TIDMPOLR
RNS Number : 8992T
Polar Capital Holdings PLC
20 November 2023
Polar Capital Holdings plc ("Polar Capital" or "the Group")
Unaudited interim results for six months ended 30 September
2023
"Strong pipeline of interest in our diversified thematic
strategies, improving fund performance and balance sheet strength
support a maintained first interim dividend" Gavin Rochussen,
CEO
Highlights
-- Assets under Management ("AuM") at 30 September 2023
GBP19.1bn (31 March 2023: GBP19.2bn) and at 10 November 2023
GBP18.9bn.
-- Net outflows of GBP581m, a material decrease of GBP264m vs
the prior comparable period, aided by inflows into a number of
funds.
-- Core operating profit GBP22.5m (30 September 2022: GBP25.8m)
-- Profit before tax GBP21.1m (30 September 2022: GBP23.0m)
-- Basic earnings per share 16.2p (30 September 2022: 17.7p) and
adjusted diluted total earnings per share 17.2p (30 September 2022:
19.0p)
-- Interim dividend per ordinary share of 14.0p (January 2023:
14.0p) declared to be paid in January 2024. The dividend payment
date is 12 January 2024, with an ex-dividend date of 14 December
2023 and a record date of 15 December 2023.
T he non-GAAP alternative performance measures shown here are
described and reconciled to IFRS measures on the Alternative
Performance Measures (APM) page
This RNS does not constitute an offer or recommendation to
invest in any of the funds referenced within.
Gavin Rochussen, Chief Executive Officer, commented:
"The past six months have been a challenging period for equity
markets driven by a volatile macro environment. Like many of our
peers, Polar Capital has not been immune from these challenges, but
net outflows as a percentage of opening AuM have been relatively
modest, and in fact, have materially slowed vs the prior comparable
period. This was helped by net inflows into a number of funds,
namely our Polar Capital Emerging Market Stars Fund, Polar Capital
European ex-UK income Fund, Polar Capital Japan Value Fund and
Polar Capital Smart Energy Fund.
"Long-term performance remains positive across the UCITs fund
range with all funds bar one in the 1(st) or 2(nd) quartile of
their Lipper peer group since inception. More recently, 77% of
Polar Capital's total AuM is in the top two quartiles of the Lipper
peer group calendar year-to-date.
"As a result, and helped by a strong year for technology stocks,
assets under management ended the reporting period at GBP19.1bn,
representing a modest decrease from the year end.
"As an investment led, specialist boutique, the quality of our
product range remains central to our efforts to grow the business
and a number of our funds have seen renewed interest of late. For
example, the well documented breakthrough in artificial
intelligence has seen an increased interest in the Polar Capital
Artificial Intelligence Fund. It had its six-year anniversary in
October 2023 and is 3(rd) percentile against Lipper peers over one
year, 5(th) percentile over five years and 4(th) percentile since
inception.
"Similarly, the Polar Capital Global Insurance Fund has seen
renewed interest given its defensive characteristics. It recently
passed its 25-year anniversary and since launch it has delivered
strong and consistent annualised returns to investors of circa 10%
pa (Source: Polar Capital, 30 September 2023. R GBP Acc share class
with reinvestment of dividends and capital gain distributions, in
Pounds Sterling).
"In the six months, the largest beneficiary of net inflows was
our Emerging Market Stars fund range, which garnered a combined
total of GBP244m of net inflows, despite the tough backdrop and
muted investor demand for the asset class.
The Emerging Markets and Asia Stars team now collectively manage
GBP1.5bn and there has been continued progress in the US with US
domiciled fund vehicles surpassing GBP125m.
"The Smart funds managed by the Sustainable Thematic team have
now reached AuM of GBP280m.
"The Nordic region has continued to grow through additional
flows into the Polar Capital Emerging Market Stars Fund and there
is emerging interest in the Polar Capital Smart Energy and Smart
Mobility funds.
"Pleasingly, Polar Capital won the 2023 European Asset
Management Firm of the Year ( EUR20bn-EUR100bn) award at the Funds
Europe 2023 awards, which is testament to the quality of our
offering.
" We continue to invest in our digital marketing reach and have
intensified our client contact interactions to utilise our
significant remaining fund capacity. This, given our differentiated
range of sector, thematic and regional fund strategies, gives us
confidence that we will perform for our clients and shareholders
over the long term."
For further information please contact:
Polar Capital +44 (0)20 7227 2700
Gavin Rochussen (Chief Executive)
Samir Ayub (Finance Director)
Numis Securities- Nomad and Joint Broker +44 (0)20 7260 1000
Giles Rolls
Charles Farquhar
Stephen Westgate
Peel Hunt - Joint Broker +44 (0)20 3597 8680
Andrew Buchanan
John Welch
Sam Milford
Camarco +44 (0)20 3757 4995
Ed Gascoigne-Pees
Jennifer Renwick
Phoebe Pugh
Assets Under Management
AuM split by type
30 September 31 March 2023
2023
--------------------- --------------- -------------------- ----------------
GBPbn % GBPbn %
--------------------- -------- ----- -------------------- --------- -----
Open ended funds 14.1 74% Open ended funds 14.3 75%
Investment trusts 4.1 21% Investment trusts 3.9 20%
Segregated mandates 0.9 5% Segregated mandates 1.0 5%
--------------------- -------- ----- -------------------- --------- -----
Total 19.1 Total 19.2
--------------------- -------- ----- -------------------- --------- -----
AuM split by strategy
Ordered according to launch date
30 September 31 March 2023
2023
------------------------ --------------- ----------------------- ----------------
GBPbn % GBPbn %
------------------------ -------- ----- ----------------------- -------- ------
Technology 7.5 39% Technology 7.2 38%
European Long/Short 0.1 0.5% European Long/Short 0.1 0.5%
Healthcare 3.6 19% Healthcare 3.8 20%
Global Insurance 2.0 10% Global Insurance 2.1 11%
Financials 0.6 3% Financials 0.5 2%
Convertibles 0.5 2.5% Convertibles 0.7 4%
North America 0.6 3% North America 0.6 3%
Japan Value 0.2 1% Japan Value 0.2 1%
European Income 0.3 2% European Income 0.2 1%
UK Value 1.1 6% UK Value 1.2 6%
Emerging Markets and Emerging Markets and
Asia 1.5 8% Asia 1.3 7%
European Opportunities 0.8 4% European Opportunities 1.0 5%
European Absolute European Absolute
Return* - - Return* 0.1 0.5%
Sustainable Thematic Sustainable Thematic
Equities 0.3 2% Equities 0.2 1%
------------------------ -------- ----- ----------------------- -------- ------
Total 19.1 100% Total 19.2 100%
------------------------ -------- ----- ----------------------- -------- ------
* The Melchior European Absolute Return Fund was closed down in
May 2023.
Chief Executive's Report
Market Overview
The first half of Polar Capital's financial year ended on a weak
note in global bond and equity markets, with a sell-off during the
month of September 2023. Up to that point, bonds and equities had
been moving in opposite directions, with bonds weakening while
equity markets, and the US market in particular, made progress.
Bond markets are experiencing another difficult year. Central
banks remain in inflation-fighting mode, which has meant that
official rates have remained higher. Longer term US bond yields
have also moved up, driven by an increase in real interest rates,
and by a deterioration in the supply-demand balance as issuance
continues while the pace of central bank bond buying declines.
The positive tone in equity markets has surprised many investors
this year. Higher interest rates have not yet led to the widely
predicted recession, so corporate earnings have in aggregate
remained reasonably strong. At the same time, innovation has led to
positive outcomes in the technology and healthcare sectors. In
technology, the rapid development and commercialisation of machine
learning algorithms and large language models has led to strong
profit growth and, in turn, high expectations. In healthcare, the
positive clinical results and wide-ranging potential of the GLP-1,
class of diabetes drugs, have been similarly well received by
investors.
In both areas, the gains have accrued to a small number of
companies. The side effect of success in these particular areas is
that the big have become bigger, and equity market indices have
become more top heavy. Over the long term, the market will
naturally challenge established oligopolies, and any valuation
excesses will be unwound if underlying cash flow growth does not
match expectations.
These areas of success also led to outperformance in the first
half of 2023 in growth styles versus value, which is atypical in
periods of rising interest rates. More recently, this pattern has
started to reverse.
Fund Performance
In equity markets, the US market and the tech sector in
particular, have been the standout positive performers. At the
other end of the spectrum, Emerging Markets currently sit close to
a 20-year performance low point relative to the US. Slowing growth
in China, and the de-rating of the Chinese equity market, plays a
role here.
A further side effect of the success of tech companies which are
Artificial Intelligence beneficiaries, and of healthcare stocks
which stand to gain from GLP-1 medications, is that larger
companies have tended to outperform smaller ones. This has been a
headwind for Polar Capital. Many of our investment teams have
derived long term success from investing outside the larger,
better-known areas of their respective markets, and many clients
have supported this approach, as they often own the larger
companies directly.
So far this year, the dominance of the largest companies
accounts for the underperformance of the Polar Capital Global
Technology Fund and the Polar Capital Technology Trust, the Polar
Capital Healthcare Opportunities Fund, as well as the
underperformance of the Melchior European Opportunities Fund. These
strategies have good long term track records, but the recent past
has been more challenging.
As the dominance of growth styles has started to wane, we have
seen a recovery in the relative performance of the Group's more
value-driven strategies such as the Polar Capital European ex-UK
Income Fund, which is 277 bps ahead of benchmark in the six months
to end September 2023, the Polar Capital Japan Value Fund, which is
171 bps ahead, and the Polar Capital North American Fund, which is
107 bps ahead. The Polar Capital Global Insurance Fund is also
ahead of its benchmark over this period.
The Polar Capital Global Insurance Fund has celebrated its
25-year anniversary. Since launch it has delivered strong and
consistent annualised returns to investors of circa 10% pa, by
investing for the long-term in a concentrated portfolio of
best-in-class non-life insurers. Insurance sector performance is
typically counter cyclical, offering investors genuine
diversification with unique drivers. This Fund is ranked in the
2(nd) quartile in the Lipper peer group over three years, 1(st)
quartile over five years and is ranked at the 4(th) percentile
since inception.
The last three months have seen falling share prices across the
alternative energy sector as political commitments to
decarbonization have wavered, and as high interest rates have
undermined valuation. Polar Capital's Smart Energy strategies have
held their own versus benchmark so far, this financial year. The
rotation away from anything connected to the renewable energy or
electric vehicle supply chain has, however, been a short-term
headwind for Polar Capital's Emerging Market strategies, leading to
underperformance in the first six months of the financial year.
With the long-term need for alternative sources of energy as
pressing as ever, we believe that this will be an important
investment theme in the years to come.
Across the Polar Capital UCITS fund range, performance against
the Lipper peer group funds remains strong over all time periods,
albeit less strong over three years. The Polar Capital Global
Technology Fund had a challenging year in 2021 but has improved
relative to peers subsequently. Calendar year-to-date, against the
Lipper peer group, the Polar Capital Technology Fund is 14(th)
percentile and at the 22(nd) percentile since inception.
The Polar Capital Artificial Intelligence Fund which had its
six-year anniversary in October 2023 is 3(rd) percentile against
Lipper peers over one year, 5(th) percentile over five years and
4(th) percentile since inception.
Calendar year-to-date, 77% of Polar Capital's total AuM is in
the top two quartiles of the Lipper peer group, 73% over one year,
48% over three years, 84% over five years and 93% since inception
of respective funds.
Relative to respective benchmarks, 41% of AuM is on or ahead of
benchmark calendar year-to-date and 64% of AuM is on or ahead of
benchmark since inception.
AuM and Fund Flows
The latest Broadridge Fund Data indicate that in the period
April to August 2023 across Europe and the UK, equity funds have
been in outflow and in August bonds were also in outflow. This has
been a challenging environment for the industry.
In the six months to 30 September 2023, AuM declined from
GBP19.2bn to GBP19.1bn, a decrease of less than 1.0% over the
period. The GBP85m decline in AuM comprised net redemptions of
GBP581m, plus outflows from fund closures of GBP50m, which were
offset by an increase of GBP546m related to market movement and
fund performance.
In the six months, the largest beneficiary of net inflows was
our Emerging Market Stars fund range, which garnered a combined
total of GBP244m of net inflows, despite the tough backdrop and
muted investor demand for the asset class.
On the back of continued strong fund performance, the Polar
Capital European ex-UK Income Fund had net inflows of GBP95m.
The Polar Capital Smart Energy and Smart Mobility Funds had
combined net inflows of GBP60m. They marked their second
anniversary on 30 September 2023 and investor interest in the
strategies continues to build.
Within the healthcare suite of funds, the large cap focused,
Polar Capital Healthcare Blue Chip Fund benefited from net inflows
of GBP50m.
The Polar Capital Japan Value Fund saw a return to net inflows,
reflecting strong market returns and improving investor sentiment,
as did the Artificial Intelligence Fund, as investor interest in
this rapidly evolving space ignited.
More broadly during the period, we saw the return of inflation
and rapid interest rate rises around the world result in general
investor risk aversion, characterised by a flight to fixed income
and cash. Consequently, numerous of our funds experienced net
outflows during the period under review.
Marked negative investor sentiment towards UK and European
equities led to redemptions from the Melchior European
Opportunities Fund of GBP181m and from the Polar Capital UK Value
Opportunities Funds of GBP46m.
While the overall rate of outflows from our technology
strategies declined quarter on quarter, net outflows from the
open-ended Polar Capital Technology Fund were GBP181m and share buy
backs by the Polar Capital Technology Investment Trust amounted to
GBP65m over the period.
The Polar Capital Global Convertible Bond Fund experienced
outflows of GBP149m, as some income investors sought yield from
alternative, lower risk asset classes. The Polar Capital Global
Insurance Fund suffered net outflows of GBP152m, as two
long-standing shareholders decided to take profits following the
strong performance of the Fund in calendar year 2022.
Other funds experiencing outflows in the period included the
Polar Capital North American Fund, the Polar Capital Healthcare
Opportunities Fund, and to a lesser extent Polar Capital Global
Absolute Return, Biotechnology and Healthcare Discovery Funds.
Notwithstanding net outflows in October amounting to GBP390m,
which can mainly be attributed to redemptions by two clients from
Biotechnology and UK Value Opportunities funds, AuM at 10 November
was GBP18.9bn.
Financial Results
Average AuM over the six months to 30 September 2023 increased
by 2% from GBP19.1bn to GBP19.4bn. However, relative to the
comparable six-month period to 30 September 2022 average AuM
declined by 3% from GBP20.0bn to GBP 19.4bn. The decrease in
average AuM resulted in net management fees decreasing by 4% to
GBP76.5m from GBP80.0m in the comparable prior six-month period.
Management fee yield margin declined, as anticipated, by 1bp to
79bps over the period compared to the comparable prior half year
period.
Total operating costs were 1% lower at GBP55.0m compared to the
comparable prior half year.
Core operating profit was down 13% to GBP22.5m compared to the
comparable prior half year and up 2% from GBP22.1m in the
immediately preceding six-month period to 31 March 2023.
Profit before tax decreased by 8% to GBP21.1m compared to the
comparable prior half year. Basic EPS decreased by 8% compared to
the half year period to 30 September 2022. Adjusted diluted core
EPS of 17.3p is a 14% decrease over the comparable prior half year
period to 30 September 2022.
Six months Six months to Six months
to 31 March to
30 September 2023 30 September
2023 GBP'm 2022
GBP'm GBP'm
------------- -------------
Average AuM (GBP'bn) 19.4 19.1 20.0
Net management fees 76.5 74.8 80.0
Core operating profit 22.5 22.1 25.8
Performance fee profit - 1.7 -
Other income* (0.5) 3.6 (1.5)
Share-based payments on preference
shares (0.3) (0.2) (0.1)
Exceptional items (0.6) (5.0) (1.2)
------------- ------------- -------------------------
Profit before tax 21.1 22.2 23.0
------------- ------------- -------------------------
Basic EPS 16.2p 19.1p 17.7p
Adjusted diluted total earnings
per share 17.2p 25.3p 19.0p
Adjusted diluted core EPS 17.3p 19.6p 20.1p
----------------------------------- ------------- ------------- -------------------------
The non-GAAP alternative performance measures shown here are
described and reconciled in the APM section below.
* A reconciliation to reported results is given in the APM section below.
The Board has declared an interim dividend of 14.0p to be paid
in January 2024 (January 2023: 14.0p). Maintaining last year's
first interim dividend of 14.0p represents a covered dividend that
is 81% of first half adjusted diluted core EPS and reflects our
confidence in the business and the strength of our balance
sheet.
Strategic progress and thanks
We have continued to make steady progress in diversifying the
fund range and diversifying distribution both regionally and by
channel .
The Smart funds managed by the Sustainable Thematic team have
now reached AuM of GBP280m. The Emerging Markets and Asia Stars
team now collectively manage GBP1.5bn and there has been continued
progress in the US with US domiciled fund vehicles surpassing
GBP125m.
Further progress has been made in developing distribution
channels in Asia and the Nordic regions and following the opening
of offices in Singapore last year, an office was opened in
Stockholm during the period. The Nordic region has continued to
grow through additional flows into the Polar Capital Emerging
Market Stars funds and there is emerging interest in the Polar
Capital Smart Energy and Smart Mobility funds.
Polar Capital and its funds continued to be nominated for a
number of awards. The Convertible Bond Absolute Return Fund was
'highly commended' in the Absolute Return Category of the
Investment Week Awards. Polar Capital Technology Trust won the Best
Report & Accounts at the AIC Awards. Polar Capital Technology
Trust won the 'Best Technology/Biotech - Active' category in the A
J Bell Awards.
Polar Capital won the 2023 European Asset Management Firm of the
Year ( EUR20bn-EUR100bn) award at the Funds Europe 2023 awards and
is currently shortlisted for the following awards: ESG Investment
Leaders Awards 2023, Most Effective Brand Strategy - Small Company
at the Financial Services Forum Awards, Emerging Markets Manager of
the Year at the FN Fund Management Awards, ESG Investing Awards
2023 in both the Emerging Markets and Energy Transition categories.
The Emerging Markets Stars team is shortlisted for EM Manager of
the Year at the Wealth & Asset Management Awards. All three
Investment Trusts, Polar Capital Technology Trust, Polar Capital
Global Healthcare Trust and Polar Capital Financials Trust, have
been shortlisted at the Investment Week Investment Company of the
Year Awards.
We are immensely grateful for hard work and commitment from our
staff and partners over what has been a challenging period for
equity asset managers. We are also grateful for and appreciate the
ongoing support from our loyal and supportive clients and
shareholders.
Outlook
The last six months has continued to be challenging as the rate
of inflation, while peaking in some regions, remains stubbornly
high in others. A higher interest rate environment and increased
geopolitical tension not only in Ukraine, but also more recently in
the Middle East, has meant investors have taken a cautious 'risk
off' stance resulting in outflows across all asset classes.
Notwithstanding a challenging investment backdrop, our capacity
constrained funds have performed well over the long term. The total
capacity across all 13 of our teams is currently GBP63bn which
allows significant headroom for net inflows when market sentiment
improves.
We continue to invest in our digital marketing reach and have
intensified our client contact interactions to utilise our
significant remaining fund capacity. This, given our differentiated
range of sector, thematic and regional fund strategies, gives us
confidence that we will perform for our clients and shareholders
over the long term.
Gavin Rochussen
Chief Executive
17 November 2023
Alternate Performance Measures (APMs)
The Group uses the non-GAAP APMs listed below to provide users
of the Interim Report with supplemental financial information that
helps explain its results for the current accounting period.
APM Definition Reconciliation Reason for use
------------------- ------------------------ ------------------- ---------------------------------------
Core operating Profit before APM reconciliation To present a measure of the
profit performance Group's profitability excluding
fee profits, performance fee profits and
other income other components which may
and tax. be volatile, non-recurring
or non-cash in nature.
------------------- ------------------------ ------------------- ---------------------------------------
Performance fee Gross performance APM reconciliation To present a clear view of
profit fee revenue the net amount of performance
less performance fee earned by the Group after
fee interests accounting for staff remuneration
due to staff. payable that is directly attributable
to performance fee revenues
generated.
------------------- ------------------------ ------------------- ---------------------------------------
Core distributions Variable compensation APM reconciliation To present additional information
payable to investment thereby assisting users of
teams from management the accounts in understanding
fee revenue. key components of variable
costs paid out of management
fee revenue.
------------------- ------------------------ ------------------- ---------------------------------------
Performance Variable compensation APM reconciliation To present additional information
fee interests payable to investment thereby assisting users of
teams from performance the accounts in understanding
fee revenue. key components of variable
costs paid out of performance
fee revenue.
------------------- ------------------------ ------------------- ---------------------------------------
Adjusted diluted Profit after APM reconciliation The Group believes that (a)
total EPS tax but excluding as the preference share awards
(a) cost of have been designed to be earnings
share-based enhancing to shareholders
payments on adjusting for this non-cash
preference shares, item provides a useful supplemental
(b) the net understanding of the financial
cost of deferred performance of the Group,
staff remuneration (b) comparing staff remuneration
and (c) exceptional and profits generated in the
items which same time period (rather than
may either be deferring remuneration over
non-recurring a longer vesting period) allows
or non-cash users of the accounts to gain
in nature, and a useful supplemental understanding
in the case of the Group's results and
of adjusted their comparability period
diluted earnings on period and (c) removing
per share, divided acquisition related transition
by the weighted and termination costs as well
average number as the non-cash amortisation
of ordinary and any impairment, of intangible
shares. assets and goodwill provides
a useful supplemental understanding
of the Group's results.
------------------- ------------------------ ------------------- ---------------------------------------
Adjusted diluted Core operating APM reconciliation To present additional information
core EPS profit after that allows users of the accounts
tax excluding to measure the Group's earnings
the net cost excluding those from performance
of deferred fees and other components
core distributions which may be volatile, non-recurring
divided by the or non-cash in nature.
weighted average
number of ordinary
shares.
------------------- ------------------------ ------------------- ---------------------------------------
Core operating Core operating Chief Executive's To present additional information
profit margin profit divided report that allows users of the accounts
by to measure the core profitability
net management of the Group before performance
fees revenue. fee profits, and other components,
which can be volatile and
non-recurring.
------------------- ------------------------ ------------------- ---------------------------------------
Net management Gross management Chief Executive's To present a clear view of
fee fees revenue report the net amount of management
less commissions fees earned by the Group after
and fees payable. accounting for commissions
and fees payable.
------------------- ------------------------ ------------------- ---------------------------------------
Net Management Net management Chief Executive's To present additional information
fee yield fees revenue report that allows users of the accounts
divided by average to measure the fee margin
AuM. for the Group in relation
to its assets under management.
------------------- ------------------------ ------------------- ---------------------------------------
Summary of non-GAAP financial performance and reconciliation of
APMs to interim reported results
The summary below reconciles key APMs the Group measures to its
interim reported results for the current year and also reclassifies
the line-by-line impact on consolidation of seed investments to
provide a clearer understanding of the Group's core business
operation of fund management.
Any seed investments in newly launched or nascent funds, where
the Group is determined to have control, are consolidated. As a
consequence, the statement of profit or loss of the fund is
consolidated into that of the Group on a line-by-line basis. Any
seed investments that are not consolidated are fair valued through
a single line item (other income) on the Group consolidated
statement of profit or loss.
2023 Reclassification 2023 2022
Interim on consolidation Interim Interim
Reported of seed Reclassification Non-GAAP Non-GAAP
Results investments of costs results results APMs
GBP'm GBP'm GBP'm GBP'm GBP'm
Investment
management
and research fees 86.9 - - 86.9 90.9
Commissions and
fees payable (10.4) - - (10.4) (10.9)
------------------- ---------- ----------------- ------------------ ---------- ---------- ------------------
Net management
76.5 - - 76.5 80.0 fees
Operating costs (55.0) 0.2 21.8 (33.0) (31.3)
Finance costs (0.1) - - (0.1) -
- - (20.9) (20.9) (22.9) Core distributions
------------------ ---------- ----------------- ------------------ ---------- ---------- ------------------
Core operating
21.4 0.2 0.9 22.5 25.8 profits
Investment - - - - -
performance
fees
- - - - - Performance
fee interests
------------------ ---------- ----------------- ------------------ ---------- ---------- ------------------
- - - - - Performance
fee profits
Other income (0.3) (0.2) - (0.5) (1.5)
Share-based
payments
on preference
shares - - (0.3) (0.3) (0.1)
Exceptional items - - (0.6) (0.6) (1.2)
------------------- ---------- ----------------- ------------------ ---------- ---------- ------------------
Profit before
tax for the period 21.1 - - 21.1 23.0
------------------- ---------- ----------------- ------------------ ---------- ---------- ------------------
The effect of the adjustments made in arriving at the adjusted
diluted total EPS and adjusted diluted core EPS figures of the
Group is as follows:
Earnings per share (Unaudited) (Unaudited)
30 September 30 September
2023 2022
Pence Pence
--------------------------------- --- ------------- -------------
Diluted earnings per share 16.0 17.4
Impact of share-based payments
- preference shares only 0.3 0.1
Impact of exceptional items 0.6 1.2
Impact of deferment, where IFRS
defers cost into future periods 0.3 0.3
-------------------------------------- ------------- -------------
Adjusted diluted total EPS 17.2 19.0
Add back other income (post-tax) 0.1 1.1
-------------------------------------- ------------- -------------
Adjusted diluted core EPS 17.3 20.1
-------------------------------------- ------------- -------------
Exceptional items
Exceptional items for the period to 30 September 2023 include
amortisation of the acquired intangible asset as part of Dalton
acquisition (2022: Exceptional items include non-recurring
termination and reorganisation costs related to the closure of
Phaeacian mutual funds which were closed down in May 2022).
A breakdown of exceptional items is as follows:
Exceptional items (Unaudited) (Unaudited)
30 September 30 September
2023 2022
GBP'm GBP'm
------------------------------------------ ------------- -------------
Recorded in operating costs
Termination and reorganisation costs - 0.6
Amortisation of intangible asset 0.6 0.6
Net exceptional items recorded in the
consolidated statement of profit or loss 0.6 1.2
------------------------------------------ ------------- -------------
Interim Consolidated Statement of Profit or Loss
For the six months to 30 September 2023
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
----------------------------------------------- ---------------- ----------------
Revenue 86,891 90,936
Other income (271) (1,221)
----------------------------------------------- ---------------- ----------------
Gross income 86,620 89,715
Commissions and fees payable (10,435) (10,955)
----------------------------------------------- ---------------- ----------------
Net income 76,185 78,760
Operating costs (55,020) (55,758)
Finance costs (108) -
Profit for the period before tax 21,057 23,002
Taxation (5,423) (5,914)
----------------------------------------------- ---------------- ----------------
Profit for the period attributable to ordinary
shareholders 15,634 17,088
----------------------------------------------- ---------------- ----------------
Earnings per share
Basic 16.2p 17.7p
Diluted 16.0p 17.4p
Adjusted basic (Non-GAAP measure) 17.4p 19.3p
Adjusted diluted (Non-GAAP measure) 17.2p 19.0p
----------------------------------------------- ---------------- ----------------
Interim Consolidated Statement of Other Comprehensive Income
For the six months to 30 September 2023
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
--------------------------------------------------- ---------------- ----------------
Profit for the period attributable to ordinary
shareholders 15,634 17,088
Other comprehensive income - items that will
be reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign
operations (163) 2,267
--------------------------------------------------- ---------------- ----------------
Other comprehensive (loss)/income for the
period (163) 2,267
--------------------------------------------------- ---------------- ----------------
Total comprehensive income for the period,
net of tax, attributable to ordinary shareholders 15,471 19,355
--------------------------------------------------- ---------------- ----------------
All of the items in the above statements are derived from
continuing operations.
Interim Consolidated Balance Sheet
As at 30 September 2023
(Audited)
(Unaudited) 31 March
30 September
2023 2023
GBP'000 GBP'000
-------------------------------------------- -------------- ---------
Non-current assets
Goodwill and intangible assets 15,356 15,937
Property and equipment 9,451 10,534
Deferred tax assets 1,009 106
-------------------------------------------- -------------- ---------
25,816 26,577
-------------------------------------------- -------------- ---------
Current assets
Assets at fair value through profit or loss 70,471 83,048
Trade and other receivables 22,700 19,523
Other financial assets 4,667 5,237
Cash and cash equivalents 72,785 106,976
Current tax assets 610 319
171,233 215,103
-------------------------------------------- -------------- ---------
Total assets 197,049 241,680
-------------------------------------------- -------------- ---------
Non-current liabilities
Provisions and other liabilities 7,921 8,900
Liabilities at fair value through profit or
loss 286 462
Deferred tax liabilities - 518
-------------------------------------------- -------------- ---------
8,207 9,880
-------------------------------------------- -------------- ---------
Current liabilities
Liabilities at fair value through profit or
loss 8,163 16,369
Trade and other payables 55,266 68,651
Provisions 332 3,203
Other financial liabilities - 10
Current tax liabilities 2,004 712
65,765 88,945
-------------------------------------------- -------------- ---------
Total liabilities 73,972 98,825
-------------------------------------------- -------------- ---------
Net assets 123,077 142,855
-------------------------------------------- -------------- ---------
Capital and reserves
Issued share capital 2,530 2,520
Share premium 19,364 19,364
Investment in own shares (33,286) (31,623)
Capital and other reserves 12,188 12,299
Retained earnings 122,281 140,295
--------------------------------------------------- -------- --------
Total equity attributable to ordinary shareholders 123,077 142,855
--------------------------------------------------- -------- --------
Interim Consolidated Statement of Changes in Equity
For the six months to 30 September 2023
Issued Investment
share Share in own Capital Other Retained
capital premium shares reserves reserves earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- -------- ---------- --------- --------- --------- ------------
As at 1 April 2023
(audited) 2,520 19,364 (31,623) 695 11,604 140,295 142,855
Profit for the period - - - - - 15,634 15,634
Other comprehensive
income - - - - (163) - (163)
------------------------ --------- -------- ---------- --------- --------- --------- ------------
Total comprehensive
income - - - - (163) 15,634 15,471
Dividends paid to
shareholders - - - - - (30,865) (30,865)
Issue of shares 10 - - - - (10) -
Own shares acquired - - (7,588) - - - (7,588)
Release of own shares - - 5,925 - - (5,190) 735
Share-based payment - - - - - 2,417 2,417
Current tax in respect
of employee share
options - - - - 18 - 18
Deferred tax in respect
of employee share
options - - - - 34 - 34
------------------------ --------- -------- ---------- --------- --------- --------- ------------
As at 30 September
2023 (unaudited) 2,530 19,364 (33,286) 695 11,493 122,281 123,077
------------------------ --------- -------- ---------- --------- --------- --------- ------------
As at 1 April 2022
(audited) 2,506 19,364 (24,915) 695 11,722 146,875 156,247
Profit for the period - - - - - 17,088 17,088
Other comprehensive
income - - - - 2,267 - 2,267
------------------------ ----- ------ -------- --- ------ -------- --------
Total comprehensive
income - - - - 2,267 17,088 19,355
Dividends paid to
shareholders - - - - - (30,911) (30,911)
Issue of shares 14 - - - - (14) -
Own shares acquired - - (6,734) - - - (6,734)
Release of own shares - - 2,991 - - (1,736) 1,255
Share-based payment - - - - - 2,717 2,717
Current tax in respect
of employee share
options - - - - (3) - (3)
Deferred tax in respect
of employee share
options - - - - (606) - (606)
------------------------ ----- ------ -------- --- ------ -------- --------
As at 30 September
2022 (unaudited) 2,520 19,364 (28,658) 695 13,380 134,019 141,320
------------------------ ----- ------ -------- --- ------ -------- --------
Interim Consolidated Cash Flow Statement
For the six months to 30 September 2023
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
--------------------------------------------- ---------------- ----------------
Operating activities
Cash flow generated from operations 7,449 10,405
Tax paid (5,853) (1,081)
Interest received 1,104 214
Interest on lease - (37)
--------------------------------------------- ---------------- ----------------
Net cash inflow from operating activities 2,700 9,501
--------------------------------------------- ---------------- ----------------
Investing activities
Investment income 350 502
Sale of assets at fair value through profit
or loss 28,971 17,850
Purchase of assets at fair value through
profit or loss (20,341) (33,733)
Net cashflow from deconsolidation of seed
investment - (6,080)
Purchase of property and equipment (149) (143)
Net cash inflow/(outflow) from investing
activities 8,831 (21,604)
--------------------------------------------- ---------------- ----------------
Financing activities
Dividends paid to shareholders (30,865) (30,911)
Lease payments (697) (653)
Interest on lease (108) -
Purchase of own shares (7,588) (6,734)
Third-party subscriptions into consolidated
funds 3,725 12,055
Third-party redemptions from consolidated
funds (10,163) (1,223)
Net cash outflow from financing activities (45,696) (27,466)
--------------------------------------------- ---------------- ----------------
Net decrease in cash and cash equivalents (34,165) (39,569)
Cash and cash equivalents at start of period 106,976 121,128
Effect of exchange rate changes on cash and
cash equivalents (26) 905
--------------------------------------------- ---------------- ----------------
Cash and cash equivalents at end of period 72,785 82,464
--------------------------------------------- ---------------- ----------------
Notes to the Unaudited Interim Consolidated Financial
Statements
For the six months to 30 September 2023
1. General Information, Basis of Preparation and Accounting Policies
1.1 Corporate information
Polar Capital Holdings plc (the 'Company') is a public limited
company incorporated and domiciled in England and Wales whose
shares are traded on the Alternative Investment Market ('AIM') of
the London Stock Exchange.
1.2 Basis of Preparation
The unaudited interim condensed consolidated financial
statements to 30 September 2023 have been prepared in accordance
with IAS 34: Interim Financial Reporting.
The unaudited interim condensed consolidated financial
statements do not include all the information and disclosures
required in annual financial statements and should be read in
conjunction with the Group's annual financial statements as at 31
March 2023, which have been prepared in accordance with UK-adopted
international accounting standards and in conformity with the
requirements of the Companies Act 2006.
The accounting policies adopted and the estimates and judgements
used in the preparation of the unaudited interim condensed
consolidated financial statements are consistent with the Group's
annual financial statements for the year ended 31 March 2023.
1.3 Group information
The Group is required to consolidate seed capital investments
where it is deemed to control them. The operating subsidiaries and
seed capital investments consolidated at 30 September 2023 are
consistent with the annual report at 31 March 2023 except for the
Polar Capital Emerging Market ex-China Stars Fund (a sub fund of
Polar Capital Fund plc) and Polar Capital Emerging Market ex-China
Stars Fund (a US 40-Act mutual fund), which have both been
consolidated effective 30 June 2023.
1.4 Going concern
The Directors have made an assessment of going concern taking
into account both the Group's current results as well as the impact
on the Group's outlook. As part of this assessment the Directors
have used a range of information available to the date of issue of
these interim financial statements and considered the Group budget,
longer term financial projections including stress testing
scenarios applied as part of the Group's ICARA, cash flow forecasts
and an analysis of the Group's forecasted liquid assets and its
regulatory capital position.
The Group continues to maintain a robust financial resources
position, access to cashflow from ongoing investment management
contracts and the Directors believe that the Group is well placed
to manage its business risks. The Directors also have a reasonable
expectation that the Group has adequate resources to continue
operating for a period of at least 12 months from the date of
approval of the interim consolidated financial statements.
Therefore, the Directors continue to adopt the going concern basis
of accounting in preparing the interim consolidated financial
statements.
2. Revenue
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
---------------------------------------- ---------------- ----------------
Investment management and research fees 86,891 90,936
---------------------------------------- ---------------- ----------------
3. Components of other income and other comprehensive income
(a) Components of other income
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
------------------------------------------------ ---------------- ----------------
Interest income on cash and cash equivalents 1,104 214
Net gain on other financial assets/ liabilities
- short positions 1,234 7,640
Net loss on other financial assets/ liabilities
- forward currency contracts (265) (5,607)
Net loss on financial assets and liabilities
at FVTPL (4,603) (6,460)
Investment income 350 502
Other loss - attributed to third party holdings 1,909 2,490
(271) (1,221)
------------------------------------------------ ---------------- ----------------
(b) Components of other comprehensive income
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
------------------------------------------------- ---------------- ----------------
Exchange differences on translation of foreign
operations:
------------------------------------------------- ---------------- ----------------
(Losses)/gains arising during the period (163) 2,391
Reclassification adjustments for losses included
in the consolidated statement of profit or
loss - (124)
(163) 2,267
------------------------------------------------- ---------------- ----------------
4. Operating costs
a) Operating costs include the following items:
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
----------------------------------------------------- ---------------- ----------------
Staff costs including partnership profit allocations 39,765 42,544
Depreciation 1,232 751
Amortisation of intangible assets 581 581
Auditors' remuneration 228 193
----------------------------------------------------- ---------------- ----------------
b) Auditors' remuneration:
Audit of Group financial statements 56 63
Local statutory audits of subsidiaries 105 76
Audit-related assurance services 4 3
Other assurance services - internal controls
review 63 51
228 193
--------------------------------------------- --- ---
5. Dividends
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
-------------- ---------------- ----------------
Dividend paid 30,865 30,911
-------------- ---------------- ----------------
On 28 July 2023, the Group paid a second interim dividend for
2023 of 32p (2022: 32p) per ordinary share.
6. Share-based Payments
A summary of the charge to the consolidated statement of profit
or loss for each share-based payment arrangement is as follows:
(Unaudited) (Unaudited)
Six months Six months
to 30 September to 30 September
2023 2022
GBP'000 GBP'000
---------------------------------- ---------------- ----------------
Preference shares 370 138
LTIP share awards 860 1,514
Equity incentive shares 304 315
Deferred remuneration plan shares 883 750
---------------------------------- ---------------- ----------------
2,417 2,717
---------------------------------- ---------------- ----------------
Certain employees of the Group and partners of Polar Capital LLP
hold Manager Preference Shares or Manager Team Member Preference
Shares (together 'Preference Shares') in Polar Capital Partners
Limited, a group company.
The preference shares are designed to incentivise and retain the
Group's fund management teams. These shares provide each manager
with an economic interest in the funds that they run and ultimately
enable the manager, at their option and at a future date, to
convert their interest in the revenues generated from their funds
to a value that may (at the discretion of the parent undertaking,
Polar Capital Holdings plc) be satisfied by the issue of ordinary
shares in Polar Capital Holdings plc. Such conversion takes place
according to a pre-defined conversion formula that considers the
relative contribution of the manager to the Group as a whole. The
equity is awarded in return for the forfeiture of a manager's
current core economic interest and is issued over three years from
the date of conversion.
No conversion of preference shares into Polar Capital Holdings
plc equity has taken place during the period to 30 September 2023
(2022: No conversion).
At 30 September 2023, five sets of preference shares (2022: five
sets) have the right to call for conversion.
The following table illustrates the number of, and movements in,
the estimated number of ordinary shares to be issued.
Estimated number of ordinary shares to be issued against
preference shares with a right to call for conversion:
(Unaudited) (Unaudited)
30 September 30 September
2023 2022
Number of
shares Number of shares
--------------------------- -------------- -----------------
At 1 April 2,367,680 2,740,604
Conversion/crystallisation - -
Movement during the period (109,970) (404,308)
At 30 September 2,257,710 2,336,296
--------------------------- -------------- -----------------
Number of ordinary shares to be issued against converted
preference shares:
(Unaudited) (Unaudited)
30 September 30 September
2023 2022
Number of
shares Number of shares
---------------------------- -------------- -----------------
Outstanding at 1 April 810,310 1,352,128
Conversion/crystallisation - -
Issued during the period (405,154) (541,818)
Outstanding at 30 September 405,156 810,310
---------------------------- -------------- -----------------
7. Earnings Per Share
A reconciliation of the figures used in calculating the basic,
diluted and adjusted earnings per share (EPS) figures is as
follows:
(Unaudited) (Unaudited)
Six months Six months
to to
30 September 30 September
2023 2022
GBP'000 GBP'000
Earnings
Profit after tax for purpose of basic and
diluted EPS 15,634 17,088
Adjustments (post tax):
Add back cost of share-based payments on
preference shares 370 138
Add back exceptional items - termination/
acquisition related costs - 615
Add back exceptional items - amortisation
of intangible assets 581 581
Add net amount of deferred staff remuneration 225 250
-------------------------------------------------- ------------- -----------------
Profit after tax for purpose of adjusted
basic and adjusted diluted total EPS 16,810 18,672
-------------------------------------------------- ------------- -----------------
(Unaudited)
Six months (Unaudited)
to Six months
30 September to
2023 30 September
Number of 2022
shares Number of shares
-------------------------------------------------- ------------- -----------------
Weighted average number of shares
Weighted average number of ordinary shares,
excluding own shares for purposes of basic
and adjusted basic EPS 96,569,042 96,661,663
Effect of dilutive potential shares - LTIPs,
share options and preference shares crystallised
but not yet issued 1,274,957 1,372,703
Weighted average number of ordinary shares,
for purpose of diluted and adjusted diluted
total EPS 97,843,999 98,034,366
-------------------------------------------------- ------------- -----------------
(Unaudited) (Unaudited)
Six months Six months
to to
30 September 30 September
2023 2022
Pence Pence
------------------- ------------- --------------
Earnings per share
Basic 16.2 17.7
Diluted 16.0 17.4
Adjusted basic 17.4 19.3
Adjusted diluted 17.2 19.0
------------------- ------------- --------------
8. Goodwill and intangible assets
Goodwill relates to the acquisition of Dalton Capital (Holdings)
Limited, the parent company of Dalton Strategic Partnership LLP, a
UK based boutique asset manager acquired on 26 February 2021. The
goodwill is attributable to a single CGU.
Intangible assets at 30 September 2023 relate to investment
management contracts acquired as part of the business combination
with Dalton.
Investment
management
(Unaudited) Goodwill contracts Total
GBP'000 GBP'000 GBP'000
---------------------------------------- ---------- ----------- ---------
Cost
As at 1 April 2023 6,732 18,647 25,379
Revaluation/ Additions - - -
---------------------------------------- ---------- ----------- ---------
As at 30 September 2023 6,732 18,647 25,379
---------------------------------------- ---------- ----------- ---------
Accumulated amortisation and impairment
As at 1 April 2023 - 9,442 9,442
Amortisation for the period - 581 581
Impairment for the period - - -
---------------------------------------- ---------- ----------- ---------
As at 30 September 2023 - 10,023 10,023
---------------------------------------- ---------- ----------- ---------
Net book value as at 30 September
2023 6,732 8,624 15,356
---------------------------------------- ---------- ----------- ---------
Investment
management
Goodwill contracts Total
(Audited) GBP'000 GBP'000 GBP'000
---------------------------------------- ---------- ----------- ---------
Cost
As at 1 April 2022 6,732 18,647 25,379
As at 31 March 2023 6,732 18,647 25,379
---------------------------------------- ---------- ----------- ---------
Accumulated amortisation and impairment
As at 1 April 2022 - 8,279 8,279
Amortisation for the year - 1,163 1,163
Impairment for the year - - -
---------------------------------------- ---------- ----------- ---------
As at 31 March 2023 - 9,442 9,442
---------------------------------------- ---------- ----------- ---------
Net book value as at 31 March 2023 6,732 9,205 15,937
---------------------------------------- ---------- ----------- ---------
Amortisation and impairment of intangible assets are treated as
exceptional items.
Goodwill is tested for impairment at least on an annual basis or
more frequently when there are indications that goodwill may be
impaired.
The table below shows the carrying amount assigned to each
component of the intangible asset and the remaining amortisation
period.
(Unaudited) (Audited)
30 September 31 March
2023 2023
------------------------------ ----------------------------- ---------------------------
Remaining Remaining
Carrying amortisation Carrying amortisation
value period value period
GBP'000 GBP'000
------------------------------ ------------- -------------- ----------- --------------
Investment management contracts
acquired from Dalton Capital
(Holdings) Limited 8,624 7.4 years 9,205 7.9 years
8,624 9,205
------------------------------ ------------- -------------- ----------- --------------
The Group has reviewed the investment management contracts
related intangible assets as at 30 September 2023 and has concluded
that there are no indicators of impairment.
9. Property and equipment
Right-of-use Leasehold Computer Office
assets Improvements Equipment Furniture Total
(Unaudited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------- -------------- ----------- ----------- ----------
Cost
As at 1 April 2023 18,850 2,456 1,077 505 22,888
Additions - 68 52 29 149
As at 30 September
2023 18,850 2,524 1,129 534 23,037
---------------------- ------------- -------------- ----------- ----------- ----------
Accumulated Depreciation
As at 1 April 2023 9,531 1,476 877 470 12,354
Charge for the year 1,009 146 65 12 1,232
---------------------- ------------- -------------- ----------- ----------- ----------
As at 30 September
2023 10,540 1,622 942 482 13,586
---------------------- ------------- -------------- ----------- ----------- ----------
Net book value as at
30 September 2023 8,310 902 187 52 9,451
---------------------- ------------- -------------- ----------- ----------- ----------
Right-of-use Leasehold Computer Office
assets Improvements Equipment Furniture Total
(Audited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------- -------------- ----------- ----------- ----------
Cost
As at 1 April 2022 10,749 2,086 969 497 14,301
Additions 4,126 370 108 8 4,612
Modification 3,975 - - - 3,975
---------------------- ------------- -------------- ----------- ----------- ----------
As at 31 March 2023 18,850 2,456 1,077 505 22,888
---------------------- ------------- -------------- ----------- ----------- ----------
Accumulated Depreciation
As at 1 April 2022 7,763 1,256 743 426 10,188
Charge for the year 1,768 220 134 44 2,166
---------------------- ------------- -------------- ----------- ----------- ----------
As at 31 March 2023 9,531 1,476 877 470 12,354
---------------------- ------------- -------------- ----------- ----------- ----------
Net book value as at
31 March 2023 9,319 980 200 35 10,534
---------------------- ------------- -------------- ----------- ----------- ----------
10. Leases
A maturity analysis of the Group's lease liabilities is as
follows:
(Unaudited) (Audited)
30 September 31 March
2023 2023
Lease liabilities GBP'000 GBP'000
---------------------------------------------- -------------- ---------
Current 2,026 1,729
Non-current 6,544 7,526
------------------------------------
8,570 9,255
------------------------------------ ------------------------ ---------
The lease liabilities relate to the two leases in respect of the
Group's premises at 16 Palace Street in London, both expiring in
January 2028, and the Group's premises in Zurich, expiring in
November 2026. The movement in lease balances during the period was
GBP0.7m, of which GBP0.8m were lease payments and GBP0.1m was the
interest expense (31 March 2023: The movement in lease was GBP6.1m,
of which GBP1.6m were lease payments, GBP0.2m was the interest
expense, GBP3.5m related to initial recognition of new leases and
GBP4.0m related to lease modification of the existing lease).
The consolidated statement of profit or loss includes the
following amounts relating to leases recorded within operating
costs:
(Audited)
(Unaudited) 31 March
30 September
2023 2023
GBP'000 GBP'000
-------------------------------------------- -------------- -----------
Interest expense on lease liabilities 108 175
Depreciation on ROU assets 1,009 1,768
--------------------------------------------
1,117 1,943
-------------------------------------------- -------------- ---------
There are no lease expenses incurred in relation to low-value
assets or short-term leases.
11. Issued Share Capital
(Audited)
(Unaudited) 31 March
30 September
2023 2023
Allotted, called up and fully paid: GBP'000 GBP'000
--------------------------------------------- -------------- ---------
101,195,879 ordinary shares of 2.5p each
(31 March 2023: 100,790,725 ordinary shares
of 2.5p each) 2,530 2,520
--------------------------------------------- -------------- ---------
During the period, Polar Capital Holdings plc has issued 405,154
shares in connection with previously crystallised manager
preference shares.
12. Financial Instruments
The fair value of financial instruments that are traded in
active markets at each reporting date is determined by reference to
quoted market prices or dealer price quotation (bid price for long
positions and ask price for short positions), without any deduction
for transaction costs. For financial instruments not traded in an
active market, such as forward exchange contracts, the fair value
is determined using appropriate valuation techniques that take into
account the terms and conditions of the contracts and utilise
observable market data, such as spot and forward rates, as
inputs.
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities.
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
(Unaudited) (Audited)
30 September 2023 31 March 2023
------------------------------------------ ------------------------------------------
Level Level Level Total Level Level Level Total
1 2 3 GBP'000 1 2 3 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Financial assets
Assets at FVTPL 70,471 - - 70,471 83,048 - - 83,048
Other financial
assets 4,579 88 - 4,667 5,237 - - 5,237
----------------------- --------- --------- --------- --------- --------- --------- --------- ---------
75,050 88 - 75,138 88,285 - - 88,285
----------------------- --------- --------- --------- --------- --------- --------- --------- ---------
Financial liabilities
Liabilities at
FVTPL 8,107 - 342 8,449 16,285 - 546 16,831
Other financial
liabilities - - - - - 10 - 10
----------------------- --------- --------- --------- --------- --------- --------- --------- ---------
8,107 - 342 8,449 16,285 10 546 16,841
----------------------- --------- --------- --------- --------- --------- --------- --------- ---------
During the period there were no transfers between levels in fair
value measurements.
Movement in liabilities at FVTPL categorised as Level 3 during
the year were:
(Unaudited) (Audited)
30 September 31 March
2023 2023
GBP'000 GBP'000
----------------------------------------- -------------- ----------------------
At 1 April 546 855
Repayment (38) (226)
Net gains recognised in the statement of
profit or loss (166) (83)
----------------------------------------- -------------- ----------------------
At 30 September 342 546
----------------------------------------- -------------- ----------------------
13. Contingent liability
In the normal course of the Group's business, it may be subject
to legal and regulatory proceedings arising out of current and past
operations, which in some cases may result in contingent
liabilities.
There are no contingent liabilities to disclose at 30 September
2023 (31 March 2023: nil)
14. Notes to the Cash Flow Statement
Reconciliation of profit before taxation to cash generated from
operations
(Unaudited)
(Unaudited) Six months
Six months to
to 30 September 30 September
2023 2022
GBP'000 GBP'000
--------------------------------------------------- ---------------- ---------------------
Cash flows from operating activities
Profit on ordinary activities before tax 21,057 23,002
Adjustments for:
Interest receivable and similar income (1,104) (214)
Investment income (350) (502)
Interest on lease 108 37
Amortisation of intangible assets 581 581
Depreciation of non-current property and equipment 1,232 751
Decrease in fair value of assets at fair value
through profit or loss 4,768 6,552
Increase in other financial assets (553) (8,667)
(Increase)/decrease in receivables (3,176) 4,554
Decrease in trade and other payables including
other provisions (16,551) (18,861)
Share-based payments 2,416 2,717
Decrease in liabilities at fair value through
profit or loss(1) (1,945) (3,009)
Release of fund units held against deferred
remuneration 966 3,464
Cash flow generated from operations 7,449 10,405
--------------------------------------------------- ---------------- ---------------------
1. Movement includes those arising from acquiring and/or losing
control of consolidated seed funds.
2. Related Party Transactions
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation and are not included in this note. All related party
transactions during the period are consistent with those disclosed
in the Group's annual financial statements for the year ended 31
March 2023 and have taken place on an arm's length basis.
3. The Publication of Non-Statutory Accounts
The financial information contained in this unaudited interim
report for the period to 30 September 2023 does not constitute
statutory accounts as defined in s434 of the Companies Act 2006.
The financial information for the six months ended 30 September
2023 and 2022 has not been audited. The information for the year
ended 31 March 2023 has been extracted from the latest published
audited accounts, which have been filed with the Registrar of
Companies. The audited accounts filed with the Registrar of
Companies contain a report of the independent auditor dated 23 June
2023. The report of the independent auditor on those financial
statements contained no qualification or statement under s498 of
the Companies Act 2006.
Shareholder Information
Directors
David Lamb Non-executive Chairman
Gavin Rochussen Chief Executive Officer
Samir Ayub Finance Director
Alexa Coates Non-executive Director, Chair of Audit and Risk
Committee
Win Robbins Non-executive Director, Chair of Remuneration
Committee
Andrew Ross Non-executive Director
Laura Ahto Non-executive Director
Anand Aithal Non-executive Director
Company No.
Registered in England and Wales
4235369
Registered Office
16 Palace Street
London, SW1E 5JD
Tel: 020 7227 2700
Group Company Secretary
Neil Taylor
Dividend
A first interim dividend of 14.0p per share has been declared
for the year to 31 March 2024. This will be paid on 12 January 2024
to shareholders on the register on 15 December 2023. The shares
will trade ex-dividend from 14 December 2023.
Remuneration Code
Disclosure of the Group's Remuneration Code is made alongside
its MIFIDPRU public disclosure document and is available on the
Company's website.
Half Year Report
Copies of this announcement and of the Half Year report will be
available from the Secretary at the Registered Office, 16 Palace
Street, London SW1E 5JD and from the Company's website at
www.polarcapital.co.uk
Neither the contents of the Company's website nor the contents
of any website accessible from the hyperlinks on the Company's
website (or any other website) is incorporated into or forms part
of this announcement .
ENDS
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END
IR GZMMMMNNGFZZ
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November 20, 2023 02:00 ET (07:00 GMT)
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