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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Impax Asset Management Group Plc | LSE:IPX | London | Ordinary Share | GB0004905260 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 18.00 | 4.19% | 448.00 | 447.50 | 449.00 | 453.50 | 433.50 | 433.50 | 848,921 | 16:08:46 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investment Advice | 178.64M | 39.22M | 0.3057 | 14.52 | 569.75M |
From Apr 2019 to Apr 2024
TIDMIPX
RNS Number : 5333Y
Impax Asset Management Group plc
18 May 2016
Impax Asset Management Group plc - Interim Results to 31 March 2016
London, 18 May 2016 - Impax Asset Management Group plc, ("Impax" or the "Company"), the AIM listed investment manager dedicated to investing in the opportunities created by the scarcity of natural resources and growing demands for cleaner more efficient products and services, announces its results for the six months to 31 March 2016.
Highlights
-- Assets under management and advice ("AUM") increased 26% since year end to new peak of GBP3.6bn
-- Net inflows of GBP300 million, predominantly from the US and Continental Europe -- Strong investment performance: all listed equity strategies outperformed MSCI ACWI -- Strong balance sheet maintained -- Interim dividend increased by 25 per cent to 0.50 pence per share -- Encouraging discussions with investors on raising new monies in real assets strategies
Financial results
Hot Features
Premium
H1 2016 H2 2015 H1 2015 2015
Revenue GBP9.4m GBP9.3m GBP10.4m GBP19.7m
-------- --------- --------- ---------
Operating earnings(1) GBP1.6m GBP0.8m GBP2.3m GBP3.1m
-------- --------- --------- ---------
Profit before GBP2.1m GBP3.2m GBP1.9m GBP5.1m
tax
-------- --------- --------- ---------
Earnings per
share 1.35p 1.52p 1.61p 3.13p
-------- --------- --------- ---------
Dividend 0.50p 1.70p(2) 0.40p 2.10p(2)
-------- --------- --------- ---------
A material proportion of the AUM flows were received near the end of the Period, and therefore Revenue during the Period does not fully reflect the Company's AUM growth. Fees from our largest private equity fund fell from 1 April 2015 which contributed to Revenue being lower than in H1 2015; this should be replaced when the Company raises new capital in this area. Based on our current cost base and run rate revenues from AUM at the end of the Period, we would expect operating earnings to increase during the second half.
Ian Simm, Chief Executive commented:
"Impax has had a strong first half year. Our AUM has reached a new peak with net inflows of GBP300m and our funds have demonstrated superior investment performance."
"Our investment hypothesis is clearly resonating with investors around the world. Over the last year we have witnessed unprecedented levels of investor interest in our investment strategies and our pipeline is encouraging. I am optimistic on Impax's prospects and positioning and believe that the Company is well placed to deliver long term shareholder value."
(1) Revenue less operating costs
(2) Includes special dividend of 0.50p
Enquiries:
Ian Simm Tel: + 44 (0) 20 7434 1122 (switchboard)
Chief Executive
Impax Asset Management Group plc
www.impaxam.com
Anne Gilding Tel: +44 (0) 20 7434 1122 (switchboard)
Head of Brand & Communications Tel: +44 (0) 20 7432 2602 (direct) Impax Asset Management Group plc Tel: +44 (0) 7881 249612 (mobile) www.impaxam.com Email: a.gilding@impaxam.com Guy Wiehahn Tel: +44 (0) 20 7418 8893
Nominated Adviser
Peel Hunt LLP
Chief Executive's Statement
Over the first half year for Impax Asset Management Group plc ("Impax" or the "Company"), i.e. the Period from 1 October 2015 to 31 March, the Company's assets under management and advisory ("AUM") increased by 26 per cent to a new peak of GBP3,562 million, inclusive of net inflows of ca. GBP300 million. On 30 April 2016, AUM were GBP3,557 million.
During the Period, global equity markets were notably more volatile than during early to mid 2015, with heightened geopolitical risk, softer economic growth in many regions and further uncertainty in developing markets. However, the environmental and resource efficiency markets in which Impax focuses its investments proved particularly resilient and significantly outperformed the MSCI All Countries World Index.
Impax has had a strong "first half", with investment outperformance from most strategies and robust net inflows into Listed Equities. Investor interest in our capabilities and investment products remains high and we have a healthy pipeline of potential new inflows.
Developments in Environmental & Resource Efficiency Markets
Over the period we have seen a number of important developments that will underpin further growth of environmental and resource efficiency markets. We are also witnessing accelerating developments and expansion across many of the sectors in which we invest.
The successful outcome of the Paris Climate Agreement last December was more positive than most commentators had expected and is already proving to be a powerful catalyst for many of our holdings. Over the longer term we will undoubtedly see governments around the world further strengthen policy to reduce greenhouse gas emissions.
Shortly after the start of 2016 the oil price hit US$26 a barrel(1) , its lowest level for more than a decade, before rising to US$45 a barrel at the time of writing. As we have reported previously, the impact of oil prices on environmental markets is complex; for example, low prices stimulate far higher levels of fuel consumption and pollution, but also more demand for goods, including those addressing environmental problems. Recent oil price "lows" have not been a headwind to our performance.
We believe that investments in environmental and resource efficiency markets are currently well positioned for continued strong performance. For example, renewable energy generation, particularly solar, continues to grow rapidly as technology costs fall and reliance on subsidies reduces.
Similarly, the transportation sector is undergoing a significant transformation with the roll-out of new energy efficiency technologies and the increased adoption of hybrid and electric vehicles. Meanwhile, in food and agriculture we see interesting investment opportunities arising from rapidly changing consumer habits, shifts in trade flows and stricter regulation around food safety.
The announcement in March of the details in China's 13(th) Five Year Plan should provide further momentum for companies providing solutions to environmental protection in the region. In particular, the Chinese government's plans to the end of 2020 highlight huge additional investments to tackle water and air pollution and a notable new target to address soil pollution.
Investor interest in environmental and resource efficiency markets continues to build. Post the Paris Climate Agreement we are seeing significantly more requests for information from investors who want to add climate change investment solutions to their portfolios. They are seeking solutions that offer superior growth as well as a hedge against longer term risks.
Financial results for the Period
Revenue for the six months to 31 March 2016 was GBP9.4 million (H1 2015: GBP10.4 million; H2 2015: GBP9.3 million). Operating earnings(2) for the Period were GBP1.6 million (H1 2015: GBP2.3 million; H2 2015: GBP0.8 million) and the associated operating margin was 17 per cent (H1 2015: 22 per cent; H2 2015: 8 per cent).
The result for the Period was a profit before tax ("PBT") of GBP2.1 million (H1 2015: GBP1.9 million) and the earnings per share for the Period were 1.35 pence (H1 2015: 1.61 pence).
Revenue for the Period was impacted as fees from our largest private equity fund fell from 1 April 2015 following the end of the fund's investment period. In addition, revenue does not take into account the recent growth in AUM as a material proportion of the AUM flows were near the end of the period, and therefore made little contribution to these results. Based on our current cost base and run rate revenues from AUM at the end of the Period, we would expect operating earnings to increase during the second half.
Dividends
At the Annual General Meeting on 3 March 2016, shareholders approved payment of a dividend of 1.2 pence per share, taking the total dividend for the year ended 30 September 2015 to 1.6 pence per share (2014: 1.4 pence). Shareholders also approved an additional special dividend of 0.5 pence.
In line with the Company's progressive dividend policy and confidence in the Company's prospects, the Board is declaring an interim dividend for the Period of 0.5 pence per share (2015: 0.4 pence). This will be paid on 23 June 2016 to ordinary shareholders on the shareholder register at the close of business on 27 May 2016.
Board update
Sally Bridgeland, who joined the Board in August 2015, has assumed the Chair of the Audit & Risk Committee, taking over from Vince O'Brien, who remains Chair of the Remuneration Committee. Sally brings nearly 30 years' experience of governance and risk analysis to this role.
Listed Equities
During the Period, all Impax's Listed Equity strategies delivered strong performance and our major strategies significantly outperformed the MSCI All Country World Index ("ACWI"), which returned 11.0 per cent(3) .
Water remains our largest asset pool with AUM of GBP956million and was again our best performing strategy, returning 18.3 per cent in the six months to 31 March 2016. Leaders, our all cap global strategy, delivered 14.9 per cent, and Specialists, our small and mid-cap global strategy, rose by 18.0 per cent. Our smaller strategies, Food & Agriculture, and Asia-Pacific, returned 16 per cent and 11.3 per cent respectively. The longer term investment performance of all our strategies remains strong.
We have further extended our analysis into climate change investment risk in collaboration with Imperial College Business School and Carbon Tracker. In April we published a white paper setting out a methodology by which institutional investors can reduce carbon risk in their portfolios by reallocating some fossil fuel exposure to a basket of energy efficiency stocks. We have received an enthusiastic response to this approach from a number of US and UK pension funds, and are using the dialogue as a platform for extending our client base.
Private Equity
Sales of assets from Impax New Energy Investors II, our fund targeting the construction of assets providing renewable power generation in Europe, are progressing well and we expect to return more than 100 per cent of drawn capital to investors by the end of this financial year. During the Period we completed the sale of a 206MW portfolio of wind assets in France and Germany to ERG, an Italian utility, sold our stake in a 24MW Irish windfarm portfolio to the Greystone Infrastructure Fund, and agreed the sale of our 108MW Finnish wind farm portfolio to a fund managed by Allianz Capital Partners.
As we realise assets in existing funds, our management fees reduce accordingly. However, discussions with investors about their appetite for raising additional monies are progressing well. Following the European Investment Bank's announcement last year of its proposed EUR50 million allocation to a new Impax managed fund, we expect to confirm participation from other clients later this year.
Sustainable Property
We continue to pursue the letting and eventual sale of the remaining asset in the first fund, a prime office and retail building in Manchester. However, many investors in UK property are currently sitting on the sidelines, delaying allocating new capital until the uncertainties surrounding the UK's "Brexit" referendum in June become clearer.
Fund flows and distribution
We received net inflows of GBP300 million over the Period, which included two significant new mandates from North America. In January we secured our first client in Canada, and in April we announced a major new segregated account mandate from an institutional investor in the US into our Specialists strategy. Our North American pipeline remains encouraging. We also continue to see robust inflows from Continental European investors via BNP Paribas, our third party distributor in the region, particularly into our Leaders, Water and Food & Agriculture strategies. The sustainable food fund, which we manage on behalf of BNP Paribas, now has a one year track record and assets currently stand at EUR98 million.
We now have two more strategies available to UK investors and have extended our UK sales team. In January we launched the Leaders Strategy within our UCITS umbrella. Furthermore, in March BNP Paribas, which distributes the Aqua Fund based on our Water strategy, introduced a Sterling share class in response to UK investor interest.
The table below sets out the AUM movements during the Period.
AUM movement for six months to 31 March 2016
AUM movement Impax label Third party Private Property Total/GBPm
Six months to listed listed equity equity funds/GBPm funds/GBPm
31 March 2016 equity funds and
funds/GBPm accounts/GBPm
Total AUM at
30 September 2015 495 1,992 313 22 2,823
------------ --------------- ------------------- ----------- -----------
Net inflows/(outflows) 23 278 (2) - 300
------------ --------------- ------------------- ----------- -----------
Market movement
and performance 82 334 24 - 440
------------ --------------- ------------------- ----------- -----------
Total AUM at
31 March 2016 600 2,604 335 22 3,562
------------ --------------- ------------------- ----------- -----------
Infrastructure and support
Over the Period, our headcount was stable at 67. As previously stated, our core team is in place and we believe that over the medium term we should be able to scale up our business significantly with only a small number of additional hires to support new business.
Remuneration and share management
During the Period, the Board confirmed the grant of 1.0 million options under the Employee Share Option Plan ("ESOP") and 4.1 million Restricted Shares to management and staff in respect of their performance for the financial year ended 30 September 2015. The ESOP strike price was set at 45.4 pence, and the options will vest on 31 December 2018. The Restricted Shares will vest in equal instalments after three, four and five years.
The Board intends to continue to buy the Company's shares from time to time after giving due consideration to alternative uses of the Company's cash resources. Shares purchased may be used to satisfy obligations to employees for share-based awards, thus reducing the requirement to issue new shares. During the Period 3.0 million shares were bought, bringing total buybacks to 16.5 million. In comparison, 18.8 million options and restricted shares have been issued to date.
Outlook
Volatility looks set to dominate markets over the short term with widespread investor concerns on faltering rates of global growth, uncertainties surrounding the "Brexit" vote and the outcome of the US election later in the year. However, we retain our positive long term outlook for global equities and believe that the environmental and resource efficiency markets in which Impax invests will continue to outperform the wider markets.
Our investment hypothesis is clearly resonating with investors around the world, and over the last year we have witnessed unprecedented levels of investor interest in our investment strategies. Our pipeline is encouraging, with interest from both existing investors and new prospects in our established strategies and in new products, across listed equities and our real asset strategies. We are optimistic on Impax's prospects and positioning and believe the Company is well placed to deliver long-term shareholder value.
Ian Simm
17 May 2016
(1) WTI closing price of US$26.2 per barrel on 11 February 2016
(2) Revenue less operating costs
(3) The returns for the MSCI ACWI are net calculated including the dividends reinvested, net of withholding taxes. In line with market standards the Impax strategy returns (source: FactSet) are calculated including the dividends reinvested, net of withholding taxes, gross of management fee and are represented in GBP
Impax Asset Management Group plc
Condensed consolidated income statement
For the Six Months Ended 31 March 2016
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
Revenue 9,434 10,422 19,726
Operating costs (7,871) (8,142) (16,616)
Credits/(charges) related to legacy long-term
incentive schemes 3 86 (162) 1,285
Fair value gains/(losses) 4 357 (135) 615
Investment income 101 73 228
Change in third party interests in consolidated
funds 5 (48) (115) (101)
----------- ----------- -------------
Profit before taxation 2,059 1,941 5,137
Taxation 6 (508) (66) (1,504)
----------- ----------- -------------
Profit after taxation 1,551 1,875 3,633
----------- ----------- -------------
Basic earnings per share 7 1.35 p 1.62 p 3.16 p
----------- ----------- -------------
Diluted earnings per share 7 1.35 p 1.61 p 3.13 p
----------- ----------- -------------
Condensed consolidated statement of comprehensive income
For the Six Months Ended 31 March 2016
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2016 2015 2015
GBP'000 GBP'000 GBP'000
Profit for the period 1,551 1,875 3,633
Change in value of cash flow hedges (132) 41 (171)
Tax on change in value of cash flow hedges 26 (4) 38
Exchange differences on translation of foreign
operations 13 365 (35)
Third party interests' share of exchange - (61) -
differences on translation of foreign operations
----------- ----------- -------------
Total other comprehensive income (93) 341 (168)
Total comprehensive income for the period
attributable to equity holders of the parent 1,458 2,216 3,465
----------- ----------- -------------
All profit for the period is derived from
continuing operations.
Impax Asset Management Group plc
Condensed Consolidated Statement of Financial Position
As at 31 March 2016
Note As at As at As at
31 March 31 March 30 September
2016 2015 2015
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 9 1,681 1,665 1,681
Intangible assets 55 55 73
Property, plant and equipment 145 180 185
Investments 16 15 16
1,897 1,915 1,955
---------------------------------------- ----- --------- --------- -------------
Current assets
Trade and other receivables 5,314 6,582 4,754
Derivative asset - 152 49
Investments 10 10,837 11,774 7,419
Margin account 254 307 177
Cash invested in money market
funds and long term deposit accounts 10,424 10,623 17,153
Cash and cash equivalents 11 2,820 1,826 2,364
29,649 31,264 31,916
---------------------------------------- ----- --------- --------- -------------
TOTAL ASSETS 31,546 33,179 33,871
----------------------------------------- ----- --------- --------- -------------
EQUITY AND LIABILITIES
Equity
Ordinary shares 1,277 1,277 1,277
Share premium 4,093 4,093 4,093
Exchange translation reserve (228) 98 (241)
Hedging reserve (67) 209 39
Retained earnings 19,463 19,494 20,759
TOTAL EQUITY 24,538 25,171 25,927
----------------------------------------- ----- --------- --------- -------------
Current liabilities
Trade and other payables 3,079 5,343 4,987
Third party interests in consolidated funds 697 849 144
Derivative liability 105 - 74
Current tax liability 482 34 305
4,363 6,226 5,510
---------------------------------------- ----- --------- --------- -------------
Non-current liabilities
Accruals 155 225 197
Deferred tax liability 2,490 1,557 2,237
---------------------------------------- ----- --------- --------- -------------
Total non-current liabilities 2,645 1,782 2,434
TOTAL LIABILITIES 7,008 8,008 7,944
----------------------------------------- ----- --------- --------- -------------
TOTAL EQUITY AND LIABILITIES 31,546 33,179 33,871
----------------------------------------- ----- --------- --------- -------------
Impax Asset Management Group plc
Condensed Consolidated Statement of Changes in Equity
For the Six Months Ended 31 March 2016
Share capital Share premium Exchange Hedging Retained Total
translation reserve earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2014 1,277 4,093 (206) 172 19,523 24,859
Transactions with owners
Dividends paid - - - - (1,231) ( 1,231)
Acquisition of own
shares - - - - (864) ( 864)
Long-term incentive
scheme charge - - - - 191 191
-------------- -------------- ------------- --------- ---------- ---------
- - - - ( 1,904) ( 1,904)
Profit for the period - - - - 1,875 1,875
Other comprehensive
income
Cash flow hedge - - - 41 - 41
Tax on cashflow hedge - - - (4) - (4)
Exchange differences
on translation of foreign
operations - - 365 - - 365
Third party's share
of exchange differences
on translation of foreign
operations - - (61) - - (61)
-------------- -------------- ------------- --------- ---------- ---------
- - 304 37 - 341
-------------- -------------- ------------- --------- ---------- ---------
As at 31 March 2015 1,277 4,093 98 209 19,494 25,171
Transactions with owners
Dividends paid - - - - (445) (445)
Acquisition of own
shares - - - - (294) (294)
Long-term incentive
scheme charge - - - - 246 246
-------------- -------------- ------------- --------- ---------- ---------
- - - - (493) (493)
Profit for the period - - - - 1,758 1,758
Other comprehensive
income
Cash flow hedge - - - (212) - (212)
Tax on cashflow hedge - - - 42 - 42
Exchange differences
on translation of foreign
operations - - (400) - - (400)
Third party's share
of exchange differences
on translation of foreign
operations - - 61 - - 61
-------------- -------------- ------------- --------- ---------- ---------
- - (339) (170) - (570)
-------------- -------------- ------------- --------- ---------- ---------
As at 30 September
2015 1,277 4,093 (241) 39 20,759 25,927
Transactions with owners
Dividends paid - - - - (1,905) ( 1,905)
Acquisition of own
shares - - - - (1,188) ( 1,188)
Award of shares on
option exercises - - - - 3 3
Long-term incentive
scheme charge - - - - 243 243
-------------- -------------- ------------- --------- ---------- ---------
- - - - ( 2,847) ( 2,847)
Profit for the period - - - - 1,551 1,551
Other comprehensive
income
Cash flow hedge - - - (132) - (132)
Tax on cashflow hedge - - - 26 - 26
Exchange differences
on translation of foreign
operations - - 13 - - 13
-------------- -------------- ------------- --------- ---------- ---------
- - 13 ( 106) - (93)
-------------- -------------- ------------- --------- ---------- ---------
As at 31 March 2016 1,277 4,093 ( 228) ( 67) 19,463 24,538
-------------- -------------- ------------- --------- ---------- ---------
Impax Asset Management Group plc
Condensed Consolidated Statement of Cash
Flows
For the Six Months Ended 31 March
2016
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
-------------------------------------------- ----- ----------- ----------- -------------
Cashflows from operating activities
Profit before taxation 2,059 1,941 5,137
Adjustments for:
Investment income (101) (73) (228)
Depreciation and amortisation 110 163 273
Fair value gains/(losses) (357) 135 (615)
Share-based payment charges 243 191 437
(Credits)/charges related to legacy long-term
incentive schemes (86) 162 (1,285)
Change in third party interests in consolidated
funds 48 115 101
--------------------------------------------------- ----------- ----------- -------------
Operating cash flows before movement
in working capital 1,916 2,634 3,820
(Increase) in receivables (357) (2,211) (1,850)
(Increase)/decrease in margin account (78) (17) 117
(Decrease) in payables (1,863) (1,512) (280)
-------------------------------------------- ----- ----------- ----------- -------------
Cash generated from operations (382) (1,106) 1,807
Corporation tax paid (243) (42) (570)
-------------------------------------------- ----- ----------- ----------- -------------
Net cash (used by)/generated from operating
activities (625) (1,148) 1,237
Investing activities:
Investment income received 101 73 228
Settlement of investment related
hedges (714) (931) (359)
Net redemptions made to Impax by unconsolidated
investment funds 1,089 1,221 2,469
Net investments made by/(investment disposals
made by) consolidated funds (3,487) (1,412) 2,749
Decrease/(Increase) in cash held by money
market funds and long-term deposit accounts 6,729 (8) (6,538)
Acquisition of property plant and
equipment and intangible assets (52) (45) (156)
-------------------------------------------- ----- ----------- ----------- -------------
Net cash generated from/(used by)
investment activities 3,666 (1,102) (1,607)
Financing activities:
Dividends paid 8 (1,905) (1,231) (1,676)
Acquisition of own shares (1,188) (864) (1,158)
Cash received on exercise of Impax
share options 3 - -
Investments by/(redemptions made by)
third parties into/from consolidated
funds 505 (466) (1,067)
--------------------------------------------------- ----------- ----------- -------------
Net cash used by financing activities (2,585) (2,561) (3,901)
Net increase/(decrease) in cash and cash
equivalents 456 (4,811) (4,271)
Cash and cash equivalents at the beginning
of the period 2,364 6,634 6,634
Effect of foreign exchange rate
changes - 3 1
-------------------------------------------- ----- ----------- ----------- -------------
Cash and cash equivalents at the
end of the period 11 2,820 1,826 2,364
-------------------------------------------- ----- ----------- ----------- -------------
Notes to the Condensed Consolidated Interim Financial Statements
For the Six Months Ended 31 March 2016
1 Basis of preparation
This interim report is unaudited and does not constitute statutory
accounts within the meaning of Section 435 of the Companies Act
2006. These condensed consolidated interim financial statements
have been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the EU and the AIM rules. They do not
include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 30 September
2015.
The comparative figures for the financial year ended 30 September
2015 are not the Company's statutory accounts for that financial
year. Those accounts, prepared in accordance with IFRSs as adopted
by the EU, have been reported on by the Company's auditors and
delivered to Companies House. The report of the auditors was (i)
unqualified, (ii) did not include a reference to matters to which
the auditors drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006. Copies of these accounts
are available upon request from the Company's registered office
at Norfolk House, 31 St James's Square, London, SW1Y 4JR or at
the Company's website: www.impaxam.com.
The Group has considerable financial resources and a broad range
of products. As a consequence the Directors believe the Group is
well placed to manage its business risks in the context of the
current economic outlook. The Directors therefore have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and have continued
to adopt the going concern basis in preparing these interim financial
statements.
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements for
the year ended 30 September 2015.
2 Estimates
The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements,
the significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were: i) judgements and estimates made in the valuation of unlisted
current asset investments (see note 10); ii) determining whether
managed funds should be consolidated; iii) determining the size
of the charge for National Insurance Contributions payable on long-term
incentive schemes and iv) determining the value of deferred tax
assets.
3 Credits/(charges) related to legacy long-term incentive schemes
Six months Six months Year ended
ended 31 March ended 31 March 30 September
2016 2015 2015
GBP'000 GBP'000 GBP'000
EBT 2004 taxation - (93) 1,360
Advisory fees for EBT settlement - - (90)
LTIP NIC credit/(charge) 44 (51) 5
LTIP Additional payments
credit/(charge) 42 (18) 10
86 (162) 1,285
---------------- ---------------- --------------
(NIC = Employers National Insurance
Charge)
Long term incentive plan ("LTIP")
NIC Charge
The Group made awards of options over the Group's shares under
the LTIP plan in 2011. These awards vested in 2012 but 4,484,500
remain outstanding at 31 March 2016. The Group pays Employers NIC
when individuals exercise their options and accordingly accrues
for the estimated amount that would be payable on exercise using
the year end share price. The amount accrued therefore varies from
period to period in line with the Group's share price with any
adjustment recorded through the income statement.
LTIP Additional payments
Individuals receiving LTIP options are eligible for a retention
payment payable after the end of the financial year in which each
employee exercises his or her LTIP Options. The payment will be
equal to the corporation tax benefit realised by the Group on the
exercise of the LTIP options minus the amount of the NIC suffered
by the Group on the exercise of the LTIP options. The amount payable
will fluctuate inline with the Impax share price, such fluctuations
are recorded in the current period income statement.
EBT 2004 taxation
The Impax Group Employee Benefit Trust 2004 ("EBT 2004") holds
Impax shares and other assets in sub-funds for the benefit of certain
of the Group's past and current employees. The Impax shares were
awarded under the Group's Employee Incentive Arrangement Schemes
in 2011 and prior years. Taxation of these schemes had been subject
to uncertainty but in July 2015 the Group reached agreement with
HMRC whereby it made a payment of GBP715,000 to HMRC in full settlement
of income tax, National Insurance and corporation tax credits considered
payable/due in respect of the awards. The EBT 2004 has agreed to
pay the Company GBP894,000 in respect of this settlement. The credit
of GBP1,360,000 is made up of the release of the amounts previously
accrued for Employers National Insurance, payment of the GBP715,000
and the re-imbursement of the GBP894,000.
4 Fair value gains/losses
Fair value gains/(losses) include those arising on revaluation
of listed and unlisted investments held by the Group including
those held by the Group's consolidated funds (see Note 10) and
any gains or losses arising on related hedge instruments held by
the Group.
5 Change in third party interest in consolidated funds
This charge removes the fair value gains or losses, other operating
costs and investment income recorded in the Group's consolidated
funds (see Note 10) which are attributable to third party investors
in the funds.
6 Taxation
The tax rate for the period is higher than the standard rate of
corporation tax in the UK for the period (20%). The differences
are explained below:
Six months Six months Year ended
ended 31 ended 31 30 September
March 2016 March 2015 2015
GBP'000 GBP'000 GBP'000
Profit before tax 2,059 1,941 5,137
Tax charge at 20%,20.5%,20.5% 412 398 1,054
Effects of:
Non-deductible expenses and charges 9 14 169
Decrease/(increases) in value of
deductions re share awards from share
price decreases/increases 133 (206) -
Exchange differences - (137) -
Adjustment in respect of prior years - - 255
Change in UK tax rates (66) (9) (22)
Effect of higher tax rates in foreign
jurisdictions 20 6 48
Total income tax expense 508 66 1,504
-------------------------------------------- ---------------- ------------ --------------
7 Earnings per share
Earnings Earnings
for the period Shares per share
GBP'000 '000
Six months ended 31 March
2016
Basic 1,517 112,603 1.35p
-------------------------------------------- ---------------- ------------ --------------
Diluted 1,551 114,266 1.35p
-------------------------------------------- ---------------- ------------ --------------
Six months ended 31 March 2015
Basic 1,875 115,738 1.62p
-------------------------------------------- ---------------- ------------ --------------
Diluted 1,875 116,538 1.61p
-------------------------------------------- ---------------- ------------ --------------
Year ended 30 September
2015
--------------
Basic 3,633 115,133 3.16p
-------------------------------------------- ---------------- ------------ --------------
Diluted 3,633 115,909 3.13p
-------------------------------------------- ---------------- ------------ --------------
Earnings are reduced by GBP34,000 for the six months ending 31st
March 2016 for basic earnings per share to reflect the profit attributable
to holders of restricted shares, which are treated as contingently
returnable shares. This adjustment is not made for diluted earnings
per share but instead the dilutive restricted shares are included
in the number of shares used for the dilutive calculation. Where
the resulting calculation for diluted earnings per share is higher
than the basic earnings per share the basic number is used.
The weighted average number of shares is calculated as shown in
the table below.
Six months Six months Year ended
ended 31 ended 31 30 September
March 2016 March 2015 2015
'000 '000 '000
Issued share capital 127,749 127,749 127,749
Less own shares held (15,146) (12,011) (12,616)
------------------------------------------- ------------ ------------ --------------
Weighted average number of ordinary
shares used in the calculation of
basic EPS 112,603 115,738 115,133
------------------------------------------- ------------ ------------ --------------
Additional dilutive shares re share
options 7,690 10,990 10,090
Adjustment to reflect option exercise
proceeds and future service from
employees receiving awards (6,027) (10,190) (9,314)
-------------------------------------------
Weighted average number of ordinary
shares used in the calculation of
diluted earnings per share 114,266 116,538 115,909
------------------------------------------- ------------ ------------ --------------
The Basic earnings per shares for all periods shown includes vested
LTIP options on the basis that these have an inconsequential exercise
price (1p or 0p).
8 Dividends
On 3 March 2016, at the Company's Annual General Meeting, payment
of a 1.2 pence per share final dividend and payment of a 0.5 pence
special dividend was approved in respect of the year ended 30 September
2015 (2014: 1.1p per share). Combined with an interim payment of
0.4 pence this gave total dividends for the year ended 30 September
2015 of 2.1 pence. The Trustee of the Impax Employee Benefit Trusts
waived the Trusts' rights to part of this dividend, leading to
a total dividend payment of GBP1,905,000. This was paid on 11 March
2016.
The Board has declared an interim dividend for the period of 0.5
pence per ordinary share (2015: 0.4 pence). This dividend will
be paid on 23 June to ordinary shareholders on the register at
close of business on 27 May 2016.
9 Goodwill
Cost GBP'000
At 1 October 2014 and 31 March
2015 1,665
Addition 16
At 30 September 2015 and 31
March 2016 1,681
-------------------------------------------------------------------- ------------------
Goodwill arose on the acquisition of Impax Capital Limited on
18 June 2001 and on the acquisition of a property fund business
from Climate Change Capital in July 2014. Adjustments were made
to the goodwill in respect of the acquisition of the property
fund business in 2015.
The Group tests goodwill for impairment annually or more frequently
if there are indications that goodwill may be impaired.
10 Current asset investments
Unlisted investments Listed investments Total
GBP'000 GBP'000 GBP'000
At 1 October
2014 5,192 6,448 11,640
Additions 39 1,935 1,974
Fair value movements 125 720 845
Repayments/disposals (2,534) (524) (3,058)
Foreign exchange - 372 372
At 31 March 2015 2,822 8,952 11,774
---------------------------- ---- --------------------- ------------------- --------
Additions 85 3,157 3,242
Fair value movements 481 (511) (30)
Repayments/disposals (59) (7,317) (7,376)
Foreign exchange - (191) (191)
At 30 September
2015 3,329 4,090 7,419
---------------------------- ---- --------------------- ------------------- --------
Additions 91 5,164 5,255
Fair value movements 174 845 1,019
Repayments/disposals (1,180) (1,676) (2,856)
At 31 March 2016 2,414 8,423 10,837
---------------------------- ---- --------------------- ------------------- --------
Listed investments
Impax Food and Agriculture
Fund ("IFAF")
On 1 December 2012 the Group launched the IFAF and invested,
from its own resources GBP2,000,000 into the fund. The IFAF
invests in listed equities using the Group's Food and Agriculture
Strategy. The Group's investment represented more than 50% of
the IFAF's Net Asset Value ("NAV") from the date of launch to
31 March 2016 and has been consolidated throughout this period
with its underlying investments included in listed investments
in the table above.
Impax Global Equity Opportunities
Fund ("IGEO")
On 23 January 2015 the Group launched the IGEO and invested,
from its own resources GBP2,000,000 into the fund. IGEO invests
in listed equities using the Group's Global Equities Strategy.
The Group's investment represented more than 50% of IGEO's NAV
from the date of launch to 31 March 2016 and has been consolidated
throughout this period with its underlying investments included
in listed investments in the table above.
Impax Environmental Leaders
Fund ("IEL")
On 12 January 2016 the Group launched the IEL and invested,
from its own resources GBP3,000,000 into the fund. IEL invests
in listed equities using the Group's Leaders Strategy. The Group's
investment represented more than 50% of IEL's NAV from the date
of launch to 31 March 2016 and has been consolidated throughout
this period with its underlying investments included in listed
investments in the table above.
The investments held by the funds described above are revalued
to market value using quoted market prices that are available
at the date of these financial statements. The quoted market
price is the current bid price.
Unlisted investments
The Group has a 3.76 per cent partnership share of Impax New
Energy Investors LP, a private equity partnership managed by
the Group. At the period end the carrying value of the investment
was GBP560,000. The carrying value represents the Board's assessment
of the investment's fair value which was determined using a
discounted cashflow approach. 100 per cent of the partnership's
valuation is represented by investments in Spanish solar parks.
These investments have been adversely impacted by the significant
retroactive reforms of the Spanish energy markets and covenants
for loans held by the investment have been breached. Negotiations
with the relevant banks to restructure the loans are ongoing
and a claim for compensation from the Spanish government is
currently being considered by the European Court of Arbitration.
In the event that the banks take possession of the assets and
the claims for compensation are unsuccessful the investment
would be written down in full. During the period the Group received
a distribution of EUR118,000 from this investment following
the successful sale of some of its investments.
The Group also has a commitment of EUR3.3million to Impax New
Energy Investors II LP, a private equity partnership managed
by the Group which was established on 22 March 2010. At the
period end the Group had invested a total of EUR2.2m (GBP1.7m)
of this commitment. The Group's commitment of EUR3.3million
is equal to 1.14 per cent of the total commitments made to the
fund. The investment is included at the Board's assessment of
its fair value which is determined by valuing the underlying
investments. The principal valuation techniques used are discounted
cashflow, price of recent investment and market bids. During
the period the Group received a distribution of EUR1,063,000
from this investment following the successful sale of some of
its investments.
11 Cash and cash equivalents
In order to mitigate bank default risk and to access favourable
interest rates the Group invests part of its surplus cash in
money market funds and long-term deposit accounts. Amounts held
in money market funds and long-term deposit accounts are as
shown below. The Group considers the total of its cash and cash
equivalents held by operating entities of the Group and cash
invested in money market funds and in long-term deposit accounts
to be its cash reserves.
30 September
31 March 2016 31 March 2015 2015
GBP'000 GBP'000 GBP'000
-------------------------------- -------------- -------------- -------------
Cash and cash equivalents 2,820 1,826 2,364
Cash held in money market
funds and long-term deposit
accounts 10,424 10,623 17,153
Less cash and cash equivalents
held by consolidated funds (204) (215) (193)
----------------------------------- -------------- -------------- -------------
Total cash reserves 13,040 12,234 19,324
--------------------------------- ---- -------------- -------------- -------------
12 Share capital and Own shares
30 September
31 March 2016 31 March 2015 2015
Issued and fully paid ordinary
shares of 1p each
Number 127,749,098 127,749,098 127,749,098
GBP000s 1,277 1,277 1,277
----------------------------------- -------------- -------------- -------------
30 September
31 March 2016 31 March 2015 2015
-------------------------------- -------------- -------------- -------------
Own shares
Number 21,023,120 17,702,620 18,292,620
GBP000s 7,387 5,958 6,251
----------------------------------- -------------- -------------- -------------
Own shares represents a portion of the shares held in the EBT
2012 and EBT 2004. 2,883,500 shares were acquired in the six months
ended 31 March 2016, (period ended 31 March 2015: nil). 153,000
shares were awarded to option holders on exercise of options (period
ended 31 March 2015: 145,455). As at 31 March 2016 the Company
had a total of 18,369,500 options outstanding of which 11,809,500
were exercisable. As at 31 March 2016 employees also held 4,890,000
Restricted shares over which the restrictions lapse starting from
January 2018 through to January 2021. These shares are held in
trust in the EBT 2012 and are included in own shares above.
13 Related party transactions
Impax New Energy Investors LP, Impax New Energy Investors II LP,
Impax New Energy Investors II-B LP, Impax New Energy Investors
SCA, Impax Global Resource Optimization Fund LP, Impax Carried
Interest Partners LP, Impax Carried Interest Partners II LP, Impax
Climate Property Fund LP and entities controlled by them are related
parties of the Group by virtue of subsidiaries being the General
Partners to these funds. BNP Paribas Investment Partners is a
related party of the Group by virtue of owning a 24.99% equity
holding in the Group. Other funds managed by subsidiaries of the
Company are also related parties by virtue of their management
contracts.
The aggregate related party transactions during the period, and
holdings or balances as at the period end, are as shown below.
All balances were unsecured. Unless stated otherwise balances
outstanding were GBPnil.
Six months Six months Year ended
ended 31 March ended 31 March 30 September
2016 2015 2015
GBP'000 GBP'000 GBP'000
Statement of comprehensive
income
Revenue 9,378 9,939 19,293
30 September
31 March 2016 31 March 2015 2015
GBP'000 GBP'000 GBP'000
Statement of financial
position
Non-current asset investments 16 15 17
Current asset investments 2,005 2,822 2,941
Trade and other receivables 4,595 5,754 3,258
14 Group risks
The Group's principal risks remain as detailed within the Directors'
report of the Group's 2015 Annual Report and Accounts and are categorised
as financial, investment, and operational.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFSFUWFMSEDI
(END) Dow Jones Newswires
May 18, 2016 02:00 ET (06:00 GMT)
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