Jupiter showcases turnaround plan

Jupiter Fund Management (JUP) has been in the doldrums for so long that signs of even a partial turnaround would make a welcome change. While the manager still experienced a continued net outflow of funds amounting to £3.5bn, it was £6.8bn in market-related asset falls that chipped away at total assets under management, which were £50.2bn (2022: £60.5bn). Still, there were signs that outflows had started to moderate in the second half and the results were the first real opportunity for Jupiter’s new management to showcase the turnaround plan for the company.

New chief executive Matthew Beesley seems to have taken swift action to sort out Jupiter’s idiosyncratic fund range. Around one-third of the funds have been closed, or merged, in a concerted attempt to make the offering simpler, lower cost and easier to manage. That seemed to have an immediate impact on the group's administration costs, which were over £50mn lower at £302mn by the year-end. The company seems to have found substantial savings in its fixed costs, which were 9 per cent lower at £115mn.

Management did note lower fee margins (73.5 basis points compared with 76 basis points in 2021), in what looks like an attempt to generate fees from the institutional side of the business.

Analysts at Panmure Gordon described the results as “clearing the worktops” and noted that the change in chief executive has coincided with both a market and a segment recovery. The broker forecasts a price/earnings ratio for 2023 of 11, based on an upgraded earnings per share forecast of 12.1p. New management has given Jupiter a jump start. We'll wait and see whether this translates into sustainably smooth running. Hold.

Last IC View: Hold, 123p, 30 Jul 2022