TIDMIPX
RNS Number : 0835B
Impax Asset Management Group plc
31 May 2023
Impax Asset Management Group plc
Interim results to 31 March 2023
London, 31 May 2023 - Impax Asset Management Group plc ('Impax'
or the 'Company'), the specialist investor focused on a more
sustainable global economy, today announces interim results for the
six months to 31 March 2023 (the 'Period').
H1 Business highlights
-- Positive net inflows of GBP1.1 billion during the Period,
well diversified by channel and geography. Additional contribution
to AUM of GBP 3.3 billion from market movements, investment
performance and the impact of foreign exchange effects
-- Continued long-term outperformance of major strategies versus respective benchmarks
-- Expanded international footprint and direct distribution
capabilities, including opening a new office in Tokyo, Japan
-- Expanded product base, including launching an actively
managed listed equities fund investing in sustainable
infrastructure
H1 Financial highlights
-- AUM GBP40.1 billion as at 31 March 2023 (H1 2022: GBP38.0 billion; H2 2022 GBP35.7 billion)
-- Revenue of GBP88.0 million (H1 2022: GBP88.6 million; H2 2022: GBP86.8 million)
-- Adjusted operating profit of GBP27.3 million (H1 2022:
GBP34.0 million; H2 2022 GBP33.4 million)
-- Shareholders' equity at Period end GBP119.7 million (H2 2022: GBP112.3 million)
-- Adjusted diluted earnings per share of 17.2 pence (H1 2022: 21.1 pence; H2 2022 21.0 pence)
-- Interim dividend per share of 4.7 pence (H1 2022: 4.7 pence;
FY 2022, Total dividend 27.6 pence)
Ian Simm, Chief Executive commented:
"Impax has delivered a solid first half to its financial year,
despite challenging macroeconomic conditions. During the Period,
our AUM rose by 12% to reach GBP40.1 billion, driven by positive
net flows of GBP 1.1 billion. By 30 April 2023, our AUM had fallen
slightly to GBP39.4 billion.
"Thanks to positive net flows and rising equities markets, our
revenue grew compared to the second half of 2022, while adjusted
operating profit fell, reflecting our investment in people and
systems to support our growth strategy and to increase our
operational resilience. We continue to carefully manage our costs
in line with external market conditions and at the end of the
Period, our run-rate adjusted operating margin was 31.8%, only
slightly lower than the equivalent figure at the start of the
Period (32.6%).
"Impax's specialist approach positions us well to benefit
particularly from supportive policy and regulatory drivers,
including the Inflation Reduction Act in the US and equivalent
measures in Europe and Asia. Asset owners and advisers continue to
be attracted to the investment opportunities arising from the
transition to a more sustainable economy and, notwithstanding the
current backdrop of weak market sentiment, our pipeline of new
business remains healthy."
The presentation for shareholders and analysts will be available
to view on the Company's website later this morning:
https://www.impaxam.com/investor-relations/reports-and-presentations
Enquiries:
Impax Asset Management Group
plc
Ian Simm, Chief Executive
Paul French, Head of Corporate
Communications +44 (0)20 3912 3000
Montfort Communications
Gay Collins
Jack Roddan +44 (0)77 9862 6282
impax@montfort.london +44 (0)78 2567 0695
Peel Hunt LLP, Nominated Adviser
and Joint Broker
Paul Shackleton or John Welch +44 (0)20 7418 8900
Berenberg, Joint Broker
Gillian Martin +44 (0)20 3207 7800
LEI number: 213800AJDNW4S2B7E680
About Impax
Founded in 1998, Impax is a specialist asset manager, with
approximately GBP39.4 billion as of 30 April 2023 in both listed
and private markets strategies, investing in the opportunities
arising from the transition to a more sustainable global
economy.
Impax believes that capital markets will be shaped profoundly by
global sustainability challenges, including climate change,
pollution and essential investments in human capital,
infrastructure and resource efficiency. These trends will drive
growth for well-positioned companies and create risks for those
unable or unwilling to adapt.
The company seeks to invest in higher quality companies with
strong business models that demonstrate sound management of risk.
Impax offers a well-rounded suite of investment solutions spanning
multiple asset classes seeking superior risk-adjusted returns over
the medium to long term.
Impax has approximately 290 employees across its offices in the
United Kingdom, the United States, Ireland, Hong Kong and Japan,
making it one of the investment management sector's largest
investment teams dedicated to sustainable development.
www.impaxam.com
Chief Executive's Report
Business Update
Impax delivered a solid first half to its financial year, which
includes the six months to 31 March 2023 ("the Period"). Despite
challenging macroeconomic and inflationary conditions, we reported
positive net flows, benefiting from rising equities markets and the
relative outperformance by our major investment strategies.
During the Period, Impax's assets under management and advice
("AUM") rose by 12.4% to reach GBP40.1 billion. This was driven by
positive net flows of GBP1.1 billion, and GBP3.3 billion from
market movements, investment performance and the impact of foreign
exchange movements. By 30 April 2023, our AUM had fallen slightly
to GBP39.4 billion.
While all asset managers currently face a complex operating
environment, our performance demonstrates the robust nature of the
Company and how Impax's specialist approach enables us to benefit
from supportive secular, policy and regulatory drivers. Some
significant mandate wins during the Period also highlight how asset
owners and their advisers continue to be attracted to the
investable opportunities arising from the transition to a more
sustainable economy and, notwithstanding the current backdrop of
weak market sentiment, our pipeline of new business remains
healthy.
Markets
During the six months of the Period, global equities posted
modest gains. Corporate revenues broadly remained strong, but
earnings were under pressure as higher costs impacted companies'
margins. Economic data meanwhile was mixed with indicators in the
US and Europe signalling contraction.
Investors' attention continued to be focused on inflation,
interest rates and the potential impact on the real economy. Market
sentiment swung between optimism that the rate cycle would soon
peak and concern that central banks would continue to raise rates
too far as they attempt to combat inflation.
Meanwhile, policy support continues to provide tailwinds for
investors focused on the transition to a more sustainable economy.
The US' Inflation Reduction Act, the EU's Green Deal Industrial
Plan, and similar climate-related measures in China and India, have
already attracted capital flows into many areas of the economy in
which Impax invests. This includes opportunities around renewables,
transformation of the grid, and electric vehicles.
Investment Performance
Impax offers actively managed Listed Equities strategies that
use our Environmental Markets taxonomies and the Impax
Sustainability Lens, as well as strategies in Fixed Income and
Private Markets.
For the six-month Period, all of our thematic Environmental
Markets strategies outperformed their benchmarks. Two out of three
of our Sustainability Lens equities strategies outperformed their
benchmarks, including Global Opportunities, our largest strategy,
which outperformed the MSCI All Country World Index by 4.5%.
Meanwhile, in Fixed Income, the Core Bond strategy and the High
Yield strategy both performed broadly in line with their
benchmarks.
Longer term, eight out of our ten largest strategies, accounting
for 90.4% of our AUM, have continued to outperform their benchmarks
over five years, with seven out of ten outperforming over three
years.
AUM movement for the Period
Listed Fixed Private Total
equities income markets firm
GBPm GBPm GBPm GBPm
------------------------------------- ---------- -------- --------- -------
Total AUM at 30 September 2022 33,801 1,354 521 35,676
Net flows 1,089 11 23 1,123
Market movement, FX and performance 3,376 (61) 1 3,316
------------------------------------- ---------- -------- --------- -------
Total AUM at 31 March 2023 38,266 1,304 545 40,115
------------------------------------- ---------- -------- --------- -------
Client Service and Business Development
We continued to expand our international footprint, focusing on
strengthening our own direct distribution capabilities, especially
in Europe, and consolidating our partner relationships,
particularly in the US and Asia-Pacific. We also made good progress
in developing and launching new products and building our
brand.
In March we opened a new office in Japan, following our
selection by the Tokyo Metropolitan Government to receive a Green
Finance Subsidy. We have served Japanese clients since 2008 and
were pleased to win a significant segregated mandate from a
Japanese pension fund during the Period.
In the US, we also announced that the Pax World mutual fund
range would be renamed under the Impax brand, becoming the Impax
Funds, effective 31 December 2022. We have increased the
availability of the Impax Funds on several of the largest wealth
management platforms. For US institutions, we intend to make these
Funds available for larger defined contribution plans, with the
launch of two sub-trusts of a collective investment trust ("CIT")
later this year.
In the UK and European Union, we continued to see a shift
towards our own direct distribution channels. Overall, the
proportion of revenues from the BNP Paribas Asset Management range
of SICAV mutual funds fell to 29%, compared to 32% in March
2022.
Inflows during the Period were directed particularly into our
Sustainability Lens equities strategies, with the US Large Cap
strategy seeing net inflows of GBP751 million. This included a
Japanese pension fund mandate and the launch of a sub-advisory
mandate with ABN AMRO. Global Opportunities saw net inflows of
GBP708 million, including subscriptions through our distribution
relationships with St. James's Place in the UK and Formuepleje in
Denmark.
Of our thematic Environmental Markets equities strategies,
Climate and Sustainable Food received the greatest investor
interest and saw net inflows of GBP211 million and GBP77 million
respectively.
Our Ireland-based UCITS fund range grew by 2.7% to GBP2.0
billion, despite net outflows of GBP117 million. Impax
Environmental Markets plc saw its total net assets increase by 6.8%
during the Period. In the US, the Impax Funds' (formerly Pax World
funds) AUM grew by 14.5% to US$8.2 billion, despite net outflows of
US$194 million.
Within Private Markets, our team successfully exited two Spanish
solar PV investments through our third fund. The fourth fund has
been fundraising while progressing its investment programme, with
eight projects closed and EUR107.5 million invested by the Period
end. In April, the fourth fund also held the third close of its
fundraising, taking total capital commitments to EUR300.3 million
by 30 April 2023.
As part of our new product development, we launched an actively
managed, listed equities UCITS fund investing in Sustainable
Infrastructure in November.
We are currently developing a new listed equities product
targeted at Social themes, with a launch planned for the second
half of the calendar year and are exploring a number of
opportunities in fixed income.
All our funds marketed into Europe for which an Impax entity
acts as the sponsor and management company, are classified as
either Article 8 or 9 under the EU's Sustainable Finance Disclosure
Regulation ("SFDR"). We believe that this regulation, along with
its equivalents in the US and UK, will be positive for our
business.
Meanwhile, we continue to invest in our brand and enhance the
client experience beyond the pursuit of financial returns. This
includes activity relating to stewardship, policy advocacy,
environmental & social impact, and insights, including current
research with Imperial College, London on biodiversity and with the
University of Oxford on physical climate risk. Informed by our
25-year history focusing on this area, we believe this increases
our and our clients' understanding of investable opportunities and
enables us to better manage risk.
After the Period end, we were pleased to be one of eight asset
managers to categorised as a "Leader" by Morningstar for our
incorporation of ESG factors into our investment process.
Morningstar evaluated 94 companies globally for its report.
Corporate services
Through our recent growth we have been selectively investing in
systems, infrastructure, risk and compliance capabilities to
increase our operational resilience and procedures as the business
expands.
During the Period we moved our customer relationship management
system to Salesforce, in order to establish a scalable platform for
client relations. We have also extended our data management
capabilities and automated some processes within the middle
office.
To support our expanding business, we continued to hire during
the Period, albeit at a slower rate than in the recent past. By the
end of the Period, our number of employees had risen by 6% to
289.(1)
1. Full-time equivalent.
While we continue to invest in our people and systems to support
our growth strategy and increase our resilience, we are carefully
managing our costs in line with external market conditions.
Performance for Environmental Markets strategies (1, 2, 3)
Cumulative returns (%), GBP, gross
of fees
------------------------- ---------- -----------------------------------------
AUM 6M 1YR 3YR 5YR
Leaders GBP7.8bn 13.9 5.9 70.2 73.4
Water GBP6.2bn 13.1 5.6 78.9 86.8
Specialists GBP3.6bn 7.5 (1.3) 78.3 76.6
Climate GBP3.1bn 6.4 (2.7) 67.7 75.2
Sustainable Food GBP1.5bn 9.7 0.9 51.5 43.8
MSCI ACWI 6.3 (1.4) 54.0 58.6
Asian Environmental GBP1.5bn 7.7 (1.1) 50.9 45.6
MSCI Asia Pac Composite 5.9 (2.4) 27.5 18.5
Performance for Sustainability Lens Listed Equities
strategies(1,2)
Cumulative returns (%), GBP, gross
of fees
AUM 6M 1YR 3YR 5YR
---------------------- ---------- ---------- --------- ------- ---------
Global Opportunities GBP9.0bn 10.8 4.2 60.8 88.7
MSCI ACWI 6.3 (1.4) 54.0 58.6
US Large Cap GBP2.0bn 3.1 (3.0) 72.9 107.9
S&P 500 4.4 (1.7) 67.3 92.8
US Small Cap GBP0.5bn 1.7 (1.4) 73.0 51.4
Russell 2000 (1.5) (5.9) 62.7 42.8
Performance for Sustainability Lens Fixed Income
strategies(1,3)
Cumulative returns (%), GBP, gross
of fees
AUM 6M 1YR 3YR 5YR
--------------------------- ---------- ----------- ------ ---------- --------
High Yield Bond GBP0.6bn (2.7) 1.6 13.7 32.6
ICE BofA US Cash Pay High
Yield Constrained (BB-B) (2.5) 3.3 17.1 33.1
Core Bond GBP0.7bn (5.3) 1.8 (5.7) 20.6
Bloomberg US Aggregate (5.3) 1.4 (7.8) 18.7
1. AUM (GBP as at 31 March 2023). The strategy returns are
calculated including the dividends re-invested, net of withholding
taxes, gross of management fee, and are represented in
sterling.
2. MSCI AC AP Composite is a custom-made benchmark made up of
80% MSCI AC Asia Pacific ex-Japan and 20% MSCI Japan rebalanced
daily. MSCI indices are total net return (net dividend
re-invested).
3. MCSI indices are total net return (net dividend re-invested).
S&P, Russell, ICE BofA, and Bloomberg indices are all total
gross return.
Financial results for the period
Revenue for the six months to 31 March 2023 increased to GBP88.0
million compared to the second half of 2022 (H1 2022: GBP88.6
million, H2 2022: GBP86.8 million). This was driven by both
positive net flows across the business of GBP1.1 billion along with
positive market movements. At the end of the Period the weighted
average run rate revenue margin was 45 basis points (30 September
2022: 46 basis points) on the GBP40.1 billion of AUM.
Adjusted operating costs for the Period increased to GBP60.6
million (H1 2022: GBP54.7 million, H2 2022: GBP53.3 million),
reflecting our continued investment in people, technology and
operational resilience to support our growth ambitions while being
mindful of the current broader market conditions. IFRS operating
costs of GBP63.1 million (H1 2022: GBP56.7 million, H2 GBP53.5
million) includes GBP2.5 million, (H1 2022: GBP2.0 million, H2
GBP0.2 million) of charges that do not reflect the operating
performance of the Group which have been removed for adjusted
measures. A reconciliation of adjusted to IFRS measures is provided
in Note 3.
Adjusted operating profit for the Period was GBP27.3 million (H1
2022: GBP34.0 million, H2 2022: GBP33.4 million). The decrease from
H2 2022 is a result of the investment in our growth discussed above
offset in part by the growth in revenue. As a result, operating
profit margin reduced to 31% (H1 2022: 38%, H2 2022: 39%). Run rate
adjusted operating margin at the end of the Period remained a
robust 31.8% (H2 2022: 32.6%). Run rate annualised adjusted
operating profit was GBP58.0 million at the end of the Period (H1
2022: GBP65.2 million, H2 2022: GBP54.3 million).
Adjusted profit before tax of GBP28.2 million (H1 2022: GBP34.0
million2, H2 2022: GBP34.4 million) and adjusted diluted earnings
per share of 17.2 pence (H1 2022: 21.1 pence, H2 2022: 21.0 pence)
include net finance income of GBP0.9 million (H1 2022: GBP0.0
million, H2 2022 GBP0.9 million).
IFRS profit before tax of GBP21.4 million (H1 2022: GBP32.7
million, H2 2022: GBP39.9 million) and IFRS diluted earnings per
share of 12.8 pence (H1 2022: 20.1 pence, H2 2022: 24.6 pence)
reflect the increased operating costs and foreign exchange losses
of GBP4.9 million recognised in the Period, most of which is
attributable to the unrealised foreign exchange losses on the
retranslation of intercompany loans and other assets held in
foreign currencies.
Financial Highlights For H1 2023 Versus H1 2022 and H2 2022
H1 2023 H1 2022 H2 2022
------------------------------------- --------- --------- ----------
Revenue GBP88.0m GBP88.6m GBP86.8m
Adjusted operating costs GBP60.6m GBP54.7m GBP53.3m
Adjusted operating profit GBP27.3m GBP34.0m GBP33.4m
Adjusted diluted earnings per share 17.2p 21.1p 21.0p
Adjusted profit before tax GBP28.2m GBP34.0m GBP34.4m
IFRS profit before tax GBP21.4m GBP32.7m GBP39.9m
IFRS diluted earnings per share 12.8p 20.1p 24.6p
TAX
The effective tax rate has increased due to an increase in the
main corporation tax rate in the UK from 19% to 25% from 1 April
2023. As such, a blended rate of 22% has been applied for the
Period (2022: 19%).
Financial resources
The Company continues to be a strongly cash generative business
with high levels of cash and no debt. Our cash reserves were
GBP61.8 million at the Period end (H1 2022: GBP67.4 million). We
continue to hold seed investments and to invest in our private
equity funds, and these investments were in total valued at GBP10.1
million at the Period end (H1 2022: GBP6.2 million).
Dividends
A final dividend for 2022 of 22.9 pence per share was paid in
March 2023, following approval at the Annual General Meeting. This
took the total dividend paid for 2022 to 27.6 pence per share. As
described above, despite uncertain
markets, the business performed well over the Period, while we
continued to invest to support our growth ambitions. Reflecting
this, while being mindful of the uncertain market conditions, we
are pleased to announce an interim dividend of 4.7 pence (2022: 4.7
pence per share). This dividend per share will be paid on 21 July
2023 to ordinary shareholders on the shareholder register at the
close of business on 16 June 2023. The Company operates a dividend
reinvestment plan ("DRIP"). The final date for receipt of elections
under the DRIP will be 30 June 2023. For further information and to
register and elect for this facility, please visit
www.signalshares.com and search for information related to the
Company.
Share management
The Board will consider purchasing the Company's shares from
time to time after due consideration of alternative uses of the
Company's cash resources. Share purchases are usually made by the
Group's Employee Benefit Trust ("EBT") (subject to the trustees'
discretion), using funding provided by the Company.
During the Period, the EBT purchased 1.4 million of ordinary
shares at a weighted average price of GBP7.13 per share. The EBT
holds shares for Restricted Share awards until they vest or to
satisfy share option exercises.
At the Period end the EBT held a total of 3.6 million shares,
2.8 million of which were held for Restricted Share awards leaving
up to 0.8 million available for option exercises and future share
awards. At the end of the Period, there were 2.0 million options
outstanding, none of which were exercisable.
Outlook
Although the macroeconomic backdrop remains challenging, the
easing of inflationary pressures, due to lower energy prices and
the lessening of supply chain disruptions is expected to bring some
relief for businesses in the near term.
Market volatility is likely to persist so long as inflation
remains elevated and until there is greater certainty that the
interest rate cycle has peaked.
Against this backdrop, we believe that high-quality companies
with structural growth drivers benefiting from the transition to a
more sustainable economy continue to present attractive investment
opportunities.
Areas of investment interest include the beneficiaries of
increased spending on drug discovery and testing, companies
providing access to finance and businesses enabling the rise of the
sharing and circular economy.
Meanwhile, recent policy moves such as the Inflation Reduction
Act in the US and equivalent measures in Europe and Asia mean that
companies in sustainable infrastructure, renewable energy and
resource efficiency are well positioned to benefit, as policymakers
continue to prioritise energy security and fulfil their net-zero
commitments.
Despite these policy tailwinds, the operating environment in the
US has been complicated recently by the move by some Republican
politicians to campaign against "ESG investing", branding asset
managers' focus on environmental, social and governance issues as
"woke".
Our experience to date is that this criticism is largely limited
to states in which Impax is not active and that our focus on
economic transition and mainstream fundamentals rather than "ESG"
has wide appeal.
Later this year, we will celebrate 25 years of our founding and
a quarter-century of investing in the transition to a more
sustainable economy. Our understanding of the opportunities and
risks associated with the major sectoral transformations that are
underway across the economy continue to attract asset owners and
their advisers globally.
Our performance during the Period demonstrates the resilience
and strength of our diversified business model. Our authenticity
and heritage and our commitment to delivering an outstanding
service to our clients, continue to make us well-placed to continue
to provide long-term value for all our stakeholders.
Ian Simm
Chief Executive
30 May 2023
Condensed Consolidated Income Statement
For the six months ended 31 March 2023
Unaudited Unaudited Audited
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
Notes GBP000 GBP000 GBP000
------------------------ ------ ------------ ------------ --------------
Revenue 87,960 88,640 175,396
Operating costs (63,142) (56,680) (110,213)
Finance income 5 1,457 1,130 7,950
Finance expense 6 (4,879) (403) (574)
------------------------ ------ ------------ ------------ --------------
Profit before taxation 21,396 32,687 72,559
Taxation 7 (4,601) (6,046) (13,077)
------------------------ ------ ------------ ------------ --------------
Profit after taxation 16,795 26,641 59,482
Earnings per share
Basic 8 13.0p 20.6p 46.0p
Diluted 8 12.8p 20.1p 44.7p
Adjusted results are provided in Note 3.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2023
Unaudited Unaudited Audited
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
GBP000 GBP000 GBP000
------------------------------------- ------------ ------------ --------------
Profit for the Period 16,795 26,641 59,482
Exchange differences on translation
of foreign operations (466) 64 2,685
------------------------------------- ------------ ------------ --------------
Total other comprehensive income (466) 64 2,685
Total comprehensive income for the
Period attributable
to equity holders of the parent 16,329 26,705 62,167
All amounts in other comprehensive income may be reclassified to
income in the future.
The statement has been prepared on the basis that all operations
are continuing operations.
Condensed Consolidated Statement of Financial Position
For the six months ended 31 March 2023
Unaudited Unaudited Audited
As at As at As at
31 March 31 March 30 September
2023 2022 2022
Note GBP000 GBP000 GBP000
------------------------------- ----- ---------- ---------- --------------
Assets
Non-current assets
Goodwill 10 12,738 12,063 13,932
Intangible assets 10 15,378 16,714 18,340
Property, plant and equipment 11 8,271 9,020 9,279
Deferred tax assets 5,278 7,265 4,781
------------------------------- ----- ---------- ---------- --------------
Total non-current assets 41,665 45,062 46,332
Current assets
Trade and other receivables 44,003 39,496 38,769
Investments 12 10,127 6,246 7,255
Current tax asset 2,416 558 176
Cash invested in money market
funds 13 20,153 40,451 58,687
Cash and cash equivalents 13 46,932 31,574 52,232
------------------------------- ----- ---------- ---------- --------------
Total current assets 123,631 118,325 157,119
------------------------------- ----- ---------- ---------- --------------
Total assets 165,296 163,387 203,451
------------------------------- ----- ---------- ---------- --------------
Equity and liabilities
Equity
Ordinary shares 15 1,326 1,326 1,326
Share premium 9,291 9,291 9,291
Merger reserve 1,533 1,533 1,533
Exchange translation reserve 2,593 438 3,059
Retained earnings 104,966 99,758 122,969
------------------------------- ----- ---------- ---------- --------------
Total equity 119,709 112,346 138,178
------------------------------- ----- ---------- ---------- --------------
Current liabilities
Trade and other payables 35,166 41,365 53,624
Lease liabilities 11 1,361 1,311 1,488
Current tax liability 1,985 409 2,202
------------------------------- ----- ---------- ---------- --------------
Total current liabilities 38,512 43,085 57,314
Non-current liabilities
Lease liabilities 11 6,706 7,585 7,590
Deferred tax liability 369 371 369
------------------------------- ----- ---------- ---------- --------------
Total non-current liabilities 7,075 7,956 7,959
------------------------------- ----- ---------- ---------- --------------
Total liabilities 45,587 51,041 65,273
------------------------------- ----- ---------- ---------- --------------
Total equity and liabilities 165,296 163,387 203,451
------------------------------- ----- ---------- ---------- --------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 March 2023
Exchange
Share Share Merger translation Retained Total
capital premium reserve reserve earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- --------- --------- --------- ------------- ---------- ---------
1 October 2021 1,326 9,291 1,533 374 97,998 110,522
Transactions with owners
of the Company:
Dividends paid - - - - (22,475) (22,475)
Cash received on option exercises - - - - 180 180
Tax charge on long-term incentive
schemes - - - - (1,269) (1,269)
Share based payment charge - - - - 2,558 2,558
Acquisition of own shares - - - - (3,875) (3,875)
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total transactions with owners - - - - (24,881) (24,881)
Profit for the Period - - - - 26,641 26,641
Other comprehensive income
Exchange differences on translation
of foreign operations - - - 64 - 64
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total other comprehensive
income - - - 64 - 64
------------------------------------- --------- --------- --------- ------------- ---------- ---------
31 March 2022 1,326 9,291 1,533 438 99,758 112,346
Transactions with owners
of the Company
Dividends paid - - - - (6,190) (6,190)
Cash received on option exercises - - - - 360 360
Tax charge on long-term incentive
schemes - - - - (2,487) (2,487)
Share based payment charge - - - - 3,593 3,593
Acquisition of own shares - - - - (4,906) (4,906)
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total transactions with owners - - - - (9,630) (9,630)
Profit for the Period - - - - 32,841 32,841
Other comprehensive income
Exchange differences on translation
of foreign operations - - - 2,621 - 2,621
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total other comprehensive
income - - - 2,621 - 2,621
------------------------------------- --------- --------- --------- ------------- ---------- ---------
30 September 2022 1,326 9,291 1,533 3,059 122,969 138,178
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Exchange
Share Share Merger translation Retained Total
capital premium reserve reserve earnings Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
30 September 2022 1,326 9,291 1,533 3,059 122,969 138,178
Transactions with owners
of the Company
Dividends paid - - - - (30,216) (30,216)
Cash received on option exercises - - - - 1,261 1,261
Tax credit on long-term incentive
schemes - - - - 1,623 1,623
Share based payment charge - - - - 2,649 2,649
Acquisition of own shares - - - - (10,115) (10,115)
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total transactions with owners - - - - (34,798) (34,798)
Profit for the Period - - - - 16,795 16,795
Other comprehensive income
Exchange differences on translation
of foreign operations - - - (466) - (466)
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Total other comprehensive
income - - - (466) - (466)
------------------------------------- --------- --------- --------- ------------- ---------- ---------
31 March 2023 1,326 9,291 1,533 2,593 104,966 119,709
------------------------------------- --------- --------- --------- ------------- ---------- ---------
Condensed Consolidated Statement of Cash Flows
For the six months ended 31 March 2023
Unaudited Unaudited Audited
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
Note GBP000 GBP000 GBP000
--------------------------------------------------- ----- ------------ ------------ --------------
Operating activities:
Cash generated from operations 17 6,203 28,149 80,321
Corporation tax paid (5,932) (4,624) (9,046)
--------------------------------------------------- ----- ------------ ------------ --------------
Net cash generated from operating activities 271 23,525 71,275
Investing activities:
Net acquisition of property plant and
equipment and intangible assets (376) (407) (796)
Net (investments)/redemptions from unconsolidated
Impax funds (2,202) 1,229 355
Settlement of investment related hedges (477) (97) 69
Investment income received 1,264 145 586
Decrease/(increase) in cash invested
in money market funds 38,534 (2,385) (19,091)
--------------------------------------------------- ----- ------------ ------------ --------------
Net cash generated from/(used by) investment
activities 36,743 (1,515) (18,877)
Financing activities:
Acquisition of non-controlling interest - - (182)
Interest paid on bank borrowings (34) (59) (141)
Payment of lease liabilities (1,011) (846) (1,729)
Acquisition of own shares (10,115) (3,875) (8,781)
Cash received on exercise of Impax share
options 1,261 180 540
Dividends paid (30,216) (22,475) (28,665)
--------------------------------------------------- ----- ------------ ------------ --------------
Net cash used by financing activities (40,115) (27,075) (38,958)
Net (decrease)/increase in cash and cash
equivalents (3,101) (5,065) 13,440
Cash and cash equivalents at the beginning
of the Period 52,232 36,172 36,172
Effect of foreign exchange rate changes (2,199) 467 2,620
--------------------------------------------------- ----- ------------ ------------ --------------
Cash and cash equivalents at the end
of the Period 13 46,932 31,574 52,232
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 31 March 2023
1 Basis of preparation
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK and the AIM Rules.
The annual financial statements of the Group for the year ended
30 September 2023 will be prepared in accordance with UK-adopted
international accounting standards. The condensed set of financial
statements has been prepared applying the accounting policies and
presentation that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 30
September 2022 which were prepared in accordance with the
requirements of the Companies Act 2006 ("Adopted IFRS") and
applicable law.
The comparative figures for the financial year ended 30
September 2022 are not the Company's statutory accounts for that
financial year. Those accounts, prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006, have been reported on by
the Company's auditors and delivered to Companies House. The report
of the auditors was (i) unqualified, (ii) did not include a
reference to matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain
a statement under Section 498 (2) or (3) of the Companies Act 2006.
Copies of these accounts are available upon request from the
Company's registered office at 7th floor, 30 Panton St, London,
SW1Y 4AJ or at the Company's website: www.impaxam.com.
Going concern
The Board has made an assessment covering a period of 12 months
from the date of approval of these financial statements which
indicates that, taking account of reasonably possible downside
assumptions in relation to asset inflows, market performance and
costs, the Group will have sufficient funds to meet its liabilities
as they fall due and regulatory capital requirements for that
period. The Group has sufficient cash balances and no debt and, at
the period-end market levels, is profitable. A significant part of
the Group's cost basis is variable as bonuses are linked to
profitability. The Group can also preserve cash through dividend
reduction and through issuance of shares to cover share option
exercises/restricted share awards (rather than purchasing shares).
Consequently, the Directors are confident that the Group will have
sufficient funds to continue to meet its liabilities as they fall
due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis.
Accounting policies
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 2022.
New and forthcoming accounting standards applicable to the
Group
No new accounting standards or interpretations issued or not yet
effective are expected to have an impact on the Group's condensed
consolidated financial statements.
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.
The Group has not identified any significant judgements and
estimates at the end of the reporting Period. However the key areas
that include judgement and/or estimates are set out in Note 10.
3 Adjusted profits and earnings
The reported operating earnings, profit before tax and earnings
per share are substantially affected by business combination
effects and other items. The Directors have therefore decided to
report an adjusted operating profit, adjusted profit before tax and
adjusted earnings per share which exclude these items in order to
enable comparison with peers and provide consistent measures of
performance over time. A reconciliation of the adjusted amounts to
the IFRS reported amounts is shown below.
Six months ended 31 March 2023
--------------------------------- ---------------------------------------------
Adjustments
--------- ----------------------- ---------
Business
Reported combination
IFRS effects Other Adjusted
GBP000 GBP000 GBP000 GBP000
--------------------------------- --------- ------------- -------- ---------
Income statement
Revenue 87,960 87,960
Operating costs (63,142) (60,645)
Amortisation of intangibles
arising on acquisition 1,344
Acquisition equity incentive
scheme charges 661
Mark to market charge on equity
awards(1) 492
--------------------------------- --------- ------------- -------- ---------
Operating Profit 24,818 2,005 492 27,315
Finance income 1,457 1,457
Finance expense (4,879) 4,328 (551)
--------------------------------- --------- ------------- -------- ---------
Profit before taxation 21,396 2,005 4,820 28,221
Taxation (4,601) (5,686)
Tax charge on adjustments (1,085)
--------------------------------- --------- ------------- -------- ---------
Profit after taxation 16,795 2,005 3,735 22,535
--------------------------------- --------- ------------- -------- ---------
Diluted earnings per share 12.8p 1.5p 2.8p 17.2p
--------------------------------- --------- ------------- -------- ---------
1. The charge is offset by GBP1,623,000 of tax credits shown in
the Statement of Changes in Equity.
Six months ended 31 March 2022
---------------------------------------------------
Adjustments
--------- ----------------------- ---------------
Business
Reported combination Adjusted
IFRS effects Other (restated)(2)
GBP000 GBP000 GBP000 GBP000
--------- ------------- -------- ---------------
Income statement
Revenue 88,640 88,640
Operating costs (56,680) (54,688)
Amortisation of intangibles
arising on acquisition 1,200
Acquisition equity incentive
scheme charges 669
Mark to market charge on equity
awards(1) 123
--------------------------------- --------- ------------- -------- ---------------
Operating Profit 31,960 1,869 123 33,952
Finance income(2) 1,130 (682) 448
Finance expense (403) (403)
--------------------------------- --------- ------------- -------- ---------------
Profit before taxation 32,687 1,869 (559) 33,997
Taxation (6,046) (5,940)
Tax credit on adjustments 106
--------------------------------- --------- ------------- -------- ---------------
Profit after taxation 26,641 1,869 (453) 28,057
--------------------------------- --------- ------------- -------- ---------------
Diluted earnings per share 20.1p 1.4p (0.3)p 21.1p
--------------------------------- --------- ------------- -------- ---------------
1. The credit is offset by GBP1,269,000 of tax charges shown in
the Statement of Changes in Equity.
2. Adjusted profit before tax has been restated to add back
unrealised foreign exchange gains of GBP650,000.
The adjusted diluted earnings per share is calculated using the
adjusted profit after taxation shown above. The diluted number of
shares is the same as used for the IFRS calculation of earnings per
share (see Note 8).
Similar adjustments have been made, where relevant, for the year
ended 30 September 2022 to give adjusted operating profit of
GBP67,416,000, adjusted profit before tax of GBP56,059,000 and
adjusted diluted earnings per share of 42.1 pence.
Amortisation of intangibles
Management contracts, which are classified as intangible assets,
were acquired as part of the acquisition of Impax NH and are
amortised over their 11 year life. This charge is not linked to the
operating performance of the Impax NH business so is excluded from
adjusted profit.
Acquisition equity incentive scheme charges
Impax NH staff have been awarded share-based payments in respect
of the acquisition of Impax NH. Charges in respect of these relate
to the acquisition rather than the operating performance of the
Group and are therefore excluded from adjusted profit.
Mark to market charge on equity incentive awards
The Group has in prior years and the current Period awarded
employees options over the Group's shares, some of which are either
unvested or unexercised at the balance sheet date. The Group has
also made awards of restricted shares ("RSS awards") which have not
vested at the balance sheet date. Employers National Insurance
Contributions ("NIC") are payable on the option awards when they
are exercised and on the RSS awards when they vest, based on the
valuation of the underlying shares at that point. The Group does
however receive a corporation tax credit equal to the value of the
awards at the date they are exercised (options) or vest (RSS
awards). An accrual for the NIC is recognised based on the share
price at the balance sheet date and changes in the accrual are
recognised as a charge or credit within IFRS operating profit.
Similarly, the corporation tax credit is accrued within equity
based on the share price at the balance sheet date with changes in
the credit recognised as a credit or charge to equity.
The charge to profit varies based on the Group's share price and
is not linked to the operating performance of the Group. It is
therefore eliminated when reporting adjusted profit.
Finance income and expense
Finance expense for the Period has been adjusted for foreign
exchange losses on intercompany loans and other unrealised foreign
exchange gains and losses that are not linked to the performance of
the Group. Prior period adjusted profit before tax has been
restated to remove unrealised foreign exchange gains of GBP650,000
from finance income to aid comparability with the current
Period.
Taxation
The IFRS tax charge for 2022 includes a credit in respect of
historical tax charges related to private equity income. This does
not reflect the performance of the Group and is therefore excluded
from adjusted profit.
4 Segment Information
The Group is managed on an integrated basis and there are no
reportable segments.
5 Finance income
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
------------------------- --------- --------- -------------
Fair value gains 193 - 148
Interest income 1,264 53 520
Other investment income - 32 33
Foreign exchange gains - 1,045 7,249
------------------------- --------- --------- -------------
1,457 1,130 7,950
------------------------- --------- --------- -------------
Fair value gains represent those arising on the revaluation of
investments held by the Group (see Note 12) and any gains or losses
arising on related hedged instruments held by the Group.
Foreign exchange gains mainly arise on the retranslation of
intercompany loans and cash balances held in USD.
6 Finance expense
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
------------------------------- --------- --------- -------------
Interest on lease liabilities 209 217 433
Finance costs on bank loans 34 59 141
Foreign exchange losses 4,636 - -
Fair value losses - 127 -
------------------------------- --------- --------- -------------
4,879 403 574
------------------------------- --------- --------- -------------
Foreign exchange losses mainly arise on the retranslation of
intercompany loans and cash balances held in USD. Fair value losses
represent those arising on the revaluation of investments held by
the Group (see Note 12) and any gains or losses arising on related
hedge instruments held by the Group. Commitment fees were payable
on the revolving credit facility which the Group retained until
January 2023.
7 Taxation
The blended UK tax rate for the year is 22% due to the increase
in the corporation tax rate from 19% to 25% from 1 April 2023. The
tax assessment for the Period is lower than this rate. The
differences are explained below:
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
GBP000 GBP000 GBP000
---------------------------------------- ------------ ------------ --------------
Profit before tax 21,396 32,687 72,559
Tax charge at 22% (FY22 and HY22: 19%) 4,707 6,211 13,786
Effects of:
Non-taxable income (47) (13) (506)
Non-deductible expenses and charges 4 252 1,118
Tax relief on share awards (449) (251) (501)
Adjustment in respect of historical
tax charges 289 (65) (928)
Effect of (lower)/higher tax rates
in foreign jurisdictions (1) 123 31
Tax losses not recognised 98 2 77
Recognition of prior year tax losses - (213) -
---------------------------------------- ------------ ------------ --------------
Total income tax expense 4,601 6,046 13,077
---------------------------------------- ------------ ------------ --------------
8 Earnings per share
Earnings
for the
Period Shares Earnings
Six months ended 31 March 2023 GBP000 '000 per share
-------------------------------- --------- -------- -----------
Basic 16,795 129,076 13.0p
Diluted 16,795 131,114 12.8p
Six months ended 31 March 2022
-------------------------------- ------- -------- ------
Basic 26,641 129,259 20.6p
Diluted 26,641 132,743 20.1p
Year ended 30 September 2022
------------------------------ ------- -------- ------
Basic 59,482 129,409 46.0p
Diluted 59,482 133,168 44.7p
The weighted average number of shares is calculated as shown in
the table below.
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
'000 '000 '000
-------------------------------------------- ------------ ------------ --------------
Weighted average issued share capital 132,597 132,597 132,597
Less own shares held (3,521) (3,338) (3,188)
-------------------------------------------- ------------ ------------ --------------
Weighted average number of ordinary
shares used in the calculation of basic
EPS 129,076 129,259 129,409
Additional dilutive shares regarding
share awards 3,767 5,120 4,860
Adjustment to reflect option exercise
proceeds and future
service from employees receiving share
awards (1,729) (1,636) (1,101)
-------------------------------------------- ------------ ------------ --------------
Weighted average number of ordinary
shares used in the calculation of diluted
EPS 131,114 132,743 133,168
-------------------------------------------- ------------ ------------ --------------
9 Dividends
On 16 March 2023, at the Company's Annual General Meeting,
payment of a 22.9 pence per share final dividend for the year ended
30 September 2022 (2021: 17.0 pence per share) was approved.
Combined with an interim payment of 4.7 pence this gave total
dividends for the year ended 30 September 2022 of 27.6 pence. The
Trustee of the Impax Employee Benefit Trusts waived the Trusts'
rights to part of the final dividend, leading to a total dividend
payment of GBP30,216,474 which was paid on 21 March 2023.
The Board has declared an interim dividend for the Period of 4.7
pence per ordinary share (2022: 4.7 pence). This dividend will be
paid on 21 July 2023 to ordinary shareholders on the register at
close of business on 16 June 2023.
10 Goodwill and Intangible assets
The goodwill and intangible assets held by the Group primarily
relate to the acquisition of Impax NH in January 2018.
Goodwill GBP000
--------------------------- --------
Cost
At 1 October 2021 11,816
Foreign exchange movement 247
--------------------------- --------
At 31 March 2022 12,063
Foreign exchange movement 1,869
--------------------------- --------
At 30 September 2022 13,932
Foreign exchange movement (1,194)
--------------------------- --------
At 31 March 2023 12,738
--------------------------- --------
There were no brought forward impairment losses at 1 October
2022 or impairment charges during the Period.
Intangible assets
Management
contracts Software Total
GBP000 GBP000 GBP000
--------------------------- ----------- --------- --------
Cost
At 1 October 2021 26,441 529 26,970
Additions - 57 57
Foreign exchange movement 640 - 640
--------------------------- ----------- --------- --------
At 31 March 2022 27,081 586 27,667
Additions - 24 24
Disposals - (309) (309)
Foreign exchange movement 4,829 - 4,829
--------------------------- ----------- --------- --------
At 30 September 2022 31,910 301 32,211
Additions - 132 132
Foreign exchange movement (3,490) - (3,490)
--------------------------- ----------- --------- --------
At 31 March 2023 28,420 433 28,853
Accumulated amortisation
At 1 October 2021 8,988 509 9,497
Charge for the period 1,200 14 1,214
Foreign exchange movement 242 - 242
--------------------------- ----------- --------- --------
At 31 March 2022 10,430 523 10,953
Charge for the period 1,259 11 1,270
Disposals - (309) (309)
Foreign exchange movement 1,957 - 1,957
--------------------------- ----------- --------- --------
At 30 September 2022 13,646 225 13,871
Charge for the period 1,344 15 1,359
Foreign exchange movement (1,755) - (1,755)
--------------------------- ----------- --------- --------
At 31 March 2023 13,235 240 13,475
--------------------------- ----------- --------- --------
Net book value
--------------------------- ----------- --------- --------
At 31 March 2023 15,185 193 15,378
--------------------------- ----------- --------- --------
At 30 September 2022 18,264 76 18,340
--------------------------- ----------- --------- --------
At 31 March 2022 16,651 63 16,714
--------------------------- ----------- --------- --------
The management contracts were acquired with the acquisition of
Impax NH in January 2018 and are amortised over an 11 year life.
Asset inflows, operation margin, discounted cost of capital are all
the same
or in excess of the assumptions when the management contracts
were first valued. As such, there are no indicators of
impairment.
11 Property, plant and equipment
Property plant and equipment
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
------------------------------------- --------- --------- -------------
Right-of-use assets 6,689 7,531 7,647
Property, plant and equipment owned
by the Group 1,582 1,489 1,632
------------------------------------- --------- --------- -------------
8,271 9,020 9,279
------------------------------------- --------- --------- -------------
The carrying value of the Group's right of use assets,
associated lease liabilities and the movements during the Period
are set out below.
Lease arrangements
Right of Lease
use asset liabilities
GBP000 GBP000
--------------------------- ----------- -------------
At 1 October 2022 7,647 9,078
Additions 231 231
Lease payments - (1,011)
Interest expense - 209
Depreciation charge (804) -
Foreign exchange movement (385) (440)
--------------------------- ----------- -------------
At 31 March 2023 6,689 8,067
--------------------------- ----------- -------------
12 Current asset investments
The Group makes seed investments into its own Listed Equities
funds and also invests in its Private Equity funds. Where the funds
are consolidated the underlying investments are shown in the table
below. Investments made in unconsolidated funds are also
included.
GBP000
At 1 October 2021 7,564
Additions 125
Fair value movements (89)
Repayments/disposals (1,354)
---------------------- --------
At 31 March 2022 6,246
Additions 874
Fair value movements 135
---------------------- --------
At 30 September 2022 7,255
Additions 2,298
Fair value movements 670
Repayments/disposals (96)
---------------------- --------
At 31 March 2023 10,127
---------------------- --------
An analysis of the investment by valuation technique hierarchy
is disclosed below:
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
--------- --------- --------- -------------
Level 1 6,363 3,880 3,721
Level 2 - - -
Level 3 3,764 2,366 3,534
--------- --------- --------- -------------
10,127 6,246 7,255
--------- --------- --------- -------------
Level 1 means that valuation is made by reference to quoted
prices in active markets for the relevant securities.
Level 2 assets do not have regular market pricing but can be
given a fair value based on quoted prices in active markets.
Level 3 assets are those where there is no readily available
market information to value them and the asset values are based on
models. They represent investments in our private equity funds.
13 Cash reserves
Cash and cash equivalents under IFRS does not include deposits
in money market funds. However the Group considers its total cash
reserves to include these amounts. Cash held in Research Payment
Accounts ("RPAs") is collected from funds managed by the Group and
can only be used towards the cost of researching stocks. A
liability of an equal amount is included in trade and other
payables. This cash is also excluded from cash reserves. A
reconciliation is shown below:
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
------------------------------------ --------- --------- -------------
Cash and cash equivalents 46,932 31,574 52,232
Cash held invested in money market
funds 20,153 40,451 58,687
Less: cash held in RPAs (5,276) (4,673) (3,951)
------------------------------------ --------- --------- -------------
Total cash reserves 61,809 67,352 106,968
------------------------------------ --------- --------- -------------
14 Loans
Up until January 2023, the Group retained a US$13 million
revolving credit facility ("RCF") with RBS International that has
now expired. No amounts were drawn down or repaid in the current
Period or in the prior year.
15 Share capital and own shares
31 March 31 March 30 September
2023 2022 2022
--------------------------------------- ------------ ------------ -------------
Issued and fully paid ordinary shares
of 1 pence each
Number 132,596,554 132,596,554 132,596,554
GBP000s 1,326 1,326 1,326
--------------------------------------- ------------ ------------ -------------
31 March 31 March 30 September
2023 2022 2022
------------ ---------- ---------- -------------
Own shares
Number 3,613,276 2,792,373 3,265,109
GBP000s 8,995 2,802 8,128
------------ ---------- ---------- -------------
Own shares represents those held by the Impax Asset Management
Group plc Employee Benefit Trust 2012 (the "EBT") which are
typically used to fund exercise of options or awards of restricted
shares. 1.4 million shares were purchased by the EBT in the six
months ended 31 March 2023. The EBT transferred 1.1 million shares
to option/restricted shareholders on exercise of options or to
holders of restricted shares when the restrictions lapsed.
As at 31 March 2023 there were a total of 2.0 million options
outstanding over the Group's shares of which none were exercisable.
As at 31 March 2023 employees also held 2.8 million restricted
shares over which the restrictions lapse from February 2024 through
to January 2028. These Restricted Shares are held in the EBT and
included in the own shares numbers shown above.
16 Related party transactions
Private equity funds managed by the Group, entities controlled
by these funds and certain other funds are related parties of the
Group by virtue of subsidiaries being the General Partners to these
funds. The Group earns management fees from these entities.
BNP Paribas Asset Management Holdings is a related party of the
Group by virtue of owning a significant stake in the Group. The
Group also sub-manages certain funds for BNP for which it earns
fees.
Other funds managed by subsidiaries of the Group are also
related parties by virtue of its management contracts.
During 2020 a loan facility was first provided to an executive
for the sole purpose of investment in a fund managed by the Group.
The loan is provided at an interest rate of LIBOR plus 2% per annum
on amounts drawn, calculated on a daily basis. Interest of EUR3,960
was accrued on the loan during the Period. The balance on the loan
is EUR220,463 at the reporting date.
Revenue earned from and operating costs for related parties of
the Group are as shown in the table below:
Six months Six months Year ended
ended 31 ended 31 30 September
March 2023 March 2022 2022
GBP000 GBP000 GBP000
----------------- ------------ ------------ --------------
Revenue 84,425 88,595 170,840
Operating costs 537 509 1,183
----------------- ------------ ------------ --------------
Investments in related parties of the Group and trade and other
receivables due from related parties are as shown in the table
below:
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
----------------------------- --------- --------- -------------
Current asset investments 3,764 2,366 3,534
Trade and other receivables 35,593 33,460 32,954
----------------------------- --------- --------- -------------
17 Reconciliation of net cashflow from operating activities
This Note should be read in conjunction with the condensed
Consolidated cashflow statement. It provides a reconciliation of
how profit before tax, which is based on accounting rules,
translates to cashflows.
31 March 31 March 30 September
2023 2022 2022
GBP000 GBP000 GBP000
------------------------------------------- --------- --------- -------------
Profit before taxation 21,396 32,687 72,559
Adjustments for:
Depreciation of property, plant and
equipment and amortisation of intangible
assets 2,428 2,069 4,257
Finance income (1,457) (1,130) (7,950)
Finance expense 4,879 403 574
Share-based payment charges 2,649 2,558 6,151
Adjustment for statement of financial
position movements:
(Increase)/decrease in trade and other
receivables (5,234) 304 1,031
(Decrease)/increase in trade and other
payables (18,458) (8,742) 3,699
------------------------------------------- --------- --------- -------------
Cash generated from operations 6,203 28,149 80,321
------------------------------------------- --------- --------- -------------
18 Group risks
The Group's principal risks remain as detailed within the
Directors' Report of the Group's 2022 Strategic Report.
Alternative Performance Measures
The Group uses the following Alternative Performance Measures
("APMs").
ADJUSTED OPERATING COSTS, ADJUSTED OPERATING PROFIT, ADJUSTED
PROFIT BEFORE TAX AND ADJUSTED PROFIT AFTER TAX
These APMs exclude the impact of the following items:
-- amortisation of intangible assets which arose on the acquisition of Impax NH;
-- charges in respect of equity incentive scheme related to the acquisition of Impax NH;
-- mark-to-market charges in respect of National Insurance payable on share awards;
-- foreign exchange gains and losses on the retranslation of
intercompany loans and other unrealised foreign exchange gains and
losses;
-- significant tax credits related to the prior year.
These performance measures are reported as they facilitate
comparison with prior periods and provide an appropriate comparison
with our peers. Excluding amortisation of intangible assets arising
from acquisitions is consistent with peers and therefore aids
comparability. It also aids comparison to businesses which have
grown organically, and do not have such charges. Mark to market
charges in respect of National Insurance are excluded as they arise
due only to changes in the share price and therefore do not re ect
the operating performance of the Group. Foreign exchange gains and
losses on the retranslation of intercompany loans and other
unrealised foreign exchange gains and losses are excluded as they
are not linked to the performance of the Group.
A reconciliation to the relevant IFRS terms is provided in Note
3 of the nancial statements.
ADJUSTED OPERATING MARGIN
This is calculated as the ratio of adjusted operating pro t to
revenue. This number is reported as it gives
a good indication of the underlying pro tability of the company
and how this has changed year on year.
ADJUSTED Diluted EARNINGS PER SHARE
This is calculated as the adjusted pro t after tax divided by
the diluted number of shares used in the calculation of IFRS
diluted earnings per share.
This is used to present a measure of pro tability per share in
line with adjusted pro ts.
A reconciliation to IFRS diluted earnings per share is shown in
Note 3 of the nancial statements.
RUN RATE REVENUE AND RUN RATE ADJUSTED OPERATING PROFIT
Run rate revenue is the revenue that the Group would report if
the AUM for the year remained static at that shown at 31 March and
fee rates were those at 31 March. Run rate revenue margin is the
ratio of run rate revenue to AUM.
Run rate adjusted operating pro t is the run rate revenue less
adjusted operating costs for the month of March extrapolated for 12
months. Adjustments are made to exclude any one-off items.
Run rate numbers are reported as they give a good indication of
the current pro tability of the Group.
CASH RESERVES
Cash reserves is the sum of cash and cash equivalents and cash
held in money market accounts less cash held in research payment
accounts and cash held by consolidated funds. The calculation of
cash reserves is shown in Note 13 to the nancial statements.
Cash reserves are reported as they give a good indication of the
total cash resources available to the Group.
S
Issued in the UK by Impax Asset Management Group plc, whose
shares are quoted on AIM, part of the London Stock Exchange. Impax
Asset Management Group plc is registered in England & Wales,
number 03262305. AUM relates to Impax Asset Management Limited,
Impax Asset Management (AIFM) Limited, Impax Asset Management
Ireland Limited and Impax Asset Management LLC. Impax Asset
Management Limited and Impax Asset Management (AIFM) Limited are
authorised and regulated by the Financial Conduct Authority and are
wholly owned subsidiaries of Impax Asset Management Group plc.
Please note that the information provided on www.impaxam.com and
links from it should not be relied upon for investment
purposes.
Impax is trademark of Impax Asset Management Group Plc. Impax is
a registered trademark in the EU, US, Hong Kong and Australia. (c)
Impax Asset Management LLC, Impax Asset Management Limited and/or
Impax Asset Management (Ireland) Limited. All rights reserved.
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