REG - Polar Capital Hldgs - Group Audited Results for year ended 31 March 2025
Yesterday 07:02
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250630:nRSd9350Oa&default-theme=true
RNS Number : 9350O Polar Capital Holdings PLC 30 June 2025
POLAR CAPITAL HOLDINGS plc
Group Audited Results for the year ended 31 March 2025
"Despite market volatility, we had a positive financial year with average AuM
increasing by 17%, core operating profit growing by 27%, and we attracted
positive net inflows into key strategies -
underscoring the resilience of our model and the strength of client
relationships."
Gavin Rochussen, CEO
Highlights
• Average Assets under Management (AuM) for the year up 17% to
£22.9bn (2024: £19.6bn)
• AuM at 31 March 2025 down 2% to £21.4bn (31 March 2024: £21.9bn)
• Core operating profit(†) up 27% to £56.7m (2024: £44.8m)
• Statutory profit before tax down 6% to £51.6m (2024: £54.7m)
primarily due to a £13.6m impairment charge on intangible assets
• Basic earnings per share down 13% to 36.6p (2024: 42.3p) and
adjusted diluted total earnings per share(†) up 22% to 53.5p (2024: 44.0p)
• Second interim dividend of 32.0p per share (2024: 32.0p) bringing the
total dividend for the year to 46.0p per share (2024: 46.0p). The dividend
payment date is 7 August 2025, with an ex-dividend date of 10 July 2025 and a
record date of 11 July 2025.
† The non-GAAP alternative performance measures shown here are described and
reconciled to IFRS measures in the Alternative Performance Measures (APM)
section.
This RNS does not constitute an offer or recommendation to invest in any of
the funds referenced within.
Gavin Rochussen, Chief Executive Officer, commented:
"Polar Capital delivered a resilient outcome for the financial year despite
industry headwinds for active equity managers. Our AuM ended at £21.4bn on 31
March 2025, just 2% lower than the £21.9bn a year prior. This decline was
primarily due to negative market movements in the final quarter, as net flows
over the year were broadly flat. Total AuM as at 20 June 2025 were £22.6bn
with net outflows of £0.6bn from open ended funds and segregated mandates in
the period 1 April to 20 June 2025.
"Average AuM increased by 17% to £22.9bn. Maintaining the management fee(†)
yield steady at 78 basis points, net management fees(†) increased 16% to
£178.3m (2024: £153.7m). Core operating profit(†) increased by 27% and
adjusted diluted total EPS(†) increased 22% from 44.0p to 53.5p.
"Polar Capital made progress during the year in delivering our strategy of
"growth with diversification" - expanding our capabilities, client base, and
geographic reach to drive sustainable growth. In line with this, we welcomed
Dan Boston in September 2024 as Head of our new Global Small Company team.
Based in Tampa, Florida he, alongside two colleagues, manages the Polar
Capital International Small Company Fund which was launched in September 2024
as a US mutual fund. The fund has now surpassed the $100m AuM milestone and
our pipeline looks encouraging.
"The breadth of our product range - spanning specialisms such as Technology,
Healthcare, Financials, Insurance as well as regional such as UK, Europe,
Emerging Markets, North America and now International Small Company - allows
us to have relevant offerings for different client segments across regions.
Our diverse specialist strategies give us multiple avenues to connect with
clients globally, helping us to reduce reliance on any single market or
channel.
"I am proud of Polar Capital's achievements in a year that challenged the
asset management industry, particularly active equity asset managers. We
navigated macroeconomic turbulence and delivered on key strategic goals -
broadening our investment strategies and client reach - all while staying true
to our active management DNA and performance led culture."
For further information please contact:
Polar Capital +44 (0)20 7227 2700
Gavin Rochussen (Chief Executive Officer)
Samir Ayub (Chief Financial Officer)
Numis Securities Limited - Nomad and Joint Broker +44 (0)20 7260 1000
Giles Rolls
Charles Farquhar
Peel Hunt LLP- Joint Broker +44 (0)20 3597 8680
Andrew Buchanan
Oliver Jackson
Camarco - PR +44 (0)20 3757 4980
Ed Gascoigne-Pees
Jennifer Renwick
Phoebe Pugh
Assets under Management Analysis
AuM split by type
31 March 2025 31 March 2024
£bn % £bn %
Open ended funds 16.0 75% Open ended funds 16.0 73%
Investment trusts 4.8 22% Investment trusts 5.1 23%
Segregated mandates 0.6 3% Segregated mandates 0.8 4%
Total 21.4 100% Total 21.9 100%
AuM split by strategy
Ordered according to launch date
31 March 2025 31 March 2024
£bn % £bn %
Technology 9.0 42% Technology 9.9 45%
European Long/Short(1) - - European Long/Short 0.1 0.5%
Healthcare 3.5 16.5% Healthcare 3.9 18%
Global Insurance 2.6 12% Global Insurance 2.3 10%
Financials 0.7 3% Financials 0.6 3%
Convertibles 0.3 1.5% Convertibles 0.4 2%
North America 0.5 2.5% North America 0.7 3%
Japan Value 0.2 1% Japan Value 0.2 1%
European Income 0.2 1% European Income 0.2 1%
UK Value 0.9 4% UK Value 0.9 4%
Emerging Markets and Asia 3.0 14% Emerging Markets and Asia 1.8 8%
European Opportunities 0.2 1% European Opportunities 0.6 3%
Sustainable Thematic Equities 0.2 1% Sustainable Thematic Equities 0.3 1.5%
European Small Cap(2) - - European Small Cap(2) - -
Global Small Company(3) 0.1 0.5% Global Small Company(3) - -
Total 21.4 100% Total 21.9 100%
AuM split by geography of investors
31 March 2025
%
UK 63%
Europe 23%
Asia 7%
Nordics 5%
North America 1%
Other 1%
Total 100%
31 March 2024
%
UK 60%
Europe 29%
Asia 6%
Nordics 3%
North America 1%
Other 1%
Total 100%
1. Polar Capital European Forager Fund managed under this
strategy was closed in September 2024.
2. The AuM of Polar Capital European Small Cap Fund managed
under this strategy was £8.0m at 31 March 2025 (2024: £4.0m).
3. The Polar Capital International Small Company Fund managed
under this strategy was launched on 30 September 2024.
Chair's Statement
Introduction
I focus below on the results of the latest financial year, though much has
changed in the few months following our year end. At the time of writing, it
simply isn't clear how global economic and investing markets will settle. We
will need to be patient to see how governments across the world, and
companies, learn to deal with the economic 'winds of change' coming from the
US.
For Polar Capital, the financial year started with a resilient US economy and
stubborn levels of inflation pushing out the prospect of interest rate cuts,
before ending with the US-led trade tariffs and heightened market uncertainty.
The conflicts in Ukraine and the Middle East continued, stoking wider
geopolitical tensions. Political cycles added to the backdrop, with
anticipation around major elections in the US, UK and across Europe shaping
investor behaviour.
Looking ahead, it is clear that challenges persist - notably geopolitics,
trade and war. We also see ongoing regulatory shifts, as well as evolving
risks such as cybersecurity and climate change. Despite these challenges, we
are confident in our business model and in our people. Our balance sheet
strength and entrepreneurial culture, together with our continued focus on our
clients, ensures that we remain well positioned to take advantage of the
opportunities that we believe will arise in the future.
Results
AuM decreased by 2% over the year, from £21.9bn to £21.4bn, primarily due to
negative market movements in the final quarter whilst net flows for the year
were broadly flat. Nevertheless, average AuM increased by 17% in the year to
£22.9bn.
The higher average AuM, together with a carefully managed cost base,
contributed to a 27% increase in core operating profit(†) to £56.7m (2024:
£44.8m). Despite the increase in core operating profit(†) and a
contribution from performance fee profits(†) totalling £7.9m (2024:
£9.6m), profit before tax declined to £51.6m (2024: £54.7m), primarily due
to the recognition of a £13.6m impairment charge relating to goodwill and
intangible assets.
Dividend
With the increase in adjusted earnings during the year and given the strength
of our balance sheet and our confidence in the long-term outlook for the
Company, the Board recommend maintaining a second interim dividend of 32.0p
per share (2024: 32.0p) to be paid in August 2025. This, together with the
first interim dividend of 14.0p per share paid in January 2025, means that the
total dividend per share for the year is maintained at 46.0p (2024: 46.0p)
representing an 86% payout ratio on adjusted diluted total earnings(†) per
share of 53.5p.
Strategy
As described in the CEO's report, our long-term investment performance remains
strong, despite the recent tough, volatile operating and investing
environment, and our distribution reach continues to grow, with new personnel
in the UK, US and Nordic regions. Given significant industry-wide net outflows
from active equity managers during the period, it is notable that Polar
Capital achieved net inflows into its open-ended fund range of £495m
excluding fund closures with net inflows before fund closures across all
investment offerings of £123m.
Net flows during the final quarter of the financial year were encouraging,
with net inflows of £398m across several funds in our range, including Polar
Capital Global Absolute Return, International Small Company (launched at the
end of September 2024), Emerging Market Stars, Healthcare Blue Chip,
Biotechnology and Artificial Intelligence funds.
Culture
Since its foundation, Polar Capital has prided itself on its meritocratic and
collegiate culture and this has served us well during another tough year for
markets, meeting the challenges head on and working together to continue to
deliver for our clients.
We have also maintained our voluntary mentoring program and bursary scheme,
Polar Capital Aspire Scheme (PCAS) for students at Westminster City School, an
academy that is local to our London head office. This ongoing relationship
shows the mutual benefit of the support provided by Polar Capital to the
students at the school and is a tangible example of our culture in action.
Board
Whilst there have been no changes to the Board during the year, our CEO, Gavin
Rochussen, has informed the Board that he intends to retire after the Annual
General Meeting (AGM) in September 2025.
Gavin has been an outstanding CEO since joining Polar Capital in 2017,
successfully leading the Group during the last eight years through a number of
external and market related challenges. From the fallout from the Brexit
referendum, to leading the Group through the unprecedented Covid pandemic,
successfully adapting the business at a time when all of us were forced to
'stay at home', to the more recent challenges for markets that I referred to
above.
Throughout his time in post, Gavin has been an ever-present leader and
spokesman for the business.
On behalf of everyone at Polar Capital, I want to thank Gavin for everything
that he has done in his time with us and for the considerable success that he
has brought to the Group, helping to grow the Group and make us a stronger
more resilient business.
During Gavin's tenure between 2017 to 2025, AuM increased 130% from £9.3bn to
£21.4bn, with the adjusted diluted total EPS(†) increasing 162% from 20.4p
to 53.5p.
We wish Gavin well in his retirement and look forward to thanking him at the
AGM.
As the door closes on Gavin's tenure, I also want to congratulate Iain Evans
on being selected as our new CEO. Iain has been with Polar Capital for the
last twenty years, leading our distribution and marketing teams, and
successfully helping to build out our client base beyond the UK.
Annual General Meeting
We are planning to hold the Company's forthcoming AGM at 2.00pm on 25
September 2025 at the Company's registered office. Shareholders are encouraged
to submit any questions to our Company Secretary before the meeting (by using
Investorrelations@polarcapital.co.uk, using the subject title 'PCH AGM') who
will arrange for a response to be provided to the questions. There will not be
a presentation at the meeting, but a video of the CEO and CFO presenting the
results will be available on the Company's website ahead of the meeting. The
notice of the meeting is also available on the Company's website.
Thank you
Polar Capital has built an impressive business that I am proud to be Chair of.
This would not be possible without the individuals who work here, or our
clients, suppliers and partners who support us. I would like to take this
opportunity to thank everyone, but particularly the Polar Capital staff and
investment teams, for all their hard work and efforts during a tough year for
the industry as a whole.
The Board, and I, really appreciate the commitment and dedication shown by
all.
Thank you.
David Lamb
Chair
27 June 2025
† The non-GAAP alternative performance measures mentioned here are described
and reconciled in the APM section.
Chief Executive Officer's Report
The financial year presented a complex mix of challenges and opportunities. We
navigated high inflation giving way to cooling price pressures, shifting
central bank policies, significant political transitions in the UK and US, and
ongoing conflicts casting long shadows. By the end of the period, several
major uncertainties had cleared - the UK and US elections were behind us and
inflation was on a better trajectory - but new concerns such as the return of
tariffs and potential global trade wars have since emerged.
By the fourth calendar quarter of 2024, many active strategies enjoyed better
performance with global stock markets continuing to climb and many active
portfolios finally recouping losses from the prior year. This favourable
backdrop also contributed to improved fund performance across Polar Capital's
product range, which helped reinforce client confidence.
However, the momentum for active managers shifted sharply as we entered
calendar year 2025, when volatility returned. In the first calendar quarter of
2025, global investors became more risk-averse - spooked by the prospects of a
renewed trade war and other uncertainties. A swift pivot to risk-off sentiment
led to outflows for active funds, as money-market funds and gold attracted
inflows as safe havens.
At 31 May 2025, 84% of our UCITS fund AuM was in the top two quartiles versus
Lipper peer groups over three years with 82% and 100% in the top two quartiles
over five years and since inception respectively. Of our UCITS funds, 82% were
in the first quartile against the Lipper peer group since inception with 88%
of UCITS AuM delivering benchmark outperformance since inception.
In terms of AuM, Polar Capital delivered a resilient outcome for the financial
year despite industry headwinds for active equity managers. Our AuM ended at
£21.4bn on 31 March 2025, just 2% lower than the £21.9bn a year prior. This
decline was primarily due to negative market movements in the final quarter,
as net flows over the year were broadly flat. In fact, we achieved net inflows
of £0.5bn into our open-ended funds before fund closures. These inflows were
largely driven by demand for our specialist active funds; Polar Capital Global
Absolute Return, Biotechnology, Healthcare Blue Chip, Emerging Market Stars,
and our new International Small Company Funds all attracted new money during
the year. After accounting for two fund closures, total net flows for the year
were broadly flat. Given the wider context of active managers experiencing net
outflows, maintaining flat net flows over the financial year is a creditable
result and speaks to the strength of our fund performance and client
relationships. It is also noteworthy that asset appreciation earlier in the
year had put our AuM as high as £23.8bn by December 2024, before the Q1 2025
pullback. The Group's ability to end the year with only a minor dip in AuM, in
a period of such pronounced market swings, demonstrates the resilience of our
diversified product range and the value clients place on our active investment
approach. Markets have recovered as the severity of 'liberation day' tariffs
have decreased, although markets have remained volatile following increased
uncertainty relating to global trade wars. Total AuM as at 20 June 2025 were
£22.6bn.
Financial performance has seen an improvement over the previous year. While
AuM at year-end declined 2% to £21.4bn, average AuM increased by 17% to
£22.9bn. Maintaining the management fee yield(†) steady at 78 basis points,
net management fees(†) increased 16% to £178.3m (2024: £153.7m). Core
operating profit(†) increased by 27%, although performance fees were lower
than the prior year and exceptional items comprising mainly of goodwill and
intangible assets impairment resulted in diluted EPS declining 13.6% to 36.1p
(2024: 41.8p). Adjusted diluted core EPS(†) increased 26% to 44.0p (2024:
35.0p). Adjusted diluted total EPS(†) increased 22% from 44.0p to 53.5p.
The total dividend per share for the year has been maintained at 46.0p (2024:
46.0p).
Polar Capital made progress during the year in delivering our strategy of
"growth with diversification" - expanding our capabilities, client base, and
geographic reach to drive sustainable growth. In line with this, we welcomed
Dan Boston in September 2024 as Head of our new Global Small Company team.
Dan's arrival brings us world-class expertise in international small-cap
equities and underscores our ability to attract top talent to the Group.
At the end of September 2024 we launched the Polar Capital International Small
Company Fund, a US-domiciled mutual fund created specifically to serve US
investors, marking an important expansion of our product range and our work to
diversify our client base geographically. US investors now have a third local
Polar Capital fund through which they can access our active expertise,
complementing the UCITS funds we offer in the UK, Europe, and Asia. Despite
coming to market during a volatile period for equities, the Polar Capital
International Small Company Fund has been met with encouraging demand. In its
first six months since launch, the fund raised approximately $90m in assets
and has now surpassed the $100m AuM milestone. Achieving this scale so early
is a strong vote of confidence from investors and provides a solid foundation
on which the strategy can continue to grow. We believe that as global equity
leadership broadens beyond the US mega-caps, there will be increasing interest
from US clients in international small-cap opportunities, which bodes well for
this franchise's future.
The breadth of our product range - spanning specialisms such as Technology,
Healthcare, Financials, Insurance and as well as regional such as UK, Europe,
Emerging Markets, North America and now International Small Company - allows
us to have relevant offerings for different client segments across regions.
Our diverse specialist strategies give us multiple avenues to connect with
clients globally, helping us to reduce reliance on any single market or
channel.
Internally, the year was also about strengthening the platform to support
future growth. We invested in our distribution capabilities, including
enhancements to our US sales team in tandem with the new fund launch.
Additionally, cost discipline and operational efficiency remained a focus,
ensuring we can scale up our business without introducing complexity and
unnecessary costs, thus maintaining the ability to harness improvements in
profit margins through operational gearing.
I am proud of Polar Capital's achievements in a year that challenged the asset
management industry, particularly active equity asset managers. We navigated
macroeconomic turbulence and delivered on key strategic goals - broadening our
investment strategies and client reach - all while staying true to our active
management DNA and performance led culture.
I joined Polar Capital as CEO in July 2017, amidst the low-interest rate
environment that followed the extensive quantitative easing post the financial
crisis almost a decade earlier, and which in turn underpinned the prolonged
bull market in equities fuelled by this excessive market liquidity. Brexit,
with the UK officially only leaving the EU on 31 January 2020, the
'unprecedented' pandemic in 2020 which resulted in global lockdowns, high
inflation in 2021, and interest rates increasing to 40-year highs in 2022 have
all shaped our strategic direction during my tenure.
It is over this geopolitically volatile and challenging period for global
equity markets that Polar Capital has prospered through a deliberate strategy
of 'growth with diversification' and tireless dedication from its staff with
support from an increasing client base.
It has been a privilege to have led Polar Capital through this challenging
eight-year period and to have worked with amazing colleagues in a firm with a
strong culture that is focused on outcomes for clients and shareholders. In
September 2025 at the Annual General Meeting, I will hand over leadership to a
long-standing colleague, Iain Evans, who has been Global Head of Distribution
at Polar Capital for the past two decades during which he has been responsible
for the incredible diversification and growth of the distribution footprint.
Given the diverse range of differentiated investment strategies and the solid
leadership foundation, I am confident that Polar Capital has the attributes to
continue to prosper and grow.
Gavin Rochussen
Chief Executive Officer
27 June 2025
† The non-GAAP alternative performance measures mentioned here are described
and reconciled in the APM section.
Business Review
Assets under Management and Fund Flows
The environment for active managers remains challenging, as investors continue
to favour lower-cost index-tracking strategies. Actively managed equity funds
have seen net outflows in seven of the past eight years, culminating in a
record $450bn(1) withdrawn in calendar year 2024.
Despite these headwinds, Polar Capital has demonstrated relative resilience.
We recorded net outflows in just three of those years, and the financial year
to 31 March 2025 was broadly flat, with net inflows of £12.3m. Gross inflows
remained healthy at £6.1bn.
At the end of the financial year, our reported AuM stood at £21.4bn, down 2%
from £21.9bn in March 2024. Average AuM for the year was £22.9bn, compared
to £19.6bn in the previous year.
Although we experienced selling pressure across several strategies -
particularly in segments that were out of favour with investors, such as UK
and European equities - we also recorded encouraging net inflows elsewhere.
Our Polar Capital Emerging Market team was a key contributor, attracting net
new inflows of £1.3bn. Our Polar Capital Healthcare team delivered total net
inflows of £28m, despite a £40m outflow related to the full repayment to ZDP
shareholders of the Polar Capital Global Healthcare Trust in June 2024.
Our Polar Capital International Small Company Fund, launched in September
2024, reached approximately $90m in assets within six months, despite a
volatile market environment.
Conversely, net outflows from the open-ended Polar Capital Global Technology
Fund in the final quarter were £201m compared to £123m in the previous
quarter - driven by heightened market volatility and uncertainty surrounding
the potential for a tariff-driven global trade war. Total net outflows for the
year reached £567m, although these were partially offset by £173m of net
inflows into the Polar Capital Artificial Intelligence Fund.
In September 2024, the Polar Capital European Forager Fund was closed
following a full redemption by its largest holder, resulting in a total
outflow for the year of £105m.
Net outflows on Polar Capital Melchior European Opportunities Fund for the
year were £213m.
Communicating with our clients
At Polar Capital, a client-centric philosophy is underpinned by clear,
consistent and effective communication. Over the past five years, we have
significantly enhanced our digital marketing capabilities, recognising the
increasing importance of online engagement.
With this digital foundation in place, we continue to deliver targeted
communications globally, supporting both client servicing and new business
development. These efforts are integral to our strategy of expanding Polar
Capital's reach across geographies. We regularly publish written, audio, and
video insights from our fund managers, complemented by performance updates and
market commentary that are consistently well received.
While digital channels are essential, we also understand the enduring value of
direct, personal connection. Our global events programme plays a vital role in
our relationship-building and brand engagement. During the year, we
participated in 49 events, reaching over 12,000 delegates - including our
flagship Annual Conference in London. Notably, 12 events took place in the US
or Asia, reflecting our international ambition.
Our communication and engagement efforts are supported by the strength of our
investment strategies, as recognised by several industry awards. In 2024 and
2025, Polar Capital received multiple honours, including the Morningstar
Awards for Investing Excellence 2025 (winner in Belgium, shortlisted in the UK
and Spain), Emerging Markets Manager of the Year at the European Pension
Awards 2024, and the Specialist category award at the Investment Week Fund
Manager of the Year Awards 2024 for our Global Insurance Fund.
International diversification
International clients now represent close to 40% of our total AuM,
underscoring the growing importance of our global client base. Our approach to
overseas expansion remains targeted and disciplined, focusing on markets where
we see the greatest long-term growth potential - namely the US, South-East
Asia, and seven core markets in Continental Europe.
In the US, we expanded our product offering with the launch of the
International Small Company Fund, our third US-domiciled mutual fund. Post
year end, assets have crossed the key milestone of $100m. As global equity
markets broaden, we expect increasing demand from US investors for
international equity exposure, which supports the continued development of
this franchise.
We also made strong progress in Scandinavia, where AuM has reached £0.9bn.
The region has become a key market for Polar Capital, with growing investor
support for our strategies and fund offerings.
Outlook
Although global economic and political uncertainty continues to weigh on
financial markets, we believe that growing return dispersion and a renewed
allocator focus on alpha generation will create a more favourable environment
for active management. Polar Capital is well positioned to benefit from this
shift, underpinned by our differentiated strategies, global distribution
capabilities, and scalable operational platform.
We see a strong alignment between long-term thematic trends and our investment
expertise, while increasing digitalisation has the potential to level the
playing field and broaden investor access. Our well-established brand and
specialist active fund strategies equip us to capitalise on emerging
opportunities and navigate the challenges facing active asset managers in the
years ahead.
Fund performance and oversight
Two related structural factors, namely equity benchmark concentration, and the
underperformance of smaller companies versus broad markets, continue to
influence equity markets and manager performance. There is a well-documented
inverse relationship between index concentration and the relative performance
of active managers; when individual companies become very large index
constituents, fund concentration rules make it more difficult for managers to
capitalise.
These factors have contributed to the underperformance of Polar Capital's
Global Technology Fund, and its closed-end sister strategy, the Polar Capital
Technology Trust plc, in the financial year under review. Polar Capital's
Technology team also manages a global equity strategy, the Polar Capital
Artificial Intelligence Fund, which invests in a range of AI enablers and
beneficiaries across all equity market sectors. The Fund is overweight in the
technology sector, versus its world benchmark, which has negatively affected
performance in the financial year to March 2025 as technology leadership has
rolled over. We still believe that the addressable market for AI across the
corporate sector is vast (approximating to the size of the global wage bill),
and that AI technologies will deliver enormous benefit and efficiency over the
long term.
The beginnings of change in market leadership during the first calendar
quarter of 2025 are evident in good relative performance from Polar Capital's
Japan Value strategy (+880 bps in the year to March 2025) and Polar Capital
Europe ex UK Income Fund (+380 bps). As the US underperformed other markets,
and technology did less well than other sectors, so value styles of investing
recovered. This also benefited Polar Capital North America Fund, which beat
its benchmark by 230 bps in Q1 2025, although it lagged over the full 12-month
period.
The Group's Emerging Market (EM) and Asia strategies, and its Healthcare
funds, had a tougher time in the financial year to March 2025. The strong
performance of very large companies played a part here too. In both the EM and
Healthcare areas, company performance was closely correlated with size; the
returns from companies in the top 40% by market capitalisation of the relevant
benchmark indices were substantially higher than those in the bottom 10% of
the indices. For EM, the resurgence of the Chinese market, and particularly
Chinese tech following the Deepseek reveal, created an additional headwind.
For both EM and Healthcare, longer term and since inception returns remain
ahead of benchmark, and ahead of many peer funds, but that does not take away
from the need to address more recent market changes.
With equity markets weaker towards the end of the business year, and more
volatile than earlier, two of Polar Capital's non equity strategies acquitted
themselves well. Polar Capital Global Convertibles and its sister strategy,
Polar Capital Global Absolute Return, both delivered returns a little above 7%
for the financial year to end March 2025. In addition, the recently
re-launched Polar Capital Financial Credit Fund returned 11% in its first full
year, 460 bps ahead of its reference benchmark.
The other significant launch in the year was the Polar Capital Global Small
Company strategy, which went live at the end of September 2024. This strategy
is designed for US investors who want exposure to, and outperformance from, a
portfolio of growing non-US companies. The strategy is led by Dan Boston, from
the Group's new office in Tampa, Florida. Initial progress has been very
encouraging, with assets under management recently surpassing $100m.
The strongest absolute returns for the financial year to March 2025 came from
two areas which are demonstrating that good investment results can come from
asset classes which have been overlooked and out of favour. Polar Capital's
China Stars strategy, specialising in a country often characterised as
'uninvestible', rose by 31% in the year, beating its benchmark, while the
Polar Capital Financials Trust plc, which selects stocks from across the
financial services spectrum, was up by 17%.
The increased volatility towards the end of the financial year meant that as
at 31 March 2025, 19% of our UCITS funds' AuM, representing 74% of total AuM,
were in the top two quartiles against the Lipper peer group over one year, 79%
in the top two quartiles over three years with 70% and 100% in the top two
quartiles over five years and since inception respectively. Of our 22 funds
listed within the UCITS umbrella 43% were in the top two quartiles over one
year, and 74%, 88% and 86% in the top two quartiles over three years, five
years and since inception respectively.
With markets rebounding sharply following the easing of tariffs-induced
volatility, as at 31 May 2025, 57% of our UCITS funds' AuM, representing 73%
of total AuM, were in the top two quartiles against the Lipper peer group over
one year, 84% in the top two quartiles over three years with 82% and 100% in
the top two quartiles over five years and since inception respectively. Of our
22 funds listed within the UCITS umbrella 55% were in the top two quartiles
over one year, and 79%, 81% and 86% in the top two quartiles over three years,
five years and since inception respectively.
1. Source: Financial Times "Stockpicking funds suffer record $450bn of
outflows", 30 December 2024
Financial Review
AuM
AuM movement in twelve months to 31 March 2025 (£bn) Open ended funds Investment Trusts Segregated mandates
Total
AuM at 1 April 2024 16.0 5.1 0.8 21.9
Net flows 0.5 (0.2) (0.2) 0.1
Fund closures (0.1) - - (0.1)
Market movement and performance (0.4) (0.1) - (0.5)
Total AuM at 31 March 2025 16.0 4.8 0.6 21.4
Over the financial year, closing AuM decreased by 2% from £21.9bn in 2024 to
£21.4bn in 2025 through a combination of net flows and fund closures, which
in aggregate were flat, and market movement and fund performance of £(0.5)bn.
The mix of AuM between open ended funds, investment trusts and segregated
mandates remained unchanged compared to the prior year.
Average AuM for the year was £22.9bn which was a 17% increase compared to
£19.6bn for the previous year.
Revenue
31 March 2025 31 March 2024
Management fees £'m £'m
Management and research fees 206.1 176.4
Commissions and fees payable (27.8) (22.7)
Net management fees(†) 178.3 153.7
The higher average AuM over the year and unchanged yield translated into the
Group's net management fees(†) increasing by 16% from £153.7m in 2024 to
£178.3m this year.
Net management fee yield 31 March 2025 31 March 2024
Average AuM (£'bn) 22.9 19.6
Net management fees(†) (£'m) 178.3 153.7
Net management fee yield(†) (bps) 78 78
Net management fee yield(†) over the year measured 78bps (2024: 78bps). Over
the medium term our stated guidance is for an annual decrease of at least
1-2bps due to changing client and product mix as well as long term industry
trends.
31 March 2025 31 March 2024
Performance fees £'m £'m
Performance fees 16.0 18.7
The strong performance posted by certain underlying funds resulted in
performance fees earned for the financial year to 31 March 2025 of £16.0m
(2024: £18.7m).
Operating and finance costs 31 March 2025 31 March 2024
£'m £'m
Salaries, bonuses and other staff costs(1) 39.6 35.0
Core distributions(2)(†) 50.6 42.8
Share-based payments(3) 5.0 3.2
Performance fee interests(†) 8.1 9.1
Total staff compensation 103.3 90.1
Other operating costs 28.4 28.7
Exceptional items 14.8 1.2
Total operating costs 146.5 120.0
Finance costs 0.2 0.2
Operating and finance costs 146.7 120.2
1. Including share awards under deferment plan of £0.8m (2024:
£0.7m).
2. Including share awards under deferment plan of £1.2m (2024:
£1.2m).
3. Share-based payments on preference shares of £1.9m (2024:
£0.7m), LTIPs of £2.4m (2024: £1.9m) and equity incentive plan of £0.7m
(2024: £0.6m). Refer to note 5 below.
† The non-GAAP alternative performance measures mentioned
here are described and reconciled in the APM section.
Total operating and finance costs increased 22% to £146.7m (2024: £120.2m)
with the increase resulting partly from higher staff compensation costs as
variable compensation increased in line with profitability, and partly due to
exceptional costs including an impairment charge on goodwill and intangible
assets held.
Core distributions, which are variable compensation amounts payable to
investment teams from management fee revenue, increased as a direct
consequence of the higher average AuM over most of the year and the resulting
higher management fee revenues and core operating profit.
Performance fee interests, which are variable compensation amounts payable to
staff from performance fee revenue, declined due to the lower amount of such
fees generated this year.
Other operating, non-staff compensation related, costs have marginally
decreased compared to prior year.
Exceptional items 31 March 2025 31 March 2024
£'m £'m
Recorded in operating costs
Amortisation of intangibles 1.2 1.2
Impairment of goodwill and intangibles 13.6 -
Total exceptional items recorded in the consolidated statement of profit or 14.8 1.2
loss
Exceptional items for both 2025 and 2024 comprised of either significant items
of income or expenditure related to the non-cash amortisation and impairment
of previously acquired goodwill and intangible assets. The items are presented
separately to allow a supplemental understanding of the Group's results.
In 2025 exceptional items included £13.6m related to an impairment charge in
respect of goodwill and intangible assets connected to the Dalton acquisition
and the related CGU. Due to the challenging environment for small and mid-cap
European equities and continued net outflows from the CGU, the Group's
judgement was that the present value of the goodwill and intangible assets
acquired as part of the Dalton acquisition was less than its carrying value at
31 March 2025, resulting in the recognition of the impairment charge. The
impairment charge is a non-cash item and does not affect the Group's cashflow.
Profit before tax 31 March 2025 31 March 2024
£'m £'m
Core operating profit(†) 56.7 44.8
Performance fee profit(†) 7.9 9.6
Other income(^) 3.7 2.2
Share-based payments on preference shares (1.9) (0.7)
Exceptional items (14.8) (1.2)
Profit before tax 51.6 54.7
Core operating profit margin(† 4) 32% 29%
† The non-GAAP alternative performance measures mentioned
here are described and reconciled on the APM page.
^ A reconciliation to reported results is given in the APM
section.
4. This measure is calculated as core operating profit divided
by net management fee.
The statutory profit before tax for the year has decreased by 6% to £51.6m
(2024: £54.7m) mainly driven by the impairment of goodwill and related
intangible asset.
The analysis of the three key components of profits shows that:
• Core operating profit
Increased by 27% to £56.7m (2024: £44.8m) reflecting the higher average AuM
over the year and continued discipline around operating costs. Over time, we
expect to grow core operating profit(†) as a proportion of the Group's total
earnings and thereby reduce the volatility of total earnings due to
performance fees.
• Performance fee profit
Performance fee profits(†) were lower than the prior year but reflected the
strong investment performance on certain specific strategies during the
current year.
• Other income
The increase in other income was mainly due to positive marked-to-market gains
on the Group's seed portfolio net of hedging costs.
Earnings per share
Basic EPS decreased by 13% to 36.6p during the year (2024: 42.3p) and diluted
EPS decreased by 14% to 36.1p (2024: 41.8p) while adjusted diluted total
EPS(†) increased year on year by 22% to 53.5p (2024: 44.0p). The effect of
the adjustments made in arriving at the adjusted diluted total EPS(†) and
adjusted diluted core EPS(†) figures of the Group is as follows:
(Pence) 31 March 2025 31 March 2024
Diluted earnings per share 36.1 41.8
Impact of share-based payments on preference shares 2.0 0.7
Impact of deferment, where staff compensation costs are deferred into future 0.3 0.3
periods
Impact of exceptional items 15.1 1.2
Adjusted diluted total EPS(†) 53.5 44.0
Of which: Performance fee profit and other income 9.5 9.0
Adjusted diluted core EPS(†) 44.0 35.0
† The non-GAAP alternative performance measures mentioned
here are described and reconciled on the APM page.
Preference shares
A separate class of preference share has historically been issued by Polar
Capital Partners Limited for purchase by each new team of fund managers on
their arrival at the Group.
These shares provide each manager with an economic interest in the funds that
they run and ultimately enable the manager to convert their interest in the
revenues generated from their funds into equity in Polar Capital Holdings plc.
The equity is awarded in return for the forfeiture of their current core
economic interest and vests over three years with the full quantum of the
dilution being reflected in the diluted share count (and so diluted EPS) from
the point of conversion.
The event has been designed to be, at both the actual and the diluted levels,
earnings enhancing to shareholders.
In the year to 31 March 2025 there was one conversion of preference shares
into Polar Capital Holdings plc equity (2024: no conversions).
As at 31 March 2025 five sets of preference shares (2024: five sets) have the
ability to call for a conversion.
The call must be made on or before 30 November 2025 if any conversion is to
take place with effect from 31 March 2025.
As indicated last year, no further preference shares are expected to be issued
and any new teams arriving are expected to be on a revenue sharing model with
deferment into equity in Polar Capital Holdings plc as the new long-term
incentivisation plan for investment teams. This revised model is not expected
to change core distributions when measured in percentage terms against net
management fee revenue but is expected to be simpler to administer compared to
the preference shares arrangement.
Balance sheet and cash
At the year end, the Group's cash and cash equivalents were £121.8m (2024:
£105.6m including long-term deposits maturing over the period of 6-12 months
of £6.7m). In line with the Group treasury policy, cash and cash equivalents
are held across several UK banking counterparties on maturity terms ranging
from 30 to 90 days. At the balance sheet date the Group also held £37.3m of
investments in its funds (2024: £35.8m).
Capital management
The Group believes in retaining a strong balance sheet. The capital that is
retained in the business is used to seed new investment products, as a buffer
for times of uncertainty, pay dividends and fund the EBT to buy Company shares
to reduce the dilutive effects of Group share awards. Depending on the market
outlook, and as the Group grows in size, the allocation of overall capital
amongst these four categories may vary over time as we seek to balance returns
to shareholders with the need to re-invest in the business for future growth.
As at 31 March 2025 £37.3m (2024: £35.8m) of the Group's balance sheet was
invested to seed fledgling funds and during the year the Group advanced loans
to the EBT of £0.5m (2024: £7.5m) to buy shares in the Company.
The Group's dividend policy is to pay an annual dividend within a range of 55%
and 85% of adjusted total earnings, dependent on the scale of performance fees
in the relevant year and the anticipated trading conditions for the following
year.
As at 31 March 2025 the Group had surplus capital of £65.1m (2024: £52.1m)
above its regulatory capital requirement of £26.0m (2024: £26.0m) and August
dividend commitment of £30.9m (2024: £30.9m).
Going concern
The Financial Reporting Council has determined that all companies should carry
out a rigorous assessment of all the factors affecting the business in
deciding to adopt a going concern basis for the preparation of the accounts.
The Directors have reviewed and examined the financial and other processes
embedded in the business, in particular the annual budget process and the
financial stress testing inherent in the Internal Capital Adequacy and Risk
Assessment ('ICARA') process.
Based on this review and the significant liquid assets underpinning the
balance sheet relative to the Group's predictable operating cost profile, the
Directors consider that the adoption of a going concern basis, covering a
period of at least 12 months from the date of this report, is appropriate.
Samir Ayub
Chief Financial Officer
27 June 2025
Alternative Performance Measures (APMs)
The Group uses the non-GAAP APMs listed below to provide users of the Annual
Report with supplemental financial information that helps explain its results
for the current accounting period. There have been no changes to the APMs
compared to the prior year.
APM Definition Reconciliation Reason for use
Core operating profit Profit before performance fee profits, other income and tax. APM reconciliation To present a measure of the Group's profitability excluding performance fee
profits and other components which may be volatile, non-recurring or non-cash
in nature.
Performance fee profit Gross performance fee revenue less performance fee interests due to staff. APM reconciliation To present a clear view of the net amount of performance fee earned by the
Group after accounting for staff remuneration payable that is directly
attributable to performance fee revenues generated.
Core distributions Variable compensation payable to investment teams from management fee revenue. APM reconciliation To present additional information thereby assisting users of the Annual Report
in understanding key components of variable costs paid out of management fee
revenue.
Performance fee interests Variable compensation payable to investment teams from performance fee APM reconciliation To present additional information thereby assisting users of the Annual Report
revenue. in understanding key components of variable costs paid out of performance fee
revenue.
Adjusted diluted total EPS Profit after tax but excluding (a) cost of share-based payments on preference Finance review The Group believes that (a) as the preference share awards have been designed
shares, (b) the net cost of deferred staff remuneration and (c) exceptional to be earnings enhancing to shareholders adjusting for this non-cash item
items which may either be non-recurring or non-cash in nature, and in the case provides a useful supplemental understanding of the financial performance of
of adjusted diluted earnings per share, divided by the weighted average number the Group, (b) comparing staff remuneration and profits generated in the same
of ordinary shares. time period (rather than deferring remuneration over a longer vesting period)
allows users of the Annual Report to gain a useful supplemental understanding
of the Group's results and their comparability year on year and (c) removing
non-cash amortisation and impairment of goodwill and intangible assets
provides a useful supplemental understanding of the Group's results.
Adjusted diluted core EPS Core operating profit after tax excluding the net cost of deferred core Finance review To present additional information that allows users of the Annual Report to
distributions divided by the weighted average number of ordinary shares. measure the Group's earnings excluding those from performance fees and other
components which may be volatile, non-recurring or non-cash in nature.
Core operating profit margin Core operating profit divided by Finance review To present additional information that allows users of the Annual Report to
net management fees revenue. measure the core profitability of the Group before performance fee profits,
and other components, which can be volatile and non-recurring.
Net management fee Gross management fees less commissions and fees payable. Finance review To present a clear view of the net amount of management fees earned by the
Group after accounting for commissions and fees payable.
Net management fee yield Net management fees divided by average AuM. Finance review To present additional information that allows users of the Annual Report to
measure the fee margin for the Group in relation to its assets under
management.
Summary of non-GAAP financial performance and reconciliation of APMs to
reported results
The summary below reconciles key APMs the Group measures to its reported
results for the current year and also reclassifies the line-by-line impact on
consolidation of seed investments to provide a clearer understanding of the
Group's core business operation of fund management.
Any seed investments in newly launched or nascent funds, where the Group is
determined to have control, are consolidated. As a consequence, the statement
of profit or loss of the fund is consolidated into that of the Group on a
line-by-line basis. Any seed investments that are not consolidated are fair
valued through a single line item (other income) on the Group consolidated
statement of profit or loss.
Reclassification 2025 2024
2025 on consolidation Non-GAAP Non-GAAP
Reported of seed Reclassification results results
Results investments of costs £'m £'m
£'m £'m £'m APMs
Investment management and research fees 206.1 - - 206.1 176.4
Commissions and fees payable (27.8) - - (27.8) (22.7)
178.3 - - 178.3 153.7 Net management fees
Operating costs (146.5) 0.3 75.4 (70.8) (65.9)
Finance costs (0.2) - - (0.2) (0.2)
- - (50.6) (50.6) (42.8) Core distributions
31.6 0.3 24.8 56.7 44.8 Core operating profit
Performance fees 16.0 - - 16.0 18.7
Performance fee interests - - (8.1) (8.1) (9.1) Performance fee interests
16.0 - (8.1) 7.9 9.6 Performance fee profits
Other income 4.0 (0.3) - 3.7 2.2
Exceptional items - - (14.8) (14.8) (1.2)
Share-based payments - - (1.9) (1.9) (0.7)
on preference shares
Profit for the year before tax
51.6 - - 51.6 54.7
Consolidated Statement of Profit or Loss
For the year ended 31 March 2025
31 March 2025 31 March 2024
£'000 £'000
Revenue 222,111 195,065
Other income 3,997 2,521
Gross income 226,108 197,586
Commissions and fees payable (27,775) (22,658)
Net income 198,333 174,928
Operating costs (146,483) (120,027)
Finance costs (205) (211)
Profit before tax 51,645 54,690
Taxation (16,335) (13,897)
Profit for the year attributable to ordinary shareholders 35,310 40,793
Earnings per share
Basic 36.6p 42.3p
Diluted 36.1p 41.8p
Adjusted basic (Non-GAAP measure) 54.2p 44.6p
Adjusted diluted (Non-GAAP measure) 53.5p 44.0p
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2025
31 March 2025 31 March 2024
£'000 £'000
Profit for the year attributable to ordinary shareholders 35,310 40,793
Other comprehensive income/(expense) - items that will be reclassified to
profit or loss statement in subsequent periods
Exchange differences on translation of foreign operations 345 (505)
Other comprehensive income/(expense) for the year 345 (505)
Total comprehensive income for the year, net of tax, attributable to ordinary 35,655 40,288
shareholders
All of the items in the above statements are derived from continuing
operations.
Consolidated Balance Sheet
As at 31 March 2025
31 March 2025
£'000 31 March 2024
£'000
Non-current assets
Goodwill and intangible assets - 14,774
Property and equipment 6,129 8,307
Deferred tax assets 4,264 1,938
10,393 25,019
Current assets
Assets at fair value through profit or loss 63,347 62,433
Trade and other receivables 22,880 21,070
Other financial assets 1,539 3,393
Assets at amortised cost - 6,698
Cash and cash equivalents 121,819 98,880
Current tax assets 149 127
209,734 192,601
Total assets 220,127 217,620
Non-current liabilities
Provisions and other liabilities 5,123 7,537
Liabilities at fair value through profit or loss 68 249
5,191 7,786
Current liabilities
Liabilities at fair value through profit or loss 5,808 5,425
Trade and other payables 71,158 64,128
Provisions - 247
Other financial liabilities - 9
Current tax liabilities 3,527 4,127
80,493 73,936
Total liabilities 85,684 81,722
Net assets 134,443 135,898
Capital and reserves
Issued share capital 2,539 2,530
Share premium 19,364 19,364
Investment in own shares (29,731) (34,652)
Capital and other reserves 12,277 12,019
Retained earnings 129,994 136,637
Total equity - attributable to ordinary shareholders 134,443 135,898
Consolidated Statement of Changes in Equity
For the year ended 31 March 2025
Issued share capital £'000 Investment in own shares
Share premium £'000 Capital reserves Other reserves Retained earnings
£'000 £'000 £'000 £'000 Total equity
£'000
As at 1 April 2023 2,520 19,364 (31,623) 695 11,604 140,295 142,855
Profit for the year - - - - - 40,793 40,793
Other comprehensive expense - - - - (505) - (505)
Total comprehensive income - - - - (505) 40,793 40,288
Dividends paid to shareholders - - - - - (44,329) (44,329)
Issue of shares 10 - - - - (10) -
Own shares acquired - - (9,858) - - - (9,858)
Release of own shares - - 6,829 - - (5,195) 1,634
Share-based payment - - - - - 5,083 5,083
Current tax in respect of employee share options - - - - 18 - 18
Deferred tax in respect of employee share options - - - - 207 - 207
As at 1 April 2024 2,530 19,364 (34,652) 695 11,324 136,637 135,898
Profit for the year - - - - - 35,310 35,310
Other comprehensive income - - - - 345 - 345
Total comprehensive income - - - - 345 35,310 35,655
Dividends paid to shareholders - - - - - (44,403) (44,403)
Issue of shares 9 - - - - - 9
Own shares acquired - - (1,598) - - - (1,598)
Release of own shares - - 6,519 - - (4,559) 1,960
Share-based payment - - - - - 7,009 7,009
Current tax in respect of employee share options - - - - (112) - (112)
Deferred tax in respect of employee share options - - - - 25 - 25
As at 31 March 2025 2,539 19,364 (29,731) 695 11,582 129,994 134,443
Consolidated Cash Flow Statement
For the year ended 31 March 2025
31 March 2025 31 March 2024
£'000 £'000
Cash flows generated from operating activities
Cash generated from operations 80,707 51,978
Tax paid (19,371) (12,419)
Interest received 2,682 2,348
Net cash inflow generated from operating activities 64,018 41,907
Cash flows generated from investing activities
Investment income 345 430
Sale of assets/liabilities at fair value through profit or loss 44,010 56,105
Purchase of assets at fair value through profit or loss (46,945) (36,415)
Redemption/(purchase) of assets at amortised cost 6,698 (6,698)
Purchase of property and equipment (170) (243)
Sale of property and equipment 12 -
Payments in respect of asset acquisition (39) (70)
Net cash inflow from investing activities 3,911 13,109
Cash flows generated from financing activities
Dividends paid to shareholders (44,403) (44,329)
Lease payments (1,501) (1,734)
Interest on lease (205) (211)
Sale/(purchase) of own shares 364 (8,222)
Third-party subscriptions into consolidated funds 1,411 4,987
Third-party redemptions from consolidated funds (1,102) (13,415)
Net cash outflow from financing activities (45,436) (62,924)
Net increase/(decrease) in cash and cash equivalents 22,493 (7,908)
Cash and cash equivalents at start of the year 98,880 106,976
Effect of exchange rate changes on cash and cash equivalents 446 (188)
Cash and cash equivalents at end of the year 121,819 98,880
Selected notes to the Consolidated Financial Statements for the year ended 31
March 2025
1. General information, Basis of Preparation and Accounting policies
Corporate information
Polar Capital Holdings plc (the 'Company') is a public limited company
incorporated and domiciled in England and Wales whose shares are traded on the
Alternative Investment Market ('AIM') of the London Stock Exchange.
Group information
Details of operating subsidiaries, seed capital investments and indirectly
held entities consolidated into the Group are disclosed in Note 8 below.
Basis of preparation
The consolidated Group financial statements have been prepared on a going
concern basis in accordance with UK-adopted international accounting standards
and in conformity with the requirements of the Companies Act 2006. The
accounting policies used in the preparation of these financial statements have
been consistently applied, except when otherwise stated.
The consolidated financial statements have been prepared under the historical
cost convention, modified by the measurement at fair value of certain
financial assets and liabilities and derivative financial instruments. The
consolidated financial statements are presented in Sterling and all values are
rounded to the nearest thousand (£'000), except when otherwise stated.
Going concern
The Directors have made an assessment of going concern taking into account
both the Group's results as well as the impact of the Group's outlook. As part
of this assessment the Directors have used a range of information available to
the date of issue of these financial statements and considered the Group
budget, longer term financial projections, cash flow forecasts and an analysis
of the Group's liquid assets and its regulatory capital position and
forecasts. The stress testing scenarios applied as part of the Group's ICARA
have also been revisited to ensure they remain appropriate.
The Group continues to maintain a robust financial resources position, access
to cashflow from ongoing investment
management contracts and the Directors believe that the Group is well placed
to manage its business risks. The Directors also have a reasonable expectation
that the Group and the Company have adequate resources to continue operating
for a period of at least 12 months from the date of signing the financial
statements. Therefore, the Directors continue to adopt the going concern basis
of accounting in preparing the consolidated financial statements.
Basis of consolidation
The consolidated financial statements of the Group comprise the financial
statements of the Company and its subsidiaries for the year ended 31 March
2025. Subsidiaries are those entities over which the Group has control. The
Group controls an investee if, and only if, the Group has:
• Power over the investee;
• Exposure, or rights, to variable returns from its involvement with
the investee; and
• The ability to use its power over the investee to affect returns.
The Group considers all relevant facts and circumstances in assessing whether
it has power over an investee, including the purpose and design of an
investee, relevant activities, substantive and protective rights, voting
rights and potential voting rights.
The financial statements of subsidiaries are either prepared for the same
reporting period as the parent company or where necessary, adjustments are
made to the financial statements of subsidiaries to bring their reporting
period and results in line with those of the Group. All intra-group
transactions, balances, income and expenses are eliminated on consolidation.
When the Group loses control over a subsidiary, it derecognises the related
assets, liabilities, third-party interest and other components of equity,
while any resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value.
Seed capital investments in funds that the Group manages are accounted for as
subsidiaries, associates or financial assets at fair value through profit or
loss (FVTPL) depending on the holdings of the Group, on the level of influence
and control that the Group is judged to have and whether the Group assesses it
is acting as an agent or principal for its holdings in the seed capital
investments. There is no fixed minimum percentage at which the Group
consolidates, and each exposure is reviewed individually.
Where the Group concludes it is acting as a principal the entity is
consolidated. This assessment is based on the Group's total exposure. This
incorporates direct holdings, income earned from management and performance
fees and the assessed strength of third-party kick-out rights. The funds
consolidated at 31 March 2025 are disclosed in Note 8.
The Group concludes that it acts as an agent when the power it has over an
entity is deemed to be exercised for the benefit of third-party investors.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which the Group obtains control and continue to be consolidated until the date
when such control ceases.
Where external investors hold redeemable shares in funds controlled by the
Group, the portion of profit or loss and net assets held by these third-party
interests is included within other income in the consolidated statement of
profit or loss and as financial liabilities at FVTPL in the consolidated
balance sheet respectively.
Net cashflows on initial consolidation or deconsolidation are presented as
investing activities within the consolidated cashflow statement. Cashflows
from third-party interests into consolidated funds are presented as financing
activities.
Investment in associates
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control
over those policies. Generally, it is presumed that the Group has significant
influence where it has voting rights of 20% or more, but not control of an
investee.
Seed capital investments over which the Group has significant influence, but
not control, are carried on the balance sheet as assets at FVTPL as permitted
by IAS 28: Investment in Associates, with changes in fair value recognised in
the consolidated statement of profit or loss. The fair value of investments in
associates is determined by reference to the quoted price at the close of
business on the balance sheet date. The Group has no other investments in
associates and, therefore, no associates are currently accounted for using the
equity method.
Goodwill and intangible assets
Goodwill arising on the acquisition of a business is the excess of the
consideration paid over the net identifiable assets acquired and liabilities
assumed. Goodwill is measured at cost less any accumulated impairment losses.
Impairment testing is based on the expected future benefits of the relevant
cash-generating unit (CGU) as a whole.
Intangible assets such as investment management contracts acquired separately
are measured on initial recognition at cost which is their fair value as at
acquisition date. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses,
with the related expenditure or charge recognised in the consolidated
statement of profit or loss. Intangible assets are amortised on a
straight-line basis over their useful economic lives. Intangible assets are
derecognised upon disposal or when no future economic benefits are expected
from their use or disposal. Any gain or loss on derecognition is included in
the consolidated statement of profit or loss.
Financial assets
The Group's financial assets include seed capital investments, investment
securities, trade and other receivables, cash and cash equivalents, term
deposits with a maturity greater than three months and derivative financial
instruments. The classification adopted by the Group depends on the purpose
for which the financial assets were acquired and is determined at initial
recognition.
Financial assets are initially recognised at fair value, being the
consideration given, plus, any directly attributable transaction costs, except
in the case of financial assets recorded at fair value through profit or loss
where transaction costs are immediately recognised in the consolidated
statement of profit or loss.
Purchases and sales of financial assets are recognised at trade date, being
the date when the Group commits to purchase or sell the asset.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets at FVTPL include the Group's investments in the funds that it
manages, but does not control, including those which are held by the Group
against bonus awards deferred into fund units. Such assets are subsequently
carried at fair value, with any gains or losses arising from changes in fair
value being recognised in the consolidated statement of profit or loss.
Financial assets at amortised cost
Financial assets at amortised cost include term deposits with a maturity
greater than three months. These assets are held for collection of contractual
cash flows representing solely payments of principal and interest and are
subsequently carried at amortised cost over the term of the deposit with
interest income recognised in the consolidated statement of profit or loss in
accordance with the effective interest method.
Investment securities
Investment securities represent securities both long and short positions,
other than derivatives, held by consolidated funds. These securities are
classified as FVTPL and are measured at fair value with gains and losses
recognised through the consolidated statement of profit or loss.
Financial liabilities
The Group's financial liabilities include trade and other payables, derivative
financial instruments and third-party interests in funds that have been
consolidated as subsidiaries.
Financial liabilities at fair value through profit or loss
Financial liabilities at FVTPL are carried at fair value, with gains and
losses recognised in the consolidated statement of profit or loss within other
income in the period in which they arise. Financial liabilities at FVTPL
include third-party interests in consolidated funds which are classified as at
FVTPL.
Contingent liabilities
Contingent liabilities are potential obligations that may arise due to
uncertain future events that are not wholly within the control of the Group.
Such liabilities are disclosed when the chance of such events occurring is no
longer remote.
Revenue from contracts with customers
Revenue from contracts with customers represents fees receivable, excluding
value added tax, for discretionary investment management services and research
fees during the year.
Management fees are based on a percentage of assets under management either
per day or calendar month and payable monthly or quarterly as set out in the
relevant investment management agreements (IMA). Management fees relate
specifically to the Group's provision of investment management services for
each relevant time period and therefore such services are satisfied over time
because either the customer simultaneously receives and consumes the benefits
provided by the fund manager as the service is provided or, the fund manager's
performance enhances the assets that the fund controls. Management fees are
recognised as the service is provided and it is probable that the fee will be
collected.
Research fee income relates to research provided in respect of funds managed
in accordance with the relevant IMA and is recognised as the service is
provided and it is probable that the fee will be collected.
Performance fees are variable consideration based on a percentage of
investment performance achieved relative to
predefined benchmarks as set out in the relevant IMA. Performance fees by
their nature are highly susceptible to volatility until they are crystallised
and are no longer subject to claw back. This is usually at the end of the
performance period of a fund when the performance fee calculation can be
confirmed with certainty. Therefore, performance fees are recognised at the
point when they are crystallised.
Commissions and fees payable
Commissions and fees payable to third parties are in respect of rebates on
investment management fees, distribution and research fees, and are recognised
over the period for which the service is provided.
Standards and amendments not yet effective
There are no new or amended standards and interpretations that are issued, but
not yet effective, up to the date of issuance of the Group's consolidated
financial statements that would be expected to have a material impact on the
Group when they become effective.
Changes in accounting policies and disclosures
No standards or amendments have been issued during the year that have had or
are expected to have an impact on the Group's consolidated financial
statements.
2. Revenue
31 March 2025 31 March 2024
£'000 £'000
Investment management and research fees 206,139 176,400
Investment performance fees 15,972 18,665
222,111 195,065
Geographical analysis of revenue (by location of the funds) is as follows:
31 March 2025 31 March 2024
£'000 £'000
United Kingdom 39,068 32,599
Ireland 175,578 152,419
Rest of Europe 4,123 7,093
Cayman Islands 1,315 1,215
United States of America 962 341
Rest of the world 1,065 1,398
222,111 195,065
3. Operating costs
a) Operating costs include the following expenses:
31 March 2025 31 March 2024
£'000 £'000
Staff costs including partnership profit allocations 103,282 90,110
Depreciation 2,485 2,470
Amortisation and impairment of goodwill and intangible assets 14,774 1,163
Auditors' remuneration 680 615
b) Auditors' remuneration:
31 March 2025 31 March 2024
£'000
£'000
Audit of Group and Company financial statements 188 177
Statutory audits of subsidiaries 309 258
Audit-related assurance services 34 38
Other assurance services - internal controls report 149 142
680 615
4. Dividends paid and proposed
Dividends on ordinary shares declared and paid during the year:
31 March 2025 31 March 2024
£'000 £'000
First interim dividend for 2025: 14.0p per share (2024: 14.0p per share) 13,534 13,464
Second interim dividend for 2024: 32.0p per share (2023: 32.0p per share) 30,869 30,865
Total dividend paid and charged to equity 44,403 44,329
The Board has declared a second interim dividend per share of 32.0p (2024:
32.0p) to be paid in August 2025.
Together with the first interim dividend per share of 14.0p paid in January
2025 the total dividend per share for the year amounts to 46.0p (2024: 46.0p).
5. Share-based payments
A summary of the charge to the consolidated statement of profit or loss for
each share-based payment arrangement is as follows:
31 March 2025 31 March 2024
£'000 £'000
Preference shares 1,942 715
LTIP awards 2,362 1,867
Equity incentive plan 708 616
Deferred remuneration plan 1,997 1,885
7,009 5,083
Certain employees of the Group and partners of Polar Capital LLP hold Manager
Preference Shares or Manager Team Member Preference Shares (together
'Preference Shares') in Polar Capital Partners Limited, a group company.
The preference shares are designed to incentivise and retain the Group's fund
management teams. These shares provide each manager with an economic interest
in the funds that they run and ultimately enable the manager, at their option
and at a future date, to convert their interest in the revenues generated from
their funds to a value that may (at the discretion of the parent undertaking,
Polar Capital Holdings plc) be satisfied by the issue of ordinary shares in
Polar Capital Holdings plc. Such conversion takes place according to a
pre-defined conversion formula that considers the relative contribution of the
manager to the Group as a whole. The equity is awarded in return for the
forfeiture of a manager's current core economic interest and is issued over
three years from the date of conversion.
The issue of the Preference Shares constitutes a share-based payment under
IFRS 2 and the cost is the estimated fair value, at the date of issue of the
preference shares, of the effective entitlement to the ordinary shares. At
each reporting date the estimated number of ordinary shares to be ultimately
issued upon conversion will vary and the holder, initially, and the Group,
ultimately, determines the start of the three-year period ('Crystallisation')
over which the ordinary shares are awarded following conversion. The start of
this period will always be at least three years after the end of the financial
accounting period in which the preference shares are issued.
The expected life of the Preference Shares is 6 years (2024: 6 years). In the
year to 31 March 2025, the Convertibles team called for a partial conversion
of preference shares into Polar Capital Holdings plc equity (2024: no
conversion).
At 31 March 2025 five sets of preference shares (2024: five sets) have the
right to call for conversion.
The following table illustrates the number of, and movements in, the estimated
number of ordinary shares to be issued.
Estimated number of ordinary shares to be issued against preference shares
with a right to call for conversion:
31 March 2025 31 March 2024
Number of shares Number of shares
At 1 April 2,234,988 2,367,680
Conversion/crystallisation (114,716) -
Movement in the year 288,916 (132,692)
At 31 March 2,409,188 2,234,988
Number of ordinary shares to be issued against converted preference shares:
31 March 2025 31 March 2024
Number of shares Number of shares
Outstanding at 1 April 353,055 810,310
Conversion/crystallisation 114,716 -
Adjustment on re-calculation (79,338) (52,101)
Issued in the year (364,526) (405,154)
Outstanding at 31 March 23,907 353,055
6. Earnings per Share
A reconciliation of the figures used in calculating the basic, diluted,
adjusted basic and adjusted diluted total earnings per share (EPS) is as
follows:
31 March 2025 31 March 2024
£'000 £'000
Earnings
Profit after tax for purpose of basic and diluted EPS 35,310 40,793
Adjustments (post tax):
Add exceptional items - amortisation of intangible assets 1,163 1,163
Add exceptional items - impairment of goodwill and intangible assets 13,611 -
Add back cost of share-based payments on preference shares 1,942 715
Add net amount of deferred staff remuneration 315 344
Profit after tax for purpose of adjusted basic and adjusted diluted total EPS 52,341 43,015
The adjusted EPS figure includes an adjustment for deferred remuneration
costs. The Group believes that aligning staff remuneration and profits
generated in the same period will allow users of the financial statements a
useful supplemental understanding of the Group's results and their
comparability year on year.
Exceptional items were also excluded from the adjusted EPS calculations as
they included non-cash/non-recurring costs such as the amortisation and
impairment of previously acquired goodwill and intangible assets.
31 March 2025 31 March 2024
Number of shares Number of shares
'000 '000
Weighted average number of shares
Weighted average number of ordinary shares, excluding own shares, for the 96,556 96,376
purpose of basic and adjusted basic EPS
Effect of dilutive potential shares - LTIPs, share options and preference 1,313 1,317
shares crystallised but not yet issued
Weighted average number of ordinary shares, for purpose of diluted and 97,869 97,693
adjusted diluted total EPS
31 March 2025 31 March 2024
Pence Pence
Earnings per share
Basic 36.6 42.3
Diluted 36.1 41.8
Adjusted basic 54.2 44.6
Adjusted diluted 53.5 44.0
7. Goodwill and intangible assets
Investment management
contracts
Goodwill £'000 Total
£'000 £'000
Cost
As at 1 April 2024 6,732 18,647 25,379
As at 31 March 2025 6,732 18,647 25,379
Accumulated amortisation and impairment
As at 1 April 2024 - 10,605 10,605
Amortisation for the year - 1,163 1,163
Impairment for the year 6,732 6,879 13,611
As at 31 March 2025 6,732 18,647 25,379
Net book value as at 31 March 2025 - - -
Cost
As at 1 April 2023 6,732 18,647 25,379
As at 31 March 2024 6,732 18,647 25,379
Accumulated amortisation and impairment
As at 1 April 2023 - 9,442 9,442
Amortisation for the year - 1,163 1,163
As at 31 March 2024 - 10,605 10,605
Net book value as at 31 March 2024 6,732 8,042 14,774
Amortisation and impairment of intangible assets and goodwill are treated as
exceptional items.
(a) Goodwill
Goodwill relates to the acquisition of Dalton Capital (Holdings) Limited, the
parent company of Dalton Strategic Partnership LLP, a UK based boutique asset
manager acquired on 26 February 2021 and was attributable to a single CGU. The
goodwill was impaired in full during the year ended 31 March 2025, for the
reasons discussed below.
(b) Intangible assets
The table below shows the carrying amount assigned to each component of the
intangible asset and the remaining
amortisation period.
31 March 2025 31 March 2024
Remaining amortisation Remaining
Carrying value period Carrying value amortisation
£'000 £'000 period
Investment management contracts acquired from Dalton Capital (Holdings) - - 8,042 6.9 years
Limited
- 8,042
Due to the challenging environment for small and mid-cap European equities and
continued net outflows over most of the financial year from the CGU, the Group
reassessed the value of the goodwill and intangible assets originally
recognised on the acquisition of Dalton Capital (Holdings) Limited at 31 March
2025.
Following this review, it was concluded that the expected present value
attributable to the acquired business was below the carrying value of these
assets at 31 March 2025. The present value was determined using a value-in-use
calculation based on a discounted cash flow model. As a result, an impairment
charge of £13.6m was recognised in the consolidated statement of profit or
loss within operating costs comprising:
• £6.7m relating to goodwill (2024: £nil)
• £6.9m relating to investment management contracts (2024 £nil)
As a result of this impairment, both the goodwill and intangible assets
associated with this CGU have been fully derecognised.
8. Subsidiary undertakings
The consolidated financial statements of the Group include the operating
subsidiaries listed below. At 31 March 2025 and 2024 all operating
subsidiaries, other than Polar Capital Partners Limited and Polar Capital US
Holdings Limited, were indirectly held. All operating subsidiaries are wholly
owned, except for: Polar Capital LLP in which Polar Capital Partners Limited
has contributed 72% (2024: 63%) of the capital. The Company is deemed to be
the controlling party of Polar Capital LLP.
Name Country of incorporation Registered Principal
office activities
Polar Capital Partners Limited UK 16 Palace Street, London, UK Services company
Polar Capital US Holdings Limited UK 16 Palace Street, London, UK Investment holding company
Polar Capital LLP UK 16 Palace Street, London, UK Investment management
Polar Capital Secretarial Services Limited UK 16 Palace Street, London, UK Corporate secretary
Polar Capital Partners (Jersey) Limited Jersey 12 Castle Street, St Helier, Jersey Dormant
Polar Capital (America) Corporation USA 2711 Centreville Road, Wilmington, Delaware, USA Investment advisory
Polar Capital (Europe) SAS France 18 Rue de Londres, Paris, France Investment management
Polar Capital (Shanghai) Consulting Co Limited China Bund Finance Centre S2, No.600 Zhongshan East 2 Road, Shanghai, China Services company
Polar Capital Holdings LLC USA 1209 Orange Street, Wilmington, Delaware, USA Investment holding company
Polar Capital (Switzerland) AG Switzerland Klausstrasse 4, Zurich, Switzerland Investment management
Polar Capital (Singapore) Private Limited Singapore 77 Robinson Road, #13-00, Robinson 77, Singapore (068896) Services company
The consolidated financial statements of the Group also include the following
seed capital investments and indirectly held entities which were judged to
require consolidation into the Group as at 31 March 2025:
Name Country of Registered office Principal activities Percentage
incorporation of ordinary
shares held
Polar Capital China Stars Fund Ireland 4 Georges Court, 54-62 Townsend Street, Dublin, Ireland UCITS sub-fund 78%
Polar Capital Smart Mobility Fund Ireland 4 Georges Court, 54-62 Townsend Street, Dublin, Ireland UCITS sub-fund 51%
Polar Capital Emerging Market Healthcare Fund Ireland 4 Georges Court, 54-62 Townsend Street, Dublin, Ireland UCITS sub-fund 71%
Polar Capital Emerging ex-China Stars Fund Ireland 4 Georges Court, 54-62 Townsend Street, Dublin, Ireland UCITS sub-fund 86%
Polar Capital Emerging ex-China Stars Fund USA 50 S.LaSallee Street, Chicago, USA Mutual fund 100%
On 30 September 2024, the Group obtained control of the Polar Capital
International Small Company Fund, a U.S.-domiciled 40-act mutual fund and as
such, the Group consolidated the fund in accordance with IFRS 10 from that
date.
As a result of third-party investors subscription, the Group concluded that it
lost control of the fund on 28 February 2025 and deconsolidated the fund from
that date.
A consolidated loss of £0.4m relating to the fund was recognised for the
period from 30 September 2024 to 28 February 2025, representing the Group's
share of the fund's profit or loss while under control. A corresponding profit
on deconsolidation of £0.4m was recognised in the consolidated statement of
profit or loss. As a result, the net impact on the Group's profit for the year
was nil.
9. Financial Instruments
The fair value of financial instruments that are traded in active markets at
each reporting date is determined by reference to quoted market prices or
dealer price quotation (bid price for long positions and ask price for short
positions), without any deduction for transaction costs. For financial
instruments not traded in an active market, such as forward exchange
contracts, the fair value is determined using appropriate valuation techniques
that take into account the terms and conditions of the contracts and utilise
observable market data, such as spot and forward rates, as inputs.
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities.
Level 2: other techniques for which all inputs which have a significant effect
on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
At the end of both the current year as well as the comparative period, all
financial instruments at fair value through profit or loss held by the Group
were Level 1 except for:
• forward foreign exchange contracts classified as Level 2. These
were fair valued using valuation techniques that incorporate foreign exchange
spot and forward rates.
• other financial liability classified as Level 3. These were fair
valued using a discounted cash flow models that incorporate unobservable
inputs.
The fair value hierarchy of financial assets and liabilities which are carried
at fair value at the year-end is as follows:
31 March 2025 31 March 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial assets
Assets at FVTPL 63,347 - - 63,347 62,433 - - 62,433
Other financial assets 1,508 31 - 1,539 3,393 - - 3,393
64,855 31 - 64,886 65,826 - - 65,826
Financial liabilities
Liabilities at FVTPL 5,793 - 83 5,876 5,380 - 294 5,674
Other financial liabilities - - - - - 9 - 9
5,793 - 83 5,876 5,380 9 294 5,683
Movement in liabilities at FVTPL categorised as Level 3 during the year were:
31 March 2025 31 March 2024
£'000 £'000
At 1 April 294 546
Repayment (39) (70)
Net gain recognised in the statement of profit or loss (172) (182)
At 31 March 83 294
The fair value of financial instruments not held at fair value approximates to
their carrying value as at reporting date. During the reporting year there
were no transfers between levels in fair value measurements.
10. Cash flows generated from operations
A reconciliation of profit before tax to cash generated from operations is as
follows:
31 March 2025 31 March 2024
£'000 £'000
Profit before tax 51,645 54,690
Adjustments for:
Interest receivable and similar income (2,682) (2,348)
Investment income (345) (430)
Interest on lease 205 211
Depreciation of non-current property and equipment 2,485 2,470
Amortisation and impairment of goodwill and intangible assets 14,775 1,163
(Increase)/decrease in assets at FVTPL (1,772) 2,934
Increase in other financial assets and liabilities 1,567 213
Increase in receivables (1,810) (1,546)
Increase/(decrease) in trade and other payables including other provisions 5,727 (7,094)
Share-based payment 7,009 5,083
Increase/(decrease) in liabilities at FVTPL(1) 60 (2,158)
Changes relating to fund units held against deferred remuneration 3,843 (1,210)
Cash flows generated from operations 80,707 51,978
1. Movement includes those arising from acquiring and/or losing control of
consolidated seed funds.
11. Contingent liabilities
There are no contingent liabilities to disclose at 31 March 2025 (2024: nil).
12. 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.
13. Status of results announcement
The Board of Directors approved this results announcement on 27 June 2025.
Whilst the financial information included in this announcement has been
prepared in accordance with UK-adopted international accounting standards,
this announcement does not itself contain sufficient information to comply
with all the disclosure requirements of UK-adopted international accounting
standards and does not constitute statutory accounts of the Group for the
years ended 31 March 2025 or 31 March 2024.
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EASKEDDNSEEARecent news on Polar Capital Holdings
See all newsREG - Polar Capital Hldgs - Change of Nominated Adviser
AnnouncementREG - Polar Capital Hldgs - Group Audited Results for year ended 31 March 2025
AnnouncementREG - Polar Capital Hldgs - CEO Succession
AnnouncementREG - Polar Capital Hldgs Alpha Group Intl PLC - Form 8.3 - Alpha Group International PLC
AnnouncementREG - Polar Capital Hldgs Alpha Group Intl PLC - Form 8.3 - Alpha Group International PLC
Announcement