Jupiter Fund Management profits drop but divi beats expectations
Shares in Jupiter Fund Management surged on Friday as the asset manager posted a drop in full-year profit and assets under management amid market volatility, but its dividend came in ahead of expectations.
Financial Services
14,016.47
14:49 26/04/24
FTSE 250
19,811.26
14:50 26/04/24
FTSE 350
4,465.87
14:50 26/04/24
FTSE All-Share
4,419.29
14:50 26/04/24
Jupiter Fund Management
76.50p
14:44 26/04/24
In the year to the end of December 2018, pre-tax profit fell by £13.7m to £179.2m as assets under management declined 15% to £42.7bn amid net outflows of £4.6bn.
Meanwhile, underlying earnings per share were down 2.5p to 31.7p and the dividend was reduced by 13% to 28.5p a share. Still, this was above consensus expectations for a dividend of 25.4p a share.
Outgoing chief executive Maarten Slendebroek said: "With market volatility continuing during the year, it was encouraging to see that our strategy of diversification underpinned solid business performance for the period.
"It was also a tough year for asset managers in general, who faced a challenging environment as market sentiment towards the sector experienced a significant shift. Headwinds such as rising compliance and regulatory costs negatively affected the industry.
"This was exacerbated by the prospect of rising long-term interest rates and the uncertainty of the impact of Brexit on the British economy and UK equities. In the first nine months of the year, higher interest rates also had an impact on investor sentiment towards fixed income products."
Jupiter said it has established a Luxembourg-based management company, which will manage the activities of its European offices and allow the group to continue to look after its European clients without any disruption post-Brexit, despite the political and economic uncertainty that it may bring.
Numis upgraded its stance on the shares to ‘add’ from ‘hold’ following the results, as it highlighted a number of positives such as a better-than-expected revenue margin and the fact that management has taken actions that will lower run rate costs this year.
"We feel that a reasonable amount of shorter term uncertainty has been removed by today's update. However, we also note that short-term flows remain unpredictable and we do not yet know in what direction new management might take the company over the medium-long term, hence we do not feel it is appropriate at this stage to upgrade to an ‘fully fledged’ buy recommendation, but we have turned positive nonetheless."
At 0930 GMT, the shares were up 7.7% to 364.72p.