“If you want to compete with passive, you have to beat your benchmarks – it’s that simple.” So says Polar Capital (POLR) chief executive Gavin Rochussen, although buyers of the investment manager’s shares and funds will no doubt agree. The good news for both is that most of the research-driven firm’s funds pulled ahead of their passive comparators in the group’s most recent financial year.
That meant navigating a volatile period for equity markets, which partly explains the dip in assets under management in the second half of the year. And while net inflows picked up in the final quarter, several of Polar’s funds underperformed, including the UK Value Opportunities and the Emerging Market Stars and North American strategies.
However, resilient performance across the board was reflected in a rise in fees from £15.3m to £24m, and the fact that 99 per cent of Polar’s funds sit in the top quartile against their peer group since inception. Equally encouraging, Mr Rochussen says 81 per cent of Polar’s assets under management (which stood at £14.1bn at the end of May) are ahead of their benchmarks for the year to date.
Peel Hunt upgraded its target price to 710p on these numbers, but kept its adjusted earnings forecasts unchanged at 37.9p a share for the year to March 2020 and 44.9p in FY2021.
| POLAR CAPITAL (POLR) | ||||
| ORD PRICE: | 607p | MARKET VALUE: | £586m | |
| TOUCH: | 600-610p | 12-MONTH HIGH: | 738p | LOW: 447p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 114p | NET CASH: | £110m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 96.2 | 31.1 | 27.5 | 25 |
| 2016 | 84.2 | 23.6 | 20.5 | 25 |
| 2017 | 73.8 | 20.4 | 17.8 | 25 |
| 2018 | 134 | 41.3 | 36.4 | 28 |
| 2019 | 178 | 64.1 | 57.8 | 33 |
| % change | +33 | +55 | +59 | +18 |
| Ex-div: | 4 Jul | |||
| Payment: | 26 Jul |
