Don't worry about the slide in reported half-year pre-tax profit at Jupiter Fund Management (JUP). That reflects last year's gain from selling a holding in IFA platform Cofunds, as well around £5m of costs associated with selling its private clients operation. Cash profit actually rose 1 per cent year on year to £76.3m.
Of more significance is new chief executive Maarten Slendebroek’s clarification of Jupiter’s dividend policy. He plans to target a 50 per cent payout ratio, and intends to return most residual earnings to shareholders through special dividends. That could see Jupiter’s income characteristics improve sharply: broker Numis Securities is expecting a full-year total payout of 26.3p, from 12.6p in 2013, suggesting a prospective yield of 6.6 per cent.
Meanwhile, Jupiter’s funds under management rose 14 per cent to £33.1bn, helped by a £1.3bn net fund inflow. Within this was an £875m net inflow into the group’s mutual funds - three quarters of its mutual fund assets have outperformed over the past three years - although management expects a large mandate to be lost later this year. The company has also bolstered its presence internationally over the past 18 months by increasing headcount in Europe and Asia.
Numis expects full-year pre-tax profit of £154m, giving EPS of 26.6p (from £149m and 25.2p in 2013).
JUPITER FUND MANAGEMENT (JUP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 399p | MARKET VALUE: | £1.83bn | |
| TOUCH: | 398-399p | 12-MONTH HIGH: | 448p | LOW: 320p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 112p* | NET CASH: | £172m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 192 | 59.1 | 11.7 | 3.5 |
| 2014 | 193 | 48.4 | 8.5 | 3.7 |
| % change | +1 | -18 | -27 | +6 |
Ex-div: 7 Aug Payment: 29 Aug *Includes intangible assets of £351m, or 77p a share | ||||
