22nd Jun 2020 10:00
(Alliance News) - Polar Capital Holdings PLC on Monday maintained its dividend payout for financial 2020, despite reporting a drop in assets under management and profit for the year.
"The sharp falls in equity markets and government bond yields which accompanied the worldwide spread of the coronavirus brought our financial year to a dramatic end. Major equity markets entered bear market territory due to the rapid price falls in late February and early March 2020, although at the time of writing, there has been a significant recovery," said Chair Tom Bartlam.
Polar Capital said the market sell-off caused by the virus pandemic and oil price collapse reduced assets under management to GBP12.2 billion at March 31 from GBP13.8 billion a year ago. AuM had peaked at GBP15.1 billion in mid-February but declined subsequently due to the the sell-off resulting from the Covd-19 pandemic.
Since then, AuM has rebounded to GBP14.4 billion as of May 29.
For financial 2020, the London-based asset manager recorded pretax profit of GBP50.9 million, down 21% from GBP64.1 million a year ago. Net performance fee profit amounted to GBP8.8 million, down from a record GBP24 million.
"This reflects an increased cost base as new teams have been hired and additional distribution capability recruited for the North American and Nordic markets," Polar Capital said.
Annual revenue fell 15% year-on-year to GBP151.7 million.
Despite the drop in assets under management and profit, the company has maintained its total dividend for financial 2020 at 33.0 pence per share.
"Our previously stated dividend policy remains that, under normal circumstances, we would expect to pay an annual dividend within a range of 55% to 85% of adjusted total earnings dependent on the quantum of performance fees earned in that year. The total dividend is 81% of adjusted diluted earnings per share and is at the higher end of the range reflecting the lower quantum of performance fees earned in the year," Polar commented.
Adjusted diluted earnings per share, after allowing for share-based payments on preference shares and deferred remuneration costs, were 40.7 pence, down 21% year-on-year.
Chair Bartlam said "The longer-term impact on economic activity is unknown and continued volatility of markets will be a feature for some time. We believe that with our strong balance sheet, resilient operating platform and diverse range of specialist strategies, we are well positioned for the future."
Shares in Polar Capital were down 0.8% at 489.00 pence each in London on Monday morning, down 12% in 2020 so far.
By Tapan Panchal; [email protected]
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