Asset manager Jupiter beats market expectations despite profit drop

(Reuters) -British asset manager Jupiter Fund Management reported a sharp drop in annual profit on Friday after a global markets rout in 2022, but beat market forecasts for a deeper slump, sending its shares up as much as 14%.

Fund managers have struggled due to weak investor sentiment and volatile stock markets amid fears over raging inflation and a potential recession, following robust asset growth during the pandemic.

Jupiter's pretax profit for 2022 fell 68% to 58 million pounds ($69.75 million), with year-end assets under management declining 17% to 50.2 billion pounds from a year earlier.

But the earnings exceeded analysts' forecasts, who noted a small return to net inflows of client funds in the second half for the first time since 2017.

Jupiter has begun a cost-cutting drive and plans to scrap around a quarter of its product range under new CEO Matthew Beesley, who was appointed in June 2022.

"It remains early days in the new CEO's plans to turn Jupiter around, but [the fourth quarter] was more positive after many years of net outflows," analysts at Peel Hunt said in a note

The stocks were last up 13% at 0847 GMT.

The asset manager still reported net outflows of 3.5 billion pounds for the year, reduced from 3.8 billion pounds in 2021.

"The past year has clearly been difficult, with macro-economic events significantly impacting investor sentiment and asset valuations," Beesley said in a statement.

($1 = 0.8323 pounds)

($1 = 0.8315 pounds)

(Reporting by Sinchita Mitra and Radhika Anilkumar in Bengaluru and Iain Withers in London; Editing by Vinay Dwivedi and Sharon Singleton)