Jupiter Fund Management has reported a 4.6 per cent rise in its assets under management in the first half of 2014 to £33.1bn, but profits were lower due to three exceptional items.
In results for the first half of the year the group has reported pre-tax profits of £48.4m in the six months to the end of June - 18.1 per cent lower than the £59.1m profit delivered in the same period in 2013.
A £2.6m write-down of Jupiter’s iO Adria business and £5.3m of costs relating to its sale of the private client business to Rathbones both weighed on the figure. In addition, last year’s profit number was flattered by proceeds from the sale of Jupiter’s stake in Cofunds.
Shares of the firm are trading 4.2 per cent lower today on the results. In addition to the slightly higher than expected fall in earnings, net fund management fee margins fell to 87 basis points in the first half of 2014 compared to 92 basis points reported last year, disappointing the markets.
Jupiter has been pushing to diversify its asset base into fixed income funds, which pay lower profit margins than equity funds. The group is also expanding its presence in Europe by promoting its Sicav fund range, which also delivers lower margins.
Elsewhere, the group reported mutual fund net inflows of £875m in the first half and net segregated mandate inflows of £240m. It warned a large mandate was set to redeem later this year.
Investment trust assets rose by 25 per cent.
The group’s private client business saw a relatively minor £5m overall net outflow in the first half, following the announcement of the sale of the business. Negative market movements also weighed on the business’s assets under management, which fell overall by £25m to £2.2bn.
Jupiter has also advised on its dividend policy, raising its interim dividend to 3.7p compared to 3.5p this time last year.
The group said it would target a 50 per cent dividend payout ratio on an ongoing basis, but it would top this up with special dividends depending on the size of its residual earnings.
