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Polar Capital Expects More Challenging Year Ahead As Profit Doubles

June 20, 2014

Samuel Agini

LONDON (Alliance News) - AIM-listed investment manager Polar Capital Holdings PLC Friday said its pretax profit more than doubled in its last financial year, as it reported net inflows from investors in every quarter boosting the assets it manages by USD6 billion to USD13.2 billion at the year-end.

Shares were trading up by 7.1% at 497.25 pence at midday Friday.

Polar Capital said the drivers behind its performance were strong inflows into a number of its funds, resulting in GBP4.94 billion in net inflows, and highlighted its Japanese funds and strength in most major global equity markets as the main reasons for success.

"After 15 quarters of net inflows, the first quarter of our current financial year has so far seen more challenging market conditions and resulted in net outflows of approximately USD300 million although currently our [assets under management are] above the year-end level," Polar Capital said in a statement.

In a statement, Polar Capital, which manages a number of funds and trusts, said it made a GBP32.8 million pretax profit in the year ended March 31, compared with GBP15.3 million a year earlier. Revenue increased to GBP91.8 million, from GBP51.7 million, driven by gains in net management fees due to the increase in assets under management, and rising performance fees due to general outperformance of the company's products against their benchmarks.

Operating costs rose by GBP20.0 million to GBP53.3 million due to an increase in performance fees paid to managers, as well as an increase in the staff numbers Polar employs as it looks to grow.

"After an eighteen-month period of consolidation in terms of team numbers, we are now actively looking to make additions again. We are encouraged by the number and quality of unsolicited approaches we are now receiving from managers across a variety of strategies as our profile continues to increase within the industry," Chief Executive Tim Woolley said in a statement.

"As long as we are able to keep delivering differentiated performance on our products and value to our clients, we remain optimistic that our current positioning and strategy will allow us to deliver significant further profit and dividend growth to shareholders over the long term. We do though have to recognise that last year was an exceptional year in terms of profit and dividend growth and it would be unrealistic to anticipate a similar level of growth in the coming year - indeed, we expect an altogether more challenging year," Woolley added.

Polar Capital increased its full-year dividend to 25.0 pence, from 13.0 pence.

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Source: Alliance News

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