REG - Impax Asset Mngmnt - Half-year Report <Origin Href="QuoteRef">IPX.L</Origin> - Part 2
11/05/2017 07:07
- Part 2: For the preceding part double click ID:nRSK7934Ea
(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 2016.
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 Charges/(credits) related to legacy long-term incentive
schemes
Six months ended 31 March 2017 Six months ended 31 March 2016 Year ended 30 September 2016
£000 £000 £000
LTIP NIC charge/(credit) 159 (44) 3
LTIP Additional payments charge/(credit) 83 (42) (55)
Advisory fees for EBT settlement - - 25
242 (86) (27)
(NIC = Employer's 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 2,969,500 remain outstanding at 31 March 2017.
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 in line with the Impax share
price, such fluctuations are recorded in the current
period income statement.
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 lower than the standard
rate of corporation tax in the UK for the period (19.5
per cent). The differences are explained below:
Six months ended 31 March 2017 Six months ended 31 March 2016 Year ended 30 September 2016
£000 £000 £000
Profit before tax 2,444 2,059 5,199
Tax charge at 19.5 per cent, 20 per cent, 20 per cent 477 412 1,040
Effects of:
Non-deductible expenses and charges 2 9 24
Decrease/(increases) in value of deductions re share (663) 133 -
awards from share price decreases/increases
Adjustment in respect of prior years 41 - (59)
Change in UK tax rates - (66) (42)
Effect of higher tax rates in foreign jurisdictions 66 20 59
Total income tax expense (77) 508 1,022
7 Earnings per share
Earnings for the period Shares Earnings per share
£'000 '000
Six months ended 31 March 2017
Basic 2,380 110,904 2.15p
Diluted 2,380 113,048 2.11p
Six months ended 31 March 2016
Basic 1,517 112,603 1.35p
Diluted 1,551 114,266 1.35p
Year ended 30 September 2016
Basic 4,043 111,794 3.62p
Diluted 4,177 114,399 3.62p
Earnings are reduced by £141,000 for the six months
ending 31 March 2017 (31 March 2016, £34,000) for basic
earnings per shares to reflect the profit attributable
to holders of restricted shares, which are treated as
contingently returnable shares. This adjustment is not
normally made for diluted earnings per shares but
instead the dilutive restricted shares are included in
the number of shares used for the dilutive calculation.
However, where the resulting calculation for diluted
earnings per share is lower 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 ended 31 March 2017 Six months ended 31 March 2016 Year ended 30 September 2016
'000 '000 '000
Issued share capital 127,749 127,749 127,749
Less own shares held (16,845) (15,146) (15,955)
Weighted average number of ordinary shares used in the 110,904 112,603 111,794
calculation of basic EPS
Additional dilutive shares re share options 10,630 7,690 10,690
Adjustment to reflect option exercise proceeds and (8,486) (6,027) (8,085)
future service from employees receiving awards
Weighted average number of ordinary shares used in the 113,048 114,266 114,399
calculation of diluted earnings per share
The basic earnings per share for all periods shown
includes vested LTIP options on the basis that these
have an inconsequential exercise price (1 pence or 0
pence). There were 7,440,000 restricted shares in issue
at 31 March 2017 which would have increased dilutive
shares by 3,662,000.
8 Dividends
On 8 March 2017, at the Company's Annual General
Meeting, payment of a 1.6 pence per share final dividend
30 September 2016 (2015: 1.2p per share) was approved.
Combined with an interim payment of 0.5 pence this gave
total dividends for the year ended 30 September 2016 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
£1,855,916. This was paid on 17 March 2017.
The Board has declared an interim dividend for the
period of 0.7 pence per ordinary share (2016: 0.5
pence). This dividend will be paid on 23 June to
ordinary shareholders on the register at close of
business on 26 May 2017.
9 Goodwill
Cost £'000
At 1 October 2015, 31 March 2016, 30 September 2016 and 1,681
31 March 2017
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
£000 £000 £000
At 1 October 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
Additions 25 2,052 2,077
Fair value movements 392 1,759 2,151
Repayments/disposals (1,263) (991) (2,254)
At 30 September 2016 1,568 11,243 12,811
Additions - 3,457 3,457
Fair value movements 6 731 737
Repayments/disposals - (1,455) (1,455)
At 31 March 2017 1,574 13,976 15,550
Listed investments
Impax Food and Agriculture Fund ("IFAF")
On 1 December 2012 the Group launched the IFAF and
invested, from its own resources £2 million 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 per cent of the
IFAF's NAV from the date of launch to 31 March 2017 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 Fund and
invested, from its own resources £2 million into the
fund. IGEO invests in listed equities using the Group's
Global Equities Strategy. The Group's investment
represented more than 50 per cent of IGEO's NAV from the
date of launch to 31 March 2017 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 Fund and
invested, from its own resources £3 million into the
fund. IEL invests in listed equities using the Group's
Leaders Strategy. The Group's investment represented
more than 50 per cent of IEL's NAV from the date of
launch to 31 March 2017 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 £562,000. The carrying value
represents the Board's assessment of the investment's
fair value which was determined using a discounted
cashflow approach. 100% 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. The assets are currently the
subject of a sales process. At the same time
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
sales process is unsuccessful and the banks take
possession of the assets and the claims for compensation
are unsuccessful the investment would be written down in
full.
The Group has a 1.14 per cent partnership share in Impax
New Energy Investors II LP, a private equity partnership
managed by the Group. To date the Group has invested a
total of E2,195,000 into the partnership and received
distributions of E2,868,000 following sales of
investments by the partnership. The investment is
included at the Board's assessment of its fair value,
being £541,000 at 31 March 2017, which is determined by
valuing the underlying investments. The principal
valuation techniques used are discounted cashflow, price
of recent investment and market bids. The Group has a
commitment to invest up to a further E1,103,000 into
this partnership.
The Group has a 3.03 per cent partnership share in Impax
New Energy Investors III LP, a private equity
partnership managed by the Group. The Group has made no
investments in this partnership to date. The Group has
a commitment to invest up to E4 million into this
partnership.
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.
31 March 2017 31 March 2016 30 September 2016
£000 £000 £000
Cash and cash equivalents 2,664 2,820 2,804
Cash held in money market funds and long-term deposit 10,623 10,424 12,891
accounts
Less cash and cash equivalents held by consolidated (307) (204) (292)
funds
Total cash reserves 12,980 13,040 15,403
12 Share capital and Own shares
31 March 2017 31 March 2016 30 September 2016
Issued and fully paid ordinary shares of 1 pence each
Number 127,749,098 127,749,098 127,749,098
£000s 1,277 1,277 1,277
31 March 2017 31 March 2016 30 September 2016
Own shares
Number 19,144,332 21,023,120 21,387,839
£000s 6,631 7,387 7,131
Own shares represent a portion of those held in the EBT
2012 and EBT 2004. 1,466,493 shares were acquired in the
six months ended 31 March 2017, (period ended 31 March
2016: 2,883,500). 3,710,000 shares were awarded to
option holders on exercise of options (period ended 31
March 2016: 153,000). As at 31 March 2017 the Company
had a total of 13,599,500 options outstanding of which
- More to follow, for following part double click ID:nRSK7934EcRecent news on Impax Asset Management
See all newsREG - Impax Asset Mng Ltd Impax Asset Mgmnt Mondi plc - Form 8.3 - Mondi Plc
AnnouncementREG - Impax Asset Mgmnt - Holding(s) in Company
AnnouncementREG - Impax Asset Mgmnt - Q2 AUM Update
AnnouncementREG - Impax Asset Mgmnt - Director/PDMR Shareholding
AnnouncementREG - Impax Asset Mng Ltd Impax Asset Mgmnt Mondi plc - Form 8.3 - Mondi Plc
Announcement