Polar Capital maintains dividend as earnings fall
By Josh White
Date: Monday 21 Nov 2022
(Sharecast News) - Polar Capital reported assets under management of £18.8bn at the end of its first half on Monday, down from £22.1bn over the period and from £19.2bn year-on-year.
The AIM-traded firm said its core operating profit for the six months ended 30 September totalled £25.8m, down from £36.3m a year earlier, while its pre-tax profit fell to £23m from £31.7m.
Basic earnings per share came in at 17.7p, down from 26.5p, and its adjusted diluted total earnings per share slid to 19p from 28.1p.
It declared an interim dividend per share of 14p, in line with the half-year distribution it made last year, to be paid in January.
Shareholders' funds totalled £141.3m at period end, down from £156.2m on 31 March, including cash and investments of £129.2m, falling from £169.4m.
"The last six months have been challenging for all asset management firms, whatever their size or business model," said chief executive officer Gavin Rochussen.
"At some point, as inflation stabilises and interest rates peak, investors will require increased market exposure and we are well placed to benefit from this demand.
"Against this background, we are pleased to report that there is a strong pipeline of interest in many of Polar Capital's strategies and the short list of new potential investment teams is larger than for many years."
Rochussen said the fall in assets under management was made up of net redemptions of £0.8bn, outflows from previously-reported fund closures of £0.5bn, and a £2bn decrease relating to market movement and fund performance.
"Despite the reduction in adjusted diluted core earnings per share, the first interim dividend has been maintained at 14p, reflecting our confidence in the business and the strength of our balance sheet.
"The group launched two new Article 9 strategies one year ago - smart energy and smart mobility, investing in decarbonisation, electrification and sustainable transport themes.
"Our sustainable thematic equity team, led by Thiemo Lang, has been successful in raising assets and both funds have delivered returns ahead of the MSCI All Countries World Index in the first half of our financial year."
Gavin Rochussen said that with the attainment of a "highly credible" four-year track record since joining Polar Capital, the assets under management in the sustainable Emerging Market Stars suite of fund strategies now exceeded £1.1bn and had been "instrumental" in establishing a "meaningful and valued" client base in the Nordic region, and building its presence in the United States.
"Our diverse and differentiated range of sector, thematic and regional fund strategies where 73%, 87%, 86% and 93% of our assets under management is in the top two quartiles against peers over one year, three years, five years and since inception, our improved distribution capability and significant remaining capacity gives us confidence that we will perform for our clients and shareholders over the long term."
At 0953 GMT, shares in Polar Capital Holdings were up 0.52% at 474.98p.
Reporting by Josh White for Sharecast.com.
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