Half Year Results

RNS Number : 6626K

Jupiter Fund Management PLC

01 August 2013

 



Jupiter Fund Management plc
 Half Year Results 2013

Highlights

1 August 2013

·      Strong investment performance across mutual fund range

·      Assets under management increased to £29bn, benefitting from net mutual fund inflows of £426m

·      EBITDA of £75.3m, up 25% due to improved trading performance

·      Net cash strengthened to £113m

·      Interim dividend to shareholders increased to 3.5p

			Six months ended 30 June 2013 (unaudited)	Six months ended 30 June 2012 (unaudited)	Year ended 31 December 2012
	Assets under management (£bn)		29.0	23.4	26.3
	Net inflows/(outflows) (£bn)		0.4	(0.3)	1.0
	EBITDA1 (£m)		75.3	60.3	124.2
	EBITDA margin2 (per cent.)		54	51	51
	Profit before tax (£m)		59.1	31.2	73.6
	Underlying earnings per share2 (p)		12.4	9.0	19.0
	Net cash (£m)		113.3	1.0	69.0
	Dividend per share (p)		3.5	2.5	8.8

¹ Earnings before interest, tax, depreciation and amortisation ("EBITDA") is a non-GAAP measure which the Group uses to assess its performance. It is defined as operating earnings excluding the effect of depreciation and the charge for options over pre-Listing shares

² non-GAAP

Edward Bonham Carter, Chief Executive, commented:

"Jupiter continues to attract healthy inflows while delivering consistently strong investment performance. We have also made excellent progress in developing a strengthened and sustainable balance sheet. This performance, together with confidence in our prospects, has allowed us to increase our interim dividend by 40 per cent. to 3.5p."

Analyst presentation

There will be an analyst presentation to discuss the results on 1 August 2013 at 9.00am. The presentation will be held at FTI Consulting, Holborn Gate, 26 Southampton Buildings, London, WC2A 1PB and is also accessible via a live audiocast for those unable to attend in person. To attend the presentation, please contact Laura Ewart at FTI Consulting on [phone] or at [e-mail]. Alternatively, sign up online to access the live audiocast using the following link: http://mediazone.brighttalk.com/event/Jupiter/aa85e45da9-7819-intro

The Interim Report will be available at www.jupiteronline.com

For further information, please contact:

	Investors	Media
Jupiter	Philip Johnson [phone]	Alicia Wyllie [phone]
FTI Consulting	Laura Ewart [phone]	Andrew Walton [phone]

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results of operations and businesses of the Group. Such statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors' current view and information known to them at the date of this announcement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.

Chief Executive's statement

It is pleasing to report that we have delivered a robust performance for clients and shareholders over the first half of 2013. Higher revenues, driven by healthy net inflows and increased average market levels, have combined with the benefits of our scalable business model to increase EBITDA by 25 per cent. to £75.3m (2012 H1: £60.3m). Strong cash generation enabled a further repayment of debt, reducing our bank loan by £36.0m to £42.0m. At the end of the period, net cash was £113.3m, up £44.3m on the year end figure of £69.0m.

These healthy results, together with the continued improvement in our balance sheet, have allowed the Board to increase the interim dividend by 40 per cent. to 3.5p for 2013.

Market review

Following a first quarter during which stock markets reached highs not seen since before the Lehman Brothers collapse, the second quarter brought a significant correction. Signs of slower growth in China, and an indication that the US Federal Reserve would rein in its programme of quantitative easing (QE), saw equity markets surrender most of their previous gains and sovereign bond prices fall. Emerging markets, in particular, suffered as investor appetite for risk diminished and many of them saw considerable outflows, especially from sovereign debt and currencies.

Retail fund flows in the UK remained resilient on the back of the market rally early in the year, although the overall environment has been quiet as distributors adapt to RDR. 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. Net sales of UCITS funds across Europe showed significant strength in the first quarter, although bond products remained more popular than equity funds. However, initial market data suggests there was a sharp reversal in European flows in June with significant redemptions across both equity and bond products.

Operational review

Although financial markets remained volatile, Jupiter's fund managers continued to demonstrate their ability to deliver strong returns for clients, with 67 per cent. of our mutual fund assets delivering outperformance after fees over the three years to 30 June 2013. Jupiter has a high quality distribution franchise built around a culture of long term investment performance and strong brand, and this delivered £418m of net inflows across the period.

While we continue to believe that our core UK market offers significant long-term opportunities for growth, our international distribution efforts are becoming an increasingly important contributor to the Group. SICAV assets grew 30 per cent. across the period to £2.5bn at 30 June 2013, and are now just under 10 per cent. of mutual fund AUM. Building our relationships with key distributors on a global basis in order to position the business for future growth remains a key focus and during the period, we announced two strategic hires to help us extend our reach internationally. In April, Peter Swarbreck joined as head of Jupiter's Asia Pacific business to drive our growth in this region while Andrej Brodnik, who joined in June as head of our sales operations in Germany, Austria and Switzerland, will focus on broadening our client base in these countries.

A continuous programme of both developing our internal talent and bringing in expertise to build out our fund management capabilities has enabled Jupiter to deliver performance across a broad range of funds through a natural cycle of evolution and change. We have continued to develop our product range during the period, launching the Jupiter Global Equity Income Fund in April. The management of four funds changed during the period, with one further change in July. This followed two retirement announcements, the departure of one fund manager and a decision to bring two products under the same management.

Outlook

Financial markets are likely to remain volatile in the near term as investors adjust to a world unsupported by QE. That is not to say interest rates are in imminent danger of rising as measures to keep bond yields low have, so far, kept these constrained, but declining interest rates are, in most economies, a thing of the past. This will, in time, place increased pressure on already stretched household finances, with investors likely to place ever greater emphasis on the delivery of strong investment performance after fees and a rising income to compensate.

Our performance record, brand and distribution capabilities, together with our growing financial strength, puts us in a strong position from which to benefit from the long-term structural drivers supporting growth in the savings industry in the UK and, as we build out our relationships with key distributors on a global basis, in other markets. We are confident these factors will enable us to continue delivering profitable growth at attractive margins and, within our sustainable balance sheet structure, to share the rewards of this growth through dividend progression.

Edward Bonham Carter

Chief Executive

Business review

Assets under management and flows

	Movement in assets under management by product across the period
		31 December 2012 £m	Q1 net flows £m	Q2 net flows £m	Market movement £m	30 June 2013 £m
	Mutual funds	20,572	247	179	1,732	22,730
	Segregated mandates	3,207	(56)	(100)	475	3,526
	Private clients	1,888	9	121	112	2,130
	Investment trusts	601	9	9	40	659
	Total	26,268	209	209	2,359	29,045

Assets under management ("AUM") increased to £29.0bn as at 30 June 2013 (31 December 2012: £26.3bn). While the FTSE increased five per cent. across the period, AUM increased 11 per cent., benefiting from net inflows and continued investment outperformance.

In both quarters, mutual fund inflows remained healthy despite the challenging flow environment experienced towards the end of the period, taking year to date net mutual fund inflows to £426m. This was due to encouraging flows into our fixed income funds, the Merlin fund of funds range and top-performing equity funds. Whilst UK flows were dampened by the effects of RDR, international expansion bolstered overall AUM growth. There were also net inflows of £130m for private clients, primarily resulting from staff transfers of vested Jupiter shares into their accounts. These positive inflows were offset by the expected losses from UK equity segregated mandates.

Investment performance

Delivering investment outperformance across our product range remains one of our core strategic objectives. In the key three year investment period, as at 30 June 2013, 25 mutual funds, representing approximately 67 per cent. of mutual funds by AUM, had delivered first and second quartile investment performance (31 December 2012: 33 mutual funds representing approximately 79 per cent. of mutual fund AUM). Over one year, 32 mutual funds representing approximately 58 per cent. of mutual funds by AUM, delivered first and second quartile investment performance (31 December 2012: 28 mutual funds representing approximately 56 per cent. of mutual fund AUM). Our segregated mandates continue to perform well with 100 per cent. of AUM above benchmark over one year and 90 per cent. above benchmark over three years.

Financial review

RESULTS FOR THE PERIOD

The financial performance of the Group is discussed below.

Net revenue

	Six months ended 30 June 2013 £m		Six months ended 30 June 2012 £m		Year ended 31 December 2012 £m
Net management fees	131.0		109.4		225.7
Net initial charge	8.8		7.7		14.3
Performance fees	0.5		0.6		4.5
Total	140.3		117.7		244.5

Net revenues for the period were £140.3m (2012 H1: £117.7m), a 19 per cent. increase on 2012 H1. This was driven by an increase in net management fees to £131.0m (2012 H1: £109.4m), ahead of underlying market levels as a result of strong flows, particularly in 2012 H2, and investment outperformance. Net initial charges of £8.8m (2012 H1: £7.7m), rose due to a more favourable pattern of sales versus redemption activity across individual funds, partially offset by the expected reduction in net amortised front end fees.

Net revenue (continued)	Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
Net management fees (£m)	131.0		109.4		225.7
Average AUM (£bn)	28.6		23.4		24.2
Net management fee margin (bps)	92		93		93

Net management fees continue to contribute the majority of our net revenues (2013 H1: 93 per cent., 2012 H1: 93 per cent.). The Group's net management fee margin for the period was 92 basis points, slightly below the 2012 H1 margin of 93 basis points, in line with our expectations and previous market guidance. We continue to expect net management fee margins to decline slowly over time, although the rate and angle of any such decline continues to be uncertain.

Administrative expenses

	Six months ended 30 June 2013 £m		Six months ended 30 June 2012 £m		Year ended 31 December 2012 £m
Fixed staff costs	21.2		19.5		39.5
Other expenses	20.4		20.4		41.5
Total fixed costs	41.6		39.9		81.0
Variable staff costs	23.9		17.9		40.1
Charge for options over pre-Listing shares	2.4		4.0		7.3
Total administrative expenses	67.9		61.8		128.4

Administrative expenses of £67.9m (2012 H1: £61.8m) were £6.1m higher than 2012 H1, predominantly as a result of increased variable staff costs in line with higher profitability and the continued roll out of our post-Listing compensation structure (see below for further detail).

Fixed costs of £41.6m (2012 H1: £39.9m) were four per cent. ahead of 2012 H1 due to an increase in fixed staff costs as we continued steady investment in our people, platform and distribution capabilities. Other expenses remained flat at £20.4m (2012 H1: £20.4m). We will maintain careful cost discipline while continuing to position the business for growth, being mindful of both prevailing market conditions and our desire to grow the business over time.

	Six months ended 30 June 2013 £m		Six months ended 30 June 2012 £m		Year ended 31 December 2012 £m
Cash bonus	16.5		13.4		30.0
Deferred bonus	3.8		2.6		5.4
LTIP and SAYE	3.6		1.7		4.5
Pre-IPO deferral scheme	-		0.2		0.2
Variable staff costs	23.9		17.9		40.1
Variable compensation ratio1	24%		23%		25%

¹ Variable staff costs as a proportion of pre-variable staff cost operating earnings before charge for options over pre-Listing schemes

Variable staff costs of £23.9m (2012 H1: £17.9m) increased by 34 per cent. due in part to higher profitability of the Group, with the cash bonus increasing in line with earnings. This growth was magnified further by the continuing roll out of the post-Listing compensation structure, driven by a further year of awards under the LTIP scheme and Deferred Bonus Plan.

We continue to expect the variable compensation ratio to remain in the mid to high 20 per cents. range over the medium-term as the incentive schemes put in place as part of our Listing build to maturity. However, the equity-settled nature of previously awarded deferred bonus and LTIP schemes means that their costs are not impacted by rising earnings. As a result, the variable compensation ratio only increased to 24 per cent., in line with our expectations for such an environment.

EBITDA

EBITDA was £75.3m for the period (2012 H2: £60.3m), up 25 per cent., driven by an increase in net revenue from higher average market levels and strong 2012 H2 net flows. The Group's EBITDA margin increased to 54 per cent. as our scalable operating model meant that higher revenues allowed for continued investment in growth whilst maintaining attractive profitability levels.

Other income statement movements

During 2013 H1, the Group sold its entire holding in Cofunds to a co-investor, Legal & General Group plc, resulting in a gain of £6.7m which has been included within the other gains/(losses) line on the income statement. Of this, £6.6m was previously held within the available for sale reserve and transferred to the income statement, and a further gain of £0.1m was recognised in the period.

Finance expenses of £2.0m (2012 H1: £4.4m) decreased by 55 per cent., primarily due to a reduction in interest payable on the bank loan from £3.3m in 2012 H1 to £1.4m in 2013 H1. This was due to £32.0m of outstanding bank debt being paid down in 2012 H2 and further repayments of £36.0m in 2013 H1. The positive effect of the loan repayment was partially offset by an acceleration in the recognition of the debt issuance costs of £0.2m (2012 H1: £0.3m).

Profit before tax

Profit before tax for the period rose to £59.1m (2012 H1: £31.2m). This increase of 89 per cent. was driven by increased earnings, reduced finance expenses and the gain made from the sale of Cofunds.

Tax

The effective tax rate was 20.6 per cent. (2012 H1: 22.8 per cent., 2012: 23.6 per cent.) against a headline corporation tax rate of 23.25 per cent. (2012 H1: 24.5 per cent., 2012: 24.5 per cent.). The reduction is primarily due to the crystallisation of an accounting gain of £6.7m for the Cofunds disposal which generated a loss for tax purposes owing to the previous disallowance of write downs in the investment for tax purposes. 

Underlying profit before tax and underlying earnings per share ("EPS")

Underlying profit before tax and underlying EPS are non-GAAP measures which the Board believes provide a more useful representation of the Group's trading performance than the statutory presentation. The Group's basic and diluted EPS were 11.7p and 11.0p respectively.

	Six months ended 30 June 2013 £m		Six months ended 30 June 2012 £m		Year ended 31 December 2012 £m
Profit before tax	59.1		31.2		73.6
Adjustments:
Amortisation of acquired investment management contracts and trade name	19.4		19.4		38.7
Charge for options over pre-Listing shares	2.4		4.0		7.3
(Gain)/loss taken to the income statement on available for sale investments	(6.7)		-		0.7
FSCS Levy exceptional income	-		-		(5.0)
Underlying profit before tax	74.2		54.6		115.3
Tax at statutory rate of 23.25 per cent.	(17.3)		(13.4)		(28.2)
(2012 H1: 24.5 per cent., 2012: 24.5 per cent.)
Underlying profit after tax	56.9		41.2		87.1
Issued share capital (m)	457.7		457.7		457.7
Underlying EPS	12.4p		9.0p		19.0p
Basic EPS	11.7p		6.7p		14.9p
Diluted EPS	11.0p		6.4p		14.2p

Underlying EPS was 38 per cent. ahead of 2012 H1 at 12.4p (2012 H1: 9.0p), reflective of the Group's improved trading performance, reduced finance expenses following the debt repayments and the lower statutory tax rate.

CASH FLOW

The Group generated positive operating cashflows after tax in 2013 H1 of £54.4m (2012 H1: £33.1m). Coupled with the £16.6m received from the sale of Cofunds, this cash was primarily used to repay £36.0m of bank debt.

ASSETS AND LIABILITIES

The Group further strengthened its net cash position to £113.3m (31 December 2012: £69.0m), aided by the money received from the sale of Cofunds, alongside cash amounts generated through trading. The balance was flattered by £8.7m of cash from unsettled client balances, in the absence of which net cash would have been £104.6m.

We deploy seed capital into funds to assist us in building a track record from launch or to give small but strongly performing funds sufficient scale to attract external money. As at 30 June 2013, we had a total investment of £51.5m in our own funds (31 December 2012: £53.8m). This includes £2.6m of investments in our own funds to hedge our obligation to settle amounts payable to employees in relation to Deferred Bonus Plan awards.

£36.0m of bank debt was repaid in the period, reducing the outstanding loan balance to £42.0m as at 30 June 2013. Subsequent to the period end, the Board approved refinancing our existing loan facility with a new three year revolving credit facility. It is our intention to pay down over time our initial drawing in line with our existing balance sheet management strategy, with the aim of then leaving the facility intact but undrawn in case of need. This will give Jupiter greater liquidity and flexibility for a longer period at more attractive terms and rates than were previously available and supports our intention to run a sustainable balance sheet with net cash across the cycle. 

EQUITY AND CAPITAL MANAGEMENT

Total shareholders' equity increased by £18.9m to £477.9m, as a result of the continued profitability of the Group, partially offset by the payment of the 2012 final dividend of £27.5m.

The Group currently has a three year investment firm consolidation waiver which will run to June 2015.

DIVIDENDS

The Board considers the dividend on a total basis, whilst looking to maintain an appropriate balance between interim and final dividends. Reflecting our strong trading and robust balance sheet, as well as our confidence in prospects for the business, the Board has declared an increased interim dividend of 3.5p (2012 H1: 2.5p)

Our intention remains to use profits and cashflow to pay shareholder dividends, to reinvest selectively for future growth and to use the remainder to pay down debt. As we trade out of our need for the consolidation waiver and eliminate the remainder of our debt, this will give us a sustainable balance sheet structure which supports our progressive dividend policy.

Section 1: Results for the period

Consolidated income statement

			Six months ended 30 June 2013  (unaudited)		Six months ended 30 June 2012 (unaudited)		Year ended 31 December 2012 (audited)
		Notes	£m		£m		£m
	Revenue		191.7		166.8		346.4
	Fee and commission expenses		(51.4)		(49.1)		(101.9)
	Net revenue	1.1	140.3		117.7		244.5
	Administrative expenses		(67.9)		(61.8)		(128.4)
	Operating earnings	1.3	72.4		55.9		116.1
	Other gains/(losses)	1.4	8.1		(0.7)		(0.9)
	Amortisation of intangible assets	3.2	(19.8)		(19.9)		(39.7)
	Operating profit before exceptional items		60.7		35.3		75.5
	Exceptional income	1.5	-		-		5.0
	Operating profit		60.7		35.3		80.5
	Finance income		0.4		0.3		0.5
	Finance expense	1.6	(2.0)		(4.4)		(7.4)
	Profit before taxation		59.1		31.2		73.6
	Income tax expense	1.7	(12.2)		(7.1)		(17.4)
	Profit for the period attributable to owners of the parent		46.9		24.1		56.2
	Earnings per share
	Basic	1.8	11.7p		6.7p		14.9p
	Diluted	1.8	11.0p		6.4p		14.2p

Consolidated statement of comprehensive income

			Six months ended 30 June 2013 (unaudited)		Six months ended 30 June 2012 (unaudited)		Year ended 31 December 2012 (audited)
		Notes	£m		£m		£m
	Profit for the period		46.9		24.1		56.2
	Items that may be reclassified subsequently to profit or loss
	Exchange movements on translation of subsidiary undertakings		0.1		(0.4)		(0.3)
	Net change in fair value of available for sale investments	3.4	0.1		(0.1)		(5.5)
	Net change in fair value of available for sale investments reclassified to the profit or loss	3.4	(6.6)		-		0.7
	Other comprehensive expense for the period net of tax		(6.4)		(0.5)		(5.1)
	Total comprehensive income for the period net of tax		40.5		23.6		51.1

Notes to the financial statements - Income statement

INTRODUCTION

Jupiter Fund Management plc and its subsidiaries (the "Group"), offer a range of asset management products. Through its subsidiaries, the Group acts as an investment manager to authorised unit trusts, SICAVs, investment trust companies, pension funds, private clients and other specialist funds. The Group has offices in the United Kingdom, Germany, Jersey, Singapore, Hong Kong and Switzerland.

Changes have been made to the format of the financial statements to align the Interim Report with the Annual Report. The financial statements have been split into sections to assist with their navigation and align with the Financial Review commentary. The basis of preparation, accounting policies, and principal risks and mitigations are within Section 5.

1.1 NET REVENUE

The Group's primary source of revenue is management fees. Management fees are based on an agreed percentage of the assets under management. Performance fees are earned from some funds when agreed performance conditions are met. Initial charges include fees based on a set percentage of certain inflows to our funds, box profits and commission earned on private client dealing charges. Net revenue is stated after fee and commission expenses to intermediaries for ongoing services under distribution agreements.

		Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
		£m		£m		£m
	Management fees	178.9		154.8		320.4
	Initial charges	12.3		11.4		21.5
	Performance fees	0.5		0.6		4.5
	Fee and commission expenses	(51.4)		(49.1)		(101.9)
	Total net revenue	140.3		117.7		244.5

1.2 SEGMENTAL REPORTING

The Group operates only as a single operating segment, investment management.

The Group offers different fund products through different distribution channels. All financial, business and strategic decisions are made centrally by the Board of Directors (the "Board"), which determines the key performance indicators of the Group. Information is reported to the chief operating decision maker, the Board, on a single segment basis. Whilst the Group has the ability to analyse its underlying information in different ways, this information is not used by the Board to make decisions on an aggregated basis. The information used to allocate resources and assess performance is reviewed for the Group as a whole. On this basis, the Board considers the Group to be a single-segment investment management business.

Management monitors the operating earnings of its business segment for the purposes of making decisions about resource allocation and performance assessment.

1.3 OPERATING EARNINGS

Operating earnings are defined as net revenue less administrative expenses and do not include investment income and returns, other gains/(losses), amortisation of intangible assets or exceptional income. These are items which the Group considers are not indicative of the ongoing income and costs of its operations. The Group believes that operating earnings, while not a GAAP measure, gives relevant information on the profitability of the Group and its ongoing operations. Operating earnings may not be comparable with similarly titled measures used by other companies.

1.4 OTHER GAINS/(LOSSES)

Other gains/(losses) total £8.1m, of which £6.7m is due to the gain on the sale of Cofunds. See 3.4 for further details.

1.5 EXCEPTIONAL INCOME

During 2010, a charge of £5.2m was recognised in relation to the contribution made to the Financial Services Compensation Scheme (FSCS) second interim levy for 2010/11. In 2012 H2, £5.0m of this levy was refunded and recognised as exceptional income.

There was no income arising in 2013 H1 or 2012 H1 which the Group considers to be exceptional.

1.6 FINANCE EXPENSE

		Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
		£m		£m		£m
	Interest payable on bank borrowings	1.4		3.3		5.6
	Amortisation of debt issue costs	0.4		0.5		0.9
	Fair value movement on interest rate swaps	-		0.3		0.3
	Interest payable on interest rate swaps	0.1		0.2		0.4
	Other finance costs	0.1		0.1		0.2
	Total finance expense	2.0		4.4		7.4

Partial debt repayments of £36.0m were made during 2013 H1. Following these repayments, the Group's outstanding bank debt was £42.0m (2012 H1: £110.0m, 2012: £78.0m). The repayments resulted in an acceleration of the amortisation of debt issue costs of £0.2m.

Interest rate swaps

At 30 June 2013, the Group had one interest rate swap, with a notional value of £35.0m and interest settling quarterly. This matures in November 2013 and pays interest at a fixed interest rate of 1.33 per cent.

During the period, the Group terminated another £35m swap which was due to mature in November 2014 and paid interest at a fixed rate of 1.6175 per cent.

1.7 INCOME TAX EXPENSE

		Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
		£m		£m		£m
	Current taxation
	UK corporation tax
	Tax on profits for the period	16.0		13.2		30.1
	Adjustment in respect of prior periods	-		-		(0.1)
		16.0		13.2		30.0
	Deferred taxation
	Origination and reversal of temporary differences	(3.8)		(5.8)		(12.5)
	Impact of changes in corporation tax rate	-		(0.3)		(0.1)
	Adjustment in respect of prior periods	-		-		-
		(3.8)		(6.1)		(12.6)
	Total income tax expense	12.2		7.1		17.4

The average UK corporation tax rate for the period ended 30 June 2013 was 23.25 per cent. (2012 H1: 24.5 per cent., 2012: 24.5 per cent.)

The main rate of corporation tax decreased from 24 per cent. to 23 per cent. from 1 April 2013.

Further changes to the UK corporation tax system were announced in the March 2013 UK Budget Statement and form part of The Finance Bill 2013. HMRC have proposed to reduce the main rate of corporation tax to 21 per cent. on 6 April 2014 and to 20 per cent. on 6 April 2015.

These further changes were not substantively enacted until 2 July 2013, and therefore have not been reflected in the calculations at the balance sheet date. The overall effect of the further changes from 23 per cent. to 20 per cent., if applied to the deferred tax balance at the balance sheet date, would be to reduce the net deferred tax asset by £0.2m. 

1.8 EARNINGS PER SHARE

Basic EPS is calculated by dividing the profit for the period attributable to ordinary equity holders of the parent by the weighted average number of issued ordinary shares during the period, less the weighted average number of own shares held. 

Diluted EPS is calculated by dividing the profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during that period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

For the purposes of calculating EPS, the share capital of the parent is calculated as the weighted average number of ordinary shares in issue over the periods reported. The weighted average number of ordinary shares during the period used for the purposes of calculating EPS is as follows:

	Weighted average number of shares		Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
			Number		Number		Number
			m		m		m
	Issued share capital		457.7		457.7		457.7
	Less: own shares held		(56.1)		(96.8)		(80.0)
	Weighted average number of ordinary shares for the purpose of basic EPS		401.6		360.9		377.7
	Add back weighted average number of dilutive shares		23.5		15.9		18.1
	Weighted average number of ordinary shares for the purpose of diluted EPS		425.1		376.8		395.8

The weighted average number of own shares is deducted from the weighted average number of ordinary shares. 'Own shares' are shares held in an Employee Benefit Trust ("EBT") for the benefit of employees under the vesting, lock-in and other incentive arrangements in place.

	Earnings per share		Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
			p		p		p
	Basic		11.7		6.7		14.9
	Diluted		11.0		6.4		14.2

Section 2: Statement of cash flows

Statement of cash flows

			Six months ended 30 June 2013 (unaudited)		Six months ended 30 June 2012 (unaudited)		Year ended 31 December 2012 (audited)
		Notes	£m		£m		£m
	Cash flows from operating activities
	Cash generated from operations	2.1	70.9		49.2		141.2
	Income tax paid		(16.5)		(16.1)		(30.6)
	Net cash inflows from operating activities		54.4		33.1		110.6
	Cash flows from investing activities
	Purchases of property, plant and equipment	3.3	(0.1)		(0.3)		(0.8)
	Purchase of intangible assets	3.2	(0.7)		(0.5)		(0.7)
	Purchase of financial assets at FVTPL		(2.8)		(17.1)		(26.6)
	Proceeds from disposal of financial assets at FVTPL		6.8		6.0		19.8
	Proceeds from available for sale investments		16.6		-		-
	Finance income received		0.4		0.3		0.5
	Net cash inflows/(outflows) from investing activities		20.2		(11.6)		(7.8)
	Cash flow from financing activities
	Dividends paid		(27.5)		(23.1)		(33.9)
	Purchase of shares by EBT		(0.6)		-		-
	Finance expenses paid		(2.2)		(4.8)		(7.3)
	Repayment of bank loans		(36.0)		(33.0)		(65.0)
	Net cash outflows from financing activities		(66.3)		(60.9)		(106.2)
	Net increase/(decrease) in cash and cash equivalents		8.3		(39.4)		(3.4)
	Cash and cash equivalents at beginning of the period		147.0		150.4		150.4
	Cash and cash equivalents at end of period	3.5	155.3		111.0		147.0

Notes to the financial statements - Statement of cash flows

2.1 CASH GENERATED FROM OPERATIONS

			Six months ended 30 June 2013		Six months ended 30 June 2012		Year ended 31 December 2012
			£m		£m		£m
	Cash flows from operating activities
	Operating profit		60.7		35.3		80.5
	Adjustments for:
	Amortisation of intangible assets		19.8		19.9		39.7
	Depreciation of property, plant and equipment		0.5		0.4		0.8
	Other non-cash (gains)/losses		(8.4)		4.5		(4.8)
	Share-based payments		6.6		7.2		13.7
	Increase in trade and other receivables		(33.9)		(9.5)		(8.7)
	Increase/(decrease) in trade and other payables		25.6		(8.6)		20.0
	Cash generated from operations		70.9		49.2		141.2

Section 3: Assets and liabilities

Consolidated balance sheet

			30 June 2013 (unaudited)		30 June 2012 (unaudited)		31 December 2012 (audited)
		Notes	£m		£m		£m
	ASSETS
	NON-CURRENT ASSETS
	Goodwill	3.1	341.2		341.2		341.2
	Intangible assets	3.2	45.4		84.1		64.5
	Property, plant and equipment	3.3	1.3		1.5		1.6
	Available for sale investments	3.4	2.7		24.5		19.1
	Deferred tax assets	5.3	14.6		12.1		15.3
	Trade and other receivables	5.3	11.6		15.6		13.9
	Total non-current assets		416.8		479.0		455.6
	CURRENT ASSETS
	Investment in associates	3.4	15.1		13.9		19.2
	Financial assets at fair value through profit or loss	3.4	40.3		35.6		34.2
	Trade and other receivables	5.3	126.9		89.6		90.6
	Cash and cash equivalents	3.5	155.3		113.7		147.0
	Total current assets		337.6		252.8		291.0
	TOTAL ASSETS		754.4		731.8		746.6
	EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT
	Share capital	4.1	9.2		9.2		9.2
	Own share reserve	4.2	(0.5)		(1.3)		(1.3)
	Other reserve	4.2	8.0		8.0		8.0
	Available for sale reserve	4.2	0.1		11.3		6.6
	Foreign currency translation reserve	4.2	7.2		7.0		7.1
	Retained earnings		453.9		399.1		429.4
	TOTAL EQUITY		477.9		433.3		459.0
	LIABILITIES
	NON-CURRENT LIABILITIES
	Loans and borrowings	3.6	41.7		108.9		77.3
	Trade and other payables	5.3	18.7		24.6		22.3
	Deferred tax liabilities	5.3	10.0		20.3		14.5
	Total non-current liabilities		70.4		153.8		114.1
	CURRENT LIABILITIES
	Financial liabilities at fair value through profit or loss	3.4	8.3		5.1		3.1
	Trade and other payables	5.3	181.6		126.4		154.8
	Current income tax liabilities	5.3	16.2		13.2		15.6
	Total current liabilities		206.1		144.7		173.5
	TOTAL LIABILITIES		276.5		298.5		287.6
	TOTAL EQUITY AND LIABILITIES		754.4		731.8		746.6

Notes to the financial statements - Balance sheet

3.1 GOODWILL

In 2007, the Group acquired the entire share capital of Knightsbridge Asset Management Limited ("KAML") which gave rise to a goodwill asset being recognised.

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Goodwill		341.2		341.2		341.2
			341.2		341.2		341.2

The Group has determined that it is a single cash generating unit for the purpose of assessing the potential impairment of goodwill. No additional goodwill was recognised in the period (2012 H1: £nil, 2012: £nil).

3.2 INTANGIBLE ASSETS

In 2007, the Group acquired the entire share capital of KAML. This acquisition gave rise to the recognition of intangible assets relating to investment management contracts and trade name of the Group.

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Investment management contracts		35.6		72.3		54.1
	Trade name		7.4		9.3		8.3
	Computer software		2.4		2.5		2.1
			45.4		84.1		64.5

The amortisation charge for the period was £19.8m (2012 H1: £19.9m, 2012: £39.7m). No additional investment management contracts and trade names were acquired in the period (2012 H1: £nil, 2012: £nil).

During the period, the Group acquired software with a value of £0.7m (2012 H1: £0.5m, 2012: £0.7m).

3.3 PROPERTY, PLANT AND EQUIPMENT

The net book value of property, plant and equipment at 30 June 2013 was £1.3m (2012 H1: £1.5m, 2012: £1.6m). During the period, the Group acquired property, plant and equipment with a value of £0.1m (2012 H1: £0.3m, 2012: £0.8m).

3.4 FINANCIAL INSTRUMENTS HELD AT FAIR VALUE

Financial instruments held at fair value are carried at a value which represents the price to exit the instruments at the balance sheet date. The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. Where a quoted market price is not available, the Group establishes fair value using valuation techniques such as recent arm's length market transactions, reference to current fair value of another instrument that is substantially the same, discounted cash flow analysis or other valuation models.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments:

·      Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

·      Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

·      Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data (unobservable inputs).

As at 30 June 2013, the Group held the following classes of financial instruments measured at fair value:

			Level 1		Level 2		Level 3		Total
			£m		£m		£m		£m
	Available for sale investments		-		-		2.7		2.7
	Investments in associates		15.1		-		-		15.1
	Financial assets at FVTPL		40.3		-		-		40.3
	Financial liabilities at FVTPL		(8.2)		(0.1)		-		(8.3)
			47.2		(0.1)		2.7		49.8

As at 30 June 2012, the Group held the following classes of financial instruments measured at fair value:

			Level 1		Level 2		Level 3		Total
			£m		£m		£m		£m
	Available for sale investments		-		-		24.5		24.5
	Investments in associates		13.9		-		-		13.9
	Financial assets at FVTPL		35.6		-		-		35.6
	Financial liabilities at FVTPL		(4.1)		(1.0)		-		(5.1)
			45.4		(1.0)		24.5		68.9

3.4 FINANCIAL INSTRUMENTS HELD AT FAIR VALUE (continued)

As at 31 December 2012, the Group held the following classes of financial instruments measured at fair value:

			Level 1		Level 2		Level 3		Total
			£m		£m		£m		£m
	Available for sale investments		-		-		19.1		19.1
	Investments in associates		19.2		-		-		19.2
	Financial assets at FVTPL		34.2		-		-		34.2
	Financial liabilities at FVTPL		(2.2)		(0.9)		-		(3.1)
			51.2		(0.9)		19.1		69.4

Level 2 financial instruments

At 30 June 2013, the Level 2 financial instrument relates to an interest rate swap. The Group uses the swap to manage the interest rate exposure on its floating-rate loan.

The fair value of the swap is determined by discounting future cash flows at the prevailing market rates at the balance sheet date. The swap is not designated as a hedging instrument as defined in IAS 39, and consequently all changes in the fair value are taken to the income statement within finance income or finance expense.

At 30 June 2012 and 31 December 2012, the Group had one additional interest rate swap, which was valued and accounted for in the same way. Further information on the swaps is included in Note 1.6.

Level 3 financial instruments

Level 3 financial instruments held at fair value relate to available for sale investments. Fair value is based on internally calculated valuations of the entity, which takes into account inputs such as expected future cash flows or the net assets of the investment. Liquidity discounts are included where considered relevant.

The Level 3 financial instrument held at 30 June 2013 relates to an investment in iO Adria Limited ("Adria"). At 30 June 2013, Adria was revalued and an unrealised gain of £0.1m was recognised in other comprehensive income.

At 30 June 2012 and 31 December 2012, there was also an investment in Cofunds Holdings Limited ("Cofunds"). The carrying value of the investment at 31 December 2012 was £16.5m. In May 2013, the Group sold its investment for £16.6m, a £0.1m increase on the 31 December 2012 carrying value. This was recognised in the income statement along with £6.6m previously recognised in the available for sale reserve, which was recycled to the income statement on disposal. This resulted in a total realised gain in the income statement of £6.7m - see Note 1.4.

The table below reconciles the carrying values of Level 3 financial instruments at the beginning and end of the period.

			Adria		Cofunds		Total
			£m		£m		£m
	At 1 January 2012		2.7		21.9		24.6
	Losses recognised in other comprehensive income		(0.1)		-		(0.1)
	Balance as at 30 June 2012		2.6		21.9		24.5
	Gains/(losses) recognised in other comprehensive income		0.7		(5.4)		(4.7)
	Losses recognised in profit or loss within other gains/(losses)		(0.7)		-		(0.7)
	Balance as at 31 December 2012		2.6		16.5		19.1
	Gains/(losses) recognised in other comprehensive income		0.1		(6.6)		(6.5)
	Gains recognised in profit or loss within other gains/(losses)		-		6.7		6.7
	Sales		-		(16.6)		(16.6)
	Balance as at 30 June 2013		2.7		-		2.7

3.5 CASH AND CASH EQUIVALENTS

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Cash at bank and in hand		91.5		19.0		35.2
	Short-term deposits		55.0		92.0		108.5
	Cash held by EBT and seed capital subsidiaries		8.8		2.7		3.3
	Cash and cash equivalents per the balance sheet		155.3		113.7		147.0
	Overdraft (included within trade and other payables)		-		(2.7)		-
	Cash and cash equivalents for the purposes of the statement of cash flows		155.3		111.0		147.0

The overdraft at 30 June 2012 arose during the ordinary course of business and relates to settlement timing differences at the period end.

3.6 LOANS AND BORROWINGS

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Bank loan		41.7		108.9		77.3
	At end of period		41.7		108.9		77.3

The Group has a syndicated loan which is repayable on or before 19 June 2015. The loan is secured by a charge over the assets of a subsidiary company, Jupiter Asset Management Group Limited ("JAMG"). The restrictions which arise under the terms of the loan facility prevent intercompany loans between certain subsidiaries and prohibit assets being sold, leased or disposed of, other than in the ordinary course of business.

As shown below, the carrying value of the loan is disclosed net of unamortised debt issue costs which were capitalised on issue.

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Bank loan		42.0		110.0		78.0
	Unamortised debt issue costs		(0.3)		(1.1)		(0.7)
	At end of period		41.7		108.9		77.3

The movement on the carrying value of the loan is shown below:

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	At 1 January		77.3		141.4		141.4
	Voluntary prepayments made in the period		(36.0)		(33.0)		(65.0)
	Amortisation of senior debt issue costs (Note 1.6)		0.4		0.5		0.9
	At end of period		41.7		108.9		77.3

Interest is payable at a rate of 3 month LIBOR plus a margin of 3.75 per cent. The Group has an interest rate swap in place to hedge its floating rate exposure. Details on this are given in Note 1.6.

Under the facility agreement, the Group also had access to a revolving credit facility of £10m. This was not utilised during the period.

On 30 July 2013, the Group entered into a three year revolving credit facility. On 31 July 2013, the Group gave notice to repay and cancel all outstanding obligations under the loan agreement in place at 30 June 2013. There will be no significant impact on the financial statements as a result of these transactions.

Section 4: Equity

Consolidated statement of changes in equity

	Share  capital	Own  share  reserve	Other   reserve	Available  for sale  reserve	Foreign  currency  translation  reserve	Retained  earnings	Total
	£m	£m	£m	£m	£m	£m	£m
At 1 January 2012 (audited)	9.2	(2.1)	8.0	11.4	7.4	390.7	424.6
Profit for the period	-	-	-	-	-	24.1	24.1
Other comprehensive income/(expense)	-	-	-	(0.1)	(0.4)	-	(0.5)
Total comprehensive income/(expense)	-	-	-	(0.1)	(0.4)	24.1	23.6
Vesting of ordinary shares	-	0.8	-	-	-	-	0.8
Dividends paid	-	-	-	-	-	(23.1)	(23.1)
Share-based payments	-	-	-	-	-	7.2	7.2
Deferred tax on share-based payments	-	-	-	-	-	0.2	0.2
Total transactions with owners	-	0.8	-	-	-	(15.7)	(14.9)
Balance at 30 June 2012 (unaudited)	9.2	(1.3)	8.0	11.3	7.0	399.1	433.3
Profit for the period	-	-	-	-	-	32.1	32.1
Other comprehensive income/(expense)	-	-	-	(4.7)	0.1	-	(4.6)
Total comprehensive income/(expense)	-	-	-	(4.7)	0.1	32.1	27.5
Dividends paid	-	-	-	-	-	(10.8)	(10.8)
Share-based payments	-	-	-	-	-	6.5	6.5
Deferred tax on share-based payments	-	-	-	-	-	2.5	2.5
Total transactions with owners	-	-	-	-	-	(1.8)	(1.8)
Balance at 31 December 2012 (audited)	9.2	(1.3)	8.0	6.6	7.1	429.4	459.0
Profit for the period	-	-	-	-	-	46.9	46.9
Other comprehensive income/(expense)	-	-	-	(6.5)	0.1	-	(6.4)
Total comprehensive income/(expense)	-	-	-	(6.5)	0.1	46.9	40.5
Vesting of ordinary shares	-	0.8	-	-	-	-	0.8
Dividends paid	-	-	-	-	-	(28.5)	(28.5)
Purchase of shares by EBT	-	-	-	-	-	(0.6)	(0.6)
Share-based payments	-	-	-	-	-	6.6	6.6
Deferred tax on share-based payments	-	-	-	-	-	0.1	0.1
Total transactions with owners	-	0.8	-	-	-	(22.4)	(21.6)
Balance at 30 June 2013 (unaudited)	9.2	(0.5)	8.0	0.1	7.2	453.9	477.9

Notes to the financial statements - Statement of changes in equity

4.1 SHARE CAPITAL

			30 June 2013		30 June 2012		31 December 2012
			£m		£m		£m
	Issued, allotted, called-up and fully paid
	457.7m ordinary shares of 2p each		9.2		9.2		9.2
	At end of period		9.2		9.2		9.2

4.2 RESERVES

(i) Own share reserve

At 30 June 2013, 3.5m (2012 H1: 42.8m, 2012: 42.5m) ordinary shares beneficially owned by senior employees were subject to restrictions which, in some circumstances, require the Group to repurchase the shares at their nominal value, and this liability is shown within current trade and other payables. The shares are held within the Group's EBT and together with a further 18.7m (2012 H1: 20.9m, 2012: 20.9m) shares held for the purpose of satisfying share option obligations to employees, are treated as own shares with a cost of £0.5m (2012 H1: £1.3m, 2012: £1.3m).

(ii) Other reserve

The other reserve of £8.0m (2012 H1: £8.0m, 2012: £8.0m) relates to the conversion of Tier 2 preference shares in 2010.

(iii) Available for sale reserve

The available for sale reserve relates to the uplift in the fair value of the Group's holdings in investments classified as available for sale. The movement during the period ending 30 June 2013 relates to recycling a gain of £6.6m to the income statement previously recognised on Cofunds offset by a gain of £0.1m on Adria.

(iv) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

4.3 DIVIDENDS

On 23 April 2013, the Group paid a final dividend for 2012 of 6.3p per ordinary share.

The Board has declared an interim dividend for the period of 3.5p per ordinary share. This dividend will be paid on 30 August 2013 to ordinary shareholders on the register at close of business on 9 August 2013.

Section 5: Other notes

Notes to the financial statements - Other

5.1 BASIS OF PREPARATION

These condensed interim financial statements for the period ended 30 June 2013 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34 'Interim Financial Reporting', as adopted by the European Union. The condensed interim financial statements should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

The condensed interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2012 were approved by the Board on 27 February 2013 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006. The condensed interim financial statements have been reviewed, not audited.

The Group has access to the financial resources required to run the business efficiently and a strong gross cash position. The Group's forecasts and projections, which are subject to rigorous sensitivity analysis, show that the Group will be able to operate within its available resources. As a consequence, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing these financial statements.

5.2 ACCOUNTING POLICIES

The accounting policies applied are consistent with those described in the Group's annual financial statements for the year ended 31 December 2012.

The following standards were adopted with effect from 1 January 2013:

·      IAS 1 (revised) Presentation of Items in Other Comprehensive Income; and

·      IFRS 13 Fair Value Measurement

There has been no material impact on the financial results but disclosures have been updated to comply with the new requirements.

5.3 FINANCIAL INSTRUMENTS

Financial instruments by category

The carrying value of the financial instruments of the Group at the period end is shown below.

As at 30 June 2013	Available for sale	Designated at FVTPL	Loans and receivables	Financial liabilities at FVTPL	Other financial liabilities	Total financial instruments	Non-financial instruments	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Goodwill	-	-	-	-	-	-	341.2	341.2
Intangible assets	-	-	-	-	-	-	45.4	45.4
Property, plant and equipment	-	-	-	-	-	-	1.3	1.3
Available for sale investments	2.7	-	-	-	-	2.7	-	2.7
Deferred tax assets	-	-	-	-	-	-	14.6	14.6
Non-current trade and other receivables*	-	-	-	-	-	-	11.6	11.6
Investments in associates	-	15.1	-	-	-	15.1	-	15.1
Financial assets at fair value through profit or loss ("FVTPL")	-	40.3	-	-	-	40.3	-	40.3
Current trade and other receivables*	-	-	116.4	-	-	116.4	10.5	126.9
Cash and cash equivalents	-	-	155.3	-	-	155.3	-	155.3
Loans and borrowings	-	-	-	-	(42.0)	(42.0)	0.3	(41.7)
Non-current trade and other payables*	-	-	-	-	(0.8)	(0.8)	(17.9)	(18.7)
Deferred tax liabilities	-	-	-	-	-	-	(10.0)	(10.0)
Current trade and other payables*	-	-	-	-	(151.7)	(151.7)	(29.9)	(181.6)
Current income tax liability	-	-	-	-	-	-	(16.2)	(16.2)
Financial liabilities at FVTPL	-	-	-	(8.3)	-	(8.3)	-	(8.3)
Total	2.7	55.4	271.7	(8.3)	(194.5)	127.0	350.9	477.9

As at 30 June 2012	Available for sale		Designated at FVTPL	Loans and receivables		Financial liabilities at FVTPL		Other financial liabilities		Total financial instruments		Non-financial instruments		Total
	£m		£m	£m		£m		£m		£m		£m		£m
Goodwill	-		-	-		-		-		-		341.2		341.2
Intangible assets	-		-	-		-		-		-		84.1		84.1
Property, plant and equipment	-		-	-		-		-		-		1.5		1.5
Available for sale investments	24.5		-	-		-		-		24.5		-		24.5
Deferred tax assets	-		-	-		-		-		-		12.1		12.1
Non-current trade and other receivables*	-		-	-		-		-		-		15.6		15.6
Investments in associates	-		13.9	-		-		-		13.9		-		13.9
Financial assets at FVTPL	-		35.6	-		-		-		35.6		-		35.6
Current trade and other receivables*	-		-	79.1		-		-		79.1		10.5		89.6
Cash and cash equivalents	-		-	113.7		-		-		113.7		-		113.7
Loans and borrowings	-		-	-		-		(110.0)		(110.0)		1.1		(108.9)
Non-current trade and other payables*	-		-	-		-		(0.9)		(0.9)		(23.7)		(24.6)
Deferred tax liabilities	-		-	-		-		-		-		(20.3)		(20.3)
Current trade and other payables*	-		-	-		-		(107.2)		(107.2)		(19.2)		(126.4)
Current income tax liability	-		-	-		-		-		-		(13.2)		(13.2)
Financial liabilities at FVTPL	-		-	-		(5.1)		-		(5.1)		-		(5.1)
Total	24.5		49.5	192.8		(5.1)		(218.1)		43.6		389.7		433.3
As at 31 December 2012		Available for sale	Designated at FVTPL	Loans and receivables	Financial liabilities at FVTPL		Other financial liabilities		Total financial instruments		Non-financial instruments		Total
		£m	£m	£m	£m		£m		£m		£m		£m
Goodwill		-	-	-	-		-		-'		341.2		341.2
Intangible assets		-	-	-	-		-		-'		64.5		64.5
Property, plant and equipment		-	-	-	-		-		-'		1.6		1.6
Available for sale investments		19.1	-	-	-		-		19.1'		-		19.1
Deferred tax assets		-	-	-	-		-		-'		15.3		15.3
Non-current trade and other receivables*		-	-	-	-		-		-'		13.9		13.9
Investments in associates		-	19.2	-	-		-		19.2'		-		19.2
Financial assets at FVTPL		-	34.2	-	-		-		34.2'		-		34.2
Current trade and other receivables*		-	-	80.8	-		-		80.8'		9.8		90.6
Cash and cash equivalents		-	-	147.0	-		-		147.0'		-		147.0
Loans and borrowings		-	-	-	-		(78.0)		(78.0)		0.7		(77.3)
Non-current trade and other payables*		-	-	-	-		(0.8)		(0.8)		(21.5)		(22.3)
Deferred tax liabilities		-	-	-	-		-		-'		(14.5)		(14.5)
Current trade and other payables*		-	-	-	-		(132.6)		(132.6)'		(22.2)		(154.8)
Current income tax liability		-	-	-	-		-		-'		(15.6)		(15.6)
Financial liabilities at FVTPL		-	-	-	(3.1)		-		(3.1)'		-		(3.1)
Total		19.1	53.4	227.8	(3.1)		(211.4)		85.8''		373.2		459.0

* Financial instruments do not include prepayments, deferred income or deferred acquisition and commission costs as these are not financial instruments

There are no significant differences between fair value and the carrying value at the balance sheet dates.

5.4 RELATED PARTY TRANSACTIONS

Related party transactions during the period are consistent with those disclosed in the Annual Report for the year ended 31 December 2012 and have taken place under normal market conditions. No new related parties or related party transactions that materially affect the financial position or performance of the Group existed during the period.

5.5 PRINCIPAL RISKS AND MITIGATIONS

The Group faces a number of risks and uncertainties associated with the investment management business it carries out. Management has established a framework to govern the risks of the business and takes responsibility for ensuring that appropriate risk management processes are effective across the Group. The management of risk within the Group is governed by the Board. All functions within the Group identify and prioritise risks and all significant risks are recorded and managed. Each part of the business is responsible for developing and maintaining procedures and controls. Operational activities that are outsourced to third party providers are monitored on a regular basis.

The principal risks to which the Group will be exposed in the second half of 2013 are substantially the same as those outlined in the Annual Report and Accounts for the year ended 31 December 2012, being:

Investment performance

·      Sustained underperformance: There is a risk that our clients' portfolios will not meet their investment objectives due to underperformance.

·      Failure to retain key staff: We are a human capital business and our staff are a significant component of successfully executing our strategy.

·      Significant mandate breach: Our funds are managed in accordance with investment mandates and restrictions agreed with our clients. Failure to adhere to these mandates would reflect a poor level of client service and may jeopardise relationships with our clients.

·      Regulatory non-compliance: A significant regulatory investigation or action against the firm could have a detrimental effect on our reputation and business.

Effective distribution

·      Changes in distribution and product trends: The risks reflect potential future changes in our fee structures, or in the appetite of clients to invest in our products.

Efficient operations

·      Operational error or fraud: A material error in the execution of a key business process, or a fraud being successfully carried out against us or our clients.

·      Failure of third party supplier: The failure of a provider to which we have outsourced key business processing activities may lead to our not delivering the required level of service to our clients and shareholders or fulfilling our regulatory obligations.

·      Business continuity incident: Business operations, systems and processes are liable to disruption from fire, power loss, systems failure or external events.

·      Counterparty failure: The failure of a trading or depository counterparty with which we have a relationship.

Section 6: Directors' responsibility statement

We confirm that to the best of our knowledge:

·      the condensed set of financial statements has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union, and gives a true and fair view of the assets, liabilities, financial position and profit of the Group for the period ended 30 June 2013.

·      the interim report includes a fair review of the information required by:

·      DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the current financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

·      DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the past six months of the current financial year.

·      the Directors of Jupiter Fund Management plc are listed in the Annual Report for 31 December 2012, with the exception of Richard I. Morris Jr, who resigned on 19 July 2013. A list of current Directors is maintained on the website: www.jupiteronline.com

On behalf of the Board

Philip Johnson

Chief Financial Officer

31 July 2013

Independent auditors' review report on the interim financial statements of the Group

Introduction

We have been engaged by the Company to review the condensed interim financial statements in the interim financial report for the half-year ended 30 June 2013, which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows, the consolidated balance sheet, the consolidated statement of changes in equity and related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed interim financial statements.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in Note 5.1, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed interim financial statements included in this interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed interim financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed interim financial statements in the interim financial report for the half-year ended 30 June 2013 are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

London

31 July 2013

Notes

a)     The maintenance and integrity of the Jupiter Fund Management plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

b)     Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

END

 

 

IR LLFSDDIILVIV