Jupiter Fund Surges as Profit Jump Sparks Dividend Rise

Jupiter Fund Management Plc rallied the most in more than three years after the U.K.-based money manager run by Edward Bonham Carter boosted its first-half dividend by 40 percent as earnings almost doubled.

The stock jumped 11 percent to 360 pence at the close, the biggest advance since June 2010. Jupiter raised its dividend to 3.5 pence after first-half pretax profit surged 89 percent to 59.1 million pounds ($90 million) from a year earlier, the London-based company said in a statement today.

“We are toward the end of paying off our debt so we can now use that position to invest in growth of the business and progress our dividend development,” said Bonham Carter in a telephone interview. We have seen “considerable strength in our balance sheet” during the period.

First-half revenue increased 19 percent to 140.3 million pounds from a year earlier, helping the company reduce its bank loan by 36 million pounds to 42 million pounds. Net cash climbed 44.3 million pounds to 113.3 million pounds.

Assets under management increased to 29 billion pounds from 23.4 billion pounds a year earlier, boosted by 426 million pounds of inflows from Jupiter’s mutual funds. The company also posted a gain from selling its stake in investment firm Cofunds to Legal and General Group Plc.

“Retail fund flows in the U.K. remained resilient on the back of the market rally early in the year,” said Bonham Carter. “While bond funds saw net redemptions in the early stages of the year, demand for these products, together with absolute return funds, recovered into the second quarter, indicating that the widely predicted ‘great rotation’ out of bonds is not yet underway.”

JPMorgan Chase & Co. reiterated is overweight rating for the shares, the equivalent of a buy recommendation, and raised its 12-month share price estimate by 17 percent to 375 pence.

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