Jupiter to hand more cash to shareholders

As new CEO Matthew Beesley unveils £10m buyback programme

Beleaguered Jupiter Fund Management shareholders reacted positively to the firm’s latest set of financial results after it revealed plans to return more money to shareholders, more regularly.

The firm’s share price rose 5.4% in early trading to hit 93p around midday, but remains a long way from the £1.73 its commanded at the start of the year, let alone the nearly £4 it boasted as recently as February 2020.

It has been a tumultuous year for Jupiter, with CEO Andrew Formica stepping down on 1 October and handing the reins to Matthew Beasley (pictured), formerly group CIO who joined from Artemis in January.

Unhappy shareholders have long lamented the firm’s performance, which saw its share price plunge nearly 85% in the past five years.

So, it is unsurprising that news Jupiter is amending its dividend policy to “return capital to shareholders on a clear, sustainable basis and, where there are no further capital needs, […] return additional capital to shareholders at the appropriate time” has had a positive share price impact.

From 1 January, the firm’s ordinary dividend policy will be reset to 50% of pre-performance fee earnings and no longer be subject to a minimum of the prior year amount.

“We previously reported a target of returning at least 70% of cumulative underlying earnings per share for 2021 and 2022,” the company added. “In view of that target, and our current valuation, Jupiter today announces that we will commence a share buyback programme to repurchase and subsequently cancel shares for up to a maximum consideration of £10m.”

It will run from 24 October and will complete no later than 31 December.

See also: Jupiter downgraded to negative by Fitch

Financial results

The FTSE 250 fund manager started its third quarter with assets under management of £43.5bn and ended on £41.9bn, with £0.5bn of net inflows into its institutional arm softening the £1.1bn that was pulled from its retail & wholesale division.

Jupiter has reported net outflows every quarter since at least the start of 2021, but the £600m that walked out the door in Q3 this year was a marked improvement on the £2bn lost in Q2 and £1.6bn in Q1.

The company said: “A worsening macroeconomic backdrop, continued geopolitical challenges and inflationary concerns, particularly in the UK, again weighed upon investor sentiment in the third quarter. Despite this, we are pleased to report a much-improved flow picture with net outflows of £0.6bn. We continued to attract strong levels of gross flows, with £3.8bn for the quarter and £10.7bn year to date.”

In his first financial results since taking over as CEO, Beesley said: “I am encouraged by the improved flow picture in Q3, despite continued market volatility. This flow momentum has continued into the fourth quarter with the funding of further institutional mandates in excess of £500m in the first week of October alone.

“While we saw net outflows overall, retail outflows have slowed as we continue to focus on delivering a differentiated product set, which both meets our clients’ increasingly complex needs and demonstrates the value of high-conviction, active investment management.

“Since my appointment, I have sought to take decisive actions to ensure we have the optimal operating model to succeed in a competitive environment. This includes reducing our cost base, streamlining the fund range and restructuring our management team. Although this work is ongoing, we have made a good start and this, combined with the success of our existing strategies and new growth opportunities ahead of us, gives me confidence that Jupiter is well placed for a return to sustainable growth.”

See also: Beesley plans to restructure Jupiter funds and split CIO role

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