TIDMJUP
RNS Number : 9894G
Jupiter Fund Management PLC
30 July 2021
Highlights
30 July 2021
n Consistent strong investment performance with 69% of mutual
fund assets under management (AUM) above median over three
years
n AUM ended the period at a record high of GBP60.3bn
n Strong gross flows of GBP9.6bn, net outflows of GBP2.3bn
n Underlying profit before tax increased 38% to GBP78.2m (2020
H1: GBP56.6m). Statutory profits rose 40% to GBP57.0m (2020 H1:
GBP40.8m)
n Underlying earnings per share grew 15% to 11.5p
n Interim dividend unchanged at 7.9p per share
Six months Six months ended Year ended
ended 30 June 2020(2) 31 December 2020
30 June 2021
Assets under management
(GBPbn) 60.3 39.2 58.7
---------------------------- -------------- ----------------- ------------------
Net outflows (GBPbn) (2.3) (2.0) (4.0)
---------------------------- -------------- ----------------- ------------------
Net management fees(1)
(GBPm) 224.1 161.4 384.0
---------------------------- -------------- ----------------- ------------------
Statutory profit before
tax (GBPm) 57.0 40.8 132.6
---------------------------- -------------- ----------------- ------------------
Basic earnings per share
(p) 8.7 6.5 21.3
---------------------------- -------------- ----------------- ------------------
Underlying profit before
tax(1) (GBPm) 78.2 56.6 179.0
---------------------------- -------------- ----------------- ------------------
Underlying earnings per
share(1) (p) 11.5 10.0 28.7
---------------------------- -------------- ----------------- ------------------
Interim dividend per share
(p) 7.9 7.9 7.9
---------------------------- -------------- ----------------- ------------------
Operating margin (before
exceptional items)(1) 36% 36% 41%
---------------------------- -------------- ----------------- ------------------
(1) The Group's use of alternative performance measures is
explained on pages 10 and 11.
(2) The acquisition of Merian Global Investors Limited (Merian)
completed on 1 July 2020.
Andrew Formica, Chief Executive, commented:
"I am pleased to report a resilient set of results and strong
investment performance for our clients, which is central to
everything we do.
We have reported record gross inflows for the period, with a
number of strategically important products performing very well,
which highlights our positive momentum going into the second half
of the year. That said, it is disappointing to see net outflows for
the half year, which were concentrated in a small number of
strategies and have been driven primarily by a shift in asset
allocations. The medium to long term investment performance of
these funds remains strong.
With Merian now fully integrated, cost synergies have been
achieved and significantly exceeded our original expectations. We
also have a number of key funds reaching their three-year track
record which, along with our successful focus on cost management,
mean we continue to be well positioned to return to growth."
Analyst presentation
There will be an analyst presentation at 10:15am on 30 July
2021.
The audio presentation will be held virtually. The presentation
may be joined by either telephone
https://secure.emincote.com/client/jupiter/jfm025/vip_connect or by
webcast at https://secure.emincote.com/client/jupiter/jfm025 .
Please note that questions will be taken from the phone lines
only and that registration is required to receive unique joining
details.
The interim report and accounts will be available on the Group's
website at: https://www.jupiteram.com/investor-relations/.
For further information please contact:
Investors Media
Jupiter Alex James Despina Constantinides
+44 (0)20 3817 1636 +44 (0)20 3817 1278
Powerscourt Justin Griffiths Gilly Lock
+44 (0)20 7250 1446 +44 (0)20 7250 1446
LEI Number: 5493003DJ1G01IMQ7S28
Forward-looking statements
This announcement contains forward-looking statements with
respect to the financial condition, results of operations and
businesses of the Group. Such statements and forecasts involve risk
and uncertainty because they relate to events and depend upon
circumstances in the future. There are a number of factors that
could cause actual results or developments to differ materially
from those expressed or implied by forward-looking statements and
forecasts. Forward-looking statements and forecasts are based on
the Directors' current view and information known to them at the
date of this announcement. The Directors do not make any
undertaking to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Nothing in this announcement should be construed as a profit
forecast.
Chief Executive's statement
Following a year of significant upheaval and volatility in 2020,
the first half of 2021 has been relatively stable. As much of the
world has seen encouraging progress against the Covid-19 pandemic,
global markets performed strongly as sentiment has continued to
improve.
As local restrictions have eased, we have begun to welcome our
colleagues as they return to our global offices.
Despite this improving picture, the well-publicised headwinds
facing the asset management industry remain. We generated strong
gross flows in the period of almost GBP10bn but saw total net
outflows of GBP2.3bn.
With Merian now fully integrated into the wider business, we
have delivered resilient financial performance compared to the
second half of 2020. With the acquisition of the Merian business
completing on 1 July 2020, this has driven strong growth in our
financial performance and AUM compared with H1 2020. Underlying
profit before tax(1) was up 38% to GBP78.2m (2020 H1: GBP56.6m) and
underlying earnings per share rose 15% to 11.5p (2020 H1: 10.0p).
In accordance with our dividend policy, we will pay an unchanged
interim dividend of 7.9p per share on 1 September 2021. Statutory
profit before tax increased by 40% to GBP57.0m (2020 H1:
GBP40.8m).
As a high conviction active asset manager, delivering positive
investment performance for our clients is key to our ongoing
success. We will retain our focus on specialist strategies where we
believe we can really add value for our clients and differentiate
ourselves from our peers. We maintained strong performance in the
first half of the year, with 69% of our mutual fund assets
outperforming their peer group over three years, net of all fees
(31 December 2020: 70%). Over a five-year period, 72% of our assets
outperformed (31 December 2020: 69%).
Assets under management
AUM rose to a record GBP60.3bn, a 54% increase from 30 June 2020
(2020 H1: GBP39.2bn) and 3% from 31 December 2020 (GBP58.7bn).
Gross flows remained strong and grew to a record GBP9.6bn.
Despite this, we saw total net outflows in the first half of 2021
of GBP2.3bn (2020 H1: net outflows of GBP2.0bn). This comprised net
outflows from mutual funds of GBP1.7bn and from segregated mandates
of GBP0.6bn.
Outflows were concentrated in a few areas, often where
performance has been robust but the asset class has not been in
client demand. European Growth and UK equities remained out of
favour and both saw further redemptions. Systematic strategies,
excluding the Global Equity Absolute Return fund (GEAR) also saw
outflows, along with the Merlin range.
At the full year, we highlighted a number of funds which,
through strong performance in areas of good client demand, had the
potential to drive future growth. I am pleased to report that in
the first half, these funds' performance remained strong and most
generated positive net inflows.
Our partnership with NZS continues to perform strongly. AUM has
increased to GBP800m, driven by net inflows of over GBP300m. As
short term performance has improved, GEAR has also returned to
positive inflows, with over GBP200m in the first half. The fund is
now much closer to its high water mark compared with the year
end.
In addition, other areas of growth saw good momentum. Global
Sustainable Equities and Strategic Absolute Return Bond have
generated positive inflows and have seen their AUM double in the
last six months. Gold & Silver has also had a strong first
half, generating almost GBP200m in net inflows and reaching over
GBP800m in AUM.
The Chrysalis Investment Trust continued to perform strongly and
saw a successful capital raise in the first quarter that generated
net inflows of GBP257m. AUM has increased to GBP1.4bn.
We remain confident that our strategy and focus is right and in
time will deliver a return to net inflows.
Ongoing commitment to sustainability
As a high conviction active asset manager and stewards of our
clients' capital, we have a responsibility to both actively engage
with our investee companies and to ensure that we hold ourselves to
the same high standards.
We have made strategic progress in both of these areas in the
first half of the year. We have made key hires in both our
Stewardship and Sustainable Investing team, and have restructured
the latter under new leadership.
We remain committed towards a Net Zero emissions target and are
working towards including ESG considerations in all of our supplier
selection processes.
We continue to see significant client interest in our range of
Sustainable strategies. We generated around GBP100m of net inflows
in the first half of 2021 and total AUM in Sustainable strategies
has now grown to over GBP1bn.
Financial results
We have delivered resilient results in the first half of the
year, benefiting from the acquisition and full integration of the
Merian business. Statutory profit before tax increased by 40% to
GBP57.0m (2020 H1: GBP40.8m) and underlying profit before tax rose
38% to GBP78.2m (2020 H1: GBP56.6m) as we benefited from fully
integrating the Merian business last year.
Net revenue(1) also increased by 38% to GBP224.0m (2020 H1:
GBP161.9m). Revenue was down 22% from H2 2020 as no performance
fees crystallised in the first half of the year (2020 H1: GBPnil,
2020 H2: GBP63.6m), although Chrysalis have reported just under
GBP50m of potential performance fees based on their NAV at 31
March. The net management fee margin(1) at 30 June 2021 was 77
basis points, an increase on the 76 basis points run rate at the
beginning of the year.
Total underlying expenses increased by 41% to GBP139.0m (2020
H1: GBP98.6m), mainly as a result of a larger business following
the acquisition and through strategic investments for future
growth. Exceptional items of GBP21.2m (2020 H1: GBP15.8m) primarily
comprise the amortisation of intangible assets and restructuring
costs.
Our operating margin remains unchanged from the first half of
last year at 36%.
Robust and growing capital base
The Board remains focused on maintaining the Group's capital
strength, including a robust surplus over regulatory capital
requirements, while balancing making investments for long-term
growth with distribution to Jupiter shareholders.
We have continued to grow the Group's expected surplus over
regulatory requirements, which at 30 June 2021 was GBP134m (2020
H1: GBP90m) and is sufficient to absorb the estimated GBP44m
reduction in our capital surplus resulting from the implementation
of the prudential regulatory regime (IFPR), which is expected to
come into effect from 1 January 2022.
In accordance with our policy of a progressive dividend in line
with the trend in profitability, the Board has proposed an
unchanged interim ordinary dividend of 7.9p per share payable on 1
September 2021 to shareholders on the register on 13 August
2021.
Positioned to return to growth
Despite the headwinds facing the business, we have delivered a
robust set of results. Investment performance remains strong and we
continue to deliver increasing levels of gross flows. Although we
saw net outflows in the first half, we have a number of key
products with strong investment performance and we are hopeful
given performance and compelling market valuations that sentiment
will change.
With Merian now fully integrated, cost synergies have been
achieved and significantly exceeded our original expectations. We
also have a number of key funds reaching their three-year track
record which, along with our successful focus on cost management,
mean we continue to be well positioned to return to growth.
Andrew Formica
Chief Executive Officer
29 July 2021
(1) The Group's use of alternative performance measures is
explained on pages 10 and 11.
Business review
Assets under management and flows
31 December Q1 net Q2 net flows H1 net flows Market returns 30 June
2020 flows GBPbn GBPbn GBPbn 2021
GBPbn GBPbn GBPbn
============== ============ ======= ============= ============= =============== ========
Mutual funds 49.9 (0.9) (0.8) (1.7) 2.6 50.8
============== ============ ======= ============= ============= =============== ========
Segregated
mandates 7.9 (0.1) (0.5) (0.6) 1.0 8.3
============== ============ ======= ============= ============= =============== ========
Investment
trusts 0.9 0.2 (0.2) - 0.3 1.2
============== ============ ======= ============= ============= =============== ========
Total 58.7 (0.8) (1.5) (2.3) 3.9 60.3
============== ============ ======= ============= ============= =============== ========
AUM increased by 3% to GBP60.3bn as at 30 June 2021 (31 December
2020: GBP58.7bn) as a result of positive market-related movements
of GBP3.9bn in H1, partially offset by net outflows of
GBP2.3bn.
Net mutual fund outflows were GBP1.7bn during the period. This
was driven by outflows in Equities (GBP1.9bn) and Multi-asset
strategies (GBP0.4bn), partially offset by net inflows in
Alternatives (GBP0.5bn) and Fixed Income (GBP0.1bn).
Along with the increase in AUM through Merian, average AUM
increased in H1 2021 due to strong market performance which was
partially offset by net outflows, principally in our mutual funds,
where client demand for UK and European-focused equity strategies
remained subdued. However, the Group gained traction in
Alternatives, with net inflows of more than GBP0.7bn across all
product lines, as investors looked to diversify their portfolios.
The Chrysalis fund in particular benefited from client demand for
exposure to high-growth technological stocks, completing a funding
round in March 2021 and raising gross proceeds of GBP0.3bn.
Investment performance
At 30 June 2021, 69% of our mutual fund AUM had delivered
above-median performance against peer group funds over three years
(31 December 2020: 70% of mutual fund AUM), of which 23% of mutual
fund AUM had delivered first quartile performance (31 December
2020: 42% of mutual fund AUM). Measured over one year, 38% of
mutual fund AUM (31 December 2020: 63% of mutual fund AUM)
delivered above-median performance. Measured over five years, 72%
of mutual fund AUM (31 December 2020: 69% of mutual fund AUM) had
delivered above-median performance.
Financial review
Results for the period
Net revenue
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Net management fees 224.1 161.4 384.0
Net initial charges (0.1) 0.5 0.2
Performance fees - - 73.6
----------------- ----------------- ------------------
Net revenue(1) 224.0 161.9 457.8
Reclassified revenue - - (10.0)
----------------- ----------------- ------------------
Adjusted net revenue(1) 224.0 161.9 447.8
----------------- ----------------- ------------------
Revenue 247.7 182.0 500.5
================= ================= ==================
(1) The Group's use of alternative performance measures is
explained on pages 10 and 11.
Revenue for the period was GBP247.7m (2020 H1: GBP182.0m), with
net revenue of GBP224.0m (2020 H1: GBP161.9m), up 38% on H1 2020
principally as a result of higher average AUM following the
completion of the acquisition of the Merian business on 1 July 2020
and fund performance as financial markets recovered from the lows
of the first quarter of 2020, partially offset by net outflows
across the period.
Against the second half of 2020, net revenues, excluding
performance fees, were up marginally, as the revenue impact of
positive market movements more than offset the impact of net
outflows from clients.
As contractual rights to performance fees normally crystallise
in September or December, dependent on the mandate, no performance
fees were earned in the period (2020 H1: GBPnil).
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
Net management fees (GBPm) 224.1 161.4 384.0
Average AUM (GBPbn) 59.0 39.4 47.8
Net management fee margin
(bps) 77 82 79
Net management fees were up 39% to GBP224.1m (2020 H1:
GBP161.4m), benefiting from the additional average AUM but
partially offset by lower revenue margins compared with H1 2020,
driven by the change in business mix principally due to the Merian
business acquired, which has a lower average net management fee
margin.
Administrative expenses
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December
GBPm GBPm 2020
GBPm
Fixed staff costs 35.4 31.3 76.1
Variable staff costs 41.7 24.3 85.8
Other expenses before
exceptional items 61.9 43.0 103.2
----------------- ----------------- -------------
Administrative expenses
before exceptional items 139.0 98.6 265.1
Exceptional items 11.8 15.8 47.0
----------------- ----------------- -------------
Administrative expenses
after exceptional items 150.8 114.4 312.1
----------------- ----------------- -------------
Variable compensation
ratio(1) 33% 28% 31%
----------------- ----------------- -------------
Total compensation ratio(1) 34% 34% 35%
----------------- ----------------- -------------
Operating margin(1) 36% 36% 41%
----------------- ----------------- -------------
(1) Stated before exceptional items (see APMs on page 10).
Administrative expenses (before exceptional items) of GBP139.0m
(2020 H1: GBP98.6m) were 41% higher than in H1 2020, principally
driven by costs related to the Merian business and certain other
cost increases relating to the Group. Compared with H2 2020, which
reflects the first six month period following acquisition, total
staff costs were considerably lower, mainly due to performance fee
related variable compensation in H2 2020 and net cost savings in
2021. Other expenses before exceptional items were broadly
unchanged but savings arising from the completion of the
integration of the Merian business in 2020 were offset by certain
other cost increases.
Fixed staff costs increased by 13%, due to the increase in the
average headcount for the Group from 533 in H1 2020 to 590 for the
current period. Against the second half of 2020, fixed staff costs
decreased by GBP9.4m, or 21%, of which GBP2.9m was through
integrating Merian and a further GBP6.5m to restructuring
programmes and support that was provided to staff last year,
including remote working allowances for all our people.
At the half year, variable staff costs before exceptional items
were GBP41.7m (2020 H1: GBP24.3m). The key drivers of the increase
were higher post-acquisition headcount and revenues, net of
operating expenses (before exceptional items). The increase also
included variable staff costs on deferred bonus awards relating to
performance fees recorded in H2 2020. These performance fee related
costs also increased the variable compensation ratio, which was 33%
(2020 H1: 28%), and also held the total compensation ratio at 34%
(2020 H1: 34%), which would otherwise have been lower. Although
there is the possibility of performance fees in H2 2021, these are
not able to be recorded at the half year and therefore no related
compensation costs on those potential fees are included in these
results.
Other expenses increased by 44% to GBP61.9m (2020 H1: GBP43.0m),
or 3% compared to the second half of 2020, largely driven by
administrative costs increasing in line with the growth in average
AUM, as well as investments made in growth areas, such as data and
research. The Group also incurred GBP2.9m of costs in H1 2021,
principally relating to FX and the settlement of historical
indirect tax issues. The Group's operating margin (before
exceptional items), including investment losses on the seed capital
portfolio, remained at 36% (2020 H1: 36%).
The Group recognised GBP11.8m of exceptional administrative
expenses (2020 H1: GBP15.8m) which related to redundancy and other
compensation costs incurred as part of the restructuring programme
that started in the final quarter of 2020 and continued into H1
2021 as well as long-term compensation costs relating to the
acquisition. Exceptional items in 2020 additionally included costs
incurred in the acquisition and integration of the Merian business.
A further GBP9.4m (2020 H1: GBPnil) of exceptional costs, bringing
the total to GBP21.2m (2020 H1: GBP15.8m), were in respect of
acquired intangible assets, which were part of the purchase
consideration of the Merian business and which represent the value
attributable to the client book excluding gross inflows. This
intangible asset of GBP75.0m on acquisition is being amortised over
four years.
Statutory profit before tax (PBT) and underlying PBT
Statutory PBT for the period increased by 40% to GBP57.0m (2020
H1: GBP40.8m). Underlying PBT, excluding exceptional items,
increased by 38% to GBP78.2m (2020 H1: GBP56.6m) and exceptional
items increased by 34% to GBP21.2m (2020 H1: GBP15.8m).
Tax
The effective tax rate was 16.8% (2020 H1: 28.7%, 2020 FY:
20.6%) against a headline corporation tax rate of 19.0% (2020 H1
and 2020 FY: 19.0%). The majority of the decrease in this rate was
due to the future increase in the UK Corporation Tax rate to 25.0%
from April 2023 being substantively enacted at the balance sheet
date. This has resulted in a lower effective tax rate as the Group
currently has a net deferred tax asset position and will be able to
attract future tax relief at a higher rate than previously
accounted for.
Earnings per share (EPS) and underlying EPS
EPS was up 34% on 2020 H1 at 8.7p (2020 H1: 6.5p). Underlying
EPS was up 15% at 11.5p (2020 H1: 10.0p). The increase in statutory
and underlying PBT was partially offset by the increase in weighted
average issued share capital issued in connection with the
acquisition on Merian. EPS also benefited from the reduction in the
effective tax rate as referred to above.
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Statutory profit before
tax 57.0 40.8 132.6
Exceptional items 21.2 15.8 46.4
----------------- ----------------- ------------------
Underlying profit before
tax 78.2 56.6 179.0
Tax at average statutory
rate of 19% (14.8) (10.8) (34.0)
----------------- ----------------- ------------------
Underlying profit after
tax(1) 63.4 45.8 145.0
----------------- ----------------- ------------------
Weighted average issued
share capital 553.1m 457.7m 505.4m
----------------- ----------------- ------------------
Underlying EPS 11.5p 10.0p 28.7p
----------------- ----------------- ------------------
Basic EPS 8.7p 6.5p 21.3p
================= ================= ==================
(1) The Group's use of alternative performance measures is
explained on pages 10 and 11.
Cash Flow
The Group generated positive operating cash flows after tax in
H1 2021 of GBP102.2m (2020 H1: GBP43.9m) as the cash generated from
profits in the period were offset by GBP66.9m spent on final
ordinary and special dividend payments to shareholders in respect
of the previous year's profit, variable compensation and related
tax costs. The net decrease in cash in the period was GBP39.6m and,
as at 30 June 2021, the Group held cash of GBP148.5m (31 December
2020: GBP188.1m).
Assets and liabilities
Balance sheet
At 30 June 2021, the Group's net assets decreased to GBP867.7m
from GBP886.1m at 31 December 2020, principally due to dividend
payments more than offsetting profits after tax. The revolving
credit facility of GBP80m was not drawn in the period.
Seed investments
We continue to use our strong capital position to deploy seed
into funds to ensure an effective launch and/or to accelerate the
timescale over which the funds can pass through critical size
thresholds. Once these have been reached, the Group will usually
seek to reinvest its capital in other new or maturing funds. As at
30 June 2021, we had a total investment at fair value of GBP159.4m
in our own funds (31 December 2020: GBP138.3m).
Capital management
The Group maintains a robust surplus over its regulatory
requirements. It assesses its capital position and requirements on
a regular basis. The Group's indicative capital surplus at 30 June
2021 was GBP134.0m (31 December 2020 actual capital surplus:
GBP111.0m). We expect the implementation of the new regulatory
regime (the Investment Firms Prudential Regime (IFPR)) on 1 January
2022 to reduce the Group's admissible capital, but that the Group
will continue to operate with a significant surplus capital at this
date. It is estimated that, if IFPR had been implemented at 30 June
2021, the Group's indicative capital surplus would have been around
GBP44.0m lower at GBP90.0m, which is the same as the capital
surplus at 30 June 2020.
Dividends
Jupiter has a progressive ordinary dividend policy, with our
intention for the ordinary dividend pay-out ratio to be 50% of
underlying EPS across the cycle. In the event that the current year
profits are lower than in previous years, the Group has maintained
the ordinary dividend at the previous high water mark pence per
share level, subject to the Group's financial strength and future
outlook. The Board normally makes additional returns of capital to
shareholders after retaining sufficient earnings for capital and
growth and investments. These additional returns have previously
been made through a special dividend.
The Group's dividend policy is unchanged in 2021. At the half
year, the Board has considered the resilience of the balance sheet
and the outlook for the remainder of the year. Consistent with the
Group's dividend policy the Board has maintained the interim
dividend at 7.9p (2020 H1: 7.9p). The Board has previously reported
its intention to continue to make additional returns of capital but
on a less frequent basis than in the past. The Board's intention
continues to be that the next additional return will be made no
earlier than for the year ending 31 December 2022.
The use of alternative performance measures (APMs)
The Group uses APMs alongside statutory reporting measures as
part of its financial reporting. The following measures are used,
principally within the Chief Executive's statement and the
Financial review, where they are cross-referenced to this page in
the first instance that they appear:
APM Definition Reconciliation Reason for
use
Adjusted net revenue Net revenue after the deduction Page 6 A
of net revenue classified as
exceptional items
Exceptional items Items of income or expenditure Pages 7 B
that are significant in size and 8
and which are not expected to
repeat over the short to medium
term
Fixed staff costs Staff costs (excluding variable Page 7 B
before exceptional items such as bonus awards, LTIP,
items SAYE and SIP) before redundancy
costs
Net management Net management fees divided by Page 6 A
fee margin average AUM
Net management Management fees less fee expenses Page 6 A
fees
Net revenue Revenue less fee and commission Page 6 A
expenses
Operating expenses Administrative expenses (before Page 7 B
(before exceptional exceptional items) less Variable
items) staff costs before exceptional
items
Operating margin Operating profit (before exceptional Page 7 B, C
(before exceptional items) divided by Adjusted net
items) revenue
Operating profit Underlying profit before tax Pages 8 B
(before exceptional before Finance costs and 12
items)
Ordinary dividends Interim and full-year dividends N/A B
per share (does not include any special
dividends)
Total compensation Fixed staff costs before exceptional Page 7 C
ratio items plus Variable staff costs
before exceptional items as a
proportion of Net revenue
Underlying EPS Underlying profit after tax divided Page 8 B, D
by issued share capital
Underlying profit Underlying profit before tax Page 8 B
after tax less tax at the weighted average
UK corporation tax rate
Underlying profit Profit before tax less Exceptional Page 8 B
before tax items
Variable compensation Variable staff costs before exceptional Page 7 B, C
ratio items as a proportion of Net
revenue less Operating expenses
before exceptional items
Variable staff Variable staff costs, excluding Page 7 B
costs before exceptional Exceptional items
items
Changes in the use of APMs
1. In 2020, exceptional items included an item of revenue. As a
result, in order to show revenue both before and after this item, a
new APM for Adjusted net revenue was introduced. Two financial
ratios use this measure (Total and Variable compensation ratios),
and we amended their definitions accordingly. This is not a change
from the Group's 2020 year-end use of APMs, but is a change from
the Group's presentation of its 2020 half-year results.
Our reasons for using APMs
A. To draw out meaningful subtotals of revenues and earnings,
together with ratios derived from such measures, commonly used by
asset managers after taking into account items such as fee
expenses, including commissions payable, without which a proportion
of the revenues would not have been earned, and administrative
expenses which often have a direct link to revenues through the use
of compensation ratios to set remuneration.
B. To present users of the accounts with a clear view of what
the Group considers to be the results of/distributions from its
underlying operations, enabling consistent period-on-period
comparisons and making it easier for users of the accounts to
identify trends.
C. To provide additional information not required for disclosure
under accounting standards. The information is given to assist
users of the accounts in gauging the level of operational gearing
and efficiency in the Group.
D. Used by the Board to determine the Group's ordinary dividend
and as a consistent measure of profitability. Also used in the
measurement of one of the criteria for share-based awards to senior
staff with performance conditions.
All APMs relate to past performance.
Section 1: Results for the period
Consolidated income statement for the six months ended 30 June
2021
Notes Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December
GBPm GBPm 2020
GBPm
Revenue 1.1 247.7 182.0 500.5
Fee and commission expenses 1.1 (23.7) (20.1) (42.7)
Net revenue 1.1 224.0 161.9 457.8
Administrative expenses 1.3 (150.8) (114.4) (312.1)
Other (losses)/gains 1.4 (2.6) (4.0) 3.3
Amortisation of intangible
assets 3.2 (10.3) (1.0) (11.3)
---------------- ---------------- ------------
Operating profit 60.3 42.5 137.7
Finance costs 1.5 (3.3) (1.7) (5.1)
Profit before taxation 57.0 40.8 132.6
Income tax expense 1.6 (9.6) (11.7) (27.3)
---------------- ---------------- ------------
Profit for the period
(1) 47.4 29.1 105.3
---------------- ---------------- ------------
Earnings per share
Basic 1.7 8.7p 6.5p 21.3p
Diluted 1.7 8.5p 6.4p 20.8p
Consolidated statement of comprehensive income for the six
months ended 30 June 2021
Notes Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December
GBPm GBPm 2020
GBPm
Profit for the period 47.4 29.1 105.3
---------------- ---------------- ------------
Items that may be reclassified
subsequently to profit
or loss
Exchange movement on
translation of subsidiary
undertakings 4.2 (1.3) 1.7 0.7
---------------- ---------------- ------------
Other comprehensive (loss)/income
for the period net of
tax (1.3) 1.7 0.7
---------------- ---------------- ------------
Total comprehensive income
for the period net of
tax 46.1 30.8 106.0
================ ================ ============
(1) Non-controlling interests are presented in the Consolidated statement of changes in equity.
Notes to the Group financial statements - Income statement
Introduction
Jupiter Fund Management plc (the Company) and its subsidiaries
(together, the Group) offer a range of asset management products.
Through its subsidiaries, the Group acts as an investment manager
to authorised unit trusts, SICAVs, ICAVs, ICVCs, OEICs, investment
trust companies, segregated mandates, pension funds and other
specialist funds. At 30 June 2021, the Group had offices in the
United Kingdom, Ireland, Austria, Germany, Hong Kong, Italy,
Luxembourg, Singapore, Spain, Sweden, Switzerland and the United
States of America.
The Group's interim financial statements have been split into
sections to assist with their navigation and align with the
Financial review. The basis of preparation, accounting policies and
principal risks and mitigations are within Section 5 and Section
7.
The impact of exceptional items on the financial statements
The Group has presented certain items as exceptional in 2020 and
in the first half of 2021. In 2021, these items principally relate
to charges arising from the Merian acquisition of 1 July 2020 which
are required to be recorded across multiple accounting periods,
together with redundancy and other compensation costs incurred as
part of the restructuring programme the Group embarked on in a
post-integration review of its structures, systems and processes.
In 2020, exceptional items principally related to the Merian
acquisition. Further details of all items that are deemed
exceptional are explained below, as well as within the relevant
notes to the accounts and in the Financial review.
The use of exceptional items and underlying profit measures
In the Financial review of this document, the Group makes use of
a number of APMs, including 'Underlying profit before tax'. The use
of such measures means that financial results referred to in that
section of this document may not be equal to the statutory results
reported in the financial statements. Guidelines issued by the
European Securities and Markets Authority require such differences
to be reconciled.
'Underlying profit before tax', which is defined on page 10, is
equal to the statutory profit before tax less exceptional items.
Exceptional items are also defined on page 10. The financial
statements do not refer to or use such measures, but the table
below provides a reconciliation, indicating in which notes the
exceptional items are recorded.
Notes Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December
GBPm GBPm 2020
GBPm
Underlying profit before
tax (page 8) 78.2 56.6 179.0
Net revenue 1.1 - - 10.0
Administrative expenses 1.3 (11.8) (15.8) (47.0)
Amortisation of intangible
assets 3.2 (9.4) - (9.4)
Statutory profit before
tax 57.0 40.8 132.6
================ ================ ============
1.1 Revenue
The Group's primary source of revenue is management fees.
Management fees are charged for investment management or
administrative services and are normally based on an agreed
percentage of the assets under management (AUM). Initial charges
and commissions are for additional administrative services at the
beginning of a client relationship, as well as ongoing
administrative costs. Performance fees may be earned from some
funds when agreed performance conditions are met. Net revenue is
stated after fee and commission expenses to intermediaries for
ongoing services under distribution agreements.
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Management fees 247.6 181.4 426.6
Initial charges and commissions 0.1 0.6 0.3
Performance fees - - 73.6
---------------- ---------------- -----------------
Revenue 247.7 182.0 500.5
Fee and commission expenses
relating to management
fees (23.5) (20.0) (42.6)
Fees and commission expenses
relating to initial charges
and commissions (0.2) (0.1) (0.1)
---------------- ---------------- -----------------
Net revenue 224.0 161.9 457.8
================ ================ =================
Disaggregation of revenue
The Group disaggregates revenue from contracts with customers on
the basis of product type as this best depicts how the nature,
amount, timing and uncertainty of the Group's revenue and cash
flows are affected by economic factors.
The Group's product types can be broadly categorised into pooled
funds and segregated mandates. Segregated mandates are generally
established in accordance with the requirements of a specific
investor. In contrast, pooled funds, which include both mutual
funds and investment trusts, are established by the Group, with the
risks, exposures and investment approach defined via a prospectus
which is provided to potential investors.
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Revenue by product type
Pooled funds 235.1 174.1 462.2
Segregated mandates 12.6 7.9 38.3
---------------- ---------------- -----------------
Revenue 247.7 182.0 500.5
================ ================ =================
1.2 Segmental reporting
The Group offers a range of products and services through
different distribution channels. All financial, business and
strategic decisions are made centrally by the Board of Directors
(the Board), which determines the key performance indicators of the
Group. Information is reported to the chief operating decision
maker, the Board, on a single segment basis. While the Group has
the ability to analyse its underlying information in different
ways, for example by product type, this information is only used to
allocate resources and assess performance for the Group as a whole.
On this basis, the Group considers itself to be a single-segment
investment management business.
1.3 Administrative expenses
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Staff costs 94.8 54.8 182.8
Depreciation of property,
plant and equipment 2.8 3.0 6.0
Other administrative
expenses 59.2 54.0 124.2
---------------- ---------------- -----------------
Administrative expenses
before (gains)/losses
arising from economic
hedging of fund awards 156.8 111.8 313.0
Net (gains)/losses on
instruments held to provide
an economic hedge for
fund awards (6.0) 2.6 (0.9)
Total administrative
expenses 150.8 114.4 312.1
================ ================ =================
1.4 Other (losses)/gains
Other (losses)/gains relate principally to (losses)/gains made
on a hedging instrument purchased to mitigate the Group's exposure
to pricing movements in its own shares in respect of share-based
awards it has granted and on the Group's seed investment portfolio
and derivative instruments held to provide economic hedges against
that portfolio. The portfolio and derivatives are held at fair
value through profit or loss (see Note 3.4). Gains and losses on
these investments comprise both realised and unrealised
amounts.
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Dividend income 0.5 0.4 0.8
Gains on financial instruments
designated at fair value
through profit or loss
upon initial recognition 4.9 1.2 14.3
Losses on financial instruments
at fair value through
profit and loss (8.0) (5.6) (11.8)
---------------- ---------------- -----------------
Other (losses)/gains (2.6) (4.0) 3.3
================ ================ =================
1.5 Finance costs
Finance costs principally relate to interest payable on Tier 2
subordinated debt notes (see Note 3.6 for further details) and the
unwinding of the discount applied to lease liabilities. Finance
costs also include ancillary charges for commitment fees and
arrangement fees associated with the revolving credit facility.
Interest payable is charged on an accruals basis using the
effective interest method.
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Interest on subordinated
debt 2.2 0.7 3.1
Interest on lease liabilities 0.8 0.9 1.8
Finance costs on the
revolving credit facility 0.1 0.1 0.2
Other finance costs 0.2 - -
Total finance costs 3.3 1.7 5.1
================ ================ =================
1.6 Income tax expense
Analysis of charge in the period:
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Current tax
Tax on profits for the
period 12.9 8.3 27.7
Adjustments in respect
of prior periods 0.5 - (0.3)
---------------- ---------------- -----------------
13.4 8.3 27.4
Deferred tax
Originating and reversal
of temporary differences (3.8) 3.4 (0.5)
Adjustments in respect
of prior periods - - 0.4
---------------- ---------------- -----------------
(3.8) 3.4 (0.1)
Total income tax expense 9.6 11.7 27.3
================ ================ =================
The weighted average UK corporation tax rate for the period
ended 30 June 2021 was 19.0% (2020 H1 and 2020 FY: 19.0%). The
estimated average annual tax rate used for the period to 30 June
2021 is 16.8%, compared to 28.7% for the six months ended 30 June
2020.
The majority of the decrease in this rate was due to the
announcement on 3 March 2021 that the corporation tax rate will
increase to 25.0% from 1 April 2023. This rate was substantively
enacted at the balance sheet date and, as such, deferred tax assets
and liabilities have been recognised at this rate where they are
expected to unwind after this date. This has resulted in an overall
increase in deferred tax assets on deferred compensation unwinding
in future years. This is partially offset by an increase in the
deferred tax liability on intangibles recognised on the acquisition
of the Merian Group.
1.7 Earnings per share
Basic EPS is calculated by dividing the profit for the period by
the weighted average number of ordinary shares outstanding during
the period, less the weighted average number of own shares held.
Own shares are shares held in an Employee Benefit Trust (EBT) for
the benefit of employees under the vesting, lock-in and other
incentive arrangements in place.
Diluted EPS is calculated by dividing the profit for the period
by the weighted average number of ordinary shares outstanding
during the period for the purpose of basic EPS, plus the weighted
average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into
ordinary shares.
For the purposes of calculating EPS, the share capital of the
parent is calculated as the weighted average number of ordinary
shares in issue.
The weighted average number of ordinary shares used in the
calculation of EPS is as follows:
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
Weighted average number Number Number Number
of shares million million million
Issued share capital 553.1 457.7 505.4
Less: own shares held (7.8) (12.5) (10.5)
----------------- ----------------- ------------------
Weighted average number
of ordinary shares for
the purpose of basic
EPS 545.3 445.2 494.9
Add back: weighted average
number of dilutive potential
shares 11.4 11.2 10.6
Weighted average number
of ordinary shares for
the purpose of diluted
EPS 556.7 456.4 505.5
================= ================= ==================
Six months ended Six months ended Year ended
30 June 2021 30 June 2020 31 December 2020
Earnings per share Pence Pence Pence
Basic 8.7p 6.5 21.3
Diluted 8.5p 6.4 20.8
Section 2: Consolidated statement of cash flows
Consolidated statement of cash flows for the six months ended 30
June 2021
Notes Six months Six months Year ended
ended ended 31 December
30 June 2021 30 June 2020 2020
GBPm GBPm GBPm
Cash flows from operating activities
Cash generated from operations 2.1 123.2 60.2 131.8
Income tax paid (21.0) (16.3) (27.2)
-------------
Net cash inflows from operating
activities 102.2 43.9 104.6
Cash flows from investing activities
Purchase of property, plant and
equipment 3.3 (0.8) (0.7) (1.3)
Purchase of intangible assets 3.2 (0.7) (0.7) (1.3)
Purchase of financial assets at
fair value through profit or loss
(FVTPL) (126.1) (194.9) (251.5)
Proceeds from disposal of financial
assets at FVTPL 83.8 170.4 249.0
Cash movement from funds no longer
consolidated (3.9) - -
Net cash received from acquisitions - - 68.2
Dividend income received 0.5 0.4 0.8
------------- ------------- ------------
Net cash (outflows)/inflows from
investing activities (47.2) (25.5) 63.9
Cash flows from financing activities
Dividends paid 4.3 (66.9) (40.8) (83.9)
Purchase of shares by EBT (13.2) (6.3) (10.7)
Proceeds from debt issued - 49.0 49.0
Repayment of borrowings - - (111.0)
Finance costs paid (4.7) (0.9) (0.6)
Cash paid in respect of lease arrangements (2.8) (2.8) (6.7)
Third-party subscriptions into
consolidated funds 16.6 32.8 53.2
Third-party redemptions from consolidated
funds (22.4) (13.5) (47.5)
Distributions paid by consolidated
funds (1.2) (1.8) (1.6)
------------- ------------- ------------
Net cash (outflows)/inflows from
financing activities (94.6) 15.7 (159.8)
Net (decrease)/increase in cash
and cash equivalents (39.6) 34.1 8.7
Cash and cash equivalents at beginning
of period 188.1 179.4 179.4
------------- ------------- ------------
Cash and cash equivalents at end
of period 3.5 148.5 213.5 188.1
============= ============= ============
Notes to the Group financial statements - Consolidated statement
of cash flows
2.1 Cash flows generated from operating activities
Six months Six months ended Year ended
ended 30 June 2020 31 December 2020
30 June 2021 GBPm GBPm
GBPm
Operating profit 60.3 42.5 137.7
Adjustments for:
Amortisation of intangible
assets 10.3 1.0 11.3
Depreciation of property,
plant and equipment 2.8 3.0 6.0
Other (gains)/losses (7.2) 3.3 (7.0)
Fund unit hedges (6.0) 2.6 (0.9)
Share-based payments 15.2 10.0 19.8
Cash inflows from exercise
of share options 0.1 0.3 0.2
Decrease/(increase) in trade
and other receivables 52.1 (39.8) (53.2)
(Decrease)/increase in trade
and other payables (4.4) 37.3 17.9
------------- ---------------- -----------------
Cash generated from operations 123.2 60.2 131.8
============= ================ =================
2.2 Changes in liabilities arising from financing activities
Six months Six months ended Year ended
ended 30 June 2020 31 December 2020
30 June 2021 GBPm GBPm
GBPm
Financial liabilities as
a result of financing activities
brought forward at 1 January 89.2 74.9 74.9
Changes from financing cash
flows (5.8) 19.3 5.7
Changes arising from obtaining
or losing control of consolidated
funds (47.0) - -
Changes in fair values 5.0 0.6 8.6
------------- ---------------- -----------------
Financial liabilities at
FVTPL as a result of financing
activities carried forward 41.4 94.8 89.2
Subordinated debt in issue 49.2 49.1 49.2
------------- ---------------- -----------------
Liabilities arising from
financing activities 90.6 143.9 138.4
============= ================ =================
Section 3: Assets and liabilities
Consolidated balance sheet at 30 June 2021
Notes 30 June 2021 30 June 2020 31 December
GBPm GBPm 2020
GBPm
Assets
Non-current assets
Goodwill 3.1 570.6 341.2 570.6
Intangible assets 3.2 61.2 5.5 70.8
Property, plant and equipment 3.3 45.6 49.6 47.4
Deferred tax assets 23.8 12.2 20.0
Trade and other receivables 0.4 0.5 0.5
701.6 409.0 709.3
Current assets
Investments in associates 3.4 32.5 - -
Financial assets at FVTPL 3.4 244.4 244.8 261.1
Trade and other receivables 135.3 150.5 187.3
Current income tax assets - 1.3 -
Cash and cash equivalents 3.5 148.5 213.5 188.1
--------------------------- --------------------------- -----------
560.7 610.1 636.5
--------------------------- --------------------------- -----------
Total assets 1,262.3 1,019.1 1,345.8
=========================== =========================== ===========
Total equity attributable
to shareholders 867.7 604.4 886.1
=========================== =========================== ===========
Liabilities
Non-current liabilities
Loans and borrowings 3.6 49.2 49.1 49.2
Trade and other payables 88.7 72.6 87.4
Deferred tax liabilities 12.1 - 12.5
--------------------------- --------------------------- -----------
150.0 121.7 149.1
Current liabilities
Financial liabilities at
FVTPL 3.4 41.7 95.1 89.4
Trade and other payables 201.8 197.9 212.8
Current income tax liability 1.1 - 8.4
--------------------------- --------------------------- -----------
244.6 293.0 310.6
--------------------------- --------------------------- -----------
Total liabilities 394.6 414.7 459.7
=========================== =========================== ===========
Total equity and liabilities 1,262.3 1,019.1 1,345.8
=========================== =========================== ===========
Notes to the Group financial statements - Assets and
liabilities
3.1 Goodwill
Goodwill relates to the 2007 acquisition of Knightsbridge Asset
Management Limited (GBP341.2m) and the 2020 acquisition of Merian
Global Investors Limited (GBP229.4m).
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Goodwill 570.6 341.2 570.6
570.6 341.2 570.6
============ ============ ================
The Group has determined that it is a single cash generating
unit for the purpose of assessing the carrying value of goodwill.
No additional goodwill was recognised in the period (2020 H1:
GBPnil, 2020 FY: GBP229.4m).
The carrying value of goodwill is not amortised but is tested
annually for impairment or more frequently if any indicators of
impairment arise. No impairment losses have been recognised in the
current or preceding periods.
3.2 Intangible assets
Intangible assets consist of investment management contracts
acquired in the business combination with Merian in 2020 and
computer software.
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Intangible assets 61.2 5.5 70.8
61.2 5.5 70.8
=========================== ============ ================
The amortisation charge for the period was GBP10.3m (2020 H1:
GBP1.0m, 2020 FY: GBP11.3m) of which GBP9.4m (2020 H1: GBPnil, 2020
FY: GBP9.4m) relates to the investment management contracts and has
been recorded as an exceptional item in the Financial review. The
Group acquired GBPnil (2020 H1: GBPnil, 2020 FY: GBP75.0m)
investment management contracts during the period and software with
a value of GBP0.7m (2020 H1: GBP0.7m, 2020 FY: GBP1.3m).
The Directors have reviewed intangible assets as at 30 June 2021
and have concluded there are no indicators of impairment (2020 H1
and 2020 FY: same).
3.3 Property, plant and equipment
The net book value of property, plant and equipment at 30 June
2021 was GBP45.6m (2020 H1: GBP49.6m, 2020 FY: GBP47.4m). During
the period, the Group acquired items of property, plant and
equipment (excluding right-to-use leased assets) with a value of
GBP0.8m (2020 H1: GBP0.7m, 2020 FY: GBP1.3m). Additions to the
right-of-use leased assets during the period were GBP0.2m (2020 H1:
GBPnil, 2020 FY: GBP15.9m). The Group disposed of right-of-use
leased assets with a value of GBPnil (2020 H1: GBPnil, 2020 FY:
GBPnil).
3.4 Financial instruments held at fair value
As at 30 June 2021, the Group held the following classes of
financial instruments measured at fair value, which principally
arise from the Group's investments in seed investments (see Note
5.3):
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Investments in associates 32.5 - -
Financial assets at FVTPL 244.4 244.8 261.1
Financial liabilities
at FVTPL (41.4) (94.8) (89.2)
Other financial liabilities
at FVTPL (0.3) (0.3) (0.2)
235.2 149.7 171.7
=========================== ============ ================
3.5 Cash and cash equivalents
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Cash at bank and in hand 145.0 204.7 179.7
Cash held by the EBT
and seed investment subsidiaries 3.5 8.8 8.4
Total cash and cash equivalents 148.5 213.5 188.1
=========================== ============ ================
3.6 Loans and borrowings
On 27 April 2020, the Group issued GBP50.0m of Tier 2
subordinated debt notes at a discount of GBP0.5m. Issue costs were
GBP0.5m. These notes will mature on 27 July 2030 and bear interest
at a rate of 8.875% per annum to 27 July 2025, and at a reset rate
thereafter. The Group has the option to redeem all of the notes
from 27 April 2025 onwards. The movements in the balance in the six
month period to 31 December 2020 represent the unwinding of the
discount applied to the liability.
30 June 2021 30 June 2020 31 December 2020
GBPm GBPm GBPm
Non-current subordinated
debt in issue 49.2 49.1 49.2
49.2 49.1 49.2
=========================== ============ ================
Section 4: Equity
Consolidated statement of changes in equity for the six months
ended 30 June 2021
Share Share Own share Other Foreign Retained Total Non-controlling Total
capital premium reserve reserve currency earnings interests equity
translation
reserve
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 January 2020 9.2 - (0.3) 8.0 2.1 592.7 611.7 - 611.7
Profit for the
period - - - - - 29.1 29.1 - 29.1
Exchange movements
on translation
of subsidiary
undertakings - - - - 1.7 - 1.7 - 1.7
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Other
comprehensive
income - - - - 1.7 - 1.7 - 1.7
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Total
comprehensive
income - - - - 1.7 29.1 30.8 - 30.8
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Vesting of
ordinary shares
and options - - 0.1 - - 0.2 0.3 - 0.3
Dividends paid - - - - - (40.8) (40.8) - (40.8)
Purchase of shares
by the
EBT - - - - - (6.3) (6.3) - (6.3)
Share-based
payments - - - - - 9.9 9.9 - 9.9
Current tax - - - - - 0.1 0.1 - 0.1
Deferred tax - - - - - (1.3) (1.3) - (1.3)
---------------
Total transactions
with
owners - - 0.1 - - (38.2) (38.1) - (38.1)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Balance at 30 June
2020 9.2 - (0.2) 8.0 3.8 583.6 604.4 - 604.4
======== ======== ========= ======== ============ ========= ====== =============== =======
Profit for the
period - - - - - 76.4 76.4 (0.2) 76.2
Exchange movements
on translation
of subsidiary
undertakings - - - - (1.0) - (1.0) - (1.0)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Other
comprehensive
loss - - - - (1.0) - (1.0) - (1.0)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Total
comprehensive
(loss)/income - - - - (1.0) 76.4 75.4 (0.2) 75.2
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Issuance of
ordinary shares
as consideration
for a
business
consideration,
net of
transaction costs
and tax 1.9 242.1 - - - - 244.0 - 244.0
Vesting of
ordinary shares
and options - - 0.1 - - (0.2) (0.1) - (0.1)
Dividends paid - - - - - (43.1) (43.1) - (43.1)
Purchase of shares
by the
EBT - - (0.1) - - (4.3) (4.4) - (4.4)
Share-based
payments - - - - - 9.9 9.9 - 9.9
Current tax - - - - - (0.1) (0.1) - (0.1)
Deferred tax - - - - - 0.3 0.3 - 0.3
-------- -------- --------- ------------ --------- ------ --------------- -------
Total transactions
with
owners 1.9 242.1 - - - (37.5) 206.5 - 206.5
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Balance at 31
December
2020 11.1 242.1 (0.2) 8.0 2.8 622.5 886.3 (0.2) 886.1
======== ======== ========= ======== ============ ========= ====== =============== =======
Profit for the
period - - - - - 47.3 47.3 0.1 47.4
Exchange movements
on translation
of subsidiary
undertakings - - - - (1.3) - (1.3) - (1.3)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Other
comprehensive
loss - - - - (1.3) - (1.3) - (1.3)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Total
comprehensive
(loss)/income - - - - (1.3) 47.3 46.0 0.1 46.1
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Vesting of
ordinary shares
and options - - 0.1 - - - 0.1 - 0.1
Dividends paid - - - - - (66.9) (66.9) - (66.9)
Purchase of shares
by the
EBT - - (0.1) - - (13.1) (13.2) - (13.2)
Share-based
payments - - - - - 15.2 15.2 - 15.2
Current tax - - - - - (0.1) (0.1) - (0.1)
Deferred tax - - - - - 0.4 0.4 - 0.4
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Total transactions
with
owners - - - - - (64.5) (64.5) - (64.5)
-------- -------- --------- -------- ------------ --------- ------ --------------- -------
Balance at 30 June
2021 11.1 242.1 (0.2) 8.0 1.5 605.3 867.8 (0.1) 867.7
======== ======== ========= ======== ============ ========= ====== =============== =======
Notes 4.1 4.1 4.2 4.2 4.2 4.2
Notes to the Group financial statements - Equity
4.1 Share capital and share premium
Share capital and 30 June 30 June 31 December 30 June 30 June 31 December
share premium 2021 2020 2020 2021 2020 2020
Shares Shares Shares GBPm GBPm GBPm
m m m
Ordinary shares
of 2p each 553.1 457.7 553.1 253.2 9.2 253.2
------- ------- ----------- ------- ------- -----------
553.1 457.7 553.1 253.2 9.2 253.2
======= ======= =========== ======= ======= ===========
Movements in ordinary shares Number of ordinary Par value Share premium
shares GBPm GBPm
m
At 30 June 2020 457.7 9.2 -
Shares issued relating to acquisition
of subsidiary 95.4 1.9 242.1
At 31 December 2020 553.1 11.1 242.1
------------------ --------- -------------
At 30 June 2021 553.1 11.1 242.1
================== ========= =============
4.2 Reserves
(i) Own share reserve
The Group operates an EBT for the purpose of satisfying certain
retention awards to employees. The holdings of this trust, which is
funded by the Group, include shares that have not vested
unconditionally to employees of the Group. These shares are
recorded at cost and are classified as own shares. The shares are
used to settle obligations that arise from the granting of
share-based awards.
At 30 June 2021, 10.2m ordinary shares (2020 H1: 8.3m, 2020 FY:
7.2m), with a par value of GBP0.2m (2020 H1: GBP0.2m, 2020 FY:
GBP0.2m), were held as own shares within the Group's EBT for the
purpose of satisfying share option obligations to employees.
(ii) Other reserve
The other reserve of GBP8.0m (2020 H1: GBP8.0m, 2020 FY:
GBP8.0m) relates to the conversion of Tier 2 preference shares in
2010.
(iii) Foreign currency translation reserve
The foreign currency translation reserve of GBP1.5m (2020 H1:
GBP3.8m, 2020 FY: GBP2.8m) is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries.
(iv) Retained earnings
Retained earnings of GBP605.3m (2020 H1: GBP583.6m, 2020 FY:
GBP622.5m) are the amount of earnings that are retained within the
Group after dividend payments and other transactions with
owners.
4.3 Dividends
On 14 May 2021 the Group paid a full-year dividend for 2020 of
9.2p per ordinary share and a special dividend of 3.0p per share.
This amounted to a total payment of GBP66.9m after taking into
account the GBP0.6m dividends waived on shares held in the EBT.
The Board has declared an interim dividend for the period of
7.9p per ordinary share. This dividend will be paid on 1 September
2021 to ordinary shareholders on the register at close of business
on 13 August 2021. This dividend amounts to GBP43.7m (before
adjusting for any dividends waived on shares in the EBT).
Section 5: Other Notes
Notes to the Group financial statements - Other notes
Within this Interim Report and Accounts, all current and
comparative data covering periods to (or as at) 30 June are
unaudited. Data given in respect of the year ended 31 December 2020
is audited. Information which is the required content of the
Interim Management Report can be found on pages 1 to 11 and 28.
5.1 Basis of preparation
These condensed financial statements for the six months ended 30
June 2021 have been prepared in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the Financial Conduct
Authority and with IAS 34 Interim Financial Reporting, as adopted
by the United Kingdom. The condensed interim financial statements
should be read in conjunction with the Group's annual financial
statements for the year ended 31 December 2020, which were prepared
in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
The condensed financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2020 were
approved by the Board on 25 February 2021 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of
the Companies Act 2006. The condensed interim financial statements
have been reviewed, not audited.
The Group has access to the financial resources required to run
the business efficiently and a strong gross cash position. The
Group's forecasts and projections, which are subject to rigorous
sensitivity analysis, show that the Group will be able to operate
within its available resources even given the uncertainty inherent
within future market levels and investment performance. The
Directors have not identified any material uncertainties to the
Group's ability to continue to adopt the going concern basis. As a
consequence, the Directors have a reasonable expectation that the
Group has adequate resources to continue operating for a period of
at least 12 months from the balance sheet date. Accordingly, they
continue to adopt the going concern basis of accounting in
preparing these financial statements.
Changes in the composition of the Group
The Group is required to consolidate seed capital investments
where it is deemed to control them. The following changes have been
made to the consolidation of the Group since 31 December 2020:
Excluded from consolidation (as a result of other investors
diluting control) and included as an associate as at 30 June
2021
Jupiter Global Sustainable Equities
Changes in accounting policies
The International Accounting Standards Board and IFRS
Interpretations Committee (IC) have issued a number of new
accounting standards and interpretations and amendments to existing
standards and interpretations. There are no IFRSs or IFRS IC
interpretations that are not yet effective that would be expected
to have a material impact on the Group.
5.2 Accounting policies
The accounting policies applied are consistent with those
applied in the Group's annual financial statements for the year
ended 31 December 2020.
5.3 Financial instruments
Financial instruments held at fair value are carried at a value
which represents the price to exit the instruments at the balance
sheet date. The fair value of financial instruments that are
actively traded in organised financial markets is determined by
reference to quoted market bid prices at the close of business on
the balance sheet date. Where a quoted market price is not
available, the Group establishes fair value using valuation
techniques such as recent arm's length market transactions,
reference to the current fair value of another instrument that is
substantially the same, discounted cash flow analysis or other
valuation models.
The Group used the following hierarchy for determining and
disclosing the fair value of financial instruments:
n Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
n Level 2: other techniques, for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly.
n Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data (unobservable inputs).
As at 30 June 2021, the Group held the following financial
instruments measured at fair value:
Level 1 Level 2 Level 3 Total
Investments in associates 32.5 - - 32.5
Financial assets at FVTPL
- funds 179.8 60.9 - 240.7
Financial assets at FVTPL
- derivatives 3.7 - - 3.7
Financial liabilities
at FVTPL (41.4) - - (41.4)
Other financial liabilities
at FVTPL - derivatives - (0.3) - (0.3)
------- ------- ------- ------
174.6 60.6 - 235.2
======= ======= ======= ======
As at 30 June 2020, the Group held the following financial
instruments measured at fair value:
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
- funds 160.2 84.6 - 244.8
Financial liabilities
at FVTPL (94.8) - - (94.8)
Other financial liabilities
at FVTPL - derivatives - (0.3) - (0.3)
------- ------- ------- ------
65.4 84.3 - 149.7
======= ======= ======= ======
As at 31 December 2020, the Group held the following financial
instruments measured at fair value:
Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
- funds 183.2 74.2 - 257.4
Financial assets at FVTPL
- derivatives - 3.7 - 3.7
Financial liabilities
at FVTPL (89.2) - - (89.2)
Other financial liabilities
at FVTPL - derivatives - (0.2) - (0.2)
------- ------- ------- ------
94.0 77.7 - 171.7
======= ======= ======= ======
5.4 Related party transactions
All related party transactions during the period are consistent
with those disclosed in the Annual Report and Accounts for the year
ended 31 December 2020 and have taken place on an arm's length
basis.
The Group made a capital contribution of GBP0.7m to NZS Capital
LLC in the period. This entity is accounted for as a subsidiary
undertaking. The Group excluded Jupiter Global Sustainable Equities
from consolidation in the period due to a reduction in the Group's
holding meaning it no longer exercises control.
Other than the above, no new related parties or related party
transactions that materially affect the financial position or
performance of the Group existed or occurred during the period.
Section 6: Directors' responsibility statement
We confirm that to the best of our knowledge:
n The condensed interim set of financial statements has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting' as required by the Companies Act 2006
and International Financial Reporting Standards as adopted by the
United Kingdom and gives a true and fair view of the assets,
liabilities, financial position and profits of the Group for the
period ended 30 June 2021.
n The interim report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Guidance, being an indication of important
events that have occurred during the first six months of the
current financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Guidance, being related party transactions
that have taken place in the first six months of the current
financial year and that have materially affected the financial
position or performance of the Group during that period; and any
changes in the related party transactions described in the last
Annual Report and Accounts that could have a material effect on the
financial position or performance of the Group in the past six
months of the current financial year.
n A list of the Directors of Jupiter Fund Management plc can be
found in the Annual Report and Accounts for the year ended 31
December 2020. A current list of Directors is maintained on the
website at www.jupiteram.com.
On behalf of the Board
Wayne Mepham
Chief Financial Officer
29 July 2021
Section 7: Principal risks and mitigations
The Group is exposed to various risk types in pursuing its
business objectives which can be driven by internal and external
factors. Understanding and managing these risks is both a business
imperative and a regulatory requirement. As an asset management
firm, Jupiter's most material exposures are in the strategic,
investment, and operational (including regulatory risk) risk
categories. Our exposure to capital adequacy, liquidity, market and
credit/counterparty risks are also monitored to ensure they are
managed on a prudent basis and remain within regulatory
requirements and Group risk appetite. We have reviewed our
principal risks as disclosed in the Group's 2020 Annual Report and
Accounts and, despite the ongoing challenges presented by Covid-19,
there have been no material changes to the Group's risk profile or
specific risk exposures in H1 2021. We continue to maintain a close
focus on monitoring our control environment including the impact of
Covid-19, Brexit, market volatility and the evolving regulatory and
cyber risk landscapes. We remain well positioned with regard to the
ongoing oversight and proactive management of our risk profile.
Independent Review Report to Jupiter Fund Management plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Jupiter Fund Management plc's condensed
consolidated interim financial statements (the "interim financial
statements") in the Interim Report and Accounts of Jupiter Fund
Management plc for the six month period ended 30 June 2021 (the
"period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
n the Consolidated balance sheet as at 30 June 2021;
n the Consolidated income statement and Consolidated statement
of comprehensive income for the period then ended;
n the Consolidated statement of cash flows for the period then
ended;
n the Consolidated statement of changes in equity for the period
then ended; and
n the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report
and Accounts of Jupiter Fund Management plc have been prepared in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Interim Report and Accounts, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Interim
Report and Accounts in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the Interim Report and Accounts based on
our review. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Interim
Report and Accounts and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
29 July 2021
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