2012/13. Half Year Report JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts for the six months ended 30th September 2012

Transcription

1 European Smaller HY cover_european Smaller HY Cover 29/11/ :09 Page /13 Half Year Report JPMorgan European Smaller Companies Trust plc Half Year Report & Accounts for the six months ended 30th September 2012

2 Features Contents About the Company 1 Half Year Performance 2 Chairman s Statement 4 Investment Managers Report Investment Review 6 List of Investments 7 Portfolio Analyses Accounts 11 Income Statement 12 Reconciliation of Movements in Shareholders Funds 13 Balance Sheet 14 Cash Flow Statement 15 Notes to the Accounts 17 Interim Management Report Shareholder Information 18 Glossary of Terms and Definitions 21 Information about the Company Objective Capital growth from smaller European companies (excluding the United Kingdom). Investment Policies To invest in a diversified portfolio of smaller companies in Europe, excluding the United Kingdom. To manage liquidity and borrowings to increase potential returns to shareholders. The Board s current policy is to be between 80% and 120% invested. To emphasise capital growth rather than income. To invest no more than 15% of gross assets in other UK listed investment companies (including investment trusts). Risk It should be noted that the Company invests in the shares of smaller companies, which tend to be more volatile than those of larger companies. The Company also employs gearing to generate greater returns. The Company s shares should therefore be regarded as carrying greater than average risk. Benchmark HSBC Smaller European Companies (ex UK) Total Return Index in sterling terms. Capital Structure At 30th September 2012, the Company s share capital comprised 35,926,923 ordinary shares of 25p each. Management Company The Company employs JPMorgan Asset Management (UK) Limited ( JPMAM or the Manager ) to manage its assets.

3 Half Year Performance 6.3% 4.4% Share price total return 1 Net asset value total return 2 5.0% Benchmark total return 3 Financial Data 30th September 31st March % change Shareholders funds ( 000) 289, , Number of shares in issue 35,926,923 40,083, Net asset value per share 804.5p 854.0p 5.8 Share price 665.5p 722.0p 7.8 Share price discount to net asset value per share 17.3% 15.5% A glossary of terms and definitions is provided on page Source: Morningstar. 2 Source: J.P. Morgan. 3 Source: HSBC. The Company s benchmark is the HSBC Smaller European Companies (ex UK) Total Return Index in sterling terms. JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

4 Chairman s Statement Performance The economic backdrop for European investors has continued to be uncertain over the first six months of the Company s financial year. Quantitative easing in Europe and the US encouraged investor confidence, only for this to fall away with continued political and economic uncertainty, particularly in the Eurozone. However, further to the announcement in July that the European Central Bank was prepared to take action to support the Euro, equity market confidence has improved. For the six months ended 30th September 2012, the Company produced a net asset value total return of 4.4%. Although a negative return, it outperformed the return of 5.0% from the benchmark index, the HSBC Smaller European Companies (ex UK) Index. The share price total return was 6.3%, as the discount on the Company s shares widened from 15.5% to 17.3% over the period. Longer term performance remains positive, with a net asset value total return of % against the benchmark total return of % over the ten years ended 30th September In their report, the Investment Managers provide details of the key factors driving performance during the half year. Revenue and Dividend As detailed in my Chairman s Statement for the year ended 31st March 2012, the Board s dividend policy is to pay out the vast majority of revenue available each year. However, shareholders are reminded that the management of the portfolio will not be constrained to deliver income, given that the Company s objective is to achieve capital growth. Gross revenue return for the six months to 30th September 2012 was a little lower than the corresponding period in 2011 at 6.5 million (2011: 7.8 million). The Board has decided to maintain the interim dividend at 6.0 pence per share, which will be paid on 16th January 2013 to shareholders on the register as at 21st December Reverse Auction Tender Offer, Share Buybacks and Discount During the six months ended 30th September 2012, a total of 4,156,880 shares were repurchased for cancellation. 3,991,880 of those shares were repurchased as a result of the reverse auction tender offer undertaken in July 2012, at a discount of 9%. The tender offer met its principal objective of providing a liquidity event to shareholders seeking a full or partial exit from the Company at a level determined by shareholders, whilst at the same time enhancing the net asset value for ongoing shareholders, who also received a final dividend of 11.0 pence in late August. The Company has not bought back any further shares since the tender offer, but the Board continues to monitor closely the level of the discount. Directorate As detailed in the annual report, we were pleased to welcome Stephen White to the Board on 1st April In July 2012, after nine years service, Michael Wrobel stepped down as a Director. Due to new commitments, I will retire from the Board on 2 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

5 31st December 2012 and I wish Mrs Carolan Dobson, Chairman designate, every success as she takes on the role from 1st January The Board has engaged the services of an independent agency to assist in the appointment of a new Director and a further announcement will follow shortly. Outlook In spite of continued macro economic and political uncertainty, the Board believes that the prospects for European small cap equities are more encouraging than they have been for some time and is confident that the Investment Managers bottom-up stock picking approach will continue to identify good investment opportunities for the Company s portfolio. Paul Manduca Chairman 30th November 2012 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

6 Investment Managers Report Review The confidence generated by the European Central Bank s ( ECB ) liquidity injection of nearly 1 trillion into the banking system between December 2011 and February 2012 began to wane at the start of the financial year. This came about as markets focused increasingly on the structural difficulties of the Euro project, namely that the ECB was unwilling to act as lender of last resort in the same way as the Bank of England or the US Federal Reserve Board. Jim Campbell With markets losing confidence in the Euro, bond yields in the two largest Eurozone periphery economies, Italy and Spain, reached unsustainable levels by the end of July Equity markets fared poorly in this environment and looked set to worsen, when ECB President Draghi gave a now historic speech on 26th July where he famously said: Within our mandate, the ECB is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough. Markets interpreted this to mean that the ECB was indeed prepared to act as lender of last resort to prevent a break up of the Euro. Bond yields and equity markets rapidly changed trajectory and by the end of September 2012 the large company MSCI World Europe (ex UK) Index had virtually eradicated all losses, declining by 0.9% in sterling terms. Smaller companies were unable to fare as well, the benchmark HSBC Smaller European Companies (ex UK) Index falling by 5.0%. Francesco Conte Portfolio The net asset value of the portfolio declined by 4.4% in the six months ended 30th September 2012, slightly outperforming the benchmark index. This was due to positive asset allocation, namely the overweight position in Denmark and underweight position in Sweden. The portfolio benefited from holdings in companies which had either a high level of recurring revenues or good visibility. Top stock contributors over the six months included Danish hearing aid manufacturer GN Store Nord, French IT outsourcing company Atos Origin, Norwegian seismic survey provider TGS Nopec Geophysical, French food and pharma testing services provider Eurofins and German industrial lubricants group Fuchs Petrolub. Negative stock contributors tended to be stock specific, including Dutch oil service company SBM (following write downs of some of its projects), Italian life insurance and asset manager Mediolanum (on higher Italian bond yields), and Italian cement manufacturer Buzzi Unicem and Italian scooter manufacturer Piaggio (on slowing economic growth). Gearing at the end of the period was approximately 3.5%, although with improving confidence, we have raised the level at the time of writing to some 6%. Given that global economic growth is likely to be limited in the near term, we are focusing our stock picking efforts on companies that should be able to thrive despite anaemic economies. Examples include French oil storage and energy distribution supplier Rubis, Italian diagnostics company Diasorin, Swiss insurance company Helvetia, Danish food ingredients manufacturer Christian Hansen and Irish gambling company Paddy Power. 4 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

7 Outlook We are more confident in markets than we have been for some time. The risk of a Eurozone implosion has decreased significantly following President Draghi s words and the setting up of a 700 billion European Stability Mechanism to help countries in financial difficulties. The economic plight of countries in the peripheral Eurozone, whilst harsh at the human level, is having the desired effects of improving primary and current account deficits, while at the same time forcing painful structural reforms which should ultimately make these countries far more competitive. The next step for the Euro integration project is the establishment of banking union. As with all grand Eurozone projects that require the giving up of sovereignty, it will not be agreed overnight, but the resolve to move towards a closer union has now been tested in many countries, both core and periphery, and each time it has not been found wanting. Recent elections in Holland, one of the strongest core Eurozone countries, and Greece, the weakest of the periphery countries, resulted in pro-european coalitions, despite fears of anti-eurozone electoral revolts. The German Constitutional Court accepted the legality of the establishment of the European Stability Mechanism, and governments in Italy, Spain, Portugal and Greece are pushing ahead with budgetary austerity and reform despite electoral unpopularity. On the macroeconomic front, the Eurozone may be slowing down, but it is by no means collapsing like it did in 2008/09. Macroeconomic data, while soft, is generally better than expected and the rate at which it is worsening is abating. In the US, the housing market and the financial system are recovering quickly. Questions remain over the so-called US fiscal cliff, whereby expiration of certain tax cuts could lead to a sharp economic contraction, however it would seem to be in all parties interests to find a solution, as they did with the earlier problem of the debt ceiling. Indications from the emerging markets of China, India and Brazil are that the worst of the slowdown is behind them. On the microeconomic front, second and third quarter results, while generally weak in absolute terms, were largely in line with or better than analysts expectations. Those results confirmed that, in many cases, companies have solid balance sheets and are able to pay attractive dividends. The path ahead will not be smooth, because the world faces many challenges, however, central banks in the US and Europe have shown repeatedly that they are strongly committed to the reflation of the global economy. So much cheap liquidity combined with attractive valuations makes us confident that, despite expected volatility, the underlying trend for equity markets should remain positive over the coming months. Jim Campbell Francesco Conte Investment Managers 30th November 2012 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

8 List of Investments at 30th September 2012 Valuation Company Country 000 % TGS Nopec Geophysical Norway 9, GN Store Nord Denmark 9, Eurofins France 8, DiaSorin Italy 7, Finmeccanica Italy 7, Nutreco Netherlands 7, Atos Origin France 7, Rubis France 7, Kabel Deutschland Germany 7, Wirecard Germany 7, Flughafen Zurich Switzerland 7, Freenet Germany 6, Fuchs Petrolub Germany 6, D Ieteren Belgium 6, GAM Switzerland 6, Lottomatica Italy 6, Symrise Germany 6, Aker Solutions Norway 6, Helvetia Switzerland 6, Tecnicas Reunidas Spain 6, Paddy Power Ireland 6, Fred Olsen Energy Norway 6, Gjensidige Forsikring Norway 5, Chr.Hansen Denmark 5, Unit 4 Agresso Netherlands 5, MTU Aero Engines Germany 5, Topdanmark Denmark 4, Ipsos France 4, Altran Technologies France 4, Davide Campari Italy 4, Gerry Weber International Germany 4, Aalberts Industries Netherlands 3, Viscofan Spain 3, Elekta Sweden 3, Sorin Italy 3, Arcadis Netherlands 3, Ackermans & van Haaren Belgium 3, Azimut Italy 3, Gerresheimer Germany 3, Deutsche Wohnen Germany 3, Kaba Switzerland 3, JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

9 Valuation Company Country 000 % Danieli Italy 3, Andritz Austria 3, Castellum Sweden 3, Koninklijke Ten Cate Netherlands 3, Elisa Finland 3, Pohjola Bank Finland 3, Recordati Italy 3, Trelleborg Sweden 3, Burckhardt Compression Switzerland 2, Dufry Switzerland 2, Piaggio Italy 2, Vetropack Switzerland 1, Marcolin Italy 1, Brunel Netherlands 1, IMA Italy 1, Gameloft France 1, Tecan Switzerland 1, Austriamicrosystems Austria 1, Bucher Industries Switzerland 1, Trevi Finanziaria Industriale Italy 1, Drillisch Germany 1, Kuka Germany 1, Nyrstar Belgium Alten France Schoeller Bleckmann Oilfield Austria Arseus Belgium Rieter Switzerland Brembo Italy UBI Soft Entertainment France Amplifon Italy Royal Unibrew Denmark Beni Stabili Italy Gurit Switzerland Hexpol Sweden TKH Netherlands Wihlborgs Fastigheter Sweden TAG Immobilien Germany Sartorius Germany Duerr Germany Huhtamaki Finland Buzzi Unicem Italy JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

10 List of Investments continued Valuation Company Country 000 % Carl Zeiss Meditec Germany SimCorp Denmark AarhusKarlshamn Sweden Assystems France 128 Lectra France 126 Bertrandt Germany 62 Fastighets Balder Sweden 58 Zignago Vetro Italy 37 Immofinanz Austria JPM Euro Liquidity Fund Liquidity Fund 25, Net current liabilities (35,741) (12.4) Total assets less current liabilities 289, JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

11 Portfolio Analyses at 30th September 2012 at 31st March 2012 Portfolio Benchmark Portfolio Benchmark Geographical % % % % Germany Italy France Switzerland Norway Netherlands Denmark Belgium Sweden Spain Finland Ireland Austria Greece Portugal Total equities Liquidity fund Net current liabilities (12.4) (9.4) Total Based on total assets less current liabilities of 289.0m (31st March 2012: 342.3m). JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

12 Portfolio Analyses continued at 30th September 2012 at 31st March 2012 Portfolio Benchmark Portfolio Benchmark Sector % % % % Industrials Consumer Discretionary Health Care Financials Information Technology Energy Materials Consumer Staples Telecommunication Services Utilities Total equities Liquidity fund Net current liabilities (12.4) (9.4) Total Based on total assets less current liabilities of 289.0m (31st March 2012: 342.3m). 10 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

13 Income Statement for the six months ended 30th September 2012 (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30th September th September st March 2012 Revenue Capital Total Revenue Capital Total Revenue Capital Total Losses on investments held at fair value through profit or loss (26,775) (26,775) (112,497) (112,497) (104,011) (104,011) Net foreign currency gains 2,550 2, ,382 1,382 Income from investments 6,388 6,388 7,688 7,688 10,040 10,040 Other interest receivable and similar income Gross return/(loss) 6,506 (24,225) (17,719) 7,843 (112,022) (104,179) 10,215 (102,629) (92,414) Management fee (490) (1,142) (1,632) (741) (1,728) (2,469) (1,301) (3,035) (4,336) Other administrative expenses (250) (250) (300) (300) (620) (620) Net return/(loss) on ordinary activities before finance costs and taxation 5,766 (25,367) (19,601) 6,802 (113,750) (106,948) 8,294 (105,664) (97,370) Finance costs (94) (219) (313) (182) (425) (607) (360) (841) (1,201) Net return/(loss) on ordinary activities before taxation 5,672 (25,586) (19,914) 6,620 (114,175) (107,555) 7,934 (106,505) (98,571) Taxation (450) (450) (591) (591) (879) (879) Net return/(loss) on ordinary activities after taxation 5,222 (25,586) (20,364) 6,029 (114,175) (108,146) 7,055 (106,505) (99,450) Return/(loss) per share (note 4) 13.53p (66.28)p (52.75)p 14.28p (270.46)p (256.18)p 17.12p (258.41)p (241.29)p 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 Total column represents all the information that is required to be disclosed in a Statement of Total Recognised Gains and Losses ( STRGL ). For this reason a STRGL has not been presented. JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

14 Reconciliation of Movements in Shareholders Funds Called up Capital Six months ended share Share redemption Capital Revenue 30th September 2012 capital premium reserve reserves reserve Total (Unaudited) At 31st March ,021 1,312 5, ,700 5, ,299 Repurchase and cancellation of the Company s own shares (1,039) 1,039 (28,943) (28,943) Net (loss)/return on ordinary activities (25,586) 5,222 (20,364) Dividends appropriated in the period (3,952) (3,952) At 30th September ,982 1,312 6, ,171 6, ,040 Called up Capital Six months ended share Share redemption Capital Revenue 30th September 2011 capital premium reserve reserves reserve Total (Unaudited) At 31st March ,877 1,312 4, ,728 2, ,428 Repurchase and cancellation of the Company s own shares (636) 636 (25,612) (25,612) Net (loss)/return on ordinary activities (114,175) 6,029 (108,146) Dividends appropriated in the period (1,725) (1,725) At 30th September ,241 1,312 5, ,941 7, ,945 Called up Capital Year ended share Share redemption Capital Revenue 31st March 2012 capital premium reserve reserves reserve Total (Audited) At 31st March ,877 1,312 4, ,728 2, ,428 Repurchase and cancellation of the Company s own shares (856) 856 (31,523) (31,523) Net (loss)/return on ordinary activities (106,505) 7,055 (99,450) Dividends appropriated in the year (4,156) (4,156) At 31st March ,021 1,312 5, ,700 5, , JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

15 Balance Sheet at 30th September 2012 (Unaudited) (Unaudited) (Audited) 30th September th September st March Fixed assets Investments held at fair value through profit or loss 299, , ,138 Investments in liquidity funds held at fair value through profit or loss 25,558 15,003 Total investments 324, , ,141 Current assets Debtors 5,559 10,937 15,077 Cash and short term deposits 7, Derivative financial instruments: forward currency contracts held at fair value through profit or loss ,713 10,953 15,645 Creditors: amounts falling due within one year (48,454) (43,087) (47,487) Net current liabilities (35,741) (32,134) (31,842) Total assets less current liabilities 289, , ,299 Net assets 289, , ,299 Capital and reserves Called up share capital 8,982 10,241 10,021 Share premium 1,312 1,312 1,312 Capital redemption reserve 6,654 5,395 5,615 Capital reserves 265, , ,700 Revenue reserve 6,921 7,056 5,651 Equity shareholders funds 289, , ,299 Net asset value per share (note 5) 804.5p 834.8p 854.0p Company registration number: JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

16 Cash Flow Statement for the six months ended 30th September 2012 (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30th September th September st March Net cash inflow from operating activities (note 6) 4,123 4,772 3,807 Net cash outflow from returns on investments and servicing of finance (339) (847) (1,411) Tax recovered Net cash inflow from capital expenditure and financial investment 35,264 56,809 61,385 Dividend paid (3,952) (1,725) (4,156) Net cash outflow from financing (29,305) (60,232) (57,858) Increase/(decrease) in cash in the period 5,875 (1,150) 1,970 Reconciliation of net cash flow to movement in net debt Net cash movement 5,875 (1,150) 1,970 Net loans drawn down in the period 34,620 26,696 Exchange movements 2, ,386 Movement in net funds in the period 8,424 33,948 30,052 Net debt at the beginning of the period (41,106) (71,158) (71,158) Net debt at the end of the period (32,682) (37,210) (41,106) Represented by: Cash and short term deposits and bank overdrafts 7, Debt falling due within one year (39,834) (37,225) (41,674) Net debt at the end of the period (32,682) (37,210) (41,106) 14 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

17 Notes to the Accounts for the six months ended 30th September Financial statements The information contained within the financial statements in this half year report has not been audited or reviewed by the Company s auditors. The figures and financial information for the year ended 31st March 2012 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act Accounting policies The accounts have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice ( UK GAAP ) and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies in January All of the Company s operations are of a continuing nature. The accounting policies applied to these half year accounts are consistent with those applied in the accounts for the year ended 31st March Dividends (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30th September th September st March Final dividend in respect of the year ended 31st March 2012 of 11.0p (2011: 4.0p) 3,952 1,725 4,409 An interim dividend of 6.0p (2011: 6.0p) has been declared in respect of the six months ended 30th September 2012, amounting to 2,156, Return/(loss) per share (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30th September th September st March Return/(loss) per share is based on the following: Revenue return 5,222 6,029 7,055 Capital loss (25,586) (114,175) (106,505) Total loss (20,364) (108,146) (99,450) Weighted average number of shares in issue 38,601,926 42,214,624 41,215,645 Revenue return per share 13.53p 14.28p 17.12p Capital loss per share (66.28)p (270.46)p (258.41)p Total loss per share (52.75)p (256.18)p (241.29)p JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

18 Notes to the Accounts continued 5. Net asset value per share The net asset value per share is calculated by dividing shareholders funds by the number of shares in issue at 30th September 2012 of 35,926,923 (30th September 2011: 40,962,803 and 31st March 2012: 40,083,803). 6. Reconciliation of total loss on ordinary activities before finance costs and taxation to net cash inflow from operating activities (Unaudited) (Unaudited) (Audited) Six months ended Six months ended Year ended 30th September th September st March Total loss on ordinary activities before finance costs and taxation (19,601) (106,948) (97,370) Less capital loss before finance costs and taxation 25, , ,664 Scrip dividends received as income (442) (786) (1,077) Decrease in accrued income 631 1, (Increase)/decrease in other debtors (3) (Decrease)/increase in accrued expenses (36) (10) 1 Overseas withholding tax (651) (882) (1,247) Management fee charged to capital (1,142) (1,728) (3,035) Net cash inflow from operating activities 4,123 4,772 3, JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

19 Interim Management Report The Company is required to make the following disclosures in its half year report: Principal risks and uncertainties The principal risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy; market; accounting, legal and regulatory; corporate governance and shareholder relations; operational and financial. Information on each of these areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st March 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. 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. For these reasons, they consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts. 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 the Accounting Standards Board s Statement Half-Yearly Financial Reports and gives a true and fair view of the assets, liabilities, financial position and net return of the Company as required by the UK Listing Authority Disclosure and Transparency Rules 4.2.4R; and (ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK Listing Authority Disclosure and Transparency Rules. For and on behalf of the Board Paul Manduca Chairman 30th November 2012 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

20 Glossary of Terms and Definitions Share price total return Share price total return on a mid-market price to mid-market price basis, assuming that all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend. Net asset value total return Total return on net asset value ( NAV ) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Company were reinvested, without transaction costs, into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date are deducted from the NAV when calculating the net asset value total return. Benchmark total return Total return on the benchmark, on a mid-market value to mid-market value basis, assuming that all dividends received were reinvested, without transaction costs, into the shares of the underlying companies at the time the shares were quoted ex-dividend. The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company s investment universe. The Company s investment strategy does not follow or track this index and consequently, there may be some divergence between the Company s performance and that of the benchmark. Share price discount/premium to net asset value ( NAV ) per share If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The discount is shown as a percentage of the NAV per share. The opposite of a discount is a premium. It is more common for an investment trust s shares to trade at a discount than at a premium. 18 JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts 2012

21 Information about the Company Financial Calendar Financial year end 31st March Final results announced May/June Half year end 30th September Half year results announced November Interim Management Statements announced January/July Annual General Meeting 16th July 2013 Dividend July History On 24th April 1990, the Company acquired the undertaking and assets of Fleming European Fledgeling Fund Limited (the Fund ) in exchange for the issue of its shares and warrants. The Fund was an open-ended, unquoted investment company based in Jersey and formed in June 1987 with the same objectives and investment policies as the Company. The Company adopted its present name in July Directors Paul Manduca (Chairman) Anthony Davidson Federico Marescotti Carolan Dobson Stephen White Company Numbers Company registration number: London Stock Exchange number: ISIN: GB Bloomberg code: JESC LN Market Information The Company s net asset value ( NAV ) is published daily, via the London Stock Exchange. The Company s shares are listed on the London Stock Exchange. The market price is shown daily in the Financial Times, The Times, The Daily Telegraph, The Scotsman, The Independent, the Herald and on the JPMorgan Internet site at where the share price is updated every fifteen minutes during trading hours. Share Transactions The Company s shares may be dealt in directly through a stockbroker or professional adviser acting on an investor s behalf. They may also be purchased and held through the J.P. Morgan Investment Account, J.P. Morgan ISA and J.P. Morgan SIPP. These products are all available on the online wealth manager service, J.P. Morgan WealthManager+ available at Manager and Company Secretary JPMorgan Asset Management (UK) Limited A member of the AIC Company s Registered Office Finsbury Dials 20 Finsbury Street London EC2Y 9AQ Telephone: For company secretarial issues and administrative matters, please contact Jonathan Latter. Custodian JPMorgan Chase Bank, N.A. 25 Bank Street Canary Wharf London E14 5JP Registrars Equiniti Limited Reference 1083 Aspect House Spencer Road Lancing West Sussex BN99 6DA Telephone number: Calls to this number cost 8p per minute from a BT landline. Other providers costs may vary. Lines open 8.30am to 5.30pm Monday to Friday. The overseas helpline number is +44 (0) Notifications of changes of address and enquiries regarding share certificates or dividend cheques should be made in writing to the Registrar quoting reference Registered shareholders can obtain further details on individual holdings on the internet by visiting Independent Auditors PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors 7 More London Riverside London SE1 2RT Brokers Cenkos Securities plc Tokenhouse Yard London EC2R 7AS Savings Product Administrators For queries on the J.P. Morgan Investment Account, J.P. Morgan ISA and J.P. Morgan SIPP, see contact details on the back cover of this report. JPMorgan European Smaller Companies Trust plc. Half Year Report & Accounts

22 J.P. Morgan Helpline Freephone or +44 (0) Your telephone call may be recorded for your security