LONDON STOCK EXCHANGE
ANNOUNCEMENT
JPMORGAN GLOBAL EMERGING
MARKETS INCOME TRUST PLC
UNAUDITED HALF YEAR RESULTS
FOR THE SIX MONTHS ENDED 31ST JANUARY 2024
LEI: 549300OPJXU72JMCYU09
JPMorgan Global Emerging Markets
Income Trust Plc (the "Company" or "JEMI") today publishes its
unaudited Half Year Report & Financial Statements for the six
months ended 31st January 2024.
CHAIR'S STATEMENT
Performance
Following good returns in the year
to July 2023, Emerging Markets declined during the six months to
31st January 2024. The Company's benchmark index, the MSCI
Emerging Markets Index with net dividends reinvested (in sterling
terms) (the 'Benchmark'), fell by 5.0% over the six months under
review. In the same period, the Company's total return on net
assets was -2.4%, outperforming the Benchmark.
The total return to shareholders
(which includes both the share price return and dividends) was
-5.0%, which reflects a widening of the discount to net asset value
('NAV') at which the Company's shares trade from 9.3% at the
previous financial year end to 12.0% at the end of the half year
period.
The Investment Manager's Report,
which can be found in the Half Year Report, reviews the market
environment and the Company's performance over the reporting period
in more detail and comments on the investment strategy and outlook
for Emerging Markets.
It is worth highlighting that
returns were supported by the positive performance of positions in
Korea, Taiwan and South Africa while not owning the three largest
Chinese internet stocks also provided a boost to relative
performance. The Company's underweight position in the Indian
equity market detracted from overall performance although
shareholders will be aware that many Indian companies do not pay
dividends and are therefore excluded from the Portfolio Managers'
universe of stocks. Nonetheless, the Board is pleased that the
Portfolio Managers' stock selection was the principal reason for
the Company's outperformance against the Benchmark over the
reporting period.
Whilst the decline in share price
and NAV over the six months is disappointing, I want to draw your
attention to the fact that performance over periods of three, five
years and beyond is significantly ahead of the Benchmark,
reflective of the Company's long-term approach and testament to the
experience of the Portfolio Managers and strength of their process.
Please see the Half Year Report for the long-term performance
figures.
Revenue and Dividends
Net revenue earnings for the six
months to 31st January 2024 amounted to 1.78p per share. As is
generally the case, the Company expects to earn the bulk of its
dividend income during the second half of its financial
year.
During the reporting period, the
Board has declared two interim dividends of 1.0p each, in line with
the same period last year. The second interim dividend will be paid
on 19th April 2024 to shareholders on the register as at the close
of business on 8th March 2024. The ex-dividend date was 7th March
2024. In the last financial year, the Board paid a total dividend
of 5.3p per share, a modest increase from 5.2p in 2022. This was
fully covered by income. The fourth interim dividend was paid on
20th October 2023.
The Board reviews dividend receipts
at each of its Board meetings, given their importance to the
Company. The Board carefully considers the outlook for dividend
receipts with the Portfolio Managers on a regular basis, including
a sensitivity analysis of the impact of currency movements on
revenue receipts. As shareholders are aware, the Company receives
dividends in the currencies of developing countries and US dollars
but pays dividends in sterling. It has not been the Company's
policy to hedge currency risk as that is expensive and, for many
currencies, impracticable. That policy inevitably means that the
Company's asset values, and cash flows may be damaged by adverse
currency movements (if sterling strengthens) and flattered by
favourable moves (if sterling weakens) relative to Emerging Market
currencies and US dollars. Over the longer term, your Board and the
Investment Manager are of the view that Emerging Markets offer
attractive income prospects alongside the prospects for strong
earnings growth.
Gearing and Loan Facilities
The Board believes that gearing can
be used to enhance long-term shareholder returns. Gearing levels
are discussed with the Portfolio Managers at each Board meeting.
Presently, the Company has a US$20 million two-year revolving
loan facility with Mizuho Bank Limited ('Mizuho'), repayable in
November 2024, with an interest rate of margin plus Secured
Overnight Financing Rate ('SOFR'). The Company also maintains a
US$20 million revolving loan facility with ING Bank Limited, which
is repayable in October 2025, having been renewed during the
reporting period at a competitive market rate plus SOFR.
With the pending maturity of the
Mizuho facility later in the year, your Board will be working
closely with the Manager to review the borrowing options. As at
31st January 2024, gearing stood at 7.4% (31st July 2023:
5.7%).
Share Repurchases and Issuance
During the six months to 31st
January 2024, the Company's share price traded at an average
discount to NAV of 11.6%. The Board regularly considers the merits
of buying back shares in order to manage the level and volatility
of the discount. The Board will buy back shares only if it is
considered to be in the best interests of shareholders to do so.
During the reporting period, the Company repurchased 1,109,472
shares into Treasury at an average discount of 11.7% and at a total
cost of £1.4 million. It did not issue any shares. These purchases
were value accretive for shareholders, increasing the NAV per share
by 0.1%, and they underscore your Board's belief that there is
attractive value in the investments held by the Company.
At the time of writing, the discount
stands at 13.2%. The Board will continue to actively manage the
Company's discount in its commitment to seek a stable discount or
premium over the longer-term, in recognition of the Company's
long-term consistent and strong investment performance, and with
the aim of enhancing NAV for shareholders. Between the end of the
half year period and 3rd April 2024, the Company has repurchased a
further 1.6 million shares into Treasury.
Environmental, Social and Governance
The Investment Manager incorporates
Environmental, Social and Governance ('ESG') considerations into
its investment process, with the potential impact of financially
material ESG factors on a company's ability to deliver shareholder
value considered as part of the Portfolio Managers' stock selection
process in building a strong and resilient portfolio.
Your Board shares this belief in the
importance of ESG factors for long-term investments and supports
the Portfolio Managers' efforts to maintain continuous engagement
with investee companies.
The Investment Manager has recently
published a document containing its latest Investment Stewardship
Priorities, which may be of interest to shareholders. This can be
found at: https://am.jpmorgan.com/gb/en/asset-management/adv/about-us/investment-stewardship/
Investment Management Fees
During the reporting period, the
Board agreed with the Manager that the Company's investment
management fees should be tiered, as previously
announced.
With effect from 1st November
2023, the investment management fee has been charged on a tiered
basis at an annual rate of 0.75% of the Company's net assets on the
first £500 million and at 0.65% of net assets above that amount.
This compares with the previous arrangement under which the
management fee was charged at an annual rate of 0.75% on net
assets. The fee is calculated and paid monthly.
Investment Team
As previously announced, Jeffrey
Roskell, a portfolio manager for the Company since 1st August
2016, retired from JPMorgan Asset Management on 29th February 2024.
We would like to thank Jeff for his contribution to the management
of the Company's assets and wish him well in his
retirement.
Appointment of new Director
I am delighted that Ranjan Ramparia
has joined the Board with effect from 1st March 2024, as previously
announced. She brings with her considerable experience in corporate
finance and investment management along with an early career in
accountancy. It is the Board's intention that Ms Ramparia will
take on the role of Chair of the Audit & Risk Committee once Ms
Gulliver stands down at the conclusion of the Company's November
2024 Annual General Meeting. Ms Ramparia will also serve as a
member of the Company's Management Engagement Committee and the
Nomination & Remuneration Committee.
The Nomination & Remuneration
Committee plans for succession to ensure that the Board retains an
appropriate balance of skills, knowledge and diverse
perspectives.
Stay Informed
The Company delivers email updates
with regular news and views, as well as the latest performance. If
you have not already signed up to receive these communications and
you wish to do so, you can opt in via https://tinyurl.com/JEMI-Sign-Up or by
scanning the QR code on the contents page of the Half Year
Report.
Outlook
The geopolitical outlook remains
uncertain as tensions continue with the war in Ukraine currently
showing no signs of abating and elevated tensions across the Middle
East. The US elections and the consequences for relations with
China could provide further challenges.
However, there are reasons to be
optimistic on the outlook for Emerging Markets. Global inflation is
receding and there are expectations that there will be a soft
landing for the US economy followed by interest rate cuts later
this year. While these might not come about as quickly as many had
previously thought, this has provided comfort to the markets. In
addition, the Chinese government has taken policy measures to
improve its support for the economy and while these fell somewhat
short of expectations overall, we note that the Portfolio Managers'
successful selective approach to stock picking in China over the
reporting period contributed to returns.
In conclusion, the Board believes
that there are compelling opportunities for investment in Emerging
Markets, with dispersion between sectors at elevated levels and an
attractive relative level of valuation compared to developed
markets. We are confident that the focused and disciplined stock
selection process adopted by the Investment Manager will continue
to deliver attractive long term returns to shareholders, as
evidenced by the Company's strong track record.
On behalf of the Board, I would like
to thank you for your ongoing support.
Elisabeth Scott
Chair
3rd April 2024
INVESTMENT MANAGER'S
REPORT
Introduction
For the six-month period ended 31st
January 2024, the Company's total return on net assets, including
dividends, was -2.4% (in GBP). This compares to the Benchmark which
returned -5.0%. The Company's longer-term relative performance
is positive. Its net asset value ('NAV') has achieved annualised
outperformance of the Benchmark of 17.0% over three years ended
31st January 2024, 20.2% over the past five years, and 27.0% over
the past ten years.
Investment environment
Emerging markets were generally weak
over the six months ended 31st January 2024. The Company's
Benchmark declined by 5.0% over this period, due mainly to the poor
performance of the Chinese equity market, where investor sentiment
was undermined by concerns about the economy. The widely
anticipated post-pandemic rebound failed to materialise as consumer
confidence, and hence consumption, were adversely impacted by
ongoing problems in the property sector, after a prolonged
period of overbuilding and excessive leverage. The Chinese
government's apparent reluctance to take decisive steps to solve
these problems is exacerbating consumer caution.
We recognise that China faces
fundamental challenges, including not only weak consumer demand,
and a stricken property market, but also an increasingly fractious
relationship with the US, but nonetheless we still see value and
opportunities in some areas of the Chinese market. Valuations are
low following persistent declines over the past three years, and,
in addition, some corporates are returning more cash to
shareholders via higher dividend payments and share buybacks -
something which is of particular interest to income investors like
us.
Elsewhere, Taiwan performed well,
supported by the popularity of its technology stocks. The
fundamentals of this industry generally look favourable, and some
Taiwanese tech companies are also seeing stronger demand due to
exposure to the artificial intelligence ('AI') revolution. Mexico
also did well. The economy is performing strongly, helped by its
proximity to the US, as companies look to diversify and strengthen
their global supply chains by moving production closer to their
principal markets.
Overall, we have held a cautious
view around the potential risk of a slowdown in the US economy,
which would dampen global demand. However, we saw little sign of
this during the six-month review period. The US Federal Reserve
held interest rates steady as inflation pressures eased, and many
investors are now expecting rates to begin falling this
year.
Performance attribution
The Company's outperformance against
its Benchmark over the six months ended 31st January 2024 was
driven by stock selection in China and Hong Kong, Korea, Taiwan and
South Africa. The biggest drag on relative performance was the
portfolio's underweight to India, which outperformed the Benchmark
over the period.
Within China, not owning certain
internet and e-commerce stocks was helpful, as these stocks
sustained significant losses when the post-pandemic rebound in
Chinese consumption proved insipid, and investors revised down
their expectations about the economy's longer-term growth
prospects. These same factors also triggered declines in some of
the portfolio's Chinese consumer stocks, including Wuliangye (a distiller specialising in
the production of baiju, a Chinese liquor), JD.com (an e-commerce platform) and
Tingyi (a manufacturer of
noodles and drinks). Overall, however, our Chinese stocks performed
better on average than the benchmark, and thus enhanced relative
performance.
Outside China we saw strong
performance from names such as:
- Infosys and HCL Tech - Indian IT services stocks
have been rerating, partly helped by general positive sentiment in
the Indian market, and we like these companies due to their strong
franchises, attractive returns on equity and positive cash return
policies. For instance, Infosys aspires to return close to 90% of
free cashflow to shareholders via a combination of dividends and
buybacks.
- Taiwanese
semiconductor manufacturers Novatek and Realtek - These businesses performed
well thanks in part to the end of an inventory correction, which
allowed restocking to commence. Our positioning in these two names
illustrates the merit of our valuation discipline, as we acquired
exposure at what we believed to be attractive yield levels and
benefited from their subsequent share price recovery.
- Banco do Brasil - This low-priced,
state-owned Brazilian bank saw some rerating over the period. When
we met the management recently, we were impressed by the focus on
profitability, which allayed our general concerns regarding the
bank's public ownership. Dividends are also high on the
managements' agenda, which adds to the stock's appeal.
Portfolio changes
We build the portfolio from the
bottom up, based on our consistent stock selection process, which
incorporates analysis on each stock's return on equity, free cash
flow, and dividend policies. As mentioned above, we adopt a
disciplined approach to valuations. So, in effect, our approach
incorporates both quality and value.
Naturally, some areas within
emerging markets offer more investment opportunities than others,
and this results in tilts within the portfolio towards some sectors
and countries. From a sectoral viewpoint, we continue to find the
most attractive income opportunities within Consumer Staples,
Financials and Technology, so these remain the portfolio's three
key sector overweights, while historically, the portfolio is
usually underweight in Materials, Energy and
Industrials.
At the country level, portfolio
overweights include South Africa, Mexico and Taiwan. As with our
sector allocations, these country weightings are driven by the
individual stock opportunities we view as attractive from an income
investor's perspective. In contrast, our largest country
underweight remains India. This country's long-term growth
prospects are very positive and investor interest in the market
remains strong. However, valuations are high accordingly, which
make it difficult for us to find attractive income paying stocks,
albeit with some notable exceptions such as Infosys and HCL Tech,
mentioned above. The portfolio is modestly overweight China which
reflects this market's attractive valuations and improving dividend
outlook.
As ever, the portfolio changes we
implemented over the review period were mainly driven by individual
stock considerations. Recent purchases have included:
- Shoprite - We initiated a position in
this South African grocery retailer, as we like its strong
franchise and its competitive advantages versus its peers, as the
company has a policy of using efficiency gains to reduce prices.
This means it can continue to offer its customers good value. We
also like Shoprite's cash flow profile, which we expect will
support an attractive dividend stream for the portfolio.
- HDFC Bank - This high-quality Indian
financial name came under some selling pressure due in part to
uncertainties over the merger between the bank and HDFC Corp, a
non-bank financial company. We took this opportunity to add at an
attractive valuation.
- China Yangtze Power - We are always
mindful of the regulatory risks associated with emerging market
utility companies, but nonetheless, we view this Chinese utility
company as attractive. It offers relatively stable returns on
equity and cash flows, which translate into steady dividends - just
the kind of business we like to own.
Sales over the review period
included:
- Petronet LNG - We sold our position in
this state-owned, Indian LNG producer as a result of its plan to
make a large investment in a petrochemical facility. We were
concerned about both the size of this investment relative to the
company's current balance sheet, which has the potential to
adversely affect future dividends, and the fact that the investment
is not a core business.
- PZU - This Polish insurance company
re-rated due to an improvement in Polish stock market sentiment
following the election victory by a more EU-friendly political
alliance, which could help unlock EU funding for the country. We
trimmed the position on valuation grounds.
- Netease - Strong gains in this Chinese
internet gaming company reduced its dividend yield and raised other
valuation metrics such as the price/earnings ratio. We still like
the company's fundamentals, but we trimmed the position to reduce
the size of the exposure.
Dividends
Monitoring dividend delivery is
clearly essential for this portfolio, given its income focus, and
we are pleased to report that in general, portfolio companies
are paying dividends in line with our expectations. Looking ahead,
the two key determinants of portfolio dividend receipts will remain
the performance of the Chinese economy, and the ongoing, but
perhaps diminishing, possibility of a US economic downturn.
However, despite the near-term uncertainties generated by these two
issues, we are confident that the portfolio's long-term dividend
generating power remains intact.
As a reminder, emerging market
companies mainly determine their dividends using payout ratios
(i.e. paying a certain proportion of earnings) so the earnings
cycle is important in terms of the dividend companies pay in any
given year. This is one reason why we like to have a portfolio that
is diversified across countries and sectors, so we can better
manage these cycles to ensure a steady stream of portfolio
income.
Currency movements also impact
near-term dividend receipts, as the Company receives dividends from
portfolio companies in local currencies and pays out dividends in
sterling. All else being equal, a falling pound increases
revenue receipts from Emerging Markets, and vice versa.
Environmental, social and governance
We believe that the integration of
financially material environmental, social and governance ('ESG')
considerations into our investment process improves the quality of
our long-term investment decisions, and helps us build stronger,
more resilient portfolios. Each stock's financially material ESG
characteristics are considered at every stage of the
decision-making process, starting with fundamental research, where
our analysts incorporate financially material ESG considerations
into their analysis to gauge the duration of a business, the
quality of management and the risks posed to minority
shareholders.
As income investors in emerging
markets, we place particular emphasis on corporate governance, and
we draw a direct link between a company's dividend policy and the
quality of its governance. In our view, a company's
willingness to return cash to shareholders is a tangible and
positive governance indicator. We have engaged with many companies
on this issue over time, to understand their motivations and
capital allocation objectives. We also discuss the magnitude of
returns to shareholders and the motivations behind any split
between dividends and buybacks.
Outlook
At present we are focused on several
areas of interest. At the country level, low valuations in China
have created the opportunity for us to slowly increase portfolio
exposure to this market, since 2020. We are now modestly
overweight, but we intend to manage this exposure quite tightly, as
we recognise the risks and challenges of investment in this market,
especially the ongoing drag created by the property sector, and
escalating geopolitical risks. In Korea, policymakers are taking
their cue from developments in Japan, and increasing their efforts
to encourage companies to improve shareholders returns via
increased dividends and share buybacks. We view this as a generally
positive development which will drive up valuations and payout
ratios, which suits our income approach very well.
At the sector level, our technology
stocks have provided very good returns over the past few years,
more recently thanks in part to our holdings in companies set to
benefit from the AI revolution. We remain excited about the
opportunities unfolding in this sector which can offer exposure to
structural growth trends while also contributing to portfolio
income.
So, overall, we believe the
portfolio remains well-positioned to deliver a healthy level of
income to shareholders, while still participating in the ongoing
growth and capital gains available in emerging markets.
For and on behalf of
JPMorgan Asset Management
Investment Manager
Omar
Negyal
Isaac Thong
Portfolio Managers
3rd April 2024
INTERIM MANAGEMENT REPORT
The Company is required to make the
following disclosures in its interim report.
Principal Risks and Uncertainties
The principal and emerging risks and
uncertainties faced by the Company have not changed from those
reported in the Annual Report and Financial Statements for the year
ended 31st July 2023 and fall into the following broad categories:
investment; strategy; financial; operational and cybercrime;
accounting, legal and regulatory; political and economic; and
environmental, social and governance.
Related Parties Transactions
During the first six months of the
current financial year, no transactions with related parties have
taken place which have materially affected the financial position
or the performance of the Company during the period.
Going Concern
The Directors believe, having
considered the Company's investment objectives, risk management
policies, capital management policies and procedures, nature of the
portfolio and expenditure projections, that the Company has
adequate resources, an appropriate financial structure and suitable
management arrangements in place to continue in operational
existence for the foreseeable future and, more specifically, that
there are no material uncertainties pertaining to the Company that
would prevent its ability to continue in such operational
existence for at least 12 months from the date of the approval of
this half yearly financial report. In reaching that view, the
Directors have considered the impact of the ongoing Russia-Ukraine
and Hamas-Israel conflicts on the Company's financial, operational
position and market conditions. The Directors have also reviewed
the Company's compliance with debt covenants. In addition, the
Board noted the full support from 100% of voting shareholders for
the continuation vote at the Company's Annual General Meeting held
in November 2021 and does not anticipate any changes to these views
for the forthcoming Annual General Meeting in November 2024. For
these reasons, they consider it reasonable to continue to adopt the
going concern basis in preparing the financial
statements.
Directors' Responsibilities
The Board of Directors confirms
that, to the best of its knowledge:
(i) the condensed set of financial
statements contained within the half yearly financial report has
been prepared in accordance with FRS 104 'Interim Financial
Reports' and gives a true and fair view of the state of the affairs
of the Company and of the assets, liabilities, financial position
and net return of the Company, as at 31st January 2024, as required
by the UK Listing Authority Disclosure Guidance and Transparency
Rules ('DTR') 4.2.4R; and
(ii) the
interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R.
In order to provide these
confirmations, and in preparing these financial statements, the
Directors are required to:
• select suitable
accounting policies and then apply them consistently;
• make judgements and
accounting estimates that are reasonable and prudent;
• state whether
applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
• prepare the financial
statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business;
and the Directors confirm that they
have done so.
For and on behalf of the
Board
Elisabeth Scott
Chair
3rd April 2024
CONDENSED STATEMENT OF COMPREHENSIVE
INCOME
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
(Losses)/gains on
investments
|
|
|
|
|
|
|
|
|
|
held at fair value
through
|
|
|
|
|
|
|
|
|
|
profit or loss
|
-
|
(13,657)
|
(13,657)
|
-
|
31,809
|
31,809
|
-
|
21,726
|
21,726
|
Net foreign currency
|
|
|
|
|
|
|
|
|
|
(losses)/gains
|
-
|
(185)
|
(185)
|
-
|
917
|
917
|
-
|
1,845
|
1,845
|
Income from investments
|
6,919
|
-
|
6,919
|
7,027
|
-
|
7,027
|
20,604
|
348
|
20,952
|
Interest receivable and
similar
|
|
|
|
|
|
|
|
|
|
income
|
142
|
-
|
142
|
133
|
-
|
133
|
236
|
-
|
236
|
Gross return/(loss)
|
7,061
|
(13,842)
|
(6,781)
|
7,160
|
32,726
|
39,886
|
20,840
|
23,919
|
44,759
|
Management fee
|
(467)
|
(1,090)
|
(1,557)
|
(457)
|
(1,066)
|
(1,523)
|
(936)
|
(2,185)
|
(3,121)
|
Other administrative
expenses
|
(422)
|
-
|
(422)
|
(433)
|
-
|
(433)
|
(735)
|
-
|
(735)
|
Net
return/(loss) before finance
|
|
|
|
|
|
|
|
|
|
costs and taxation
|
6,172
|
(14,932)
|
(8,760)
|
6,270
|
31,660
|
37,930
|
19,169
|
21,734
|
40,903
|
Finance costs
|
(355)
|
(830)
|
(1,185)
|
(264)
|
(615)
|
(879)
|
(582)
|
(1,356)
|
(1,938)
|
Net
return/(loss) before taxation
|
5,817
|
(15,762)
|
(9,945)
|
6,006
|
31,045
|
37,051
|
18,587
|
20,378
|
38,965
|
Taxation
|
(558)
|
(158)
|
(716)
|
(380)
|
(120)
|
(500)
|
(1,679)
|
(99)
|
(1,778)
|
Net
return/(loss) after taxation
|
5,259
|
(15,920)
|
(10,661)
|
5,626
|
30,925
|
36,551
|
16,908
|
20,279
|
37,187
|
Return/(loss) per share (note
3)
|
1.78p
|
(5.38)p
|
(3.60)p
|
1.90p
|
10.42p
|
12.32p
|
5.70p
|
6.84p
|
12.54p
|
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 prepared
under guidance issued by the Association of Investment
Companies.
The net return after taxation
represents the profit or loss for the period and also the total
comprehensive income.
CONDENSED STATEMENT OF CHANGES IN
EQUITY
|
Called up
|
|
Capital
|
|
|
|
|
|
share
|
Share
|
redemption
|
Other
|
Capital
|
Revenue
|
|
|
capital
|
premium
|
reserve
|
reserve1,2
|
reserve2
|
reserve2
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Six
months ended 31st January 2024 (Unaudited)
|
|
|
|
|
|
|
|
At
31st July 2023
|
2,973
|
222,582
|
13
|
99,644
|
93,489
|
19,145
|
437,846
|
Repurchase of shares into
Treasury
|
-
|
-
|
-
|
(1,374)
|
-
|
-
|
(1,374)
|
Net (loss)/return
|
-
|
-
|
-
|
-
|
(15,920)
|
5,259
|
(10,661)
|
Dividends paid in the period (note
4)
|
-
|
-
|
-
|
-
|
-
|
(9,768)
|
(9,768)
|
At
31st January 2024
|
2,973
|
222,582
|
13
|
98,270
|
77,569
|
14,636
|
416,043
|
Six
months ended 31st January 2023 (Unaudited)
|
|
|
|
|
|
|
|
At 31st July 2022
|
2,973
|
222,582
|
13
|
100,092
|
73,210
|
17,665
|
416,535
|
Repurchase of shares into
Treasury
|
-
|
-
|
-
|
(222)
|
-
|
-
|
(222)
|
Net return
|
-
|
-
|
-
|
-
|
30,925
|
5,626
|
36,551
|
Dividends paid in the period (note
4)
|
-
|
-
|
-
|
-
|
-
|
(9,496)
|
(9,496)
|
At
31st January 2023
|
2,973
|
222,582
|
13
|
99,870
|
104,135
|
13,795
|
443,368
|
Year
ended 31st July 2023 (Audited)
|
|
|
|
|
|
|
|
At
31st July 2022
|
2,973
|
222,582
|
13
|
100,092
|
73,210
|
17,665
|
416,535
|
Repurchase of shares into
Treasury
|
-
|
-
|
-
|
(448)
|
-
|
-
|
(448)
|
Net return
|
-
|
-
|
-
|
-
|
20,279
|
16,908
|
37,187
|
Dividends paid in the year (note
4)
|
-
|
-
|
-
|
-
|
-
|
(15,428)
|
(15,428)
|
At
31st July 2023
|
2,973
|
222,582
|
13
|
99,644
|
93,489
|
19,145
|
437,846
|
1 The balance of the share premium was
cancelled on 20th October 2010 and transferred to the 'other
reserve'.
2 These reserves form the distributable
reserve of the Company and may be used to fund distributions to
investors.
CONDENSED STATEMENT OF FINANCIAL
POSITION
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
At
|
At
|
At
|
|
31st
January
|
31st
January
|
31st July
|
|
2024
|
2023
|
2023
|
|
£'000
|
£'000
|
£'000
|
Fixed assets
|
|
|
|
Investments held at fair value through profit or
loss
|
446,918
|
474,971
|
462,662
|
Current assets
|
|
|
|
Debtors
|
561
|
1,150
|
3,392
|
Cash and cash equivalents
|
876
|
3,417
|
3,475
|
|
1,437
|
4,567
|
6,867
|
Current liabilities
|
|
|
|
Creditors: amounts falling due
within one year
|
(16,321)
|
(19,742)
|
(31,559)
|
Net
current liabilities
|
(14,884)
|
(15,175)
|
(24,692)
|
Total assets less current liabilities
|
432,034
|
459,796
|
437,970
|
Non
current liabilities
|
|
|
|
Creditors: amounts falling due
after more than one year
|
(15,706)
|
(16,246)
|
-
|
Provision for capital gains
tax
|
(285)
|
(182)
|
(124)
|
Net
assets
|
416,043
|
443,368
|
437,846
|
Capital and reserves
|
|
|
|
Called up share capital
|
2,973
|
2,973
|
2,973
|
Share premium
|
222,582
|
222,582
|
222,582
|
Capital redemption reserve
|
13
|
13
|
13
|
Other reserve
|
98,270
|
99,870
|
99,644
|
Capital reserve
|
77,569
|
104,135
|
93,489
|
Revenue reserve
|
14,636
|
13,795
|
19,145
|
Total shareholders' funds
|
416,043
|
443,368
|
437,846
|
Net
asset value per share (note
5)
|
140.9p
|
149.5p
|
147.7p
|
CONDENSED STATEMENT OF CASH
FLOWS
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st
January
|
31st
January
|
31st July
|
|
2024
|
20231
|
2023
|
|
£'000
|
£'000
|
£'000
|
Cash
flows from operating activities before finance
costs
|
|
|
|
and taxation
|
|
|
|
Net (loss)/return before finance
costs and taxation
|
(8,760)
|
37,930
|
40,903
|
Adjustment for:
|
|
|
|
Net losses/(gains) on investments
held at fair value
|
|
|
|
through profit or loss
|
13,657
|
(31,809)
|
(21,726)
|
Net foreign currency
losses/(gains)
|
185
|
(917)
|
(1,845)
|
Dividend income
|
(6,917)
|
(7,027)
|
(20,943)
|
Interest income
|
(134)
|
(117)
|
(216)
|
Scrip Dividends received as
income
|
(2)
|
-
|
(9)
|
Realised (gains)/losses on foreign
exchange transactions
|
(109)
|
106
|
4
|
Realised exchange gains on
liquidity fund
|
220
|
409
|
70
|
Decrease/(increase) in accrued income
and other debtors
|
12
|
(828)
|
(7)
|
(Decrease) in accrued
expenses
|
(93)
|
(303)
|
(221)
|
Net
cash outflow from operations before dividends and
interest
|
(1,941)
|
(2,556)
|
(3,990)
|
Dividends received
|
8,451
|
9,974
|
20,571
|
Interest received
|
134
|
123
|
222
|
Overseas withholding tax
recovered
|
51
|
159
|
-
|
Indian capital gains tax
recovered/(paid)
|
3
|
(19)
|
(56)
|
Net
cash inflow from operating activities
|
6,698
|
7,681
|
16,747
|
Purchases of investments
|
(43,505)
|
(72,177)
|
(117,620)
|
Sales of investments
|
46,356
|
74,088
|
117,735
|
Net
cash inflow from investing activities
|
2,851
|
1,911
|
115
|
Dividends paid
|
(9,768)
|
(9,496)
|
(15,428)
|
Repurchase of shares into
Treasury
|
(1,248)
|
(222)
|
(448)
|
Repayment of loan
|
-
|
(16,614)
|
(16,613)
|
Drawdown of loan
|
-
|
16,614
|
16,613
|
Interest paid
|
(1,159)
|
(766)
|
(1,786)
|
Net
cash outflow from financing activities
|
(12,175)
|
(10,484)
|
(17,662)
|
Decrease in cash and cash equivalents
|
(2,626)
|
(892)
|
(800)
|
Cash and cash equivalents at start of
period/year
|
3,475
|
4,287
|
4,287
|
Exchange movements
|
27
|
22
|
(12)
|
Cash
and cash equivalents at end of period/year
|
876
|
3,417
|
3,475
|
Cash
and cash equivalents consist of:
|
|
|
|
Cash and short term
deposits
|
229
|
1,155
|
1,291
|
Cash held in JPMorgan US Dollar
Liquidity Fund
|
647
|
2,262
|
2,184
|
Total
|
876
|
3,417
|
3,475
|
1 For the six months ended 31st January
2023, the presentation of the Cash Flow Statement, as permitted
under FRS 102, has been changed so as to present the
'reconciliation of net return before finance costs and taxation' to
'net cash inflow from operating activities' on the face of the Cash
Flow Statement. Previously, this was shown by way of note to the
Cash Flow Statement. Interest paid has also been reclassified to
financing activities, previously shown under operating activities,
as this relates to the loans drawndown. 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 CHANGE IN NET
DEBT
Analysis of change in net debt
|
As at
|
|
Other
|
As at
|
|
31st July
|
|
non-cash
|
31st
January
|
|
2023
|
Cash flows
|
charges
|
2024
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Cash
and cash equivalents
|
|
|
|
|
Cash
|
1,291
|
(1,062)
|
-
|
229
|
Cash equivalents
|
2,184
|
(1,564)
|
27
|
647
|
|
3,475
|
(2,626)
|
27
|
876
|
Borrowings
|
|
|
|
|
US$20m revolving rate loan with
Mizuho maturing 2024
|
(15,544)
|
-
|
(161)
|
(15,705)
|
US$20m revolving rate loan with ING
maturing 2025
|
(15,544)
|
-
|
(162)
|
(15,706)
|
|
(31,088)
|
-
|
(323)
|
(31,411)
|
Total net debt
|
(27,613)
|
(2,626)
|
(296)
|
(30,535)
|
NOTES TO THE FINANCIAL
STATEMENTS
For the six months ended 31st
January 2024.
The Company is a listed public
limited company incorporated in England and Wales. The registered
office is detailed in the Half Year Report.
1. Financial statements
The information contained within the
condensed financial statements in the Half Year Report has not been
audited or reviewed by the Company's
auditor.
The figures and financial
information for the year ended 31st July 2023 are extracted from
the latest published financial statements of the Company and do not
constitute statutory accounts for that year. Those financial
statements have been delivered to the Registrar of Companies and
included the report of the auditor which was unqualified and did
not contain a statement under either section 498(2) or 498(3)
of the Companies Act 2006.
2. Accounting
policies
The condensed financial statements
are prepared 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.
FRS 104, 'Interim Financial
Reporting', issued by the Financial Reporting Council ('FRC') in
March 2015, and updated in March 2018, has been applied in
preparing this condensed set of financial statements for the six
months ended 31st January 2024.
All of the Company's operations are
of a continuing nature.
The accounting policies applied to
this condensed set of financial statements are consistent with
those applied in the financial statements for the year ended 31st
July 2023.
3. (Loss)/return per
share
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
|
£'000
|
£'000
|
£'000
|
Return per share is based on the
following:
|
|
|
|
Revenue return
|
5,259
|
5,626
|
16,908
|
Capital (loss)/return
|
(15,920)
|
30,925
|
20,279
|
Total (loss)/return
|
(10,661)
|
36,551
|
37,187
|
Weighted average number of shares in
issue during
|
|
|
|
the period
|
295,815,677
|
296,726,127
|
296,678,384
|
Revenue return per share
|
1.78p
|
1.90p
|
5.70p
|
Capital (loss)/return per
share
|
(5.38)p
|
10.42p
|
6.84p
|
Total (loss)/return per share
|
(3.60)p
|
12.32p
|
12.54p
|
4. Dividends paid
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
|
£'000
|
£'000
|
£'000
|
2023 fourth interim dividend of 2.3p
(2022: 2.2p)
|
6,813
|
6,529
|
6,530
|
2024 first interim dividend paid of
1.0p (2023: 1.0p)
|
2,955
|
2,967
|
2,966
|
2023 second interim dividend paid of
1.0p
|
n/a
|
n/a
|
2,966
|
2023 third interim dividend paid of
1.0p
|
n/a
|
n/a
|
2,966
|
Total dividends paid in the period/year
|
9,768
|
9,496
|
15,428
|
All dividends paid and declared in
the six months period to 31st January 2024 have been funded from
the revenue reserve.
A second interim dividend of 1.0p
per share, amounting to £2,944,000 has been declared and will be
paid on 19th April 2024 to shareholders on the register on the
record date of 8th March 2024 in respect of the year ending 31st
July 2024.
5.
Net asset value per share
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
Net assets (£'000)
|
416,043
|
443,368
|
437,846
|
Number of shares in issue
|
295,372,588
|
296,657,060
|
296,482,060
|
Net
asset value per share
|
140.9p
|
149.5p
|
147.7p
|
6. Fair valuation of investments
The fair value hierarchy disclosures
required by FRS 102 are given below:
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Level 1
|
446,892
|
-
|
474,943
|
-
|
462,636
|
-
|
Level 31
|
26
|
-
|
28
|
-
|
26
|
-
|
Total value of investments
|
446,918
|
-
|
474,971
|
-
|
462,662
|
-
|
1 The Level 3 investment relates to the
Company's holdings in Russian stocks.
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
ended
|
Six months
ended
|
Year ended
|
|
31st January
2024
|
31st January
2023
|
31st July
2023
|
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Level 3
|
|
|
|
|
|
|
Opening balance
|
26
|
26
|
28
|
28
|
28
|
28
|
Change in fair value of investment
during the year1
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
Closing balance
|
26
|
26
|
28
|
28
|
26
|
26
|
1 For these Russian stocks a valuation
method has been applied to the 25th February 2022 close of day
prices (i.e.: when market was still trading normally) which have
then been tapered at 99% haircut for valuation purposes.
JPMORGAN FUNDS LIMITED
4th April 2024
For further information, please
contact:
Emma Lamb
For and on behalf of
JPMorgan Funds Limited
0800 20 40 20 or +44 1268 44 44
70
ENDS
A copy of
the half year report will be submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The half
year report will also shortly be available on the Company's website
at www.jpmglobalemergingmarketsincome.co.uk
where up to date information on the Company,
including daily NAV and share prices, factsheets and portfolio
information can also be found.