FTSE 250 movers: Jupiter soars, IAG descends

(Sharecast News) - FTSE 250: 19,743.28, -0.24% at 1440 GMT. Jupiter Fund Management reported a slump in both assets under management and profits on Friday, after a "difficult" year for the City fund manager.

Publishing full-year results, Jupiter said assets under management had finished the year to 31 December 17% lower, at £50.2m, with total net outflows of £3.5m.

Underlying pre-tax profits tumbled to £77.6m from £216.7m, while statutory pre-tax profits fell 68% to £58m.

Matthew Beesley, Jupiter's recently installed chief executive, said the past year had "clearly been difficult", with macro-economic events hitting both investor sentiment and asset valuations.

He added that the FTSE 250 firm had had a stronger second half, however, with positive net flows for the first time since 2017.

Since taking over in October, Beesley has cut headcount and announced plans to reduce the number of funds by 25%.

Beesley said the firm would now focus on scaling up in "select geographies", decreasing "undue complexity", broadening its appeal with new investment strategies and improving relationships with stakeholders.

He added: "Although the macro-economic environment looks to set to remain uncertain in the short term, we are focused on addressing the areas that we can control and delivering on what we have promised.

"Since I was appointed, we have taken decisive action to simplify the business, deliver efficiencies and create capacity to build scale in strategically important areas."

The slide in profits was not as bad as some analysts had feared, and by 0900 GMT shares in Jupiter were ahead 12% at 149.88p.

Stuart Duncan, analyst at Peel Hunt, said: "Final results were significantly better than expected, including surprisingly positive flows in the second half. Pre-tax profits came in at £77.6m, against our estimate and consensus of £63m.

"Looking ahead, strategy is focused on increasing scale, manging costs and managing product range, with a view to diversifying client base. We will review forecasts after the meeting and expect to push higher, given AUM starting point."

British Airways owner IAG swung to a full year profit as international travel recovered from the Covid pandemic and said it had agreed to buy out the 80% of Air Europa it does not own for €400m in a move to turn Madrid into a major airport hub.

The group, which also owns Iberia, Vueling and Aer Lingus, reported an operating profit of €1.25bn in 2022 as Covid travel restrictions were lifted, compared with a loss of €2.7bn a year earlier.

"Further recovery in profits expected in 2023, with full year operating profit before exceptional items expected to be in the range of €1.8-2.3bn, based on current foreign exchange rates and jet fuel forward prices. However, we are mindful of uncertainty in the macro environment and fuel and non-fuel cost inflation," the company said on Thursday.

"2022 was a year of strong recovery, driven by sustained leisure demand and markets reopening. At this point of the year we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties."

Capacity reached 78% of pre-Covid levels and hit 87% of 2019 levels in the final quarter.

However, aviation fuel unit prices are up 30% compared with 2019, with costs rising to €6.1bn from €1.78bn as the Russia-Ukraine war drove oil prices higher.

Total costs for IAG almost doubled from €11.2bn to €21.8bn between 2021 and 2022.

"As a long-haul specialist, IAG has been one of the last names in the sector to gain momentum following the pandemic. Of course, aviation has flown straight into another hurdle in the form of a cost-of-living crisis," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"So far it seems pent up demand for travel is keeping things propped up, but there is a limit to how long this can continue. It's heartening to see IAG's capacity ramping back up to pre-pandemic levels - getting to this point didn't come without its well-publicised challenges."

"Expanded flying programmes and the agreed acquisition of the remaining Air Europa stake both mean IAG is in the best position possible to capture as much of the market as possible. In times of economic difficulty it's common to see consolidation in the aviation sector, BA's enormous brand power and scale means it's able to make the most of changing market dynamics."

However, Lund-Yates warned that IAG's debt pile - at 3.1 times cash profits - was "too heavy" following efforts to keep liquidity in check during the pandemic.

The news also impacted low-cost rivals easyJet and Wizz Air, which both fell.

FTSE 250 - Risers

Jupiter Fund Management (JUP) 146.00p 8.87% Hunting (HTG) 342.00p 6.21% PureTech Health (PRTC) 224.50p 3.46% Babcock International Group (BAB) 334.60p 2.45% Ferrexpo (FXPO) 148.20p 2.21% Spectris (SXS) 3,437.00p 2.14% FirstGroup (FGP) 102.10p 2.10% Energean (ENOG) 1,199.00p 2.04% Harbour Energy (HBR) 287.90p 1.98% Howden Joinery Group (HWDN) 717.60p 1.87%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,510.00p -7.53% Domino's Pizza Group (DOM) 271.80p -5.56% Wizz Air Holdings (WIZZ) 2,509.00p -3.94% Molten Ventures (GROW) 369.40p -3.20% easyJet (EZJ) 473.80p -3.11% Investec (INVP) 522.60p -2.54% Wood Group (John) (WG.) 195.00p -2.28% Kainos Group (KNOS) 1,364.00p -2.15% Future (FUTR) 1,399.00p -2.03% 4Imprint Group (FOUR) 4,385.00p -2.01%