TIDMJUKG
RNS Number : 0964I
Jupiter UK Growth Inv Trust PLC
30 March 2020
Jupiter UK Growth Investment Trust PLC (the 'Company')
Legal Entity Identifier: 549300QSBKGE8ZO08A97
Half Yearly Financial Report for the six months to 31 December
2019
Chairman's statement
I present the interim report for the Jupiter UK Growth
Investment Trust PLC for the six months to 31 December 2019. The UK
stock market rose over the review period, driven by greater clarity
regarding Brexit and international developments, including central
bank cuts in interest rates and optimism over a "phase one" trade
deal between the US and China.
These positive trends continued into early 2020, but have since
been completely overshadowed by the dramatic impact of the
unfolding Covid-19 coronavirus pandemic, which has eviscerated the
stock market and produced an almost unprecedentedly steep and
sudden collapse in investor confidence on a global scale.
In little over three weeks, the FTSE All-Share index has fallen
by 16.1% and the pound has lost 6.3% of its value against the US
Dollar, while bond yields have fallen to near record lows once
more. As at 24 March 2020 the Trust's share price had fallen 41.7%
since the beginning of the year. These share price and bond yield
declines have been echoed in every major market around the world.
Despite a succession of announcements of impressively large and
increasingly radical counter-measures by central banks and
governments designed to calm the markets, at the time of writing
there has been no let-up in the global market collapse.
The scale and speed of the downturn in markets has inevitably
led to fears that we may be heading into a global recession, a
renewed liquidity crisis for many financial institutions and the
possible bankruptcy of thousands of companies. In normal times,
financial markets set prices on the basis of future expectations
and until there is evidence that the spread of the virus is being
successfully contained, so that economic activity can revive after
the sudden shock of the pandemic, it is clearly impossible to make
any firm or positive statements about the outlook.
The evidence from past crises of this kind is that financial
markets do always recover over time, once there is greater
visibility of an end to the driving forces behind the disruption.
In the case of the coronavirus, that will come when it starts to
become apparent that the disease is on the way to being contained
and economic activity has resumed. Even though the authorities'
understanding of the virus is building day by day with experience,
th at realisation may take some time to crystallise. Further out
there is the hope that an effective vaccine can be developed and
produced in sufficient quantities and sufficiently rapidly to
prevent a second wave of infections.
How far and how quickly the markets recover at that point will
depend not only on the path of economic data but on the prices at
which assets are then selling, the perceived effectiveness of the
tsunami of counter-measures now in place (or being planned), and -
not least - on investors' appetite for risk. In the meantime, we
can only aspire to stay calm and monitor closely the extent of the
viral and financial contagion.
That this pandemic will also create investment opportunities in
time is not in doubt. Any eventual rebound in equity markets is
likely to favour funds that have a high conviction growth-biased
strategy similar to the one that Jupiter UK Growth has adopted in
recent years, albeit with poor delivery. The challenge for our
Trust is to take advantage of these opportunities under our new
manager.
Investment performance
Along with global equity markets, the UK stock market rose over
the second half of 2019. Larger companies, many of which have
sizeable overseas earnings, were supported by a weak pound as fears
of a no-deal Brexit weighed on the currency for much of the period.
By late July, the FTSE 100 Index had reached a one year high, but
fears of a global recession caused a sharp sell-off in August. UK
equities later recovered, with the FTSE 100 re-testing its July
highs in late December.
The FTSE 250 Index of more domestically-focused mid-sized
companies performed even better, closing the year at a record high.
In October, domestic stocks surged on news that the UK had secured
an amended withdrawal agreement with the EU. The Conservative
Party's decisive general election victory in December further
boosted sentiment towards domestically focused UK equities,
although a sharp rally in the British pound weighed on the value of
multinational companies' overseas earnings.
The combination of these factors meant that the company's
investments performed substantially better in the second half of
the period than in the first. Unfortunately, in spite of the
improving market environment, the performance of the company was
adversely affected by two holdings in particular. One was Thomas
Cook which collapsed into receivership during the period. The
second was Sirius Minerals, which was unable to secure funding for
the latest phase of its mining project in North Yorkshire, and was
subsequently rescued by Anglo-American in early 2020 at a price of
5.5p per share. In the six months to 31 December 2019 the holding
in Sirius Minerals was written down by GBP2.1m.
Despite these reverses, during the period the share price and
NAV per share increased by 11.7% and 7.8% respectively (both
including dividends) compared with a total return of 5.5% for the
FTSE All-Share index.
Dividend
An interim dividend of 8.5p per share was paid on 22 November
2019 to shareholders shown on the register of shareholders on 18
October 2019. The board has in the past stated its ambition to
maintain the dividend at the level paid in the preceding financial
year and, if justified by performance, to grow its dividend over
time. With regard to the current year, in view of the uncertainty
regarding dividend receipts from some of our investee companies, we
will keep our dividend under review while noting that we have
surplus revenue reserves which can be used to cover some dividend
payments.
Gearing
As at 31 December 2019, the company's net gearing level (being
the amount of drawn down bank debt, less cash held on the balance
sheet pending investment on that date, as a proportion of the
company's total assets) was 8%. The company's investment manager
would normally expect to increase gearing at times of low
valuations while decreasing gearing in stronger markets.
Change of investment manager
On 18(th) February the board announced that it had reached an
agreement with Jupiter for Richard Buxton to assume lead fund
management responsibility for the company. Richard will be
supported by Errol Francis and Ed Meier who have worked with
Richard for many years.
This follows the announcement by the board on 4 October 2019
that the company had decided to review its investment strategy
following a sustained period of poor performance. This was a
comprehensive exercise which considered various alternatives,
including the adoption of an alternative manager from within
Jupiter, the appointment of another fund management company as
investment manager and the liquidation of the company together with
a rollover into another listed investment company.
The conclusion to appoint Richard Buxton meets the board's
strategic objectives and follows the announcement by Jupiter on 17
February 2020 regarding its proposed acquisition of Merian Global
Investors Limited ("Merian"). Richard will assume lead fund
management responsibility following approval of the transaction by
Jupiter's shareholders and regulators which is expected to take
place before the end of April. If the acquisition is not approved
we will write to shareholders making recommendations as to the
future management of the trust.
Richard Buxton joined Merian as head of UK equities and manager
of the Merian UK Alpha Fund in 2013. Richard was previously at
Schroders, where he managed the Schroder UK Alpha Plus Fund and the
Schroder UK Growth Fund plc, an investment trust. Prior to
Schroders he spent more than a decade at Baring Asset Management,
having commenced his investment career in 1985 at Brown Shipley
Asset Management.
Richard has worked with Errol and Ed for over 14 years. In
respect of their UK Alpha strategy which will be adopted by the
company, the team utilises a high-conviction approach typically
holding 30-40 stocks, combining fundamental research with a
patient, long-term time horizon. The team principally invests in UK
large cap companies but also selectively takes mid-cap exposures.
Following this approach, the team has a strong long-term
performance record with 10 year cumulative total returns to 31(st)
December 2019 of 145.4%, which compares with the FTSE All-Share
Index return of 118.3%.
There will be no change to the investment objective or policy as
a result of the change of lead fund manager. The company's
investment objective is to deliver capital appreciation from
holding a portfolio of predominantly listed investments. While
there are no specific individual stock, sector, geographical or
market capitalisation limitations or weightings applicable, the
manager will invest principally in companies which are listed in
and/or which undertake a significant proportion of their business
in the United Kingdom.
As part of these new arrangements, the board has agreed with
Jupiter that the company will not be charged a base management fee
for the period from 1 January 2020 to 31 December 2020. Based on
the current net asset value this is an estimated saving of c.
GBP135,000 over that period.
The company will continue its stated policy of using share
buybacks and new issues of shares to ensure that, in normal market
conditions, the market price of its shares will closely track the
net asset value per share. The board believes that this commitment
to active management of discount and premium produces improved
liquidity for both buyers and sellers of the company's shares.
The future
In these turbulent times, when the outlook remains so uncertain,
there is only limited comfort to be taken from statements about
future prospects. The board believes that Richard Buxton, whom we
decided to appoint as our new investment manager, and who has
managed money through both the two worst bear markets of the last
30 years, has the necessary experience and judgement to achieve
significant improvement in the Trust's performance, consistent with
his long-term performance record.
Until his expected arrival at the end of April we will be
monitoring the portfolio closely and have put in place interim
arrangements with Jupiter intended to enable us to take advantage
of opportunities that arise as a result of any dramatic change in
current market conditions.
The board and the investment manager remain committed to growing
the company over time, recognising that the net assets,
particularly after the recent dramatic market fall which has
reduced our market capitalisation to GBP28m at 24 March 2020, are
now well below the minimum size preferred for prospective
investment by many institutional and wealth management investors.
We have already raised this serious issue with Richard Buxton and
will work with him and his colleagues to address it once the new
arrangements are in place.
While we have made our decision about the future management of
the Trust, we are also conscious that these are exceptional times
in the financial markets. Our intention therefore is to keep our
management arrangements under review over the coming months while
the economic and market backdrop evolves and to remain cognisant of
our reduced market capitalisation. If circumstances demand a change
of course, we will not hesitate to make that change if we judge
that to be in the best interests of shareholders as a whole.
Tom Bartlam
Chairman
30 March 2020
Financial highlights for the six months to
31 December 2019
Capital performance
31 December 30 June
2019 2019
Total assets less current liabilities
(GBP'000) 48,498 49,402
Ordinary share performance
31 December 30 June
2019 2019 % Change
Mid market price (pence) 302.00 278.00 +8.6
Mid market price (with dividends
added back) (pence) 310.50 +11.7
Net asset value per share (pence) 307.32 292.90 +4.8
Net asset value per share (with
dividends added back) (pence) 315.82 +7.8
FTSE All-Share Index Total Return
(Bloomberg: ASXTR) 7,837.96 7,430.61 +5.5
Discount to net asset value (%) (1.7) (5.1)
Ongoing charges ratio (%) excluding
finance costs 1.24 1.15 +7.8
Six months
Revenue performance to Six months to
31.12.19 31.12.18 % Change
Net revenue return after taxation
(GBP'000) 628 689 -8.9
Revenue earnings per ordinary share
(pence) 3.9 3.7 +5.4
Dividends declared
Rate per Announcement XD Payment
share (net) date date Date
Interim for
the year ended 22 November
30 June 2019 8.5p 4 October 2019 17 October 2019 2019
Fifteen year history to 31 December 2019
Total
Return
(net asset
Net value with
asset dividends
Total Earnings Dividend value added back)
assets less per per per per
current ordinary ordinary ordinary ordinary
Year ended liabilities share share* share* Share
30 June GBP'000 p p p %
2005 42,477 1.30 1.60 139.60 +17.2
2006 53,743 1.72 1.60 177.67 +26.6
2007 55,985 4.78 3.60 241.06 +35.4
2008 49,415 6.60 4.10 221.27 -7.3
2009 37,868 7.78 5.50 173.51 -19.3
2010 43,187 6.98 7.75 203.40 +21.0
2011 50,552 10.54 8.35 250.60 +27.5
2012 46,032 4.34 8.35 227.80 -5.8
2013(restated)* 54,683 4.54 8.35 274.30 +24.1
2014 56,603 6.03 4.80 297.10 +11.1
2015 54,099 6.67 6.40 312.90 +7.5
2016 40,052 8.27 7.00 265.35 -13.2
2017 45,224 7.69 7.00 333.99 +26.7
2018 65,192** 7.87 7.00 340.51 +4.0
2019 49,902 8.64 8.50 292.91 -11.9
6 months to 31 December
2019 48,498 3.89 0.00 307.32 +7.8
* Adjusted for five for one stock split in 2013.
** Total assets increased pursuant to the rollover of Jupiter
Dividend & Growth Trust PLC.
Investment adviser's review for the six months to 31 December
2019
Market background
The UK equity market rose over the six month period. While
international developments helped to support the advance to 31
December 2019 - central banks reduced interest rates and there was
growing optimism over a "phase one" trade deal between the US and
China - domestic policies increasingly dominated investor
sentiment. New Prime Minister Boris Johnson's "do or die" approach
to Brexit led to fears that the UK would crash out of the European
Union ('EU') without a deal on 31 October, causing global investors
initially to shun both the UK equity market and the British pound.
However, with the Brexit deadline only days away, UK equities were
boosted when Boris Johnson unexpectedly secured an amended
agreement with the EU. Unable to get House of Commons' backing for
the deal, the prime minister asked the EU for a further extension
to Article 50. The parliamentary impasse was only resolved in
December when a general election gave the Conservative Party a very
sizeable majority that exceeded most commentators' expectations.
Parliament subsequently passed into law that the UK will leave the
EU on 31 January 2020.
After trading in a relatively narrow range for much of the
period, UK stocks surged on the election result. Sterling also rose
sharply. Cheap, domestically-focused, stocks such as banks and
housebuilders rallied the most, significantly outperforming more
highly-valued global stocks as the strength of Sterling weighed on
the overseas earnings of larger, multinational companies. Utility
stocks, and companies in other industries that had been under
threat of renationalisation, also rebounded.
Performance review
Over the six months to 31 December 2019, the company's share
price returned 11.7% and NAV returned 7.8% (both including
dividends) compared to a total return of 5.5% for the FTSE
All-Share Index. The FTSE 250 Index, which tends to be more
domestically-focused, outperformed the more multinational FTSE 100
Index by a substantial margin (14.1% vs 3.7%) as UK domestic stocks
bounced after the revamped deal with the EU was announced in
October, and again, after the general election result. Sterling
also strengthened against the US Dollar during the period, boosting
domestic and importing companies in relation to
international/exporters. These factors were a significant boost for
the company's relative performance as the company has a significant
overweighting towards domestic names.
On a stock level, the largest individual contributor to relative
returns was PureTech Health. The biotech investment platform
benefited from the surging share price of a listed subsidiary,
Karuna Therapeutics, which announced positive drug testing results
for schizophrenia medication KarXT.
Elsewhere IAG - owner of airline brands British Airways and
Iberia - strengthened, as shares recovered from the lowest
valuation that IAG or its predecessor British Airways had seen in
the last 30 years. IAG continued to generate strong cashflows
despite a disruptive summer and some upward pressure on its fuel
costs. In November, IAG said it had agreed to buy Spanish airline
Air Europa for EUR1bn as it seeks to open up the South American
transatlantic market and turn Madrid into Europe's next hub
airport. December brought further good news when British Airways
pilots backed a revised pay offer, ending the threat of further
strikes.
Other winners during the period included WH Smith which
announced an acquisition to expand its travel retail operations in
North America and reported continued strong trading in its UK
travel business. Meanwhile, ITV was a beneficiary of positive
advertising revenue growth following the success of TV shows such
as Love Island and its coverage of the Rugby World Cup. ITV has
also launched a new streaming service, Britbox, in conjunction with
the BBC and Channel 4 which opens up an exciting new revenue
stream.
On the negative side, Sirius Minerals was the largest stock
specific detractor from the company's relative returns. The
fertilizer developer is developing a polyhalite mine in Yorkshire,
but announced it was not able to proceed with an anticipated $500m
high-yield bond offering. The bond was needed to unlock a $2.5bn
credit facility from JP Morgan that would fully fund the project
through to completion. Sirius decided to slow down certain elements
of the construction project to give itself time to explore other
options. In January 2020, Sirius received and recommended a
takeover bid from Anglo-American, but the uncertainty meant that it
was a significant drag on the company's relative returns during the
period under review. The company has since accepted a cash offer of
5.5 pence per share.
Thomas Cook was another notable negative. The holiday operator
finally collapsed into liquidation in September after the failure
of various rescue attempts and recapitalisations. We engaged with
the senior management of Thomas Cook on numerous occasions to
express concerns about the issues the company was facing and to
explore possible solutions to restore some value to the share
price, most notably the potential sale of the airline. Those
discussions did not produce the desired outcome, causing us to
reduce the company's holding significantly during the third quarter
of 2019, to what was a very modest position (0.15%) when the shares
were finally suspended. The liquidation process, which might take
years to complete, is ongoing with no recent updates from
liquidators at the time of writing. We do not expect any returns
from this stock and it is therefore valued at nil.
Outlook
The UK entered 2020 on a more positive footing following the
resolution of the uncertainty surrounding Brexit and the strength
of the global economy. However, any optimism about the outlook was
demolished by the emergence and spread of the Covid-19 virus. What
started out as a local issue in China was declared a pandemic by
the World Health Organisation on 11th March with rapidly growing
infection rates in multiple countries. In order to contain the
spread of the virus, governments around the world have implemented
policies designed to dramatically restrict the movement of citizens
which has led to a collapse in economic activity. The UK, along
with all other developed countries, will almost certainly go into a
recession later this year. The UK government's response to the
economic situation has been unprecedented in modern times, offering
grants to companies to continue to pay the wages of employees who
have been furloughed, deferring VAT payments by all companies for
one quarter and providing business rates holidays for the worst
affected sectors. The aggregate value of these measures is
GBP330bn. The Government has also provided a GBP30bn fiscal
stimulus package while the Bank of England has reduced interest
rates to an all-time low of 0.1%, prompting a fall in Sterling to
its lowest level against the US Dollar since 1985.
The UK equity market, like all other major equity markets, has
fallen by more than 20% over the last few weeks and we are
therefore, technically, in a bear market. As at 24 March 2020, the
FTSE All-Share Index had fallen by 28.5% since the start of the
year while the more domestically-facing FTSE 250 Index had fallen
by 34.9%. The NAV per share of the Company had fallen by 41.0% over
the same period, reflecting the domestic orientation of the
portfolio.
In periods such as this, the investment focus should be on calm
evaluation of the fundamental strengths of each company in the
portfolio. We have engaged via telephone and video-conference with
the management teams of almost all our holdings to assess balance
sheet strength and to understand contingency plans to address the
consequences of the unfolding crisis. We have been stress-testing
our holdings to ensure they could get through an extended period
with no revenues. We are gradually adapting these stress tests as
we get greater clarity on government measures and on companies' own
actions including deferring rent payments, postponing dividends
where necessary and tapping additional sources of liquidity. The
situation continues to evolve rapidly and many share prices remain
extremely volatile. We have reduced the gearing of the Trust and
will continue to adjust position sizes of individual holdings as
necessary to reflect both market moves and our risk assessment of
each company .
Steve Davies
Fund Manager
Jupiter Asset Management Limited
Investment adviser
30 March 2020
Investment portfolio as at 31 December 2019
Market
value Percentage
Company GBP'000 of portfolio
------------------------------------ ------- ------------
PureTech Health 3,235 6.2
------------------------------------ ------- ------------
Experian 2,729 5.2
------------------------------------ ------- ------------
TalkTalk Telecom Group 2,265 4.3
------------------------------------ ------- ------------
Legal & General Group 2,236 4.3
------------------------------------ ------- ------------
WH Smith 2,221 4.2
------------------------------------ ------- ------------
Lloyds Banking Group 2,170 4.1
------------------------------------ ------- ------------
Melrose Industries 2,094 4.0
------------------------------------ ------- ------------
Manchester United 'A' 2,049 3.9
------------------------------------ ------- ------------
ITV 2,000 3.8
------------------------------------ ------- ------------
Barclays 1,997 3.8
------------------------------------ ------- ------------
Ferrari 1,978 3.8
------------------------------------ ------- ------------
International Consolidated Airlines
Group 1,913 3.6
------------------------------------ ------- ------------
Yum China Holdings 1,848 3.5
------------------------------------ ------- ------------
DFS Furniture 1,835 3.5
------------------------------------ ------- ------------
Avast 1,813 3.5
------------------------------------ ------- ------------
Inchcape 1,812 3.4
------------------------------------ ------- ------------
Taylor Wimpey 1,801 3.4
------------------------------------ ------- ------------
Dixons Carphone 1,729 3.3
------------------------------------ ------- ------------
Royal Bank of Scotland Group 1,715 3.3
------------------------------------ ------- ------------
Cineworld Group 1,586 3.0
------------------------------------ ------- ------------
Howden Joinery Group 1,514 2.9
------------------------------------ ------- ------------
Prudential 1,499 2.9
------------------------------------ ------- ------------
Diageo 1,409 2.7
------------------------------------ ------- ------------
Arrow Global Group 1,279 2.4
------------------------------------ ------- ------------
Liberty Media Corp-Liberty Formula
One 'C' 951 1.8
------------------------------------ ------- ------------
Virgin Money UK 921 1.8
------------------------------------ ------- ------------
Angle 815 1.6
------------------------------------ ------- ------------
Ashtead Group 690 1.3
------------------------------------ ------- ------------
Sirius Minerals 661 1.3
------------------------------------ ------- ------------
Berkeley Group Holdings 507 1.0
------------------------------------ ------- ------------
Countrywide 330 0.6
------------------------------------ ------- ------------
Ludgate 181 (Jersey)* 189 0.4
------------------------------------ ------- ------------
Electrocomponents 189 0.4
------------------------------------ ------- ------------
Hays 169 0.3
------------------------------------ ------- ------------
Spirent Communications 148 0.3
------------------------------------ ------- ------------
Consort Medical 102 0.2
------------------------------------ ------- ------------
Tissue Regenix Group 25 -
------------------------------------ ------- ------------
Thomas Cook Group* - -
------------------------------------ ------- ------------
Total Investments 52,424 100.0
------------------------------------ ------- ------------
*Unquoted
Cross holdings in other investment companies
As at 31 December 2019, none of the company's total assets were
invested in other listed closed-ended investment funds. It is the
company's stated policy that no more than 10%, in aggregate, of the
company's total assets may be invested in the securities of other
listed closed-ended investment funds (including listed investment
trusts) other than those which themselves have stated investment
policies to invest no more than 15% of their total assets in other
listed closed-ended investment funds. The company does not
anticipate that the investment adviser will make any new
investments in other collective investment schemes, investment
companies or investment trusts.
Directors' Responsibility Statement
Related party 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 performance of the
company during the period.
Details of related party transactions are contained in the
Annual Report & Accounts 2019 and the notes to the Half Yearly
Financial Report 2019.
Principal risks and uncertainties
The principal risks to the company are interest rates,
investment policy and process, investment strategy and share price
movement, liquidity risk, gearing risk, loan facility default risk,
the discount to net asset value, regulatory risk, credit and
counterparty risk, loss of key personnel, operational risk and
financial risk. A detailed explanation of the risks and
uncertainties facing the company can be found on pages 19 and 20 of
the company's published report and accounts for the year to 30 June
2019.
Going concern
The financial statements have been prepared on a going concern
basis. The directors consider that this is the appropriate basis as
they have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable
future. In considering this, the directors took into account the
company's investment objective, risk management policies and
capital management policies, the diversified portfolio of readily
realisable securities which can be used to meet short-term funding
commitments and the ability of the company to meet all of its
liabilities and ongoing expenses. The directors continue to adopt
the going concern basis of accounting in preparing the financial
statements.
Directors' responsibility statement
We the directors of Jupiter UK Growth Investment Trust PLC
confirm to the best of our knowledge:
(a) the condensed set of financial statements contained within
the half yearly financial report has been prepared in accordance
with the applicable set of accounting standards and give a true and
fair view of the assets, liabilities, financial position and profit
and loss of the company;
(b) the half yearly report includes a fair review of the
important events that have occurred during the first six months of
the financial year and their impact on the financial
statements;
(c) the directors' statement of principal risks and
uncertainties shown above is a fair review of the principal risks
and uncertainties for the remainder of the financial year; and
(d) the half yearly report includes details on related party transactions.
The half yearly financial report for the six months to 31
December 2019 comprises the chairman's statement, investment
advisers' review, the directors' responsibility statement and a
condensed set of financial statements, and has not been audited or
reviewed by the auditors pursuant to the Auditing Practices Board
guidance on Review of Interim Financial Information.
Tom Bartlam
Chairman
30 March 2020
Statement of comprehensive income f or the half year to 31
December 2019 (unaudited)
Half year ended Half year ended
31 December 2019 31 December 2018
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on investments
at fair value - 2,996 2,996 - (13,456) (13,456)
Foreign exchange gain - 2 2 - 391 391
Income 839 - 839 949 - 949
------------------------------- ------ ------- ------- ------ --------- -------------
Gross return/(loss) 839 2,998 3,837 949 (13,065) (12,116)
------------------------------- ------ ------- ------- ------ --------- -------------
Investment management
fee (30) (90) (120) (34) (104) (138)
Other expenses (163) (6) (169) (182) (9) (191)
------------------------------- ------ ------- ------- ------ --------- -------------
Total expenses (193) (96) (289) (216) (113) (329)
------------------------------- ------ ------- ------- ------ --------- -------------
Net return/(loss) before
finance costs and tax 646 2,902 3,548 733 (13,178) (12,445)
------------------------------- ------ ------- ------- ------ --------- -------------
Finance costs (11) (33) (44) (30) (92) (122)
------------------------------- ------ ------- ------- ------ --------- -------------
Return/(loss) on ordinary
activities before taxation 635 2,869 3,504 703 (13,270) (12,567)
Taxation (7) - (7) (14) - (14)
------------------------------- ------ ------- ------- ------ --------- -------------
Net return/(loss) after
taxation 628 2,869 3,497 689 (13,270) (12,581)
------------------------------- ------ ------- ------- ------ --------- -------------
Return/(loss) per ordinary
share 3.89p 17.76p 21.65p 3.68p (70.87)p (67.19)p
------------------------------- ------ ------- ------- ------ --------- -------------
The total column of this statement is the income statement of
the company, prepared in accordance with IFRS. The supplementary
revenue return and capital return columns are both prepared under
guidance produced by the Association of Investment Companies (AIC).
All items in the above statement derive from continuing
operations.
The financial information does not constitute 'accounts' as
defined in section 434 of the Companies Act 2006.
No operations were acquired or discontinued during the
period.
All net income is attributable to the equity holders of Jupiter
UK Growth Investment Trust PLC. There are no minority
interests.
Statement of financial position as at
31 December 2019
31 December 30 June
2019 2019
(unaudited) (audited)
GBP'000 GBP'000
Non current assets
Investments held at fair value through
profit or loss 52,424 51,857
---------------------------------------- ------------ ----------
Current assets
Receivables 78 376
Cash and cash equivalents 261 1,536
---------------------------------------- ------------ ----------
339 1,912
Total assets 52,763 53,769
Current liabilities
Payables (4,265) (4,367)
---------------------------------------- ------------ ----------
Total assets less current liabilities 48,498 49,402
---------------------------------------- ------------ ----------
Capital and reserves
Called up share capital 1,486 1,486
Share premium 50,461 50,461
Capital redemption reserve 683 683
Retained earnings* (4,132) (3,228)
---------------------------------------- ------------ ----------
Total equity shareholders' funds 48,498 49,402
---------------------------------------- ------------ ----------
Net asset value per ordinary share 307.32p 292.91p
---------------------------------------- ------------ ----------
*Under the company's articles of association any dividends are
distributed only from the revenue reserve
Statement of changes in net equity f or the six months to 31
December 2019 (unaudited)
Capital
Share Share redemption Retained
For the six months to capital premium reserve earnings Total
31 December 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
30 June 2019 1,486 50,461 683 (3,228) 49,402
Net return for the period - - - 3,497 3,497
Dividends paid* - - - (1,366) (1,366)
Ordinary shares repurchased - - - (3,035) (3,035)
----------------------------- --------- --------- ------------ ---------- ---------
Balance at 31 December
2019 1,486 50,461 683 (4,132) 48,498
----------------------------- --------- --------- ------------ ---------- ---------
Capital
Share Share redemption Retained
For the six months to capital premium reserve earnings Total
31 December 2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- --------- ------------ ---------- ---------
30 June 2018 1,486 50,461 683 12,562 65,192
Net loss for the period - - - (12,581) (12,581)
Dividends paid* - - - (1,306) (1,306)
Ordinary shares repurchased - - - (2,641) (2,641)
----------------------------- --------- --------- ------------ ---------- ---------
Balance at 31 December
2018 1,486 50,461 683 (3,966) 48,664
----------------------------- --------- --------- ------------ ---------- ---------
*Dividends paid during the period were paid out of revenue
reserves.
Statement of cash flows for the six months to 31
December 2019 (unaudited)
Six months Six months
to 31 December to 31 December
2019 2018
GBP'000 GBP'000
Cash flows from operating activities
Dividends received 1,145 1,101
Deposit interest received 1 68
Investment management fee paid (122) (159)
Other cash expenses (373) (243)
Net cash inflow from operating activities
before taxation 651 767
Interest paid (44) (126)
Taxation (17) (20)
---------------------------------------------- ---------------- ----------------
Net cash inflow from operating activities 590 621
---------------------------------------------- ---------------- ----------------
Cash flows from investing activities
Purchases of investments (10,831) (12,220)
Sales of investments 13,365 18,231
---------------------------------------------- ---------------- ----------------
Net cash inflow from investing activities 2,534 6,011
---------------------------------------------- ---------------- ----------------
Cash flows from financing activities
Shares repurchased (3,035) (2,641)
Equity dividends paid (1,366) (1,306)
Short term bank loan repaid - (5,000)
Net cash outflow from investing activities (4,401) (8,947)
---------------------------------------------- ---------------- ----------------
Decrease in cash (1,277) (2,315)
Change in cash and cash equivalents
Cash and cash equivalents at start of period 1,536 10,999
Gain on foreign currency 2 391
---------------------------------------------- ---------------- ----------------
Cash and cash equivalents at end of period 261 9,075
---------------------------------------------- ---------------- ----------------
Notes to the financial statements for the six months to 31
December 2019
1. Accounting policies
The accounts comprise the unaudited financial results of the
company for the six months from 1 July 2019 to 31 December 2019,
prepared in accordance with International Financial Reporting
Standards (IFRS), which comprise standards and interpretations
approved by the International Accounting Standards Board (IASB) and
International Accounting Standards Committee (IASC), as adopted by
the European Union (EU).
The accounts are presented in pounds sterling, as this is the
functional currency of the company. All values are rounded to the
nearest thousand pounds (GBP'000) except where indicated.
Where presentational guidance set out in the Statement of
Recommended Practice (SORP) for investment trusts issued by the AIC
is consistent with the requirements of IFRS, the directors have
sought to prepare the financial statements on a basis compliant
with the recommendations of the SORP.
A summary of the principal accounting policies, all of which
have been applied consistently throughout the period, is set out
below:
Revenue recognition
Revenue includes dividends from investments quoted ex-dividend
on or before the date of the statement of financial position.
Deposit and other interest receivable, expenses and interest
payable are accounted for on an accruals basis. These are
classified within operating activities in the statement of cash
flow.
Underwriting commission is taken to income and recognised when
the issue takes place, except where the company is required to take
up all or some of the shares underwritten, in which case an
appropriate proportion of the commission received is deducted from
the cost of those shares.
Presentation of statement of comprehensive income
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC,
supplementary information which analyses the statement of
comprehensive income between items of a revenue and capital nature
has been presented alongside the statement. In accordance with the
company's articles of association, net capital returns may not be
distributed by way of dividend.
An analysis of retained earnings broken down into revenue
(distributable) items and capital (non -distributable) items is
given in the notes to the Half Yearly Financial Report 2019.
Investment management fees and finance costs are charged 75% to
capital and 25% to revenue.
All other operational costs including administration expenses
(but with the exception of any investment performance fees which
are charged to capital) were charged to revenue .
Basis of valuation of investments
Investments are recognised and derecognised on a trade date
where a purchase and sale of an investment is under contract whose
terms require delivery of the investment within the timeframe
established by the market concerned, and are initially measured at
cost, being the consideration given.
All investments are classified as held at fair value through
profit or loss. All investments are measured at fair value with
changes in their fair value recognised in the statement of
comprehensive income in the period in which they arise. The fair
value of listed investments is based on their quoted bid price at
the reporting date without any deduction for estimated future
selling costs.
Foreign exchange gains and losses on fair value through profit
and loss investments are included within the changes in the fair
value of the investments.
For investments that are not actively traded and/or where active
stock exchange quoted bid prices are not available, fair value is
determined by reference to a variety of valuation techniques. These
techniques may draw, without limitation, on one or more of: the
latest arm's length traded prices for the instrument concerned;
financial modelling based on other observable market data;
independent broker research; or the published accounts relating to
the issuer of the investment concerned.
2. Significant accounting judgements, estimates and
assumptions
The preparation of the company's financial statements on
occasion requires management to make judgements, estimates and
assumptions that affect the reported amounts in the primary
financial statements and the accompanying disclosures. These
assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities
affected in the current and future periods, depending on
circumstance.
Management do not believe that any significant accounting
judgements have been applied to this set of financial statements,
other than the allocations between capital and revenue in the
statement of comprehensive income.
3. Earnings per Ordinary Share
The earnings per ordinary share figure is based on the net
profit for the period of GBP3,497,000 (Dec 2018: Net loss
GBP12,581,000) and on 16,150,101 (Dec 2018: 18,725,313) ordinary
shares, being the weighted average number of ordinary shares in
issue during the period.
The earnings per ordinary share figure detailed above can be
further analysed between revenue and capital, as below.
Six months to Six months to
31 December 2019 31 December 2018
GBP'000 GBP'000
Net revenue return 628 689
Net capital return/loss 2,869 (13,270)
-------------------------------------- --------------------------- ------------------------------
Net total return/(loss) 3,497 (12,581)
-------------------------------------- --------------------------- ------------------------------
Weighted average number of ordinary
shares in issue during the period 16,150,101 18,725,313
Revenue earnings per ordinary
share 3.89p 3.68p
Capital earnings/(losses) per
ordinary share 17.76p (70.87)p
-------------------------------------- --------------------------- ------------------------------
Total earnings/(losses) per ordinary
share 21.65p (67.19)p
-------------------------------------- --------------------------- ------------------------------
4. Gains/(Losses)on investments
Six months to Six months to
31 December 2019 31 December 2018
GBP'000 GBP'000
Net (loss)/gain realised on sale
of investments (1,797) 640
Movement in investment holding
gains and losses 4,793 (14,096)
---------------------------------- ----------------- -----------------
Gains/(losses)on investments 2,996 (13,456)
---------------------------------- ----------------- -----------------
5. Transaction costs
The following transaction costs were incurred during the
period:
Six months to Six months to
31 December 2019 31 December 2018
GBP'000 GBP'000
Purchases 56 45
Sales 8 9
----------- ----------------- -----------------
Total 64 54
----------- ----------------- -----------------
6. Comparative information
The financial information contained in this interim report does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The financial information for the six months to
31 December 2019 and 31 December 2018 has not been audited
The information for the year ended 30 June 2019 has been
extracted from the latest published audited financial statements.
The audited financial statements for the year ended 30 June 2019
have been filed with the Register of Companies. The report of the
auditors on those accounts contained no qualification or statement
under section 498(2) of the Companies Act 2006
7. Retained earnings
The table below shows the movement in the retained earnings
analysed between revenue and capital items.
Revenue Capital Total
GBP'000 GBP'000 GBP'000
At 30 June 2019 2,478 (5,706) (3,228)
Movement during the period
Net return for the period 628 2,869 3,497
Dividends paid (1,366) - (1,366)
Share repurchased - (3,035) (3,035)
---------------------------- -------- -------- --------
At 31 December 2019 1,740 (5,872) (4,132)
---------------------------- -------- -------- --------
8. Net asset value per ordinary share
The net asset value per ordinary share is based on the net
assets attributable to the ordinary shareholders of GBP48,498,000
(30 June 2019: GBP49,402,000) and on 15,780,810 (30 June 2019:
16,866,072) ordinary shares, being the number of ordinary shares in
issue at the period end, excluding ordinary shares held in
treasury.
9. Analysis of changes in net debt
Foreign 31 December
30 June 2019 Cash Flow exchange 2019
GBP'000 GBP'000 GBP'000 GBP'000
Cash
Cash at bank 1,536 (1,277) 2 261
Debt
Short term bank loan (4,000) - - (4,000)
---------------------- ------------- ----------------- ---------- ------------
Total (2,464) (1,277) 2 (3,739)
---------------------- ------------- ----------------- ---------- ------------
10. Principal risk profile
The principal risks the company faces in its portfolio
management activities are:
-- Foreign currency risk;
-- Market price risk i.e. movements in the value of investments
holdings caused by factors other than interest rate or currency
movement.
Further details of the company's management of these risks can
be found in note 14 of the company's annual report and accounts for
the year ended 30 June 2019.
-- Covid-19 risks - The outbreak of the Covid-19 pandemic poses
additional risks to the Company beyond the risks described under
market risks above. They include liquidity risks to markets, risks
associated with the maintenance of the current dividend policy and
business continuity risks for the investment manager. Each of these
risks is being assessed on a day to day basis by the investment
manager.
11. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify
fair value measurements using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The
fair value hierarchy shall have the following levels:
Level 1 reflects financial instruments quoted in an active
market.
Level 2 reflects financial instruments whose fair value is
evidenced by comparison with other observable current market
transactions in the same instrument or based on a valuation
technique whose variables includes only data from observable
markets.
Level 3 reflects financial instruments whose fair value is
determined in whole or in part using a valuation technique based on
assumptions that are not supported by prices from observable market
transactions in the same instrument and not based on available
observable market data.
The financial assets measured at fair value in the statement of
financial position are grouped into the fair value hierarchy as
follows:
31 December 2019 30 June 2019
Level Level Level Level Level
1 2 Level 3 Total 1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Equity investments 52,235 - 189 52,424 51,667 - 190 51,857
------------------- ------- ------- -------- -------- ------- ------- ------- -------
Equity investments
A reconciliation of fair value measurements in Level 3 is set
out in the following table:
31 December 30 June
2019 2019
GBP'000 GBP'000
Opening balance 190 371
----------------------- ----------------------------------------------- -------
Sales - (209)
----------------------- ----------------------------------------------- -------
Transfer into level 3 1,287 -
----------------------- ----------------------------------------------- -------
Fair value movements (1,288) 28
----------------------- ----------------------------------------------- -------
Closing balances 189 190
----------------------- ----------------------------------------------- -------
The closing balance represents Ludgate 181 (Jersey) GBP189,000
(30 June 2019: GBP190,000)
Thomas Cook Group went into liquidation on 23 September 2019.
The book cost of GBP1,287,000 was written down to zero on 24
September 2019.
12. Related parties
Jupiter Unit Trust Managers Limited ('JUTM'), the Alternative
Investment Fund Manager, is a company within the same group as
Jupiter Asset Management Limited ('JAM') the investment adviser.
JUTM is contracted to provide investment management services to the
company, subject to termination by not less than twelve months'
notice by either party.
JUTM receives an investment management fee as set out below. The
management fee payable to JUTM in respect of the period 1 July 2019
to 31 December 2019 was GBP120,297 with GBP61,369 outstanding at
period end.
The management fee payable to JUTM is 0.50% of adjusted net
assets (being net assets before deducting or making provision for
any performance fee which may be due and after deduction of the
value of any Jupiter managed investments). This fee will be further
reduced to 0.45% to the extent that the company's adjusted net
assets come to exceed GBP150 million and will be reduced further
still to 0.40% to the extent that the company's adjusted net assets
exceed GBP250 million.
On 18 February 2020, the board announced that it had reached an
agreement with Jupiter for Richard Buxton to assume lead fund
management responsibility for the company. The base management fee
charged to the company will continue to calculate as set out above.
However, as part of these new arrangements the board has agreed
with Jupiter that the company will not be charged a base management
fee for the period from 1 January 2020 to 31 December 2020.
JUTM is also entitled to an investment performance fee which is
based on the out-performance of the net asset value per share over
the total return on the benchmark index (being the total return on
the FTSE All Share Index) in each calculation period. No
performance fee was payable to JUTM in respect of the year ended 30
June 2019. There is no accrual in the accounts in respect of the
performance fee at the interim period end. A performance fee will
only crystallize if an amount is calculated as due at the end of a
calculation period as described below.
Any performance fee payable per ordinary share to equal 15% of
the amount by which the increase in the adjusted net asset value
per ordinary share (being net asset value per ordinary share
adjusted by adding back any accrual for unpaid performance fee and
any dividends paid or payable by reference to the calculation
period in question) exceeds the higher of:
1) in respect of each subsequent calculation period, the net
asset value per ordinary share on the last calculation date of the
immediately preceding calculation period, as increased or decreased
by the percentage by which the total return of the benchmark index
increases or decreases during the calculation period plus 2%;
2) if applicable, the net asset value per ordinary share on the
last calculation date by reference to which a performance fee was
paid (such calculation date not being before 30 June 2016),
increased or decreased by the total return of the benchmark index
increases or decreases during the calculation period plus 2%;
and
3) the estimated net asset value per ordinary share on Friday, 29 July 2016 (being 285.80p).
In respect of the calculation period ending 30 June 2017, the
turbulent market conditions in the immediate aftermath of the
Brexit referendum resulted in an estimated NAV per share of 265.12p
as at 30 June 2016. Rather than adopt this NAV as the new high
watermark for the then current and subsequent calculation periods
for the purposes of any performance fee accrual, the board agreed
with the manager on 26 September 2016 that it would be appropriate
to adopt the higher estimated NAV of 285.80p as at 29 July 2016 as
its new high watermark for these purposes.
The aggregate of any base management and performance fees
payable to JUTM in respect of any one calculation period is limited
to 2% of the adjusted net assets of the company on the relevant
calculation date.
No management fee is payable by the company to JAM in respect of
the company's holdings in investment trusts, open-ended funds and
investment companies in respect of which Jupiter Fund Management
PLC, or any subsidiary undertaking of Jupiter Fund Management PLC,
receives fees as investment manager or investment adviser. During
the period there were no such investments.
There are no transactions with the directors other than the
remuneration paid to them as disclosed in the directors'
remuneration report on page 28 and the beneficial interests of the
directors in the ordinary shares of the company as disclosed on
page 29 of the 2019 annual report and accounts.
Availability of Half Yearly Financial Report
The Half Yearly Financial Report will shortly be available for
download from the Company's website www.jupiteram.com/JUKG
By order of the Board
Jupiter Asset Management Limited, Company Secretary
The Zig Zag Building
70 Victoria Street
London SW1E 6SQ
30 March 2020
For further information, please contact:
Magnus Spence
Head of Investment Trusts & Alternatives
Jupiter Asset Management Limited
investmentcompanies@jupiteram.com
020 3817 1000
[END]
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BSGDXDBXDGGG
(END) Dow Jones Newswires
March 30, 2020 10:18 ET (14:18 GMT)
Jupiter Uk Growth Invest... (LSE:JUKG)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Jupiter Uk Growth Invest... (LSE:JUKG)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024