Solid H1 as investments in capacity start to pay off
AUM was up by £2.2bn or 6% over H1-24, reaching £39.6bn on 31 Mar 24 (30 Sep 23: £37.4bn). This was a top-third growth rate among a London-listed peer group. While sustainable investing flows around the world have been subdued, we are seeing some early signs of a return to stronger flows.H1-24 revenue of £86.2m was down 2% y-o-y from £88.0m in H1-23 on lower average AUM levels and an unchanged average fee margin of 45bps. However, an AUM recovery during the period saw run-rate revenue increase from £169.0m on 30 Sep 23 to £177.1m.
Adjusted operating profit fell 5% from £27.3m to £25.8m, and adjusted operating margin fell to 30.0% from 31.1% in H1-23. We expect this margin to be around the 30% mark for FY24 and then ratchet up to the high-30s or even 40% over the medium term as the business adds AUM and benefits from operating leverage following its recent investments in capacity.
Our longer-term forecasts are virtually unchanged, and our fundamental valuation remains 800p per share, c 60% above the closing share price. We also see Impax’s PER of 16.5 as an undemanding rating.
Impax Asset Management Group is an investment firm, providing listed and private equity strategies primarily to institutional clients. As of Sep 30 2017, Co. has total assets under management and advice of £7.30 billion.
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