Core profits exceed forecast, AUM +6% in Q1’26
The period of Polar’s FY25 (1 Apr 24 – 31 Mar 25) was horrific for many asset managers – but not for Polar. It was one of only two in our peer group to record net inflows (page 4), with heavy outflows commonplace. Polar’s AUM fell 2% over the year, with a sharp decline in Q4 on falling markets. Investment performance was -£495m, net flows +£123m, and fund closures -£111m. Post year-end, AUM has bounced back, up 6% since 31 Mar to £22.6bn (page 3).Gross income increased 14% y-o-y to £226.1m, mostly as a result of higher average AUM. Core operating profit jumped 27% from £44.8m to £56.7m (previous forecast £53.9m), with revenue margin slightly higher than forecast and core operating costs slightly lower. Statutory profits were hit by a non-cash impairment of £13.6m (2021 acquisition of Dalton – page 10). PBT fell 6% to £51.6m.
Current CEO Gavin Rochussen has announced his retirement from Sep ‘25, with Iain Evans set to take over the role. Iain has 30+ years of investment industry experience, joining Polar in 2004 and is currently Global Head of Distribution.
Polar maintains its exceptionally strong balance sheet, with cash and equivalents up from £98.9m to £121.8m (now 26% of market cap), this after paying out £44.4m in dividends. Polar has no debt. An unchanged dividend of 46.0p for FY25 has been recommended, a yield of 10%.
Our FY26 forecasts are upgraded (page 16), mostly on the AUM jump in Q1-26. We have however pared back our outer year net flow forecasts slightly. These two adjustments largely offset each other with our fundamental valuation unchanged at 550p (page 17).
Polar Capital Holdings is an investment management company providing professional and institutional investors a range of geographical and sector funds. Co. manages 25 funds and four managed accounts across a range of long only and alternative products. Co. has one class of business, being the provision of investment management and advisory services. As of Mar 31 2017, Co. had total assets under management of £9.27 billion.
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