REG - Jupiter Fund Mgmt - Annual Financial Report
27/02/2025 07:15
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RNS Number : 6170Y Jupiter Fund Management PLC 27 February 2025
Jupiter Fund Management plc
Results for the year ended 31 December 2024
27 February 2025
Steady progress to deliver resilient results
· Despite ongoing industry challenges, we have delivered a resilient set of
financial results with underlying profit before tax of £97.5m (2023:
£105.2m).
· We also made significant strategic progress to better position us for
growth over the medium term.
· There were total net outflows of £10.3bn (2023: net outflows of
£2.2bn). Total underlying net outflows of £3.3bn, almost all of which came
through in the final quarter of the year. Underlying flows exclude the impact
of outflows from strategies formerly managed by the Value team and the change
in management of Chrysalis Investment Trust.
· Assets under management (AUM) decreased 13% to £45.3bn (31 December
2023: £52.2bn).
· Statutory profit before tax was £88.3m (2023: £9.4m).
· In line with our capital allocation policy, final dividend of 2.2p per
share, bringing total dividend for the year to 5.4p per share (2023: 9.8p per
share). Announced a share buyback programme of around £13m, or up to 3% of
issued share capital.
Year ended Year ended % change
31 December 2024 31 December 2023
AUM (£bn) 45.3 52.2 (13)%
Net flows (£bn) (10.3) (2.2)
Net revenue(1) (£m) 364.1 368.8 (1)%
Statutory profit before tax(2) (£m) 88.3 9.4 839%
Basic earnings per share (EPS)(2) (p) 12.5 (2.5) 600%
Underlying profit before tax(1) (£m) 97.5 105.2 (7)%
Underlying EPS(1) (p) 13.4 14.8 (9)%
Total dividends per share (p) 5.4 9.8 (45)%
Cost:income ratio(1) 78% 73%
( )
(1) The Group's use of alternative performance measures (APMs) is explained
on pages 31 to 33.
(2) IFRS measures.
Matthew Beesley, Chief Executive, commented:
"We have delivered resilient financial performance this year, despite the
ongoing challenges facing the industry.
Gross flows increased to over £14bn and although we saw net outflows, these
were predominantly driven by redemptions from strategies formerly managed by
the Value team, which are now complete. We also made active decisions designed
to increase our appeal to clients and our focus on capabilities where we have
conviction we can scale, including a change in management of our European
equity capability, which led to around £350m of outflows. Short-term outflows
inevitably follow management changes, but we are confident this sets us up
well for long-term growth.
We have made material progress to better position Jupiter for future success
and have progressed in each of our strategic objectives. We have transformed
our UK equity capabilities, brought in high quality investment talent in
European equities, and acquired the team and institutional assets of Origin,
who joined in January this year, adding a new dimension and scalability to our
global equity franchise. The actions we took during the last year, together
with improving performance and encouraging early signs this year, give us
confidence that we will see near-term growth in the majority of our investment
capabilities.
We have again delivered on costs, demonstrating strong discipline in
non-compensation costs and finishing the year with fewer than 500 FTEs, our
fourth year of headcount reduction and lowest level since 2016. We have
explored new methods of delivery, launching our first active ETF and have been
awarded a Capital Markets Services licence in Singapore, allowing us access to
the local mass affluent sector for the first time.
Although not all of these achievements can be seen in our financial results
today, they all position Jupiter better for future growth."
Analyst presentation
There will be an analyst presentation at 10.30am GMT on 27 February 2025.
The presentation will be held at The Zig Zag Building, 70 Victoria Street,
London, SW1E 6SQ and will also be accessible via a live webcast. The webcast
is available at https://secure.emincote.com/client/jupiter/jfm040
(https://secure.emincote.com/client/jupiter/jfm040) . Please note that
questions can be asked either in-person at the presentation or via the
webcast.
The results announcement and the presentation will be available at
https://www.jupiteram.com/investor-relations
(https://www.jupiteram.com/investor-relations) . Copies may also be obtained
from the registered office of the Company at The Zig Zag Building, 70 Victoria
Street, London, SW1E 6SQ.
The Annual Report will be published in March 2025 and will be available at
https://www.jupiteram.com/investor-relations
(https://www.jupiteram.com/investor-relations) .
For further information please contact:
Investors Media
Jupiter Alex James Victoria Howley
+44 (0)20 3817 1636 +44 (0)20 3817 1657
Edelman Smithfield Hastings Tarrant Andrew Wilde
+44 (0)7813 407 665 +44 (0)7786 022 022
LEI Number: 5493003DJ1G01IMQ7S28
Forward-looking statements
This announcement may contain certain "forward-looking statements" with
respect to certain plans of Jupiter Fund Management plc (Jupiter) and its
current goals and expectations relating to its future financial condition,
performance, operations, results, business, strategy and objectives.
Statements containing the words "believes", "intends", "expects", "plans",
"seeks" and "anticipates", and words of similar meaning, are forward looking.
Forward-looking statements and forecasts are based on the Directors' current
view and information known to them at the date of this announcement. 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. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events and
circumstances which are beyond Jupiter's control including, among other
things, UK domestic and global economic and business conditions;
market-related risks such as fluctuations in interest rates and exchange
rates, and the performance of financial markets generally; the policies and
actions of regulatory authorities; the impact of competition, inflation and
deflation; the timing, impact and other uncertainties of future acquisitions
or combinations within relevant industries; and the impact of changes in
capital, solvency or accounting standards, and tax and other legislation and
regulations in the jurisdictions in which Jupiter and its affiliates operate.
As a result, Jupiter's actual future financial condition, performance and
results may differ materially from the plans, goals and expectations set forth
in Jupiter's forward-looking statements. Jupiter undertakes no obligation to
update or revise any forward-looking statements contained in this presentation
or any other forward-looking statements it may make. Nothing in this
presentation should be construed as a profit forecast.
Management statement
We are pleased to report a resilient set of results for 2024, with most
financial metrics in-line with or ahead of our expectations.
It has unquestionably been a challenging year both for Jupiter and the whole
industry. Although investor sentiment towards risk assets has slightly
improved from the lows of the prior two years, persistent inflation and
elevated geopolitical tensions around the world have meant many investors
remain unconvinced of allocating away from cash and cash-like assets.
Beyond the macro-economic headwinds that all industry participants have faced,
we have also had to address Jupiter-specific challenges, notably the departure
of the Value team, which was announced in early January 2024.
Despite these challenges, we have remained resolutely focused on execution of
our strategy and have delivered results in line with, and in some cases
exceeding, our expectations as we began the year. We have also made
significant strategic progress through the year. We have strengthened, and
broadened, our depth of investment expertise across our UK, European, Emerging
Markets and Global equities capabilities. We have explored new methods of
delivery with the launch of Jupiter's first active ETF in February 2025. In
early 2025, we were awarded a Capital Markets Services licence in Singapore,
allowing us to work with the mass affluent segment in the region for the first
time. We have again delivered on costs, driving efficiencies across the Group.
Our fixed staff costs and non-compensation costs are little changed over the
year, despite the inflationary environment, and we have ended the year with
fewer than 500 Full Time Employees (FTEs), the fourth consecutive year of
headcount reduction.
Although many of these achievements will not be visible through our current
financial results, all of them serve to put Jupiter in a stronger place to
drive future growth.
In total, we saw net outflows of £10.3bn (2023: net outflows of £2.2bn).
This was predominantly driven by £6.2bn of redemptions from strategies
formerly managed by the Value team. On an underlying basis, excluding the
impact of Value-related flows and the change in management for the Chrysalis
Investment Trust, there were total net outflows of £3.3bn, almost all of
which came through in the final quarter of the year.
Assets under management (AUM) fell in the year to £45.3bn (31 December 2023:
£52.2bn), with positive market movements partially offsetting these outflows.
Performance fees of £31.2m largely offset the impact of a decrease in the net
management fee margin, resulting in net revenues of £364.1m (2023: £368.8m).
Our disciplined approach to cost control has resulted in an increase in
administrative expenses excluding exceptional items of only 3% to £273.2m
(2023: £264.6m), or 1% excluding performance fee costs.
Underlying profit before tax decreased by 7% to £97.5m (2023: £105.2m) with
underlying earnings per share of 13.4p (2023: 14.8p per share).
In line with our capital allocation policy, the Board has proposed a final
ordinary dividend of 2.2p, taking total full-year dividends to 5.4p. We have
also announced a proposed share buyback programme of up to 3% of issued share
capital and our intention to redeem £50m of subordinated debt.
A focus on execution of strategy
We have remained focused on the aspects of our business that we can control
and we have made progress against each of our four strategic objectives:
increasing scale; decreasing undue complexity; broadening appeal to clients;
and deepening relationships with all stakeholders.
The focus on increasing scale remains paramount and the future and ongoing
success of Jupiter will be dependent on growing our top line revenue, along
with reducing undue complexity, where we already have a strong track record.
It has clearly been a challenging year for increasing absolute scale, but that
should not detract from the significant progress we have made to position
ourselves better for future growth.
We have transformed our UK equity capabilities. With the arrival of Adrian
Gosden and Chris Morrison, and Alex Savvides and his team, we believe we have
the strongest UK equity line up that Jupiter has ever had. We have taken
decisive action to resolve challenges within European equities and brought in
a high quality team that will provide us with the opportunity to re-establish
our position as a market leader in the asset class. With the arrival of the
Origin team, we have brought in a differentiated investment approach, along
with scale in Emerging Market equities and new investment expertise in other
multi-regional strategies. All of these teams have strong investment track
records and clear, repeatable processes that appeal to clients across all
channels.
We have continued to strategically invest in our institutional offering and
international business. We were recently awarded a Capital Markets Services
licence in Singapore, allowing us to work with the mass affluent segment in
the region for the first time.
We have again delivered on reducing of undue complexity, driving efficiencies
across the Group. Costs have been carefully managed and headcount is lower
year-on-year for the fourth consecutive year.
These efficiencies have allowed us to invest in technology and automation,
most notably in the Client Group where we have transformed how we use data and
made real progress in automating previously manual processes. These
investments have enabled us to deliver more bespoke solutions to meet our
clients' needs.
We have continued to curate our product offering, focusing on products which
are sub-scale or not in areas of client demand. In total, we closed or merged
11 funds through 2024.
As we seek to broaden our appeal to a wider range of clients, we have launched
our first active ETF, an actively-managed government bond strategy, which
could be the first in a range.
We have announced a change to our operating model, resulting in the
outsourcing of parts of our middle office, with a view to exploring further
supplier consolidation, aligned with our objective of deepening relationships
across our stakeholders.
Our people are also a key stakeholder group and I am happy to report that our
latest employee survey showed an engagement score of 79%, an increase
year-on-year and again ahead of the financial services benchmark. We have
today announced an ordinary dividend in line with our capital allocation
policy, as well as a share buyback programme and the intention to redeem our
subordinated debt.
Client sentiment towards risk assets remain subdued
Gross flows returned to more normalised levels in 2024 of £14.1bn (2023:
£13.2bn), driven by a pick up in inflows from retail and wholesale clients
after subdued levels in the prior year.
We saw total net outflows of £10.3bn (2023: net outflows of £2.2bn), £5.8bn
from retail clients and £4.5bn through the Institutional channel. These were
primarily driven by £6.2bn of net outflows from strategies formerly managed
by the Value team, which is in line with both our expectations and our
disclosures to the market throughout the year. Of these, £4.8bn were from
segregated mandates and £1.4bn were from mutual funds. With the new
investment teams in place and all expected segregated mandate moves now
complete, we can confirm that all outflows related to the Value team's
departure were completed by year end.
On an underlying basis, excluding the impact of flows related to the Value
team and the change in management of the Chrysalis Investment Trust, we saw
net outflows of £3.3bn, almost all of which came through in the final quarter
of the year. Net underlying outflows in the retail channel of £1.8bn were
driven by a number of factors, including the managed closure of our Emerging
Market Debt funds and the announced change in our European equities
capability.
There were £1.5bn of underlying net outflows from Institutional clients. Net
inflows into Asian and Emerging Markets equity and Global equity capabilities
were offset by a £0.9bn redemption from one client in our Systematic equity
capability as they rebalanced their portfolio. We are continuing to work
closely with this client around potential new fundings and increases to
existing mandates through this year.
We remain very confident of medium-term growth potential in the Institutional
channel. We have a broader range of institutional quality investment processes
today than ever before and a strong pipeline of opportunities. We can also
confirm that we are in a net inflow position from Institutional clients so far
this year.
Despite the challenges, there were areas of strong success. Our Indian equity
strategies generated £1.2bn of net inflows in 2024 and our Asian Income
strategy saw £0.5bn of net inflows. GEAR, or Global Equity Absolute Return
fund, had another year of strong performance, leading to further net inflows
of £0.5bn.
Movement in AUM by client channel
31 December Full-year net Market returns 31 December
2023 Q1 net Q2 net Q3 net Q4 net flows £bn 2024
£bn flows flows flows flows £bn £bn
£bn £bn £bn £bn
Retail, wholesale & investment trusts 42.2 (0.8) (1.0) (1.7) (2.3) (5.8) 2.5 38.9
Institutional 10.0 (0.8) (0.8) 0.1 (3.0) (4.5) 0.9 6.4
Total 52.2 (1.6) (1.8) (1.6) (5.3) (10.3) 3.4 45.3
Of which is invested in mutual funds 38.1 (0.3) (0.6) (0.3) (1.8) (3.0) 2.1 37.2
Resilient financial performance
Despite the challenging external environment, we have delivered resilient
financial performance in 2024. We have maintained our focus on cost discipline
and driving efficiencies, while continuing to invest in areas of strategic
growth.
Underlying profit before tax was £97.5m (2023: £105.2m). Underlying EPS was
down 1.4p, to 13.4p per share (2023: 14.8p), broadly in line with the
reduction in profits.
Although closing AUM was 13% lower at £45.3bn, over half of total net
outflows took place in the fourth quarter, so average AUM was only slightly
lower at £50.7bn (2023: £50.9bn). The net management fee margin fell by 5bps
to 65bps (2023: 70bps), driven by the introduction of tiered pricing on our UK
fund ranges and the changing mix of business, part of which was Institutional
mandates funding in 2024. Our average fee margin for the retail, wholesale and
investment trust channel was 74bps and for the Institutional channel it was
26bps.
This reduction in the average management fee margin led to a fall in net
management fees to £331.3m (2023: £354.0m). Total net revenue of £364.1m
(2023: £368.8m) included £31.2m of performance fees (2023: £13.2m), a
strong delivery and ahead of management expectations.
Our discipline on cost control remains unchanged - we spend money where we
believe we should, we control the total spend where we think we can, and we
constantly think about how we can improve our cost ratios.
Excluding the impact of performance fees and exceptional items, our total
administrative expenses of £260.5m were little changed from the prior year
(2023: £258.2m).
Fixed staff costs of £79.1m and non-compensation costs of £109.5m were both
in line with our expectations and delivered as a result of driving
efficiencies across the Group, despite the inflationary environment.
Our total compensation ratio (excluding the impact of performance fees) was
45%. This is lower than our original expectations but was driven by personnel
changes and outflows late in the year.
We remained vigilant on headcount numbers and ended the year at 492 FTEs, our
lowest position since 2016.
Other gains of £6.9m (2023: £3.2m) relate to gains on our seed capital
investments, net of hedging. We also generated net finance income of £1.9m
(2023: net finance expense of £0.4m) as we carefully managed the Group's cash
balances in a higher interest rate environment.
Exceptional items of £9.2m all came through in the first half of the year and
are the final year of exceptional costs relating to the Merian acquisition.
Statutory profits before tax were £88.3m (2023: £9.4m).
2024 2023
£m Before performance fees Performance fee profits Total Before performance fees Performance Total
fee profits
Net revenue 332.9 31.2 364.1 355.6 13.2 368.8
Fixed staff costs (79.1) - (79.1) (78.1) - (78.1)
Variable staff costs(1, 2) (71.9) (12.7) (84.6) (72.8) (6.4) (79.2)
Non-compensation costs (109.5) - (109.5) (107.3) - (107.3)
Administrative expenses(2) (260.5) (12.7) (273.2) (258.2) (6.4) (264.6)
Other gains 6.9 - 6.9 3.2 - 3.2
Amortisation of intangible assets(3) (2.2) - (2.2) (1.8) - (1.8)
Operating profit before exceptional items 77.1 18.5 95.6 98.8 6.8 105.6
Net finance income/(costs) 1.9 - 1.9 (0.4) - (0.4)
Profit before taxation and exceptional items 79.0 18.5 97.5 98.4 6.8 105.2
Exceptional items (9.2) - (9.2) (95.8) - (95.8)
Statutory profit before tax 69.8 18.5 88.3 2.6 6.8 9.4
(1) Variable costs in respect of performance fee profits in 2024 mainly
relate to the accounting charge for deferred bonus awards made in respect of
2024 performance fee revenues (2023: mainly in respect of 2023 performance fee
revenues).
(2 ) Variable staff costs and Administrative expenses exclude £nil
classified as exceptional (2023: £0.8m).
(3 )Amortisation of intangible assets excludes £9.2m classified as
exceptional (2023: £18.8m).
High-conviction active management
As a high-conviction active asset manager, delivering investment performance
for our clients is key to our ongoing success.
At 31 December 2024, 61% of our mutual fund AUM had delivered above-median
performance relative to their peer group over three years (31 December 2023:
59% of mutual fund AUM). In many cases, there was exceptional performance with
50% of mutual fund AUM in the first quartile and 30% in the top decile.
Across our larger funds, performance also remains strong. We have 13 funds
with over £1bn of AUM. Of these, nine are above median and eight are top
quartile over both three and five years.
Over five years, 58% of mutual fund AUM outperformed (31 December 2023: 66%).
Over one year, which is always more volatile, the figure was 42% (31 December
2023: 65%). The change in the one year number was driven by three of our
larger funds moving below their peer-group median: Dynamic Bond, Strategic
Bond and the European fund. In some cases, sustained underperformance requires
decisive management action, as was the case with the European equities team,
where we have moved to bring in a top-quartile team who will join through
2025.
A strong capital base
The Group continues to maintain a strong capital base.
As at 31 December 2024, our expected capital surplus, including audited
current year profits and after deducting £13.0m in respect of the buyback
programme set out below, increased to £220.2m (31 December 2023: £189.6m).
We have been actively looking for ways to deploy our capital to drive growth
for the business and total returns for our shareholders. The Board have
proposed a final dividend of 2.2p per share, bringing the total dividend for
the year to 5.4p per share, in line with our policy of returning 50% of
underlying EPS before performance fees. The dividends will be paid on 20 May
2025 to shareholders on the register at the close of business on 22 April
2025.
We have also announced a share buyback programme of up to 3% of issued share
capital, which we expect to cost around £13m. Once this programme commences,
the shares will be placed into treasury and will not immediately be cancelled.
This capital therefore remains potentially available in the short term, but
otherwise it is probable that these shares will be cancelled over time.
The Board have also approved the repurchase of £50m of subordinated debt in
April 2025, which was issued in 2020. We continue to invest our capital in
our investment capabilities as seed capital or catalyst funding. This grew to
£127m at 31 December 2024, with a further £32m of capital already invested
or set aside for future investment in 2025.
We continue to deploy our capital effectively and to actively explore further
opportunities to deliver long-term shareholder growth. In the absence of
opportunities to deploy capital accretively, we will continue to consider
returning excess capital to shareholders, on a periodic basis.
Resilient performance with underlying progress
Although some of our headline performance metrics have not improved in 2024,
this belies the significant progress made in our strategic objectives. Not all
of these achievements are immediately visible in what has been a resilient set
of results, but each one positions Jupiter better for future growth.
Our business is more diversified today than ever before, with a broader array
of investment talent with a product line up that appeals across client
channels. We have built a highly efficient, very scalable operating model that
is set to benefit from significant operational leverage. And we have a strong
balance sheet, giving us optionality for organic and inorganic growth.
Through these actions, Jupiter is now better placed to take advantage of the
opportunities ahead than it was this time last year. We believe that our
long-term focus on our strategic priorities will deliver shareholder value
over time.
Matthew Beesley
Chief Executive Officer
26 February 2025
Consolidated income statement
for the year ended 31 December 2024
Notes 2024 2023
£m £m
Revenue 1, 2 402.5 405.6
Fee and commission expenses 1 (38.4) (36.8)
Net revenue 1 364.1 368.8
Administrative expenses 3 (273.2) (265.4)
Other gains 4 6.9 3.2
Amortisation of intangible assets 9 (11.4) (20.6)
Operating profit 86.4 86.0
Impairment of goodwill 8 - (76.2)
Finance income 5 8.0 5.8
Finance costs 5 (6.1) (6.2)
Profit before taxation 88.3 9.4
Income tax expense 6 (23.1) (22.3)
Profit/(loss) for the year 65.2 (12.9)
Earnings per share
Basic 7 12.5p (2.5)p
Diluted 7 12.2p (2.5)p
( )
Consolidated statement of comprehensive income
for the year ended 31 December 2024
2024 2023
£m £m
Profit/(loss) for the year net of tax 65.2 (12.9)
Items that may be reclassified subsequently to profit or loss
Exchange movements on translation of subsidiary undertakings (1.3) (1.7)
Other comprehensive loss for the year net of tax (1.3) (1.7)
Total comprehensive income/(loss) for the year net of tax 63.9 (14.6)
Consolidated balance sheet
at 31 December 2024
Notes 2024 2023
£m £m
Non-current assets
Goodwill 8 494.4 494.4
Intangible assets 9 12.3 17.5
Property, plant and equipment 10 34.8 37.5
Investment in associates 1.8 1.8
Deferred tax assets 15.6 16.1
Trade and other receivables 0.4 0.4
559.3 567.7
Current assets
Financial assets 288.6 232.8
Trade and other receivables 145.9 137.6
Cash and cash equivalents 12 261.1 268.2
Current tax asset 1.6 1.3
697.2 639.9
Total assets 1,256.5 1,207.6
Equity attributable to shareholders
Share capital 14 10.9 10.9
Own share reserve 15 (0.5) (0.7)
Other reserves 15 244.6 250.3
Foreign currency translation reserve 15 0.7 2.0
Retained earnings 15 578.3 527.0
TOTAL EQUITY 834.0 789.5
Non-current liabilities
Loans and borrowings 13 49.9 49.7
Trade and other payables 61.5 59.7
Deferred tax liabilities - 2.3
111.4 111.7
Current liabilities
Financial liabilities at fair value through profit or loss (FVTPL) 100.5 80.3
Trade and other payables 201.1 221.4
Current tax liability 4.4 -
Provisions 5.1 4.7
311.1 306.4
Total liabilities 422.5 418.1
Total equity and liabilities 1,256.5 1,207.6
( )
Consolidated statement of changes in equity
for the year ended 31 December 2024
Total Non-controlling interests Total equity
Foreign
Own currency
Share share Other translation Retained earnings
capital reserve reserves reserve
£m £m £m £m £m £m £m £m
At 1 January 2023 10.9 (0.5) 250.3 3.7 578.9 843.3 0.6 843.9
Loss for the year after tax - - - - (12.9) (12.9) - (12.9)
Exchange movements on translation of subsidiary undertakings - (1.7) - (1.7) (1.7)
- - -
Other comprehensive loss net of tax - - - (1.7) - (1.7) - (1.7)
Total comprehensive loss net of tax - - - (1.7) (12.9) (14.6) - (14.6)
Vesting of ordinary shares and options - 0.2 - - (0.2) - - -
Dividends paid - - - - (35.2) (35.2) - (35.2)
Purchase of shares by EBT - (0.4) - - (24.1) (24.5) - (24.5)
Share-based payments - - - - 18.5 18.5 - 18.5
Other movements - - - - 2.0 2.0 - 2.0
Disposal of non-controlling interests - - - - - - (0.6) (0.6)
Total transactions with owners - (0.2) - - (39.0) (39.2) (0.6) (39.8)
At 31 December 2023 10.9 (0.7) 250.3 2.0 527.0 789.5 - 789.5
Profit for the year after tax - - - - 65.2 65.2 - 65.2
Exchange movements on translation of subsidiary undertakings - (1.3) - (1.3) (1.3)
- - -
Other comprehensive loss net of tax - - - (1.3) - (1.3) - (1.3)
Total comprehensive (loss)/income net of tax - - - (1.3) 65.2 63.9 - 63.9
Vesting of ordinary shares and options - 0.2 - - (0.2) - - -
Dividends paid - - - - (34.2) (34.2) - (34.2)
Purchase of shares by EBT - - - - (1.0) (1.0) - (1.0)
Share-based payments - - - - 17.2 17.2 - 17.2
Transfers - - (5.7) - 5.7 - - -
Other movements - - - - (1.4) (1.4) - (1.4)
Total transactions with owners - 0.2 (5.7) - (13.9) (19.4) - (19.4)
At 31 December 2024 10.9 (0.5) 244.6 0.7 578.3 834.0 - 834.0
Notes 14 15 15 15 15
Consolidated statement of cash flows
for the year ended 31 December 2024
Notes 2024 2023
£m £m
Cash flows from operating activities
Cash generated from operations 17 95.5 109.1
Income tax paid (21.6) (21.1)
Net cash inflows from operating activities 73.9 88.0
Cash flows from investing activities
Purchase of intangible assets 9 (6.2) (2.9)
Purchase of property, plant and equipment 10 (1.4) (0.6)
Purchase of financial assets(1) (478.7) (187.0)
Proceeds from disposals of financial assets(2) 302.1 131.1
Cash movement from funds and subsidiaries at the date they are no longer (6.8) (3.1)
consolidated
Cash movement from funds at the date they are consolidated - 0.5
Interest income received 7.9 4.8
Dividend income received 0.9 0.6
Net cash outflows from investing activities (182.2) (56.6)
Cash flow from financing activities
Dividends paid 16 (34.2) (35.2)
Purchase of shares by EBT 15 (1.0) (24.5)
Purchase of shares for cancellation 14 - (2.0)
Finance costs paid (4.6) (4.6)
Cash paid in respect of lease arrangements (5.6) (4.9)
Third-party subscriptions into consolidated funds 248.8 63.0
Third-party redemptions from consolidated funds (101.5) (34.1)
Distributions paid by consolidated funds - (0.1)
Net cash inflows/(outflows) from financing activities 101.9 (42.4)
Net decrease in cash and cash equivalents (6.4) (11.0)
Cash and cash equivalents at beginning of year 268.2 280.3
Effects of exchange rates on cash and cash equivalents (0.7) (1.1)
Cash and cash equivalents at end of year 12 261.1 268.2
(1)Includes purchases of seed investments, fund units used as a hedge against
compensation awards linked to the value of those funds, derivative instruments
and, where the Group's investment in seed is judged to give it control of a
fund, purchases of financial assets by that fund.
(2)Includes proceeds from disposals of seed investments, fund units used as a
hedge against compensation awards, derivative instruments and, where the
Group's investment in seed is judged to give it control of a fund, disposals
of financial assets by that fund.
Notes to the Group financial statements
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,
ICVCs, OEICs, investment trust companies, pension funds and other specialist
funds. At 31 December 2024, the Group had offices in the United Kingdom,
Ireland, Germany, Hong Kong, Italy, Luxembourg, Singapore, Spain, Sweden and
Switzerland.
Basis of preparation and other accounting policies
The financial information set out does not constitute the Company's statutory
accounts for the years ended 31 December 2024 or 2023, but is derived from
those accounts. The Auditors have reported on the 2024 accounts; their report
was unqualified, unmodified and did not contain statements under section
498(2) or 498(3) of the Companies Act 2006. Statutory accounts for 2023 have
been delivered to the Registrar of Companies and those for 2024 will be
delivered in due course.
The Group financial statements have been prepared in accordance with
UK-adopted International Accounting Standards (IAS) and with the requirements
of the Companies Act 2006 as applicable to companies reporting under those
standards.
The financial statements have been prepared on a going concern basis. After
reviewing the Group's current plans and forecasts and financing arrangements,
as well as the current trading activities of the Group, the Directors consider
that the Group has adequate resources to continue operating for a period of at
least 12 months from the date of signing.
In preparing the financial statements, we have considered the impact of
climate change. There has not been a material impact on the financial
reporting judgements and estimates arising from our considerations.
Changes in the composition of the Group
The Group is required to consolidate seed capital investments if it is deemed
to control them. The following changes have been made to the consolidation of
the Group since 31 December 2023:
Included in consolidation (as a result of investments) Excluded from consolidation
Jupiter Global Fund SICAV: Asia Pacific Income Jupiter European Smaller Companies Fund
Jupiter Global Fund SICAV: Europe ex-UK Equity
Jupiter Global Fund SICAV: Global High Yield Short Duration Bond
Jupiter Global Fund SICAV: 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.
Other than IFRS 18, 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.
The IASB issued IFRS 18 Presentation and Disclosure in Financial Statements on
9 April 2024. The standard, which is effective for periods beginning on or
after 1 January 2027, aims to improve comparability and transparency of
communication in financial statements, and replaces IAS 1 Presentation of
Financial Statements. The Group has not applied IFRS 18 in these financial
statements.
IFRS 18 introduces new presentational requirements within the income
statement, including specified totals and subtotals. It also requires
disclosure of management-defined performance measures and requirements for
aggregation and disaggregation of financial information based on the
identified roles of the primary financial statements and notes to the
accounts. The new requirements are expected to impact the presentation, but
not the recognition or measurement, of items in the income statement, the cash
flow statement and relevant notes to the accounts, including what the Group
currently reports as its 'Operating profit'.
1. Revenue and fee and commission expenses
The Group's primary source of recurring revenue is management fees. Management
fees are charged for investment management or administrative services and are
normally based on an agreed percentage of 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 and segregated mandate contracts when agreed
performance conditions are met. Net revenue is stated after fee and commission
expenses to intermediaries for ongoing services under distribution agreements.
2024 2023
£m £m
Management fees 368.9 389.9
Initial charges and commissions 2.4 2.5
Performance fees 31.2 13.2
Revenue 402.5 405.6
Fee and commission expenses relating to management fees (37.6) (35.9)
Fee and commission expenses relating to initial charges and commissions (0.8) (0.9)
Net revenue 364.1 368.8
Disaggregation of revenue
The Group disaggregates revenue on the basis of product type and geographical
region, 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. 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. In contrast, segregated mandates are generally established in
accordance with the requirements of a specific institutional investor.
Institutional clients may invest in segregated mandates or pooled vehicles.
2024 2023
£m £m
Revenue by product type
Pooled funds 368.3 373.7
Segregated mandates 34.2 31.9
Revenue 402.5 405.6
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, collectively the Executive Directors, 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.
Management monitors operating profit for the purpose of making decisions about
resource allocation and performance assessment.
Geographical information
2024 2023
£m £m
Revenue by location of clients
UK 286.1 299.6
EMEA 78.1 72.3
Asia 19.0 15.0
Rest of the world 19.3 18.7
Revenue by location 402.5 405.6
The location of clients is based on management information received from
distribution partners. Where management information is not available, the
location of the distribution partner is used as a proxy for the location of
the client.
Non-current assets for the Group (excluding financial instruments and deferred
tax assets) are domiciled as set out below:
2024 2023
£m £m
Non-current assets for the Group
UK 540.0 547.1
EMEA 1.2 1.1
Asia 0.3 1.1
Rest of the world - 0.1
Non-current assets by location 541.5 549.4
3. Administrative expenses
Administrative expenses of £273.2m (2023: £265.4m) include staff costs of
£163.7m (2023: £158.1m). Staff costs consist of:
2024 2023
£m £m
Wages and salaries 119.6 116.8
Share-based payments 17.2 18.5
Social security costs 18.4 15.8
Pension costs 7.2 6.3
Redundancy costs 3.7 2.2
Staff costs before net gains arising from the economic hedging of fund units 166.1 159.6
Net gains on instruments held to provide an economic hedge for fund awards (2.4) (1.5)
Staff costs 163.7 158.1
The Management statement refers to £0.8m of 2023 staff costs that are
described as exceptional items. These costs related to the acquisition of
Merian Global Investors Limited (Merian) in 2020 and chiefly comprised
cash-based deferred earn out awards which vested in July 2023.
4. Other gains
Other gains relate principally to net gains made 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 FVTPL
(see Note 11). Gains and losses on these investments comprise both realised
and unrealised amounts.
2024 2023
£m £m
Dividend income 0.9 0.6
Gains on financial instruments at FVTPL - seed 9.8 8.2
Losses on financial instruments at FVTPL - derivatives (3.8) (5.6)
Other gains 6.9 3.2
5. Finance income and finance costs
Finance income comprises income earned on the Group's cash and cash
equivalents, being bank deposits and investments in short-term money market
funds. Interest on cash and cash equivalents is recognised on an accrual basis
using the effective interest method.
2024 2023
£m £m
Interest on bank deposits 2.5 3.5
Interest on short-term money market fund investments 5.5 2.3
8.0 5.8
Finance costs principally relate to interest payable on Tier 2 subordinated
debt notes (see Note 13) 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 accrual basis using the effective interest method.
2024 2023
£m £m
Interest on subordinated debt 4.5 4.5
Interest on lease liabilities 1.4 1.5
Finance cost on the revolving credit facility 0.2 0.2
6.1 6.2
6. Income tax expense
2024 2023
Analysis of charge in the year £m £m
Current tax
Tax on profits for the year 24.7 24.1
Adjustments in respect of prior years 0.2 (0.7)
Total current tax 24.9 23.4
Deferred tax
Origination and reversal of temporary differences (1.8) 0.1
Adjustments in respect of prior years - (1.2)
Total deferred tax (1.8) (1.1)
Income tax expense 23.1 22.3
The corporation tax rate for 2024 was 25%. In 2023, the rate increased from
19% to 25% on 1 April, giving a hybrid rate for the year of 23.5%. The tax
charge in the year is higher (2023: higher) than the standard rate of
corporation tax in the UK and the differences are explained below:
2024 2023
Factors affecting tax expense for the year £m £m
Profit before taxation 88.3 9.4
Taxation at the standard corporation tax rate (25.0%; 2023: 23.5%) 22.1 2.2
Non-taxable expenditure(1) - 17.9
Other permanent differences 1.2 4.3
Adjustments in respect of prior years 0.2 (1.9)
Effect of differences in overseas tax rates (0.4) (0.2)
Total tax expense 23.1 22.3
( )
(1) In 2023, this amount is principally relating to the impairment of
goodwill (see Note 8).
7. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit or loss
attributable to equity holders of Jupiter Fund Management plc (the parent
company of the Group) by the weighted average number of ordinary shares
outstanding and contingently issuable during the year, less the weighted
average number of own shares held. Own shares are shares typically held in an
EBT for the benefit of employees.
Diluted EPS is calculated by dividing the profit or loss for the year (as used
in the calculation of basic EPS) by the weighted average number of ordinary
shares outstanding during the year 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 arising from the
award of share options into ordinary shares.
The weighted average number of ordinary shares used in the calculation of EPS
is as follows:
2024 2023
Number Number
m m
Weighted average number of shares
Issued share capital 545.0 545.0
Add: Contingently issuable shares(1) 7.5 6.2
Less: Time-apportioned own shares held (29.1) (31.9)
Weighted average number of ordinary shares for the purpose of basic EPS 523.4 519.3
Add: Weighted average number of dilutive potential shares 10.3 -(2)
Weighted average number of ordinary shares for the purpose of diluted EPS 533.7 519.3
2024 2023
Earnings per share p p
Basic 12.5 (2.5)
Diluted 12.2 (2.5)
(1 )Contingently issuable shares relate to vested but unexercised
share-based payment awards at the balance sheet date.
(2 )Potential shares can only be treated as dilutive if their conversion to
ordinary shares increases the loss per share. As the impact of including
potential shares in the calculation of 2023 EPS would be to decrease the loss
per share, they have been excluded from the calculation.
8. Goodwill
Goodwill arising on acquisitions, being the excess of the cost of a business
combination over the fair value of the identifiable assets, liabilities and
contingent liabilities acquired, is capitalised in the consolidated balance
sheet. Goodwill is carried at cost less provision for impairment. The carrying
value of goodwill is not amortised but is tested annually for impairment or
more frequently if any indicators of impairment arise. Goodwill is allocated
to cash-generating units (CGUs) for the purpose of impairment testing, with
the allocation to those CGUs or groups of CGUs that are expected to benefit
from the business combination in which the goodwill arose. Impairment losses
on goodwill are not reversed.
Goodwill relates to the 2007 acquisition of Knightsbridge Asset Management
Limited (KAML) and the 2020 acquisition of Merian.
2024 2023
£m £m
Cost 570.6 570.6
At 1 January and at 31 December
Accumulated impairment (76.2) -
At 1 January
Charge for the year - (76.2)
At 31 December (76.2) (76.2)
Net book value 494.4 494.4
At 31 December
The Group operates as a single asset management business segment and does not
allocate costs between investment strategies or individual funds in its
day-to-day monitoring and management of the business. The businesses acquired
to which the goodwill relates are fully integrated and are not separately
measured or monitored. It is not possible to assign the Group's profitability
between the acquired businesses, and therefore we adopt a single CGU and
consider our impairment test based on Group-wide cash generation to calculate
the recoverable amount of the goodwill, using the higher of the value in use
(VIU) and fair value less costs of disposal of the CGU, and comparing this to
the carrying value of the CGU.
For the impairment test, the recoverable amount for the goodwill asset was
calculated using a VIU approach, based on the net present value of the Group's
future earnings. The net present value was calculated using a discounted cash
flow model, with the following key assumptions:
* The Group's projected base case forecast cash flows over a period of five
years, which included an assumption of annual revenue growth based on our
expectations of AUM growth, client fee rates and performance fees. The data
was taken from the five-year plan, which was approved by the Board in February
2025 and is aligned with the strategic focus set out in the Management
statement;
* Long-term growth rates of 2.1% (2023: 2.0%) were used to calculate terminal
value; and
* A post-tax discount rate of 14.1% (2023: 13.2%) was calculated using the
capital asset pricing model. Using a pre-tax discount rate of 18.0% (2023:
17.0%) on pre-tax profitability and cash flows does not produce a materially
different result.
The impairment test indicated that the VIU of the CGU of £551.1m (2023:
£549.4m) exceeded its carrying value of £541.5m (2023: £549.4m). As a
result, we do not believe that the Group's goodwill asset is impaired.
The year-on-year movement in the headroom was as follows:
£m
Headroom at 1 January 2024(1) -
Increase in VIU of CGU in 2024 1.7
Decrease in carrying value of CGU in 2024 7.9
Impairment at 31 December 2024 9.6
( )
(1 ) Headroom (i.e. the surplus of the VIU over the carrying value of the
CGU) calculated in the Group's impairment testing as at 31 December 2023 was
nil as a result of the recognition of an impairment charge in 2023.
The increase in the VIU of the CGU year-on-year was £1.7m. This arises from
small changes in forecast cash flows in the Board's financial plans, offset by
an increase in the discount rate. The decrease in the carrying value of the
CGU was largely due to the amortisation of intangible assets.
As at the end of 2024, the Group has headroom of £9.6m in respect of the VIU
of its goodwill. The sensitivity of this amount to changes in key metrics and
assumptions is shown in the table below which sets out the impacts of
reasonably possible changes in key assumptions used in the VIU calculation:
Reasonably possible adverse movement Decrease in valuation
Key variable £m
Discount rate +1% 43
Terminal growth rate movement -0.1% 3
Decrease in revenue(1) -1% 23
( )
(1)The decrease in revenue represents a modelled percentage reduction in
each year projected in the Group's base case forecast cashflows.
The sensitivities modelled above represent the estimated impact on each metric
in isolation and make no allowance for actions management would take to reduce
costs should the Group experience future reductions in AUM or profitability.
Given the low level of headroom at the year end, it is highly likely that
reasonably possible net adverse movements in one or more key variables used in
measuring the VIU of the CGU would result in the implied impairment of the
Group's goodwill asset.
The Group continues to monitor its market capitalisation against implied
internal valuations and adjust its internal models on a regular basis to
reflect the impacts of market information and its own profitability levels.
9. Intangible assets
Intangible assets principally comprise computer software. In 2023, the assets
principally comprised the expected value of investment management contracts
acquired as part of the Merian acquisition whose useful economic lives were
assessed as a maximum of four years and which are now fully amortised. The
amortisation expense on intangible assets has been recorded as a separate line
item in the consolidated income statement and is recognised on a straight-line
basis.
During the year, the Group acquired computer software of £6.2m (2023:
£2.9m). The amortisation charge for intangible assets was £11.4m (2023:
£20.6m).
The Directors have reviewed the intangible assets as at 31 December 2024 and
31 December 2023 and have concluded there are no indicators of impairment.
2024 2023
£m £m
Intangible assets 12.3 17.5
12.3 17.5
10. Property, plant and equipment
The net book value of property, plant and equipment at 31 December 2024 was
£34.8m (2023: £37.5m). Additions to the right-of-use assets in 2024 were
£0.6m (2023: £0.6m). The Group purchased other items of property, plant and
equipment of £1.4m during the year (2023: £0.6m). The depreciation charge
was £5.0m (2023: £5.2m).
11. Financial instruments
Financial instruments by category
The carrying value of the financial instruments of the Group at 31 December is
shown below:
As at 31 December 2024 Financial assets at FVTPL Financial assets at amortised cost and other(2) Financial liabilities at FVTPL Financial liabilities at amortised cost Non-financial instruments Total
£m £m £m £m £m £m
Goodwill - - - - 494.4 494.4
Intangible assets - - - - 12.3 12.3
Property, plant and equipment - - - - 34.8 34.8
Investment in associates - 1.8 - - - 1.8
Deferred tax assets - - - - 15.6 15.6
Non-current trade and other receivables(1) - 0.4 - - - 0.4
Financial assets 271.9 16.7 - - - 288.6
Current trade and other receivables(1) - 134.5 - - 11.4 145.9
Cash and cash equivalents - 261.1 - - - 261.1
Current tax asset(1) - - - - 1.6 1.6
Non-current loans and borrowings - - - (49.9) - (49.9)
Non-current trade and other payables(1) - - - (56.2) (5.3) (61.5)
Financial liabilities at FVTPL - - (100.5) - - (100.5)
Current trade and other payables(1) - - - (187.2) (13.9) (201.1)
Current tax liability (1) - - - - (4.4) (4.4)
Provisions - - - (5.1) - (5.1)
Total 271.9 414.5 (100.5) (298.4) 546.5 834.0
(1) Prepayments, contract assets, current tax asset, current tax liability
and social security and other taxes do not meet the definition of financial
instruments.
(2) Includes investments in associates, which are initially recognised at
cost and are adjusted subsequently to reflect any changes to the Group's share
of the investee's net assets.
As at 31 December 2023 Financial assets at FVTPL Financial assets at amortised cost and other(2) Financial liabilities at FVTPL Financial liabilities at amortised cost Non-financial instruments Total
£m £m £m £m £m £m
Goodwill - - - - 494.4 494.4
Intangible assets - - - - 17.5 17.5
Property, plant and equipment - - - - 37.5 37.5
Investment in associates - 1.8 - - - 1.8
Deferred tax assets - - - - 16.1 16.1
Non-current trade and other receivables(1) - 0.4 - - - 0.4
Financial assets 219.4 13.4 - - - 232.8
Current trade and other receivables(1) - 127.1 - - 10.5 137.6
Cash and cash equivalents - 268.2 - - - 268.2
Current tax asset(1) - - - - 1.3 1.3
Non-current loans and borrowings - - - (49.7) - (49.7)
Non-current trade and other payables(1) - - - (55.8) (3.9) (59.7)
Deferred tax liabilities - - - - (2.3) (2.3)
Financial liabilities at FVTPL - - (80.3) - - (80.3)
Current trade and other payables(1) - - - (208.9) (12.5) (221.4)
Provisions - - - (4.7) - (4.7)
Total 219.4 410.9 (80.3) (319.1) 558.6 789.5
( )
(1) Prepayments, contract assets, current tax asset, contract liabilities and
social security and other taxes do not meet the definition of financial
instruments.
(2) Includes investments in associates, which are initially recognised at
cost and are adjusted subsequently to reflect any changes to the Group's share
of the investee's net assets.
At 31 December 2024, the fair value of issued subordinated debt, recorded
within non-current loans and borrowings, was £50.4m (2023: £50.2m), less
unamortised expenses of £nil (2023: £0.1m). The fair value of financial
assets held at amortised cost was £414.5m (2023: £411.2m).
12. Cash and cash equivalents
2024 2023
£m £m
Cash at bank and in hand 113.4 137.5
Cash equivalents 147.1 128.4
Cash held by the EBT and seed investment subsidiaries 0.6 2.3
Total cash and cash equivalents 261.1 268.2
Cash and cash equivalents have an original maturity of three months or less.
Cash at bank earns interest at the current prevailing daily bank rates. Cash
equivalents comprises units in short-term money market funds that can readily
be converted into known amounts of cash and which are subject to an
insignificant risk of changes in value.
Cash held by the EBT and seed investment subsidiaries is not available for use
by the Group.
13. Loans and borrowings
On 27 April 2020 the Group issued £50.0m of Tier 2 subordinated debt notes at
a discount of £0.5m. Issue costs were £0.5m and the net proceeds were
therefore £49.0m. 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
and has accounted for the debt on the basis that the option to redeem will be
exercised at the earliest possible date.
2024 2023
£m £m
Non-current subordinated debt in issue 49.9 49.7
14. Share capital
In early 2023, the Group purchased and cancelled 1.4m shares at a cost of
£2.0m. On cancellation of the shares, an amount equal to their nominal value
was transferred to a capital redemption reserve which forms part of 'Other
reserves', as detailed in Note 15.
Share capital 2024 2023 2024 2023
Number of shares Number of shares £m £m
m m
Ordinary shares of 2p each 545.0 545.0 10.9 10.9
545.0 545.0 10.9 10.9
Number of shares Par value
2024 2023 2024 2023
m m £m £m
Movement in ordinary shares
At 1 January 545.0 546.4 10.9 10.9
Shares cancelled - (1.4) - -
At 31 December 545.0 545.0 10.9 10.9
15. 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 in Jupiter Fund Management plc 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.
During the year, the Group purchased 1.4m (2023: 18.7m) ordinary shares with a
par value of £nil (2023: £0.4m) for the purpose of satisfying share option
obligations to employees. The full cost of the purchases was £1.0m (2023:
£24.5m). The Group disposed of 12.9m (2023: 7.7m) own shares to employees in
satisfaction of share-based awards with a nominal value of £0.2m (2023:
£0.2m). At 31 December 2024, 22.4m (2023: 33.9m) ordinary shares, with a par
value of £0.5m (2023: £0.7m), were held as own shares within the Group's
EBT.
(ii) Other reserves
Other reserves of £244.6m (2023: £250.3m) comprise the merger relief reserve
of £236.4m (2023: £242.1m) formed on the acquisition of Merian in 2020,
£8.0m (2023: £8.0m) that relates to the conversion of Tier 2 preference
shares in 2010 and £0.2m (2023: £0.2m) of capital redemption reserve that
was transferred from share capital on the cancellation of shares repurchased
(see Note 14). The transfer of £5.7m from the reserve to the retained
earnings reserve in the year represents a partial realisation of the merger
relief reserve.
(iii) Foreign currency translation reserve
The foreign currency translation reserve of £0.7m (2023: £2.0m) is used to
record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
(iv) Retained earnings
Retained earnings of £578.3m (2023: £527.0m) are the amount of earnings that
are retained within the Group after dividend payments and other transactions
with owners.
16. Dividends
2024 2023
£m £m
Prior year final dividend (3.4p per ordinary share) (2023: 0.5p per ordinary 17.6 2.6
share)
Interim dividend (3.2p per ordinary share) (2023: 3.5p per ordinary share) 16.6 17.8
Special dividend (nil) (2023: 2.9p per ordinary share) - 14.8
34.2 35.2
Final and special dividends are paid out of profits recognised in the year
prior to the year in which the dividends are proposed, declared and reported.
The EBT has waived its right to receive future dividends on shares held in the
trust. Dividends waived on shares held in the EBT in 2024 were £1.8m (2023:
£2.4m).
A final dividend for 2024 of 2.2p per share (2023: 3.4p) has been proposed by
the Directors. This dividend amounts to £12.0m (before adjusting for any
dividends waived on shares in the EBT) and will be accounted for in 2025.
Including the interim dividend for 2024 of 3.2p per share (2023: interim and
special dividends of 6.4p), this gives a total dividend per share of 5.4p
(2023: 9.8p).
17. Cash flows from operating activities
Notes
2024 2023
£m £m
Operating profit 86.4 86.0
Adjustments for:
Amortisation of intangible assets 9 11.4 20.6
Depreciation of property, plant and equipment 10 5.0 5.2
Other net gains(1) 0.2 (5.0)
Gains on fund unit hedges(2) 3 (2.4) (1.5)
Share-based payments 3 17.2 18.5
Increase in trade and other receivables(3) (7.7) (14.4)
Decrease in trade and other payables(3) (14.6) (0.3)
Cash generated from operations 95.5 109.1
( )
(1 ) Comprises the reversal of items included in 'Other gains' in the income
statement that relate either to unrealised gains or losses, or to cash flows
relating to the disposal of financial assets. Cash flows relating to disposals
are included in the Cash flow statement within 'Proceeds from disposals of
financial assets at FVTPL'.
(2 ) Comprises the reversal of net gains on financial instruments held to
provide an economic hedge for funds awards that are recognised within
Administrative expenses (Note 3). Cash flows arising from the disposals of
such instruments are included in the Cash flow statement, in line with
footnote 1 above.
(3 ) Amounts reported in these lines can differ from the movement in the
balance sheet where cash flows that form part of that movement are separately
reported in a different line of the Cash flow statement or its notes. In 2023
and 2024, these differences are principally in respect of cash flow movements
relating to consolidated funds. For trade and other payables, additionally,
cash flows arising from movements in lease liabilities are presented on the
face of the Cash flow statement.
18. Changes in liabilities arising from financing activities
2024 2023
Financial liabilities at FVTPL Loans and borrowings(1) Leases Total Financial liabilities at FVTPL Loans and borrowings(1) Leases Total
£m £m £m £m £m £m £m £m
Brought forward at 1 January 80.2 49.7 44.1 174.0 48.6 49.5 46.3 144.4
New leases - - 0.6 0.6 - - 0.6 0.6
Changes from financing cash flows 147.3(2) - (5.6) 141.7 28.9(2) - (4.9) 24.0
Changes arising from obtaining or losing control of consolidated funds (160.9) - - (160.9) (1.2) - - (1.2)
Changes in fair value 33.5 - - 33.5 3.9 - - 3.9
Interest expense - 0.2 1.4 1.6 - 0.2 1.5 1.7
Lease reassignment and modifications - - 0.4 0.4 - - 0.6 0.6
Liabilities arising from financing activities carried forward at 31 December 100.1 49.9 40.9 190.9 80.2 49.7 44.1 174.0
Notes 19 13 19 13
( )
(1) Accrued interest on loans and borrowings is recorded within 'Trade and
other payables' and is therefore not included in this analysis. The interest
expense above comprises the charge arising from unwinding the discount applied
in calculating the amortised cost of the subordinated debt.
(2) Comprises cash flows from third-party subscriptions redemptions into
consolidated funds, net of redemptions (see Cash flow statement).
19. Financial instruments
The fair value of financial instruments that are actively traded in organised
financial markets is determined by reference to quoted market bid prices on
the balance sheet date. Derivatives held at fair value are carried at a value
which represents the price to exit the instruments at the balance sheet date.
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).
Where funds are consolidated, we look through to the underlying instruments
and assign a level in accordance with the definitions above. Where funds are
not consolidated, we do not apply a look through and these funds are
classified as level 1 as the prices of these funds are quoted in active
markets.
As at 31 December 2024, the Group held the following financial instruments
measured at fair value:
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets at FVTPL - funds 271.0 - - 271.0
Financial assets at FVTPL - derivatives - 0.9 - 0.9
Financial liabilities at FVTPL (100.1) - - (100.1)
Other financial liabilities at FVTPL - derivatives - (0.4) (0.4)
170.9 0.5 - 171.4
As at 31 December 2023, the Group held the following financial instruments
measured at fair value:
Level 1 Level 2 Level 3 Total
£m £m £m £m
Financial assets at FVTPL - funds 141.7 77.7 - 219.4
Financial liabilities at FVTPL (80.2) - - (80.2)
Other financial liabilities at FVTPL - derivatives - (0.1) - (0.1)
61.5 77.6 - 139.1
20. Related parties
During the year, as set out in the 'Changes in the composition of the Group'
section on page 13, the Group consolidated Jupiter Global Fund SICAV: Asia
Pacific Income, and ceased to consolidate Jupiter European Smaller Companies
Fund, Jupiter Global Fund SICAV: Europe ex-UK Equity, Jupiter Global Fund
SICAV: Global High Yield Short Duration Bond and Jupiter Global Fund SICAV:
Jupiter Global Sustainable Equities as the funds are no longer judged to be
controlled by the Group.
The Group manages investment trusts, unit trusts, OEICs, SICAVs, ICVCs and
Delaware LPs (closed 2024) and receives management and, in some instances,
registration (Aggregate Operating Fee) and performance fees for providing this
service. The fee arrangements are disclosed within the financial statements of
each investment management subsidiary of the Group or within other publicly
available information. By virtue of the investment management agreements in
place between the Group and the collective investment vehicles it manages,
such funds may be considered to be related parties. Investment management and
performance fees are disclosed in Note 1.
The Group acts as investment manager for 29 (2023: 30) authorised unit trusts
and 9 (2023: 9) OEICs. Each unit trust is jointly administered with the
trustees, Northern Trust Global Services SE. The aggregate total value of
transactions for the year was £2,395m (2023: £2,223m) for unit trust
creations and £5,830m (2023: £4,052m) for unit trust liquidations. The
actual aggregate amount due to the trustees at the end of the accounting year
in respect of transactions awaiting settlement was £7.8m (2023: £7.5m). The
Group also acts as the management company for the Jupiter Global Fund and
Jupiter Investment Fund SICAVs, made up of 12 sub-funds (2023: 17) and 1
sub-fund (2023: 3) respectively, as well as the Jupiter Investment Management
Series I/II and the Jupiter Asset Management Series Plc, made up of 8 (2023:
9) and 22 (2023: 23) sub-funds respectively. The administrator is Citibank
Europe plc.
The amounts received in respect of gross management, registration and
performance fee charges split by investment vehicle were £225.4m (2023:
£237.1m) for unit trusts, £42.9m (2023: £43.2m) for OEICs, £90.5m (2023:
£89.7m) for SICAVs, £58.4m (2023: £46.5m) for ICVCs, £1.5m (2023: £4.3m)
for investment trusts and £34.2m (2023: £31.9m) for segregated mandates. At
the end of the year, there was £21.0m (2023: £23.4m) accrued for annual
management fees, £1.2m (2023: £1.2m) in respect of registration fees and
£28.0m (2023: £12.7m) in respect of performance fees.
Included within financial instruments (see Note 11) are seed investments,
hedges of awards in fund units in mutual funds and investment trusts, all
managed, but not controlled, by the Group. Financial instruments also include
proprietary investments in an investment trust that was managed by the Group
until 1 April 2024. The investment trust was not controlled by the Group. At
31 December 2024, the Group had a total net investment in such funds of
£91.8m (2023: £56.5m) and received distributions of £0.9m (2023: £0.5m).
During 2024, it invested £65.9m (2023: £36.4m) in these funds and made
disposals of £55.6m (2023: £51.2m).
Key management compensation
Transactions with key management personnel also constitute related party
transactions. Key management personnel are defined as the Directors, together
with other members of the Strategy and Management Committee. The aggregate
compensation paid or payable to key management for employee services is shown
below:
2024 2023
£m £m
Short-term employee benefits 5.4 3.7
Share-based payments 3.3 1.3
Other long-term employee benefits 1.6 1.2
10.3 6.2
Statement of Directors' responsibilities
Statements relating to the preparation of the Financial Statements
The Directors are responsible for preparing the Annual Report, the
Remuneration Report and the Financial Statements in accordance with applicable
law and regulations. Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors have prepared
the Group and Company Financial Statements in accordance with UK-adopted
International Accounting Standards (IAS) and in conformity with the
requirements of the Companies Act 2006. Additionally, the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules require the Directors
to prepare the Group Financial Statements in accordance with UK-adopted IAS
and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The Directors' review of the Financial Statements
The Directors undertook a detailed review of the Financial Statements in
February 2025. Following this examination, the Board was satisfied that the
Financial Statements for 2024 give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
for that period. Before approving the Financial Statements, the Board
satisfied itself that in preparing the statements:
· suitable accounting policies had been selected in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors and
consistently applied;
· the judgements and accounting estimates that have been made were
reasonable and prudent; and
· where applicable UK-adopted IAS in conformity with the requirements of
the Companies Act 2006 have been adopted and, for the Group, UK-adopted IAS
have been followed and that there were no material departures.
The Directors' review of going concern
The Financial Statements have been prepared on the going concern basis, the
Directors having determined that the Company is likely to continue in business
for at least 12 months from the date of this report.
The Directors' review of current position, prospects and principal risks
Supported by the Audit and Risk Committee, the Directors have completed a
robust review and assessment of the principal and emerging risks in the
business, making use of the Enterprise Risk Management Framework which
operates in all areas of the Company. The framework ensures that the relevant
risks are identified and managed and that information is shared at an
appropriate level. Full details of these risks are provided in the Risk
management section of the Strategic report. The Enterprise Risk Management
Framework was reviewed by the Board in December. The Directors found it was an
effective mechanism through which the principal risks and the Company's risk
appetite and tolerances could be tested and challenged.
The Directors' responsibility for accounting records
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the Financial Statements and
the Directors' Remuneration Report comply with the Companies Act 2006.
The Directors' responsibility for the safekeeping of assets
The Directors have examined the steps in place for ensuring the prevention and
detection of fraud and other irregularities. The procedure is examined and
tested on a regular basis. The Board is satisfied it is understood and is
operated well, and accordingly that the assets of the Company are safeguarded
and protected from fraud and other irregularities.
The Directors' responsibility for information
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of Financial Statements may differ from legislation in other
jurisdictions.
Statement of Directors' responsibilities
The Directors consider that the Annual Report and Accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group's and Company's position and performance,
business model and strategy.
Each of the Directors confirm that, to the best of their knowledge:
· the Group and Company Financial Statements, which have been prepared in
accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and profit of the Group and profit of
the Company; and
· the Directors' report contained in the Annual Report and Accounts
includes a fair review of the development and performance of the business and
the position of the Group and Company, together with a description of the
principal risks and uncertainties that it faces.
· In the case of each Director in office at the date the Directors' report
is approved:
· so far as the Director is aware, there is no relevant audit information
of which the Group's and Company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as a Director
in order to make themselves aware of any relevant audit information and to
establish that the Group's and Company's auditors are aware of that
information.
On behalf of the Board
Wayne Mepham
Chief Financial and Operating Officer
26 February 2025
Principal risks and mitigations
The Board and executive management are responsible for establishing and
maintaining a strong risk management culture that embeds a high level of risk
awareness and a sound control environment across the firm.
This is achieved through leadership behaviours setting the 'tone from the
top', governance structures, a clear definition of roles and responsibilities,
and regular communication reinforcing appropriate behaviours. The Group has a
robust enterprise risk management policy to provide a comprehensive approach
to identifying, assessing, monitoring, mitigating and reporting risk.
Principal risks
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 imperative to the business to reduce potential harms
to clients, the firm and the market.
The table below lists the key risks to the firm identified through the risk
management framework, and are monitored by the Board on an ongoing basis. All
material risks are reported through the risk framework, however, the principal
risks are the most impactful risks on a residual(1) basis to our firm. The
risks are consistent with last year's assessment, with the exception of
sustainability risk which has been integrated into the other principal risk
assessments.
Principal risk Description
Market disruption The risk we fail to adequately respond to changes and/or disruption within the
markets we operate in.
Investment performance risk The risk that portfolios do not meet their investment objectives.
Outsourcing and supplier risk The risks arising from incidents or failure of providers of services to
deliver on their obligations, or inadequate selection or oversight of
providers.
People risk The risk of failures or poor practices relating to people management and the
risk of poor individual employee conduct.
Regulatory risk The risk of failing to comply with our regulatory obligations including
failures to implement changes required to meet new regulatory requirements.
Technology and information security risk The risk of deliberate attacks or accidental events that have a disruptive
effect on interconnected technologies.
Overall, the evolution of the Group's risk profile during 2024 has been driven
by external challenges such as regulatory and investor demands. Geopolitical
events across the globe have also prompted increased market volatility and
operational risks. Further details on the mitigation in place for our most
material risks are included below.
1 Residual risk is considered to be the risk exposure after the application
of existing mitigating controls, assessing the risks on the potential impact
and likelihood of them crystallising.
Description Approach and management actions Control examples
Market disruption - Events across the globe disrupt markets, which increases · We continue efforts to diversify across both regions and asset · Regular stress testing to anticipate and quantify the impact of
volatility and demand for products in impacted areas. The corresponding classes. Our strategy is to further reinforce our presence in the UK market, potential major political and market events are completed by the investment
changing global sanctions regimes increase our operational risk, for example, while also increasing the scale of our international and institutional risk team and shared with the Investment Management Leadership Team and
financial crime risk. businesses. Investment Managers.
· The Board and the Strategy and Management Committee regularly · Horizon scanning to identify potential market scenarios and model
review the strategic plan, opportunities and threats, budgets and targets. market moves that might be expected in those scenarios.
· Our financial crime framework continuously evolves to ensure the · Daily monitoring of funds including the value at risk, liquidity
ever-changing landscape of financial crime is mitigated through robust and counterparty exposure.
monitoring and testing.
Investment performance risk - Delivering positive outcomes to our clients · All performance is monitored closely and challenged on a regular · Monthly Risk and Performance Reports.
through active management is at the core of the organisation and failure to basis through senior management engagement.
deliver against our commitments leads to poor client outcomes and loss of AUM.
· Head of Investment Risk ensures that outcomes of the challenge
· The investment risk team provides detailed analysis of sessions are fed into the quarterly Portfolio Review Forum, to review all
market-related risks facing Jupiter's funds and corporate balance sheet, strategies and challenge where there has been underperformance and
ensuring that these are communicated accurately and used to challenge and outperformance.
inform various stakeholders, enhancing the investment management process.
· On a quarterly basis investment managers must present their
· In the UK, performance is overseen and assessed through active performance to Investment Risk and be challenged on their approach and
value assessments to ensure that clients are receiving the best possible holdings.
product outcome.
· Adherence to the firm's Risk Management Policy and Liquidity
· Liquidity is monitored through the dilution adjustment process, Management Policy.
liquidity stress testing, capacity review process, and liquidity management
techniques (in extreme cases).
Outsourcing and supplier risk - The firm is reliant on suppliers to which we · We continue to review and assess our appetite for outsourcing to · Supplier risk assessments ensure we adopt the correct approach to
have outsourced certain services and any failure from our third parties can ensure that it remains effective in relation to the size and scale of our the supplier's due diligence, governance and oversight.
lead to a negative impact on our clients, our staff and the firm. business.
· Service level agreement reviews for critical suppliers.
· We continue to work closely with our critical third-party suppliers
to ensure that the services they provide remain resilient. · Annual review of control reports to get an independent assessment
of our critical suppliers.
· Our framework for the oversight of activities delegated to third
parties is continually reviewed in line with our risk appetite and regulatory
requirements to ensure effectiveness.
· Risk assessment is in place to ensure prioritisation and oversight
of critical and important suppliers.
· Appropriate and effective escalation channels are in place to raise
and resolve issues.
People risk - People are at the core of the business. However, ensuring · Focused recruitment, talent and learning programmes are in place, · Talent identification and succession planning in place (overseen by
management of performance, conflicts of interest and conduct is imperative to supported by robust HR policies and procedures which comply with all relevant the Nomination Committee) including external candidate identification for key
minimise poor culture and loss of key staff. rules, regulations and guidelines. roles.
The Group recognises that conduct risk can crystallise across various parts of · Codified Jupiter behaviours are in place to underpin expectations · Reward management.
the business and can be strategic, financial, infrastructural or behavioural on culture.
in nature. Conduct risks can arise on both an individual and Group basis.
· Employee engagement survey.
· Succession plans are in place for critical staff, including all
Senior Management Team roles and lead investment managers. · Staff wellbeing measures.
· Conduct risk is monitored through the conduct risk dashboard which · Employee Handbook and policies.
is designed to provide a lens into conduct risk from which the Culture and
Conduct Committee can review, investigate and escalate potential and actual · Culture and Conduct Committee.
conduct risk issues within the Group.
· Mandatory conduct training.
· Ongoing focus on retention of key staff in Investment Management
and recruiting staff with appropriate expertise in specialised roles. · The diversity, equity and inclusion strategy is in place and
reviewed annually.
Regulatory risk - The risk of not complying with regulatory changes remains · Proactive engagement with our regulators in an open and transparent · A robust and regularly reviewed financial crime framework,
significant as we continue to see a high volume of regulatory activity, for manner while investing in education, training and robust compliance and including but not limited to financial crime risk assessments, risk-based
example, related to sustainability, Consumer Duty and operational resilience. financial crime functions. anti-money laundering/know your client controls, sanctions screening and a
Our strategic focus of growing the scale in our international business further
defined suspicious activity reporting process.
increases our regulatory footprint. · Cohesive and holistic approach to managing the evolving landscape
of regulatory and financial crime risks across jurisdictions and utilise · A clearly defined and regularly reviewed compliance framework
industry insight and specialist expertise as required to respond to regulatory incorporating policies, processes, and controls to support regulatory
change, for example, the EU Digital Operational Resilience Act. adherence.
· Relevant investment guidelines/restrictions reviewed and updated · Regular financial crime and regulatory training and education
accordingly, including investment sanctions controls. programme, overseen by the Group Head of Compliance, who is also the Money
Laundering Reporting Officer with regular reporting to committees and boards.
· Boards for regulated entities are in place to monitor regulatory
risk and where appropriate, with appointments of independent non-executive · Post-regulatory and financial crime change implementation reviews.
directors.
· Ongoing global regulatory horizon scanning and review of new
regulatory and financial crime changes.
Technology and information security risk - Our dependency on technology and · Jupiter is certified in accordance with the UK government-backed · Daily Security checks to mitigate the risk of compromised data due
data is significant and therefore it is imperative that we protect our 'Cyber Essentials Plus' scheme, demonstrating our ongoing commitment to to a cyber-incident.
clients, staff and the firms against technology failure, loss of data and reducing the likelihood of a successful cyber event, despite the rising number
system corruption. of external attacks seen across the industry. · Vulnerability scans.
· We continue to make investments in our security systems to identify · Third-party SecureWorks utilises threat-led intelligence to
and reduce vulnerabilities as quickly as possible. continuously analyse events on Jupiter network and escalates critical events
to IT Security and third line IT Operations for investigation.
· Full programme of activity is in place to monitor events and
attacks and to implement appropriate patches/changes. · Annual technology security training for all Jupiter employees.
· New data enablement initiatives are being delivered and data · Phishing scenario testing.
governance.
· Penetration tests (teleworking, office).
· Assessment and monitoring of End User Computing (EUC) and activity
to move to appropriate non-EUC solutions/technology-managed applications. · Virtual desktop and remote working capabilities.
· Use of the standard information technology infrastructure library · Jupiter are compliant with the Digital Operational Resilience Act
approach, utilising the Change Advisory Board process to ensure appropriate regulations, as required from January 2025, establishing and maintaining a
change control, including evidence of testing and sign-off on changes to the high level of operational resilience, and strengthening our digital
Production environment. resilience.
Alternative performance measures
The use of alternative performance measures (APMs)
The Group uses APMs for two principal reasons:
· We use ratios to provide metrics for users of the accounts; and
· We use revenue, expense and profitability based APMs to explain the
Group's underlying profitability.
Ratios
The Group calculates ratios to provide comparable metrics for users of the
accounts. These ratios are derived from other APMs that measure underlying
revenue and expenditure data.
In this document, we have used the following ratios:
APM 2024 2023 Definition Reconciliation
1 Cost:income ratio 78% 73% Administrative expenses before exceptional items and performance fees divided See table 1 below
by Net revenue before exceptional items and performance fees
2 Net management fee margin 65 bps 70 bps Net management fees divided by average AUM
3 Total compensation ratio before performance fees 45% 42% Fixed staff costs plus Variable staff costs before exceptional items and
performance fees as a proportion of Net revenue before performance fees
4 Underlying EPS 13.4p 14.8p Underlying profit after tax divided by average issued share capital
Reconciliations and calculations: table 1
APM 2024 2023
£m £m
Administrative expenses (page 8) 273.2 265.4
Less: Performance fee variable staff costs (page 6) (12.7) (6.4)
Less: Exceptional items included in administrative expenses (page 15) - (0.8)
Administrative expenses before exceptional items and performance fee-related 260.5 258.2
costs
Net revenue (page 8) 364.1 368.8
Less: Performance fees (page 14) (31.2) (13.2)
Net revenue before performance fees 332.9 355.6
Cost:income ratio 1 78% 73%
Management fees (page 14) 368.9 389.9
Less: Fees and commissions relating to management fees (page 14) (37.6) (35.9)
Net management fees 331.3 354.0
Average AUM (£bn) (page 5) 50.7 50.9
Net management fee margin 2 65 bps 70 bps
Fixed staff costs (page 6) 79.1 78.1
Variable staff costs before exceptional items and performance fees (page 6) 71.9 72.8
Total 151.0 150.9
Net revenue before performance fees (see above) 332.9 355.6
Total compensation ratio before net performance fees 3 45% 42%
Statutory profit before tax (page 8) 88.3 9.4
Exceptional items (page 6) 9.2 95.8
Underlying profit before tax (page 6) 97.5 105.2
Tax at average statutory rate of 25.0% (2023: 23.5%)(1) (24.4) (24.7)
Underlying profit after tax 73.1 80.5
Average issued share capital (m) (page 17) 545.0 545.0
Underlying EPS 4 13.4p 14.8p
(1)Actual effective tax rates applicable to underlying profit before tax were
26.0% in 2024 and 25.6% in 2023.
Revenue, expense and profit-related measures
1. Asset managers commonly draw out subtotals of revenues less cost of
sales, taking into account items such as fee expenses, including commissions
payable, without which a proportion of the revenues would not have been
earned. Such net subtotals can also be presented after deducting non-recurring
exceptional items.
2. The Group uses expense-based APMs to identify and separate out
non-recurring exceptional items or recurring items that are of significant
size in order to provide useful information for users of the accounts who wish
to determine the underlying cost base of the Group. To further assist in this,
we also provide breakdowns of administrative expenses below the level required
to be disclosed in the statutory accounts, for example, distinguishing between
variable and fixed compensation, as well as non-compensation expenditure.
These subdivisions of expenditure are also presented before and after
exceptional items and after accounting for the impact of performance fee
pay-aways to fund managers.
3. Profitability-based APMs are effectively the sum of the above revenue
and expense-based APMs and are provided for the same purpose - to separate out
non-recurring exceptional items or recurring items that are of significant
size in order to provide useful information for users of the accounts who wish
to determine the underlying profitability of the Group.
4. Underlying profit after tax is, in addition, used to calculate
underlying EPS which determines the Group's ordinary dividend per share and is
used in one of the criteria for measuring the vesting rates of share-based
awards that have performance conditions attached.
In this document, we have used the following measures which are reconciled or
cross-referenced in table 1:
Measure Rationale for use of measure
Net management fees 1
Exceptional items(1) 2
Net revenue 1
Performance fee costs 2
Fixed staff costs before exceptional items 2
Variable staff costs before exceptional items 2
Underlying profit before tax 3
Underlying profit after tax 3, 4
(1) Defined as items of income or expenditure that are significant in size
and which are not expected to repeat over the short to medium term.
As stated in 2 above, the Group presents a breakdown of administrative
expenses below the level required to be disclosed in the statutory accounts,
distinguishing between variable and fixed compensation, as well as
non-compensation expenditure. The relevant amounts are set out in the table on
page 6.
Changes in use of APMs since 2023
There have been no changes in the Group's APMs compared to those used in 2023.
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