31 December 2023 will be delivered to the Registrar of Companies in due course. The Auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditors' report can be found in the Company's full Annual Report and Accounts on the Company's website at www.jpmclaverhouse.co.uk.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the       Company's website (or any other website) is incorporated into, or forms part of, this announcement.

JPMORGAN FUNDS LIMITED      

 21st March 2024

        For further information, please contact:

        Emma Lamb

        For and on behalf of

        JPMorgan Funds Limited

        0800 20 40 20

ENDS

A copy of the Annual Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Annual Report will shortly be available on the Company's website at www.jpmclaverhouse.co.uk where up-to-date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

JPMORGAN FUNDS LIMITED