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POLR Polar Capital Holdings Plc

455.50
3.00 (0.66%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Polar Capital Holdings Plc LSE:POLR London Ordinary Share GB00B1GCLT25 ORD 2.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  3.00 0.66% 455.50 452.00 455.50 456.00 448.00 453.00 301,489 16:35:02
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Investment Advice 182.88M 35.61M 0.3533 12.81 456.08M

Polar Capital Holdings PLC Unaudited Interim Results (8926Y)

11/12/2017 7:00am

UK Regulatory


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TIDMPOLR

RNS Number : 8926Y

Polar Capital Holdings PLC

11 December 2017

Polar Capital Holdings plc ("Polar Capital" or "the Group")

Unaudited interim results for six months ended 30 September 2017

Summary of Results

Financial

-- Assets under Management ("AUM") at 30 September 2017 were GBP10.6bn (31 March 2017: GBP9.3bn) - net fund inflows of GBP820m together with market uplift and fund performance of GBP510m

   --     Core operating profit , excluding performance fees, GBP12.0m (30 September 2016*: GBP8.7m) 
   --     Operating profit before share-based payments GBP15.7m (30 September 2016*: GBP10.6m) 
   --     Pre-tax profit GBP11.8m (30 September 2016*: GBP8.5m) 

-- Basic earnings per share 10.19p (30 September 2016*: 6.68p) and adjusted diluted earnings per share 11.78p (30 September 2016*: 8.15p)

   --     Interim dividend per ordinary share of 6.0p declared (2016: 5.5p) to be paid in January 2018 

-- Shareholders' funds GBP68.8m (30 September 2016*: GBP65.5m) including cash and investments of GBP75.7m (30 September 2016*: GBP73.8m)

The non-GAAP alternative performance measures shown here are reconciled to IFRS measures in the Chief Executive's Statement and Note 7.

   *     Comparative amounts restated as described in Note 2. 

Corporate

-- Since the end of our interim period the Automation and Artificial Intelligence Fund was launched in October 2017 and it had assets of GBP156m at 30 November 2017.

Current Trading

   --    AUM at 30 November 2017 were GBP11.4bn 

Gavin Rochussen, Chief Executive Officer, commented:

"Fund performance has improved and it is pleasing to report that, in the nine months to 30 September 2017, performance across our fund range has been largely ahead of respective fund benchmarks.

While the ethos and philosophy of Polar will not change, there will be a strategic focus on diversification of fund strategies, client segments and client geography. We continue to search for top performing investment talent to manage funds that will complement the existing strategies.

The outlook for the Company for the remainder of the financial year is encouraging with continued momentum in flows and fund performance in the months following the reporting period."

 
 For further information please contact: 
 Polar Capital +44 (0)20 7227 2700 
  Gavin Rochussen (CEO) 
  John Mansell (COO) 
 
 
  Canaccord Genuity - Nomad and Joint Broker +44 
  (0)20 7523 8000 
  Simon Bridges (QE) 
  Andrew Buchanan 
  Margarita Mitropoulou 
 
  Peel Hunt - Joint Broker +44 (0) 20 7418 8893 
  Guy Wiehahn 
 
  Camarco +44 (0)20 3757 4984 
  Ed Gascoigne-Pees 
  Monique Perks 
------------------------------------------------ 
 

Assets Under Management (AUM)

AUM split by strategy

 
                  30 September                      31 March 
                          2017                          2017 
-------------  ---------------  ------------  -------------- 
                 GBPbn       %                 GBPbn       % 
 Long only        9.59   90.5%   Long only      8.44   91.1% 
 Alternative      1.01    9.5%   Alternative    0.83    8.9% 
-------------  -------  ------  ------------  ------  ------ 
 Total AUM       10.60           Total AUM      9.27 
-------------  -------  ------  ------------  ------  ------ 
 

AUM split by Business Unit

(in chronological order)

 
                             30 September                        31 March 
                                     2017                            2017 
------------------------  ---------------  ---------------  ------------- 
                             GBPbn      %                    GBPbn      % 
------------------------  --------  -----  ---------------  ------  ----- 
 Technology                   2.61   24.6   Technology        2.19   23.6 
 Japan                        1.00    9.4   Japan             0.97   10.4 
                                            European 
 European Long/Short          0.22    2.1    Long/Short       0.27    3.0 
 Healthcare                   1.62   15.3   Healthcare        1.43   15.4 
 Financials                   1.53   14.5   Financials        1.32   14.2 
                                            Emerging 
 Emerging Markets             0.39    3.7    Markets          0.39    4.2 
 Convertibles                 0.45    4.2   Convertibles      0.43    4.7 
 North America                1.82   17.2   North America     1.74   18.9 
 Global Alpha                 0.11    1.0   Global Alpha      0.11    1.1 
 UK Absolute                                UK Absolute 
  Equity                      0.34    3.2    Equity           0.13    1.4 
                                            European 
 European Income              0.18    1.7    Income           0.12    1.3 
                                            UK Value 
 UK Value Opportunities       0.33    3.1    Opportunities    0.17    1.8 
------------------------  --------  -----  ---------------  ------  ----- 
 Total AUM                   10.60          Total AUM         9.27 
------------------------  --------  -----  ---------------  ------  ----- 
 

Chief Executive's Statement

Notwithstanding a period of geo-political tension and other destabilising world events, markets all advanced and were, at period end, testing new all-time highs, equity market confidence remained supportive and volatility remained low. The broad-based global economic growth continued during the period with the US ISM Manufacturing Index reaching a 13-year high and September Euro Area Manufacturing PMI the highest in six years.

Financial markets have been stable with the US equity market's 30-day volatility touching a five- decade low. This low volatility is a function of a largely supportive global economic environment. The extent of the performance of markets is demonstrated by significant rises in all major indices for the nine months to 30 September 2017. The FTSE All Share Index (GBP) was up 7.75%, the MSCI North America Index (USD) was up 13.76%, the MSCI All-Country World Index (USD) was up 17.25%, Topix (Yen) was up 12.45% and leading the indices in terms of gains were the MSCI Emerging Market Index (USD) with a 27.78% rise and the Dow Jones World Technology Index (USD) up 29% in the nine months to 30 September 2017.

Fund Performance

Fund performance and positive net inflow momentum began to improve in the second half of the last financial year and this trend has continued during the period under review. It is pleasing to report that in the nine months to 30 September 2017, 75% of AUM is ahead of respective benchmarks, over 12 months 72% is ahead of benchmarks and, since inception 90% of AUM is ahead of benchmarks.

At 30 September 2017 56% of Polar's UCITS funds AUM is ranked in the top quartile against peer group over 12 months, 78% is top quartile over three years and 96% is ranked top quartile against respective peer groups since inception.

Net performance fees accrued in the funds as at 30 September 2017 amounted to GBP9.6m and, although performance fees do not crystallise until 31 December 2017, reflects a marked increase on the comparable net performance fee of GBP1.2m reported in the financial year to 31 March 2017.

AUM and Fund Flows

In the six months to 30 September 2017, AUM increased by GBP1.3bn from GBP9.3bn to GBP10.6bn, an increase of 14%. Net inflows in the six months of GBP820m together with GBP510m of market uplift and fund performance made up the increase in AUM and this compares to GBP542m of net inflows in the immediately preceding six-month period.

The total net inflows during the period are after experiencing net outflows on four equity strategies, Japan - GBP82m (GBP352m in the immediately preceding six-month period), European Forager Fund - GBP39m, Financial Opportunities Fund - GBP15m and Emerging Markets strategies - GBP9m. There has been renewed investor interest in Japanese equities and, together with improved fund performance, we anticipate the rate of outflow from our Japanese equity strategies to decline further.

Net inflows during the period have been spread across a broad range of fund strategies. Despite a backdrop of negative industry flows into UK equity funds post the Brexit referendum, the two Polar UK funds, UK Absolute Return and UK Value Opportunities, have performed well and have attracted net inflows of GBP173m and GBP143m respectively, with the UK Absolute Return Fund also claiming the Fund of the Year award at the Eurohedge Absolute UCITS Awards 2017. The Technology team benefitted from GBP170m of net inflows, Global Insurance received GBP109m and the Healthcare team recorded net inflows across the fund strategies it manages of GBP164m. The Income Opportunities Fund received GBP72m with modest inflows across the remainder of the fund strategies making up the balance.

Recent Fund Launches

The UK Value Opportunities Fund was launched on 31 January 2017, is top quartile since its inception and had total assets of GBP330m as at 30 September 2017. This marks one of Polar's more successful launches. During the period under review our Healthcare Investment Trust was successfully restructured resulting in a fund with AUM of GBP298m. The Automation and Artificial Intelligence Fund, managed by the Technology team, was successfully launched in October 2017.

Results

Profit before tax increased by 38% to GBP11.8m for the first six months of this financial year compared to the same period last year. Adjusted diluted earnings per share increased by 45% to 11.78p. The increase in profit was primarily due to increased revenue on greater average AUM during the period of GBP9.9bn compared to GBP7.4bn in the comparable prior year period - an increase of 34%.

The results do not contain any income from performance fees as such revenues arrive in the second half of the financial year.

The Board has declared an interim dividend of 6p to be paid in January 2018.

 
                                                                Restated* 
                                               Six months      Six months 
                                                       to              to 
                                             30 September    30 September 
                                                     2017            2016 
                                          ---------------  -------------- 
     Core operating profit (including 
      cost of LTIP and                           GBP12.0m         GBP8.7m 
      Group share option awards) 
 Other income                                     GBP2.4m         GBP1.4m 
                                          ---------------  -------------- 
     Profit before share-based payments 
      on preference                              GBP14.4m        GBP10.1m 
      shares and tax 
 Share-based payments on preference             GBP(2.6)m       GBP(1.6)m 
  shares 
                                          ---------------  -------------- 
 Profit before tax                               GBP11.8m         GBP8.5m 
                                          ---------------  -------------- 
 Adjusted diluted EPS (non-GAAP 
  measure. See Note 7)                             11.78p           8.15p 
                                          ---------------  -------------- 
 

* Comparative amounts have been restated as described in Note 2.

Cost of LTIP and Group share awards to 30 September 2017: GBP1.3m (30 September 2016: GBP0.5m)

Regulatory changes

As the Group looks out into 2018 and beyond it has reflected on its policy in respect of MiFID II and the cost of research. Polar has committed to its funds that it will bear the cost of all core waterfront written research consumed by its managers. For certain strategies where the consumption of specialised research is regarded as critical to the investment process, Polar is in late stage discussions with these funds to pay or contribute to such costs.

Strategic Review

As part of a strategic review following my appointment, the decision has been taken to close the Global Alpha strategy, the European Conviction Fund and Emerging Markets Growth Fund. All these closures will take place after the end of the reporting period and will not have a material impact on AUM.

While the ethos and philosophy of Polar will not change, there will be a strategic focus on diversification of fund strategies, client segments and client geography. We continue to search for top performing investment talent to manage funds that will complement the existing strategies. Capacity management remains a key means of enhancing and preserving fund performance.

Outlook

While there are constant questions about the impact of fiscal tightening in the US and the degree and timing of any rate rise, ECB tapering, Brexit outcome, US tax reform and geo-political tensions in Asia and the Middle East, our fundamental research driven highly active strategies are performing well for investors. The outlook for the Company for the remainder of the financial year is encouraging with continued momentum in flows and fund performance in the months following the reporting period.

Gavin Rochussen

Chief Executive 10 December 2017

Interim Consolidated Statement of Profit or Loss

For the six months to 30 September 2017

 
                                                               Restated* 
                                           (Unaudited)       (Unaudited) 
                                            Six months        Six months 
                                       to 30 September   to 30 September 
                                                  2017              2016 
                                               GBP'000           GBP'000 
------------------------------------  ----------------  ---------------- 
Revenue                                         44,439            33,596 
Other income                                     2,402             1,477 
------------------------------------  ----------------  ---------------- 
Gross income                                    46,841            35,073 
Commissions and fees payable                   (3,086)           (2,999) 
------------------------------------  ----------------  ---------------- 
Net income                                      43,755            32,074 
Operating costs before share-based 
 payments                                     (28,039)          (21,483) 
------------------------------------  ----------------  ---------------- 
Operating profit before share-based 
 payments and tax                               15,716            10,591 
Share-based payments                           (3,962)           (2,107) 
------------------------------------  ----------------  ---------------- 
Profit for the period before 
 tax                                            11,754             8,484 
Taxation                                       (2,607)           (2,460) 
------------------------------------  ----------------  ---------------- 
Profit for the period attributable 
 to ordinary shareholders                        9,147             6,024 
------------------------------------  ----------------  ---------------- 
Earnings per share 
 Basic                                          10.19p             6.68p 
Diluted                                          9.64p             6.40p 
Adjusted basic (Non-GAAP measure)               12.46p             8.51p 
Adjusted diluted (Non-GAAP measure)             11.78p             8.15p 
------------------------------------  ----------------  ---------------- 
 

* Certain amounts shown here do not correspond to the 2016 interim financial statements and reflect adjustments as described in Note 2.

Interim Consolidated Statement of Other Comprehensive Income

For the six months to 30 September 2017

 
                                                                   Restated* 
                                               (Unaudited)       (Unaudited) 
                                                Six months        Six months 
                                           to 30 September   to 30 September 
                                                      2017              2016 
                                                   GBP'000           GBP'000 
----------------------------------------  ----------------  ---------------- 
Profit for the period attributable 
 to ordinary shareholders                            9,147             6,024 
Other comprehensive income - 
 items that may be reclassified 
 to income statement in subsequent 
 periods: 
    Net movement on the fair valuation 
     of cash flow hedges                             1,694             (729) 
    Deferred tax effect                              (322)               147 
----------------------------------------  ----------------  ---------------- 
                                                     1,372             (582) 
----------------------------------------  ----------------  ---------------- 
    Exchange differences on translation 
     of foreign operations                            (67)               682 
----------------------------------------  ----------------  ---------------- 
Other comprehensive income for 
 the period                                          1,305               100 
----------------------------------------  ----------------  ---------------- 
Total comprehensive income for 
 the period, net of tax, attributable 
 to ordinary shareholders                           10,452             6,124 
----------------------------------------  ----------------  ---------------- 
 

* Certain amounts shown here do not correspond to the 2016 interim financial statements and reflect adjustments as described in Note 2.

All of the items in the above statements are derived from continuing operations.

Interim Consolidated Balance Sheet

As at 30 September 2017

 
                                                   (Audited) 
                                      (Unaudited)   31 March 
                                     30 September 
                                             2017       2017 
                                          GBP'000    GBP'000 
----------------------------------  -------------  --------- 
Non-current assets 
Property and equipment                      2,192      2,402 
Deferred tax assets                         4,205      3,478 
----------------------------------  -------------  --------- 
Total non-current assets                    6,397      5,880 
----------------------------------  -------------  --------- 
Current assets 
Investment securities                      15,649     14,429 
Assets at fair value through 
 profit or loss                            10,225      9,623 
Other financial assets                        301          - 
Trade and other receivables                10,917     10,107 
Cash and cash equivalents                  49,887     58,539 
Total current assets                       86,979     92,698 
----------------------------------  -------------  --------- 
Total assets                               93,376     98,578 
----------------------------------  -------------  --------- 
Non-current liabilities 
Provisions and other liabilities            2,091      2,169 
Deferred tax liabilities                      946        539 
----------------------------------  -------------  --------- 
Total non-current liabilities               3,037      2,708 
----------------------------------  -------------  --------- 
Current liabilities 
Liabilities at fair value through 
 profit or loss                             2,583      2,170 
Other financial liabilities                     -      1,350 
Trade and other payables                   16,809     19,741 
Current tax liabilities                     2,136      1,869 
----------------------------------  -------------  --------- 
Total current liabilities                  21,528     25,130 
----------------------------------  -------------  --------- 
Total liabilities                          24,565     27,838 
----------------------------------  -------------  --------- 
Net assets                                 68,811     70,740 
----------------------------------  -------------  --------- 
Capital and reserves 
Issued share capital                        2,297      2,286 
Share premium                              18,676     18,631 
Investment in own shares                  (3,532)    (3,747) 
Capital and other reserves                 10,250      7,840 
Retained earnings                          41,120     45,730 
----------------------------------  -------------  --------- 
Total equity - attributable to 
 ordinary shareholders                     68,811     70,740 
----------------------------------  -------------  --------- 
 

Interim Consolidated Statement of Changes in Equity

For the six months to 30 September 2017

 
 
                          Issued 
                           share     Share      Investment    Capital      Other   Retained     Total 
                         capital   premium   in own shares   reserves   reserves   earnings    equity 
                         GBP'000   GBP'000         GBP'000    GBP'000    GBP'000    GBP'000   GBP'000 
---------------------  ---------  --------  --------------  ---------  ---------  ---------  -------- 
 
As at 1 April 
 2017 (audited)            2,286    18,631         (3,747)        695      7,145     45,730    70,740 
Profit for the 
 period                        -         -               -          -          -      9,147     9,147 
Other comprehensive 
 income                        -         -               -          -      1,305          -     1,305 
---------------------  ---------  --------  --------------  ---------  ---------  ---------  -------- 
Total comprehensive 
 income                        -         -               -          -      1,305      9,147    10,452 
Dividends paid 
 to shareholders               -         -               -          -          -   (17,469)  (17,469) 
Dividends paid 
 to third-party 
 interests                     -         -               -          -          -       (25)      (25) 
Issue of shares 
 against options              11        45               -          -          -       (10)        46 
Loss on sale of 
 EBT shares                    -         -             215          -          -      (215)         - 
Share-based payment            -         -               -          -          -      3,962     3,962 
Current tax in 
 respect of employee 
 share options                 -         -               -          -        306          -       306 
Deferred tax in 
 respect of employee 
 share options                 -         -               -          -        799          -       799 
---------------------  ---------  --------  --------------  ---------  ---------  ---------  -------- 
As at 30 September 
 2017 (unaudited)          2,297    18,676         (3,532)        695      9,555     41,120    68,811 
---------------------  ---------  --------  --------------  ---------  ---------  ---------  -------- 
 
 
As at 1 April 
 2016 (audited)           2,280  18,509  (879)  123  6,772    48,792    75,597 
Prior period adjustment 
 (Note2)                      -       -    132  572     25     (629)       100 
------------------------  -----  ------  -----  ---  -----  --------  -------- 
As at 1 April 
 2016 - restated*         2,280  18,509  (747)  695  6,797    48,163    75,697 
Profit for the 
 period                       -       -      -    -      -     6,024     6,024 
Other comprehensive 
 income                       -       -      -    -    100         -       100 
------------------------  -----  ------  -----  ---  -----  --------  -------- 
Total comprehensive 
 income                       -       -      -    -    100     6,024     6,124 
Dividends paid 
 to shareholders              -       -      -    -      -  (17,583)  (17,583) 
Dividends paid 
 to third-party 
 interests                    -       -      -    -      -      (18)      (18) 
Issue of shares 
 against options              3     148      -    -      -     (104)        47 
Share-based payment           -       -      -    -      -     2,107     2,107 
Current tax in 
 respect of employee 
 share options                -       -      -    -     45         -        45 
Deferred tax in 
 respect of employee 
 share options                -       -      -    -  (956)         -     (956) 
------------------------  -----  ------  -----  ---  -----  --------  -------- 
As at 30 September 
 2016 (unaudited) 
 - restated*              2,283  18,657  (747)  695  5,986    38,589    65,463 
------------------------  -----  ------  -----  ---  -----  --------  -------- 
 

* Certain amounts shown here do not correspond to the 2016 interim financial statements and reflect adjustments as described in Note 2.

Interim Consolidated Cash Flow Statement

For the six months to 30 September 2017

 
                                                                 Restated* 
                                             (Unaudited)       (Unaudited) 
                                              Six months        Six months 
                                         to 30 September   to 30 September 
                                                    2017              2016 
                                                 GBP'000           GBP'000 
--------------------------------------  ----------------  ---------------- 
Operating activities 
Cash generated/(used) from operations              9,397           (3,524) 
Tax paid                                         (1,851)           (1,447) 
--------------------------------------  ----------------  ---------------- 
Net cash flow from operating 
 activities                                        7,546           (4,971) 
--------------------------------------  ----------------  ---------------- 
Investing activities 
Interest received and similar 
 income                                               34                19 
Sale of investment securities                      1,417             4,629 
Purchase of investment securities                (2,089)           (7,045) 
Sale of assets at fair value 
 through profit or loss                            2,781             9,978 
Purchase of assets at fair value 
 through profit or loss                          (1,104)                 - 
Purchase of property and equipment                  (44)              (28) 
Net cash flow from investing 
 activities                                          995             7,553 
--------------------------------------  ----------------  ---------------- 
Financing activities 
Dividends paid to shareholders                  (17,469)          (17,583) 
Dividends paid to third-party 
 interests                                          (25)              (18) 
Issue of ordinary shares                              45                45 
Third-party subscriptions into 
 consolidated funds                                  308               815 
Third-party redemptions from 
 consolidated funds                                 (25)           (2,301) 
Net cash flow from financing 
 activities                                     (17,166)          (19,042) 
--------------------------------------  ----------------  ---------------- 
Net decrease in cash and cash 
 equivalents                                     (8,625)          (16,460) 
Cash and cash equivalents at 
 start of period                                  58,539            48,862 
Effect of exchange rate changes 
 on cash and cash equivalents                       (27)                 8 
--------------------------------------  ----------------  ---------------- 
Cash and cash equivalents at 
 end of period                                    49,887            32,410 
--------------------------------------  ----------------  ---------------- 
 

* Certain amounts shown here do not correspond to the 2016 interim financial statements and reflect adjustments as described in Note 2.

Notes to the Unaudited Interim Consolidated Financial Statements

For the six months to 30 September 2017

   1.    General Information, Basis of Preparation and Accounting Policies 

Polar Capital Holdings plc ("the Company") is a public limited Company registered in England and Wales.

The unaudited interim condensed consolidated financial statements to 30 September 2017 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 2017 which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those used in the preparation of the Group's annual financial statements for the year ended 31 March 2017.

   2.    Restatement of comparatives 

a) During the year ended 31 March 2017 the Group ceased to classify its seed capital investment in the European Income and International Alpha funds as held for sale as the criteria for such recognition were no longer met. The Group determined that it controlled the funds under IFRS 10 and they were deemed to be subsidiaries of the Group. As a result, the comparatives for the period ended 30 September 2016 have been amended retrospectively as though the funds had never qualified as held-for-sale, as required by IFRS 5, and as if the Group had consolidated the funds on a line by line basis from the date of initial investment.

b) During the year ended 31 March 2017 the Group determined that it controlled the Group Employee Benefit Trust (EBT) and it was deemed to be a subsidiary. As a result, the consolidated financial statements have been restated at 1 April 2016 to reflect cash held by the EBT of GBP105,000, other net liabilities of GBP3,000, expenses of GBP30,000 and a corresponding credit to reserves of GBP132,000.

c) The Company financial statements for the year ended 31 March 2017 were restated for intra-group recharges for share awards and accounted for as a return of capital contribution. Amounts paid in excess of the original contribution recorded by the Company are treated as a distribution. As part of this restatement, other reserves of GBP572,000 were transferred to retained earnings.

The restatements have been made to each of the affected financial statement line items for prior periods, as follows:

Impact on equity (increase/ (decrease) in equity):

 
                                  30 September    1 April 
                                          2016       2016 
                                       GBP'000    GBP'000 
--------------------------------  ------------  --------- 
  Investment securities                 13,488     10,065 
  Assets held for sale                (11,626)    (6,835) 
  Trade and other receivables               54         41 
  Cash                                     229        100 
  Financial liabilities at fair 
   value through profit or loss        (2,041)    (3,249) 
  Accruals                                (29)       (22) 
  Net impact on equity                      75        100 
--------------------------------  ------------  --------- 
 

Impact on consolidated statement of profit or loss (increase/ (decrease) in profit):

 
                                       30 September 
                                               2016 
                                            GBP'000 
-------------------------------------  ------------ 
  Revenue                                      (41) 
  Other income                                (591) 
  Operating costs before share-based 
   payments                                    (21) 
  Attributable to: 
   Equity holders of the parent               (653) 
  Non-controlling interests                       - 
-------------------------------------  ------------ 
 
 

Impact on consolidated statement of other comprehensive income (increase/ (decrease) in other comprehensive income):

 
                                        30 September 
                                                2016 
                                             GBP'000 
--------------------------------------  ------------ 
  Exchange differences on translation 
   of foreign operations                         652 
--------------------------------------  ------------ 
 

Impact on earnings per share (EPS) (increase/(decrease) in EPS):

 
                                            30 September 
                                                    2016 
                                                   pence 
------------------------------------------  ------------ 
  Basic EPS                                       (0.72) 
  Diluted EPS                                     (0.69) 
  Adjusted basic EPS (Non-GAAP measure)           (1.23) 
  Adjusted diluted EPS (Non-GAAP measure)         (1.18) 
------------------------------------------  ------------ 
 
   3.    Revenue 
 
                                                       Restated 
                                  (Unaudited)       (Unaudited) 
                                   Six months        Six months 
                              to 30 September   to 30 September 
                                         2017              2016 
                                      GBP'000           GBP'000 
---------------------------  ----------------  ---------------- 
Investment management fees             45,003            34,568 
Investment advisory fees                   61                42 
Loss on hedging                         (625)           (1,014) 
---------------------------  ----------------  ---------------- 
                                       44,439            33,596 
---------------------------  ----------------  ---------------- 
 
   4     Profit Before Tax 

a) Profit before tax is stated after charging the following costs:

 
                                      (Unaudited)       (Unaudited) 
                                       Six months        Six months 
                                  to 30 September   to 30 September 
                                             2017              2016 
                                          GBP'000           GBP'000 
-------------------------------  ----------------  ---------------- 
Staff costs                                20,630            15,075 
Depreciation                                  254               253 
Operating lease rentals - land 
 & buildings                                  646               654 
-------------------------------  ----------------  ---------------- 
 

b) Auditors' remuneration:

 
Audit of group financial statements   26  26 
Other fees 
     - local statutory audits of 
      subsidiaries                    20  20 
     - GIPS Review                    11  11 
     - internal controls review       25  25 
     - tax advisory services          10  17 
------------------------------------ 
 
   5.    Taxation 

The effective tax rate for the six months ended 30 September 2017 has reduced in comparison to the six months ended 30 September 2016 mainly due to a fall in the UK main corporation tax rate on 1 April 2017 from 20% to 19%, the impact of deferring staff remuneration and a greater deduction for share based payments. Under UK tax legislation the Group is only allowed a deduction for share based payment costs when options are exercised by employees. This deduction is based on the share price at the date the options are exercised. When compared to the comparative period, the higher group share price and a larger number of options exercised has resulted in a greater amount of current tax relief in the period to 30 September 2017.

   6.    Dividends 
 
                     (Unaudited)       (Unaudited) 
                      Six months        Six months 
                 to 30 September   to 30 September 
                            2017              2016 
                         GBP'000           GBP'000 
--------------  ----------------  ---------------- 
Dividend paid             17,469            17,583 
--------------  ----------------  ---------------- 
 
   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:

 
                                                            Restated 
                                       (Unaudited)       (Unaudited) 
                                        Six months        Six months 
                                   to 30 September   to 30 September 
                                              2017              2016 
                                           GBP'000           GBP'000 
Earnings 
Profit after tax for purpose 
 of basic and diluted EPS                    9,147             6,024 
Adjustments (post tax): 
Add back cost of share-based 
 payments on preference shares               2,630             1,653 
Less net amount of deferred 
 staff remuneration                          (598)                 - 
--------------------------------  ----------------  ---------------- 
Profit after tax for purpose 
 of adjusted basic and adjusted 
 diluted EPS                                11,179             7,677 
--------------------------------  ----------------  ---------------- 
 

Going forward the adjusted EPS figures will include an adjustment for deferred remuneration costs. The Group believes that aligning staff remuneration and profits generated in the same time period will allow users of the accounts to gain a better understanding of the Group's results and their comparability period on period.

 
                                        (Unaudited)       (Unaudited) 
                                         Six months        Six months 
                                    to 30 September   to 30 September 
                                               2017              2016 
                                             Number            Number 
                                          of shares         of shares 
---------------------------------  ----------------  ---------------- 
Weighted average number of 
 shares 
Weighted average number of 
 ordinary shares, excluding 
 own, shares for purposes of 
 basic and adjusted basic EPS            89,747,434        90,177,771 
Effect of dilutive potential 
 shares - share options                   5,139,759         4,002,900 
Weighted average number of 
 ordinary shares, for purpose 
 of diluted and adjusted diluted 
 EPS                                     94,887,193        94,180,671 
---------------------------------  ----------------  ---------------- 
 
 
                                               Restated 
                          (Unaudited)       (Unaudited) 
                           Six months        Six months 
                      to 30 September   to 30 September 
                                 2017              2016 
                                Pence             Pence 
-------------------  ----------------  ---------------- 
Earnings per share 
Basic                           10.19              6.68 
Diluted                          9.64              6.40 
Adjusted basic                  12.46              8.51 
Adjusted diluted                11.78              8.15 
-------------------  ----------------  ---------------- 
 
   8.    Notes to the Cash Flow Statement 

Reconciliation of profit before tax to cash generated from operations

 
                                                                    Restated 
                                               (Unaudited)       (Unaudited) 
                                                Six months        Six months 
                                           to 30 September   to 30 September 
                                                      2017              2016 
                                                   GBP'000           GBP'000 
----------------------------------------  ----------------  ---------------- 
Cash flows from operating activities 
Profit on ordinary activities 
 before tax                                         11,754             8,484 
Adjustments for: 
Interest receivable and similar 
 income                                               (34)              (19) 
Depreciation of non-current property 
 and equipment                                         254               253 
Increase in fair value of investment 
 securities                                          (550)             (159) 
Increase in fair value of assets 
 at fair value through profit 
 or loss                                           (2,279)           (4,624) 
Decrease in other financial assets                      43                 - 
Increase in other financial liabilities                  -                87 
Increase in receivables                              (810)           (1,367) 
Decrease in trade and other payables               (2,932)           (8,467) 
(Decrease)/ Increase in provisions                    (78)               116 
Share-based payments                                 3,962             2,107 
Increase in liabilities at fair 
 value through profit or loss                           67                65 
----------------------------------------  ----------------  ---------------- 
Cash generated/(used) from operations                9,397           (3,524) 
----------------------------------------  ----------------  ---------------- 
 
   9.    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.

B J D Ashford-Russell is a member of Polar Capital LLP and a director of the Polar Capital Technology Trust plc (the Trust). Polar Capital LLP is the appointed investment manager of the Trust. The total fees received by the Group as investment manager of the Trust were GBP5,990,800 (September 2016: GBP4,290,300). The amounts receivable at period end in this respect were GBP2,113,000 (March 2017: GBP1,832,000).

10. The Publication of Non-Statutory Accounts

The financial information contained in this unaudited half year report does not constitute statutory accounts as defined in S434 of the Companies Act 2006. The financial information for the six months ended 30 September 2017 and 2016 has not been audited. The information for the year ended 31 March 2017 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 26 June 2017. The report of the independent auditor on those financial statements contained no qualification or statement under S498 of the Companies Act 2006.

Directors

   T H Bartlam                         Non-executive Chairman 
   G M Rochussen                                Chief Executive Officer 
   J B Mansell                         Chief Operating Officer, Finance Director 
   H G C Aldous                      Non-executive Director, Chairman of Audit Committee 
   B J D Ashford-Russell     Non-executive Director 
   J M B Cayzer-Colvin        Non-executive Director 
   W E Robbins                      Non-executive Director 
   M W Thomas                     Non-executive Director, Chairman of Remuneration Committee 
   T J Woolley                        Non-executive Director 

Company No.

4235369

Registered Office

16 Palace Street

London, SW1E 5JD

Tel: 020 7227 2700

Company Secretary

Neil Taylor

Dividend

A first interim dividend of 6.0p per share has been declared for the year to 31 March 2018. This will be paid on 12 January 2018 to shareholders on the register on 29 December 2017. The shares will trade ex-dividend from 28 December 2017.

Remuneration Code

Disclosure of the group's Remuneration Code will be made alongside its Pillar 3 disclosure which is available on the Company's website.

Half Year Report

The Half Year report will be posted to shareholders in late December 2017. 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

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LLFITFVLILID

(END) Dow Jones Newswires

December 11, 2017 02:00 ET (07:00 GMT)

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