Jupiter saw modest inflows in H1

Added 27th July 2016

Jupiter Asset Management reported modest inflows in its first half, but pre-tax profits were still up 3% to £86.6m.

Jupiter saw modest inflows in H1

Jupiter's assets under management increased by 7.9% to £37.bn for the six months leading up to 30 June.

Shares in the fund manager went up 2.28% to £4.08 in early trading.

“Net flows were positive despite the market backdrop and we made further targeted investments to support our strategy of diversification by product, client type and geography which continues to deliver on behalf of our clients and shareholders,” said Maarten Slendebroek, chief executive.

“Since the end of June, we have continued to see net flows into our products,” he added. But Slendebroek pointed to H1's Brexit-related uncertainty. "After a strong first quarter for inflows, progress in the second quarter was held back by uncertainty ahead of the EU referendum," he said.

"Despite this headwind, net mutual fund inflows over the first half totalled £0.4 billion and assets under management increased to £37 billion, with a strong contribution from foreign exchange movements at the very end of June," the chief executive continued. 

Slendebroek called the time ahead "a period of potentially heightened volatility."

He explained that a "full Brexit without an EU trade deal and without mutual passporting arrangements would trigger a limited amount of legal restructuring for Jupiter’s operations in continental Europe, but no movement of staff."  

Numis predicted net flows to have been positive Q3 to date, while forecasting small net outflows for H2 2016, however. “We continue to believe that Jupiter offers a favourable combination of exposure to structural long term growth in the retail savings market,” said Numis.

“Product and geographic diversification has been delivering well for Jupiter, in conjunction with improved fund performance,” said Liberum. “Consequently, fund inflows have been strong. The interim results suggest that run-rate profitability is slightly ahead of our own numbers and consensus.”

Liberum contended that marginal net outflows in Q2 2016 are disappointing, however. “Given the slight upside risk to numbers we shall review our forecasts and target price,” it said. But the EBITDA result of £84.7m is running slightly ahead of Liberum's full year forecast of £157.9m.

“Fund flows have reportedly been positive since the end of June and this gives us some comfort, albeit it looks like we will have to downgrade our £2.5bn assumption for net inflows for the full year. Investors will also be heartened to hear that even in the event of a full brexit and loss of pass-porting rights, there will be no requirement to conduct a major reorganization of the business,” said Liberum. 

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