JUP/RAT

Hits: 80

Rathbone – H1 Results

Share Price 1516p

Mkt Cap £869m

Conflict Disclosure: No Holding 

  • Results It’s always helpful when statements are headed “a strong first half” as it somehow suggests we may not get that from the numbers. Net inflows in investment management were 0.9% and in unit trusts 5.2% in Q2 and overall were down 2% in H1 to £49.4bn. Revenue was up 3.6% to £179m and underlying PBT down 1.2% to £46m. EPS down 5% to 67.5p. Margin 25.7%. Outlook is “well placed”.
  • Estimates FY estimates assume a small reduction in revenue and £73.4m adjusted PBT which looks too low on account of the market recovery during Q2.
  • Valuation PE 14.8X on numbers that could be 10-15% too low, meaning the share may trade closer to 13X in reality. Yield 4.6%
  • Conclusion I don’t recall these shares trading on such a low multiple. There is potential for growth from the court of protection and ESG businesses as well as consolidation with the strong balance sheet. Having reported margins at the lower end of medium term guidance this could be a good time to be picking these up.

Jupiter – H1 Results

Share Price 232p

Mkt Cap £1,280m

Conflict Disclosure: No Holding 

  • Results AUM down 8% over H1 to £39.2bn. Net outflows of £2bn in H1 implies net inflows in Q2 given a £2.318bn outflow in Q1 which breaks the 9 quarter run of net outflows. Management fees were down 12% to £161m and underlying PBT down 36% to £56.6m. Underlying EPS 7.9p. Margin 36%. DPS unchanged at 7.9p for H1. Merian completed on 1 July and the outlook is confident referring to strong investment performance. 
  • Estimates Given Merian is only in the numbers for H1 perhaps 2021 is a better estimate for valuation purposes, where £148m PBT is expected from £417m revenue. EPS 22.3p 
  • Valuation PE 10.4X, Yield 7%. Merian AUm was £16.7% at 30 June so adding this in we get an EV/AUM of c2%.
  • Conclusion Every contrarian bone in my body feels excited about the turnaround potential here. Perhaps the analyst call will temper it.