Equity market volatility is inescapable for an active asset manager such as Polar Capital (POLR). While £932m in net inflows and £1.8bn of market returns boosted assets under management by more than a fifth to £14.7bn during the first half, a market downturn pushed that figure back down to £13.6bn by the end of October. That meant performance fees – of which £5.5m have been crystallised and received – dipped from £32.5m to £23.3m during the same period.
Technology strategies were the most popular with investors, gaining £402m in net inflows, followed by value-biased North American funds at £218m. Chief executive Gavin Rochussen says value-biased strategies – which prioritise metrics such as cash-flow performance rather than revenue growth – should become more favoured by investors if market growth continued to slow.
Japan and emerging markets income were the only strategies to suffer net outflows, of £144m and £25m, respectively. However, that did not stop management launching three emerging markets funds during the period – the Emerging Market Stars and China Stars UCITS funds and the absolute return China Mercury fund.
Analysts at house broker Peel Hunt expect adjusted pre-tax profits of £65.2m, giving EPS of 50.1p (from £46.4m and 36.6p 2018).
POLAR CAPITAL HOLDINGS (POLR) | ||||
ORD PRICE: | 526p | MARKET VALUE: | £495m | |
TOUCH: | 526-528p | 12-MONTH HIGH: | 738p | LOW: 445p |
DIVIDEND YIELD: | 5.7% | PE RATIO: | 10 | |
NET ASSET VALUE: | 89p | NET CASH: | £60.6m |
Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2017 | 44.4 | 11.8 | 10.2 | 6 |
2018 | 74.5 | 27.3 | 24.3 | 8 |
% change | +68 | +131 | +138 | +33 |
Ex-div: | 20 Dec | |||
Payment: | 11 Jan |