LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN EUROPEAN GROWTH & INCOME PLC
FINAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2025
HIGHLIGHTS
Performance
- Best performing investment trust in its sector with an outperformance over benchmark and the investment trusts within the Company’s peer group over one, three and five year periods.
| All periods to 31st March 2025 | One Year% | Three Years% | Five Years% |
| Total Return on Net Asset Value per Share | +3.5 | +36.1 | +115.3 |
| Benchmark | +2.5 | +25.4 | +76.6 |
| Excess | +1.0 | +10.7 | +38.7 |
| Return on Share Price | +11.8 | +49.8 | +147.8 |
- The dividend for the 12 months to 31st March 2025 was 4.8p per share, resulting in an estimated dividend yield of 4.3%. (Based on dividend of 4.8p for the year ended 31st March 2025 divided by the share price of 111.0p as at 31st March 2025.)
The Chair of the Company, Rita Dhut, commented:
“In this twelve-month reporting period to 31st March 2025, I am delighted to report that the Company outperformed its benchmark by 1.0%, making five years of consistent outperformance.
This positive result is even more pleasing given the backdrop of volatile asset markets. Our Investment Manager, empowered by a clear mandate, has the freedom to skilfully navigate European markets, whilst delivering to our shareholders the best of capital growth combined with a consistent income.”
Portfolio Managers Alexander Fitzalan Howard, Zenah Shuhaiber and Tim Lewis commented:
“There are reasons to be optimistic about the outlook for European equities. The recent change to German fiscal policy is a sign that Europe may be starting to change direction. The scale of the potential spend on both defence and infrastructure is dramatic and if delivered will lift economic growth and create investment opportunities.”
CHAIR’S STATEMENT
Introduction
In this twelve-month reporting period to 31st March 2025, I am delighted to report that the Company outperformed its benchmark by 1.0% making five years of consistent outperformance. This positive result is even more pleasing given the backdrop of volatile asset markets. Our Investment Manager, empowered by a clear mandate, has the freedom to skilfully navigate European markets, whilst delivering to our shareholders the best of capital growth combined with a consistent income.
The election of President Trump in the USA has led to the introduction of geo-economics. It has brought with it much disruption and uncertainty across the globe for the future trajectory of economic growth and inflation. The tragic continuation of the devastating conflicts in Ukraine and the Middle East adds to the risky environment.
The European economy faced significant challenges during the reporting period, with muted economic growth projections and a particularly weak German economy. In response the European Central Bank (ECB) reduced interest rates six times in this reporting period, together with two further quarter point reductions in April and June 2025, reducing the Eurozone interest rate from 3.75% to 2.00%. Inflation in the Eurozone has remained relatively stable, reducing from approximately 2.4% at the start of the reporting period to 2.2% at the close.
European equity markets seemed to have shrugged off any concerns regarding the French hung parliament result in July 2024 and the increased share of the vote achieved by the AfD party in Germany’s February 2025 elections, won by the conservative CDU party. In addition, the expected reductions in US military aid to Europe was a major boost to the European defence industry, with European governments’ announcing increases in their defence budgets.
In the final quarter of this reporting period, European equities benefited from a positive change in investor sentiment experiencing significant inflows arising from uncertainty in the current US government’s economic policy.
Performance
Return on net asset value per share and return on share price
For the Company’s financial year ended 31st March 2025 the total return on net asset value per share was +3.5% (debt at fair value). This was an outperformance of 1.0% over its benchmark, which returned +2.5% driven by strong relative stock selection. On 18th June 2025, the total return on net asset value per share since the end of this reporting period was +7.3% (debt at fair value). In their report on page 12 of the annual report and financial statements, the Portfolio Managers review in more detail some of the factors underlying the performance of the Company as well as commenting on the economic and market background over the period.
The total return on share price, which takes into account the movement of the share price and dividends received, over the 12 months delivered a return of +11.8%, which was also an outperformance of the benchmark by a significantly higher margin than the net assets performance. On 18th June 2025, the total return on share price since the end of this reporting period was +10.1%.
For an explanation of the calculation of the Company’s total return on net asset value per share and the total return on share price, please see the Glossary of Terms and Alternative Performance Measures on page 99 of the annual report and financial statements.
Revenue and Dividends
During the 12 months to 31st March 2025, the Company’s net revenue attributable to shareholders (net return after taxation) was -11.2% at £12,145,000 (2024: £13,683,000) largely as a result of the decrease in dividends received from portfolio companies during the period.
As detailed in the Company’s previous annual report and latest RNS announcement on 8th May 2025, the Board’s intention is to provide shareholders with a predictable and regular dividend based on 4% of the preceding year end net asset value (‘NAV’) per share. The Company pays four interim dividends in July, October, January and March.
In line with the above aim, in respect of the year ending 31st March 2025, the Company’s dividend was 4.8 pence per share, amounting to £20.4 million. This represents an increase from the £18.1 million paid for 2024, as illustrated in note 10(b) on page 75 of the annual report and financial statements.
For the Company’s financial year ending 31st March 2026 the Board has decided to maintain the dividend per share at the same level as the year ended 31st March 2025, despite a small reduction in the Company’s NAV as at 31st March 2025 as compared with 31st March 2024. This will result in total annual dividends for the Company’s financial year ending 31st March 2026 of marginally in excess of 4% of NAV as at 31st March 2025. Therefore, the Board expects to declare dividends totalling 4.8 pence per ordinary share for the year ending 31st March 2026, being paid in four equal instalments of 1.2 pence per ordinary share in the months as stated above.
On 8th May 2025, the Board declared a first interim dividend of 1.2 pence per share in respect of the financial year ending 31st March 2026, payable on 4th July 2025. As was the case for the Company’s dividends in respect of the year ended 31st March 2025, to the extent that brought forward revenue reserves are not sufficient, dividends will be paid from distributable capital reserves for the financial year ending 31st March 2026, as permitted by the Company’s Articles.
Gearing
There has been no change in the Investment Manager’s permitted gearing range, as previously set by the Board, of between 10% net cash to 20% geared. At 31st March 2025 the Company was 4.3% geared (31st March 2024: 4.5%).
Discounts, Share Issuance and Repurchase
During the period under review, the average discount across the Investment Trust sector has remained relatively high. This has been particularly noticeable in those investment trusts with significant alternative investments with worries over liquidity, realisation and valuation of the underlying positions. For the first three quarters of the Company’s financial year the Company’s discount hovered around 10% and broadly unchanged relative to its peers. In the early part of the year, the Board undertook buybacks to ensure the discount did not widen beyond our stated objective of 10% under normal market conditions (using the cum-income NAV with debt at fair). However, in the final quarter of the Company’s financial year to 31st March 2025, a combination of improving sentiment towards European equities combined with a greater interest in the Company’s shares caused the Company’s discount to narrow considerably without requiring the Board to be active.
The Company’s Ordinary share discount to NAV with debt at fair value as at 31st March 2025 was 5.5%. The average discount of a peer group of six companies as at the same date was approximately 7.5% and reflects the Company’s narrowing level of discount in both absolute and relative terms. On 18th June, 2025, the Company’s ordinary share’s discount was 3.1%, which compares to an average discount of the same peer group of 6.7% as at the same date, though this hides variation in strategy and performance across the sector as well as significant buyback and tender activity which your Board monitors carefully for any implications for the Company.
In the period under review, 7,153,261 Ordinary shares were bought into Treasury. From 1st April 2025 to 18th June 2025, 250,000 Ordinary shares were bought into Treasury. No Ordinary shares were issued.
Marketing and Shareholder Interaction
The Company continues to raise its profile with shareholders and potential investors. It is the Board’s view that enhancing the Company’s profile will benefit all shareholders, by creating sustained demand for its shares, thereby improving liquidity and scale. Our range of activity is broad seeking to showcase the Company to as wide a relevant audience as possible. The Manager follows an established marketing and investor relations programme targeting institutions, private client stockbrokers and platforms via video conferences, podcasts and in-person meetings. Additionally, we have on-going interaction with national and investment industry journalists demonstrating the knowledge and insight of our managers.
We are careful to undertake this promotional activity in the most effective and controlled manner.
The Board and the Investment Manager maintain a dialogue with the Company’s shareholders via regular email updates, which deliver news and views, and discuss 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/JEGI-Sign-Up or by scanning the QR code in the margin.
It is the Board’s hope that these initiatives will give many more of the Company’s current and potential shareholders the opportunity to interact with the Board and portfolio managers.
AIC Investment Week 2024 Nomination
As referred to in my report included in the Company’s half year report released in November 2024, the Company was again a nominee in the best investment company in the European sector at the annual AIC Investment Week Award ceremony. When the Company won the award in 2023 the judges had commended the Company’s performance and the benefits provided by its simplified and shareholder focused structure.
Board of Directors
As referred to in my report included in the Company’s half year report released in November 2024, in line with the Company’s Board succession plan, Jutta af Rosenborg retired at the Company’s Annual General Meeting on 3rd July 2024 as Director and Audit Committee Chair on reaching her nine-year tenure. Andrew Robson was appointed as the Company’s Audit Committee Chair on the same date. On behalf of the Board thanks were given to Jutta af Rosenborg for the diligence, commitment and clear vision that she provided to the Company during her tenure.
During the year, the Board evaluation process reviewed Directors, the Chair, the Committees and the working of the Board as a whole. It was concluded that all aspects of the Board and its procedures were operating effectively. In accordance with corporate governance best practice, all of the Directors retire by rotation at this year’s AGM and will offer themselves for re-election/election.
Environmental, Social and Governance
Environmental, Social and Governance (‘ESG’) considerations are integrated into the Investment Manager’s investment process as set out in the ESG Report on page 21 of the annual report and financial statements.
Investment Manager
In January 2025, the Management Engagement Committee undertook a formal review of the Manager and Investment Manager, covering the investment management, company secretarial, administrative and marketing services provided to the Company. The review took account of the Investment Manager’s investment performance record, management processes, investment style, resources and risk control mechanisms. I am pleased to report that the Board agreed with the Committee’s recommendation that the continued appointment of the Manager is in the interests of shareholders.
Annual General Meeting
The Company’s ninety-sixth Annual General Meeting (AGM) will be held at 60 Victoria Embankment, London EC4Y 0JP at 2.00 p.m. on Monday, 28th July 2025. We are pleased to invite shareholders to join us in-person for the Company’s AGM, hear from the Portfolio Managers and ask questions. Shareholders wishing to follow the AGM proceedings but choosing not to attend in person will be able to view proceedings live and ask questions (but not vote) through conferencing software. Details on how to register, together with access details, will be available shortly on the Company’s website at www.jpmeuropeangrowthandincome.com or by contacting the Company Secretary at jpmam.investment.trusts@jpmorgan.com
My fellow Board members, representatives of JPMorgan and I look forward to the opportunity to meet and speak with shareholders after the formalities of the meeting have been concluded. Shareholders who are unable to attend the AGM are strongly encouraged to submit their proxy votes in advance of the meeting, so that they are registered and recorded at the AGM. Proxy votes can be lodged in advance of the AGM either by post or electronically: detailed instructions are included in the Notes to the Notice of Annual General Meeting on pages 95 to 98 of the annual report and financial statements.
If you hold your shares via an online platform, for further details of how to vote your shares and/or attend the Company’s AGM, please see the ‘Investing in JPMorgan European Growth & Income plc’ on page 103 of the annual report and financial statements.
If there are any changes to these arrangements for the AGM, the Company will update shareholders via the Company’s website and an announcement on the London Stock Exchange.
Outlook
European equity markets fell significantly following the announcement of the new US tariff regime in early April 2025, mirroring falls across global equities. Since then, the ongoing US tariff negotiations have continued to dominate the global economic outlook and cause large intraday movements in equity markets creating disruption and uncertainty. Despite the recent volatile backdrop, there are positive signs. Europe’s forecast economic growth is projected to move closer to the levels of growth currently forecast in the US. The German government’s €500 billion infrastructure fund, announced in March 2025, aims to revitalise the economy with construction, defence and energy sectors expected to benefit. Inflation in the Eurozone is close to the ECB target of 2% and the ECB’s vigorous reductions in interest rates signify a positive intent. These are several of the reasons why some forecasters are upgrading their expectations for the Eurozone economy.
Our Investment Manager invests in companies whose fortunes are not immune to the travails of the political machinations taking place. However, as we pass through the three-year mark since the restructuring of the company, it is pleasing to reflect back on the consistency and repeatability of their process which allows them to navigate uncertain times. This approach has delivered robust performance and having invested through many cycles the Board are fully confident in the Portfolio Managers’ ability to continue delivering attractive returns going forward.