Jupiter axes special dividend

Although mutual fund sales were reportedly strong at £11.4bn, clients withdrew their cash at a faster pace, leading to a £3bn net outflow in Jupiter’s core product category. Mandates here are still delivering on a relative basis – with 72 per cent of mutual fund assets under management outperforming their median peers on a three-year view – though that can be of scant consolation to Jupiter investors hoping for long-overdue signs of growth.

Mr Formica’s solution to this stagnation has been a £390m proposed tie-up with Merian Global Investors, which will boost assets under management but reduce the group’s average fee margin owing to the target’s product mix. Given the ongoing rout in equity markets, it’s hard to judge investors’ actual feelings toward the deal, despite a warm initial reception.

However, the cancellation of a special dividend for 2019 – ostensibly to free up capital for the purchase – is possibly less worrying than Numis’s estimation that the combined groups have seen trackable net outflows of £1.6bn so far in 2020. Together with sizeable drops in asset performance, it is surprising that management did not significantly alter guidance.

Analysts at Numis expect adjusted earnings per share of 26.9p this year, rising to 30.5p in 2021.