Jupiter Fund Management delivered a decent first-half performance, with funds under management having risen from £22.8bn at the start of the year to £23.4bn. And, while profits fell, after net management fee income slipped 4 per cent to £109m, Jupiter's defensive investment stance has shielded it from the worst of market volatility – leaving the shares looking too modestly rated.
Indeed, and despite a deterioration in the investment climate during the second quarter, there was a rise in demand for mutual funds – inflows grew from £55m in the first three months to £210m in the second quarter. Moreover, the value of the mutual funds was boosted further by an impressive £570m positive investment performance. However, the previously notified loss of a £560m lower-margin segregated mandate – relating to clients of St James's Place – led to an overall net outflow of £302m. The fall in revenue margins is expected to continue, too, as distributors take an increasing share of fees. But chief executive Edward Bonham Carter believes that the effect of this is likely to be offset by an increase in funds managed.
Canaccord Genuity is forecasting full-year pre-tax profit of £69.6m, giving EPS of 19.4p (70.3m and 19.1p in 2011).
| JUPITER FUND MANAGEMENT (JUP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 225p | MARKET VALUE: | £1.03bn | |
| TOUCH: | 224-226p | 12-MONTH HIGH: | 262p | LOW: 175p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 95p* | NET CASH: | £1m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 182 | 37.3 | 9.1 | 2.5 |
| 2012 | 167 | 31.2 | 6.7 | 2.5 |
| % change | -8 | -16 | -26 | - |
Ex-div: 8 Aug Payment: 7 Sep *Includes intangible assets of £425m, or 93p a share | ||||
