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Polar's tech strategies deliver as others falter

The asset manager has seen a sharp fall in performance fee profits
June 23, 2020

Full-year figures for Polar Capital (POLR) were undermined by a collapse in performance fee profits, which fell by nearly two-thirds to £8.8m. Admittedly, the fall-away was set against a tough comparator in FY2019, but performance across most of its strategies was underwhelming.

IC TIP: Buy at 492p

Core operating profit, ex-performance fees, contracted slightly to £41.6m,  although this was largely due to increased headcount and further expansion in the North American and Nordic markets.

The sudden deterioration in bond and equities markets exacerbated the existing divergence between the performance of growth and value stocks, as investors cast around for companies that can deliver above-average growth rates. It helps to explain why Polar’s technology strategies, which account for 43 per cent of assets under management (AuM), have outperformed.

Numis forecasts EPS of 42.6p through to March 2021, rising to 45.6p in the following year.

POLAR CAPITAL (POLR)  
ORD PRICE:492pMARKET VALUE:£483m
TOUCH:483-493p12-MONTH HIGH:628pLOW: 282p
DIVIDEND YIELD:6.7%PE RATIO:11
NET ASSET VALUE:118pNET CASH:£105m
Year to 31 MarchTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201684.223.620.525.0
201773.820.417.825.0
201813441.336.428.0
201917864.157.833.0
202015250.943.533.0
% change-15-21-25-
Ex-div: 2 July    
Payment: 31 July