Strong Q1: AUM and profit upgrades
​Impax is a market leading manager of both listed and private equity funds, which invest in ways that take advantage of more environmentally sustainable corporate and economic growth globally.
We have revised our fee income and profit forecasts to reflect recent momentum behind growth in assets under discretionary/advisory management (AUM) which hit a new peak of £5.06bn at the end of 2016 (FY16: £4.8bn). A 12% increase over the quarter puts Impax well on track to achieve our existing £5.4bn end September 2017 AUM forecast.
AUM is a key valuation metric and recent periods have seen impressive growth from £3.1bn (Q1 16) to £5.1bn (Q1 17). We expect further progress out to the end of FY18, but would still be comfortable with some volatility in a net measure i.e. which includes client withdrawals. The group has two older private equity funds which are effectively in wind-down, where profitable exits/client distributions would be regarded as positive.
The group reported record inflows into its listed equity funds during the quarter, driven by Continental European and North American clients, and confirming that the momentum achieved in the second half of FY16 has been maintained this year. Our projections puts the shares on an 11.7x FY17 EV/NOPAT multiple, and EV/AUM (Q1) of 1.2%, backed by a well-covered 4.1% dividend yield.
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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