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Impax sustains positive net inflows

The sustainability-focused investment manager again saw positive net inflows in the six months to March
June 5, 2019

It might be tempting to view Impax Asset Management (IPX) as an ESG (environmental, social and governance) box for pension funds to tick. But the group’s pitch is more nuanced and compelling: the transition to a more sustainable global economy will be a profound driver of financial performance across many industries, and requires an investment manager to identify the likely winners.

IC TIP: Buy at 265p

On this score, Impax’s funds had a mixed period in the year to March, but remain comfortably ahead of their benchmarks on a three-year view. Both the water and sustainable food strategies lagged their respective peer indices, although the global opportunities fund again comfortably pulled ahead of the MSCI All-Country World Index, navigating a choppy period for equities to post a 5.8 per cent outperformance.

In turn, this helps to explain why Impax has seen 14 consecutive quarters of positive net inflows, even if shares in the group sold off on this announcement. The cause? An outlook tempered by uncertainty over global trade, “mixed” economic and financial market signals and “fragile” investor sentiment, as well as a dip in the the operating margin to 23 per cent.

Peel Hunt expects adjusted pre-tax profits of £17.7m and earnings of 10p a share for the year to September 2019, rising to £21.3m and 12.1p in FY2020.

IMPAX ASSET MANAGEMENT (IPX)  
ORD PRICE:265pMARKET VALUE:£345m
TOUCH:255-265p12-MONTH HIGH:295pLOW: 173p
DIVIDEND YIELD:^2.1%PE RATIO:23
NET ASSET VALUE:42p*NET DEBT: 1%
Half-year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)^
201825.75.53.61.1
201933.89.36.21.5
% change+32+69+72+36
Ex-div:13 Jun   
Payment:19 Jul   
*Includes intangible assets of £36.5m, or 28p a share. ^Excludes 2.6p special dividend announced Jun 2018