JPMorgan European Discovery Trust Plc (LON:JEDT) has announced its final results for the year ended 31st March 2026
Highlights:
· Net Asset Value (NAV) total return of +23.2% compared with +17.5% for the MSCI Europe (ex UK) Small Cap Net Total Return Index in sterling terms (the “Benchmark”). Share price total return of +21.0%.
· For three years cumulative ended 31st March 2026, NAV total return of +35.3% compared with +26.1% for the Benchmark. Share price total return of +46.2%.
· For five years cumulative ended 31st March 2026, NAV total return of +30.5% compared with +26.7% for the Benchmark. Share price total return of +38.2%.
· For ten years cumulative ended 31st March 2026, NAV total return of +139.6% compared with +138.7% for the Benchmark. Share price total return of +149.9%.
· The Company generated a record revenue return for the year of 18.18p per share as at 31st March 2026 compared with 12.36p as at 31st March 2025 (+47.1%). Dividend per share 16.0p (2025: 13.0p).
· During the year, the Company repurchased 19,458,212 shares. A further 1,474,156 shares have been re-purchased since the period end.
The Chairman of JEDT, Marc van Gelder, commented:
“While the Board welcomes the strong performance over the past year, we continue to focus on long-term outcomes for shareholders. I am pleased to report that this year’s outperformance enhanced the Company’s already robust long-term performance track record. The Company has now made absolute gains and outperformed the benchmark over the three-, five-and ten-year periods ended 31st March 2026.”
“The Board is confident that the portfolio is well-positioned to continue providing shareholders with attractive returns and outperformance as European smaller companies continue their long overdue rebound.”
Portfolio Managers, Jon Ingram, Jack Featherby, Jules Bloch, commented:
“We remain highly optimistic about the prospects for European small caps. We believe the asset class is overdue a resurgence as Europe enters a new phase of investment and growth. Smaller cap companies are uniquely positioned to benefit from the major investment themes playing out in European markets, as a result of their strong domestic focus and agility in adapting to changing market conditions.”
CHAIR’S STATEMENT
Dear Shareholder,
I am pleased to present the Annual Report for the year ended 31st March 2026 and to report that our Company:
• outperformed its benchmark over the year, delivering a total return on net assets of +23.2% compared with +17.5% from the MSCI Europe (ex UK) Small Cap Net Total Return Index in sterling terms;
• on an annualised net asset value (NAV) basis, has outperformed the benchmark over the three- and five-year periods ended 31st March 2026, and matched the benchmark over the ten-year period; and
• generated a record revenue return for the year of 18.18p per share compared with 12.36p per share in the prior year – an increase of 47.1%.
Investment Performance
The investment environment over the past year was positive for European equities, despite periods of significant volatility fuelled in large part by the US’s erratic approach to tariffs and more recently, the US-Iran conflict in the Middle East. The main driver of European market gains was Germany’s very significant fiscal stimulus package, which included plans to boost defence spending in response to concerns about the US’s commitment to NATO. Other European allies followed the lead by committing to multi-year increases in military spending. European smaller cap stocks outperformed, as their domestic focus meant they benefited most from higher government spending and infrastructure investment.
Our Company outperformed its benchmark over the year, delivering a total return on net assets of +23.2% and total return on share price of +21.0%, compared with +17.5% from the MSCI Europe (ex UK) Small Cap Net Total Return Index in sterling terms. As well as performing competitively against its peers over the same period.
While the Board welcomes the strong performance over the past year, we continue to focus on long-term outcomes for shareholders. I am pleased to report that this year’s outperformance enhanced the Company’s already robust long-term performance track record. The Company has now made absolute gains and outperformed the benchmark over the three-, five-and ten-year periods ended 31st March 2026. While also delivering performance broadly in line with the benchmark over ten years on a NAV basis.
It is most pleasing to see that the enhancements made by the Manager, in conjunction with the Board, over the last 18-24 months has resulted in significantly improving performance over that period.
Gearing
Gearing can be a differentiator for an investment trust. The Board believes that it can enhance long-term shareholder returns when applied prudently and within appropriate risk parameters. The Board sets the overall strategic gearing policy and guidelines which it reviews regularly.
Until March 2026, the Company’s gearing strategy was financed via a fixed two-year €125 million revolving credit facility with Scotiabank. Following the maturity of this facility, the Board decided not to renew it as it initiated the use of Contracts for Difference (CFDs) as an alternative source of gearing.
CFDs are financial derivatives which provide exposure to share price movements without requiring ownership of the underlying shares. This offers greater flexibility and cost efficiency than traditional loan facilities, as well as offers the Portfolio Managers operational advantages. The Board continues to closely monitor both the use of CFDs and management of the exposures.
During the year, gearing ranged between 1.1% and 8.0%. At the end of the financial year gearing stood at 4.0%.
Revenue and Dividends
The Company generated a record revenue return for the year of 18.18p per share compared with 12.36p per share in the prior year – an increase of 47.1%.
The Company’s investment objective remains focused on maximising capital growth. This means that the Portfolio Managers are unconstrained to deliver income in any individual financial year. However, the Company’s dividend policy is to distribute to its shareholders substantially all available revenue each year to fulfil the distribution requirement of section 1158 of the Corporation Tax Act 2010 to maintain its investment trust status.
An interim dividend of 3.0 pence per share was paid on 5th February 2026. In light of the revenue generated during the financial year and the Company’s revenue reserves and subject to shareholder approval at the upcoming Annual General Meeting (AGM), the Directors have declared a final dividend of 13.0 pence per share. This will result in the total dividend for the year to 16.0 pence, compared to a total dividend of 13.0 pence for the previous year.
The final dividend will be paid on 3rd August 2026 to shareholders on the register at the close of business on 3rd July 2026. The ex-dividend date will be 2nd July 2026. Following this dividend payment, the Company’s revenue reserves will total £14.9 million, compared to £12.3 million at 31st March 2025.
Discount Management and Share Repurchases
The Board monitors the level of the discount carefully. When appropriate, it uses the ability to repurchase shares to minimise the short-term volatility and the absolute level of the discount. During the financial year the Company repurchased 19,458,212 shares. A further 1,474,156 shares have been re-purchased since the period end. As at 17th June 2026, the discount was 8.3%.
The Company’s share price discount relative to net asset value widened during the Company’s financial year from 7.3% as at end March 2025 to 9.0% at end March 2026. The average discount over the period was 7.5%. This widening is broadly consistent with the wider trends across the investment trust sector which has been negatively impacted by the heightened geopolitical uncertainty.
As the Company’s share buyback facility is an important tool in the management of discount volatility, my fellow Directors and I recommend that shareholders approve the renewal of the authority to repurchase up to 14.99% of the Company’s shares at the Company’s forthcoming AGM. The Board is also, once again, seeking shareholder approval to issue shares at a premium to NAV and to disapply pre-emption rights on any such issues. As with buying shares at a discount, issuing new shares at a premium to NAV enhances returns to existing shareholders and improves market liquidity.
The Manager
The Board, through its Management Engagement Committee, reviews JPMF’s performance as the Company’s Manager on an ongoing basis. In light of the Manager’s investment performance track record and the depth and quality of resources it provides to the Company and its shareholders, the Board is satisfied that JPMF’s continued appointment remains in shareholders’ best interests.
The Board
Having served on the Board for just over nine years, including seven years as Chairman, as mentioned in my statement last year, I will retire at the conclusion of the AGM in July 2026.
I am pleased to confirm that James Will will succeed me as Chair of the Board, and as Chair of both the Nomination Committee and the Management and Engagement Committee. James has served as a Director of the Company since July 2024. He is a lawyer and a seasoned non-executive director in the investment trust sector. He has been a consistently thoughtful and a constructive contributor to the Board. I am confident he will provide sound leadership to the Company in the years ahead.
During the year, the Board also completed the search for a new Non-executive Director. I am delighted to report that the process concluded with the appointment of Michiel Jaski with effect from 9th February 2026. Mr. Jaski brings a wealth of experience from his career in executive and non-executive roles across leading European businesses. His professional experience is summarised on page 48 of the Annual Report.
Environmental, Social and Governance (‘ESG’)
The Board shares the Investment Manager’s view of the significance of financially material environmental, social and governance (‘ESG’) factors when making long term investment decisions. The Portfolio Managers regularly discuss financially material ESG issues with the management teams of potential and current investee companies. Further information on the Investment Manager’s ESG process and engagement is set out in the ESG Report on pages 33 to 35 in the Annual Report.
Shareholder Engagement
The Board values regular engagement with shareholders and appreciates the insights gained through these discussions. They are most helpful in assisting it with the management of the Company.
Over the course of the year, we engaged with a number of our largest shareholders to understand their thoughts and views and thank shareholders for their support. We remain committed to continued engagement over the coming year – in particular, Board members welcome meetings as and when opportunities arise for such dialogue.
It is the Board’s view that widening the Company’s shareholder base and increasing demand for its shares by other means serve the interests of existing shareholders, by increasing liquidity and supporting the share price. To this end, as previously reported, a sub-committee of the Board works closely with the Manager’s sales and marketing teams to communicate the appeal of the European small and mid-cap sector to raise the Company’s profile and to attract more retail investors.
Annual General Meeting
The Company’s Annual General Meeting will be held on Tuesday, 21st July 2026 at 12.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP.
The Portfolio Managers will make a presentation to shareholders, reviewing the past year and commenting on the outlook for the current year. The meeting will be followed by lunch to provide shareholders the opportunity to meet the Directors and the Manager’s representatives. My fellow Directors and I look forward to seeing as many shareholders as possible at the AGM.
For shareholders wishing to follow the AGM proceedings but choosing not to attend in person, we will be able to welcome you through our conferencing software. Details on how to register, together with access details, will shortly be available on the Company’s website: www.jpmorganeuropeandiscovery.co.uk, or by contacting the Company Secretary at [email protected].
As is normal practice, all voting on the resolutions will be conducted by a poll. Your Board encourages all shareholders to support the resolutions proposed. Please note that shareholders viewing the meeting via conferencing software will not be able to vote on the poll and we therefore encourage all shareholders, and particularly those who cannot attend in person, to exercise their votes in advance of the meeting by completing and submitting their proxy. 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 AGM on pages 104 to 106 of the Annual Report.
If you have any detailed or technical questions, it would be helpful if you could raise them in advance with the Company Secretary at the above-mentioned email address.
If there are any changes to the arrangements for the AGM, the Company will update shareholders through the Company’s website and, if appropriate, through an announcement on the London Stock Exchange.
Stay Informed
The Company delivers email updates with regular news and views, as well as the latest performance. If you have not already signed up to receive these communications and you wish to do so, you can opt in via tinyurl.com/JEDT-Sign-Up or by scanning the QR code on page 13 of the Annual Report.
Outlook
The Board remains optimistic about the continued positive outlook for European smaller cap companies, and as a result for the Company.
The sector is experiencing an overdue resurgence from increased fiscal investment across Europe, particularly in Germany, together with expectations of higher infrastructure and defence spending. We welcome the Portfolio Managers’ ongoing efforts to maximise the Company’s exposure to these themes, as well as to energy sector companies in the vanguard of the transition to electrification and renewable energy – a trend gaining momentum in response to recent events in the Middle East.
The combination of these developments has the potential to drive further significant re-rating of European smaller caps over 2026 and well beyond. Especially, as valuations in this part of the market remains very attractive in absolute terms and relative to European large caps, the US and other global markets. As I noted in the Half-Year report, international investors are showing increased interest in European equities, including via M&A activity, and this investment trend is set to continue with European smaller companies as the sweet spot.
Ongoing performance has also confirmed the merits of the recent process enhancements made by the Portfolio Managers, along with their focus on high-quality companies with strong market positions, resilient business models and attractive long-term growth prospects. This has reinforced the Board’s confidence that the portfolio is very well-positioned to continue providing shareholders with attractive returns and outperformance as European smaller companies continue their long overdue rebound.
Finally, it has been a great pleasure to have been a Director of the company for almost ten years. I have enjoyed working with my Board colleagues past and present and J.P. Morgan, our Manager – I would like to thank them all for their support. As I move on, I feel assured that I leave the Company in a good place – following a period of consistently good performance and with a very positive outlook. Just as importantly, leaving the Company with a Portfolio Management team and a Board that is capable of steering the course in the best interests of our shareholders during whatever follows.
Marc van Gelder
Chair of the Board
18th June 2026
