Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2016 Earnings Presentation
21 slides from Polar Capital's earnings presentation, June 2016
Slide 1: Results Presentation June 2016
Results Presentation June 2016 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Contents
Contents Section I • Business Review Section II • Financial Review For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2016 US$10.4bn from US$12.3bn at March 2015 • Profitability – Pre-tax (pre SBP) profits £27.5m (2015: £33.7m) – Core operating profit excluding performance fees £23.7m (2015: £27.7m) • EPS and Dividend – Adjusted diluted EPS 23.6p (2015: 28.1p)1 –
Slide 4: Polar Capital AUM: Japan and non-Japan AUM
Polar Capital AUM Japan and non-Japan AUM $bn 16 $13.7 $13.4 14 $13.0 $13.2 $12.9 $12.3 $12.3 $11.9 12 $11.4 $10.9 $10.4 10 $9.2 8 $7.2 $6.0 6 $5.1 $5.1 $5.3 $3.9 $4.2 4 2 0 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Slide 5: AUM Growth Analysis
AUM Growth Analysis 31 March 2015 31 March 2016 % Increase US$’m US$’m Year on Year Japan 3,743 2,178 -41.80% Long Only (ex Japan) Technology 2,037 1,979 -2.85% North America 1,972 2,190 11% Healthcare 1,503 1,318 -12.30% Financials 1,035 1,052 1.65% GEMs 783 514 -34.35% Global Alpha 100 102 2% Euro
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2015 $12.3bn Gross inflows quarter 1 [long 805 hedge 69] $873m quarter 2 [long 1,151 hedge 110] $1,261m quarter 3 [long 968 hedge 60] $1,028m quarter 4 [long 530 hedge 76] $606m Gross outflows quarter 1 [long 1,400 hedge 60] $(1,461)m quarter 2 [long 1,339 hedge 45] $(1,384
Slide 7: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography UK 60.1% Long Only 89.9% Europe 34.4% Alternative 10.1% USA 3.4% Other 2.2% AUM split by business unit Investor mix by holdings North America 21.0% Bank 27.8% Japan 20.9% Polar Investment Company 17.3% Technology 19.0% Private Wealth Manag
Slide 8: Product Concentration
Product Concentration North America now the largest strategy March March March March 2013 2014 2015 2016 North America - 13% 16% 21% Japan 33% 43% 31% 21% Technology 17% 14% 17% 19% Europe 10% - - - Total of top 3 strategies 60% 70% 64% 61% Number of teams 11 9 11 11 Number of teams with assets > 7
Slide 9: Investment Teams: An expanded vision
Investment Teams An expanded vision Twelve to fifteen world class investment teams Pre 2010 2010 2011 2012 2013 2014 2015 2016 Technology Technology Technology Technology Technology Technology Technology Technology Japan Japan Japan Japan Japan Japan Japan Japan Europe Europe Europe Europe Europe Eu
Slide 10: Product Overview
Product Overview Long only Alternative UCITS Cayman Global Technology European Forager Japan Japan Alpha European Conviction Healthcare Opportunities ALVA Global Convertible Asian Financials Financial Opportunities Income Opportunities UCITS Global Insurance Global Convertibles Emerging Markets Grow
Slide 11: Lipper Figures For Long Only Strategies: Specialist products
Lipper Figures For Long Only Strategies Specialist products – 31 May 2016 3 months 1 year 3 years 5 years Since Inception % Growth to % Growth to % Growth to % Growth to % Growth to universe universe position/ universe position/ universe position/ universe position/ position/ universe universe total
Slide 12: Lipper Figures For Long Only Strategies: Regional products
Lipper Figures For Long Only Strategies Regional products – 31 May 2016 3 months 1 year 3 years 5 years Since Inception % Growth to % Growth to % Growth to % Growth to % Growth to universe universe position/ universe position/ universe position/ universe position/ position/ universe universe total Q
Slide 13: Alternative Strategies
Alternative Strategies 31 May 2016 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (AX EUR) 1 August 2003 -3.71% 2.21% 4.28% 9.11% Conviction (EUR) 1 April 2006 0.62% -2.05% 0.21% 3.76% ALVA (A USD) 1 November 2010 0.62% 1.95% 3.68% 4.63% Global Convertibles (Class
Slide 14: Outlook For Fiscal 2017
Outlook For Fiscal 2017 Challenges • Japan – will value remain out of favour? • European long / short – QE environment proving challenging • Regulation – continues to increase adding cost and complexity • Markets – uncertain and volatile Opportunities • Long only funds – client interest in Global Te
Slide 15: Financial Review: Profitability – by year
Financial Review Profitability – by year Year to Year to Year to March ’14 March ’15 March ’16 Average AUM US$10.8bn US$13.1bn US$11.6bn Core operating profit £24.6m £27.7m £23.7m Performance fee profit £7.6m £5.2m £3.0m Interest and similar income £2.0m £0.8m £0.8m PBT pre S.B.P. £34.2m £33.7m £27.
Slide 16: Financial Review: Costs
Financial Review Costs Year to Year to Year to March 14 March 15 March 16 Comments Salaries, bonuses and other Reduced discretionary bonus pool £15.9m £16.7m £16.6m staff costs but small increase in headcount Core distributions £16.7m £19.5m £17.2m Decrease in core profits Core cash compensation £32
Slide 17: Financial Review: Other operating costs
Financial Review Other operating costs Year to Year to Year to March 14 March 15 March 16 Comments IT £3.3m £3.9m £4.2m Increase in number and rate of Bloomberg terminals New offices → +£1m in y/e Rent and rates £1.4m £1.7m £2.7m March 2016 Professional fees £0.8m £0.7m £0.8m Insurance £0.4m £0.5m £
Slide 18: Financial Review: Dividend
Financial Review Dividend • Total dividend for the year 25.0p (2015: 25.0p) – Second dividend payable 19.5p (2015: 19.5p) – Policy of full, not progressive, dividend unchanged. No desire to cut dividend • Dividend reflects: – Health and strength of the company’s balance sheet. – Continued confidence
Slide 19: Financial Review: Cash and investments
Financial Review Cash and investments March 2015 March 2016 £m £m Cash £41.4m £48.8m Seed investments Alternative fund seed £21.2m £15.3m Long only seed £30.5m £24.8m £51.7m £40.1m Total cash and investments £93.1m £88.9m Source: Polar Capital. For non-US professional investor use only. Please refer
Slide 20: Financial Review: Shareholder analysis at 31 March 2016
Financial Review Shareholder analysis at 31 March 2016 Holding Percentage Directors, founders and staff 30.8m 34% Caledonia 7.8m 9% XL 7.0m 8% EBT 1.1m 1% Hargreve Hale 7.4m 8% Blackrock 6.4m 7% Liontrust 3.5m 4% Free Float = 48% Standard Life 3.0m 3% Artemis 2.8m 3% Others 21.5m 23% Total shares in
Slide 21: Important Information
Important Information Polar Capital 16 Palace Street London SW1E 5JD House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in this pr
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