First half pre-tax profits at fund manager Jupiter have more than halved to £29.7m (2021 H1: £78.2m).
The news comes a few weeks after the company announced that CEO Andrew Formica will retire and return to his native Australia.
The firm blamed market turbulence, the continuing impact of the pandemic, investor uncertainty and global turmoil for the “disappointing” figures.
To help improve the company’s financial position Jupiter has embarked on significant cost cutting measures, “to reduce fixed staff and non-compensations costs for the full year 2022.”
The company has not made clear if it plans compulsory redundancies. Financial Planning Today has asked for details of the measures.
Assets Under Management during the first six months of 2022 to 30 June fell from £60.5bn at 31 December 2021 to £48.8bn at 30 June 2022, a decline of £11.7bn.
Jupiter said the most significant issue to hit AUM was declining markets, which reduced the figure by £8.1bn. Much of this decline came late in the period, the company said, with over £3bn of market declines in the month of June alone.
On the more positive side, there were gross inflows of £6.9bn despite net outflows of £3.6bn.
Underlying profit before tax was £29.7m (2021 H1: £78.2m) and statutory profit before tax was £18.8m (2021 H1: £57.0m). The interim dividend was unchanged at 7.9p per share.
Jupiter CEO Andrew Formica said: “The first half of 2022 has been particularly challenging for both the industry and Jupiter, as the continued impact of the Coronavirus pandemic, the war in Ukraine, and rising inflation have created turbulent markets and heavily impacted investor sentiment.
“Our overall AUM and net outflow position is disappointing, and it remains the board’s highest priority to improve the performance of the group, with a particular focus on improving the client flow position. Outflows were largely driven by redemptions across our unconstrained fixed income strategy as well as several of our growth-focused funds, against a backdrop of increased risk aversion from investors across both equities and fixed income.
“I am encouraged to see that gross flows of £6.9bn for the first half of 2022 were broadly in line with the same period last year, despite these difficult market conditions. There continue to be signs of positive momentum in areas that have been a strategic focus for the business – with both the institutional channel and our sustainable strategies in positive net flows for the period
“Despite the challenging backdrop, Jupiter has maintained its capital position. It is prudent that we maintain our rigorous focus on cost discipline, particularly while markets remain challenged, and we have acted quickly to reduce discretionary spending where we can. While the short-term outlook is set to continue to be driven by geopolitical and macroeconomic events, I am confident as I hand over to my successor Matt Beesley that Jupiter remains financially and structurally well placed to deliver growth and investment outperformance over the longer term.”
