Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2017 Earnings Presentation
31 slides from Polar Capital's earnings presentation, Jun 26, 2017
Slide 1: Results Presentation June 2017
Results Presentation June 2017 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk 26/06/2017
Slide 2: Contents
Results Presentation June 2017 Contents • AUM • Fund Flows • Fund Performance • Industry • Leadership Change • Financials • Dividend • Outlook For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: AUM
AUM For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 3
Slide 4: Polar Capital AUM: Signs of renewed AUM growth
Polar Capital AUM Signs of renewed AUM growth $bn 16 14 $13.4 $13.2 $12.6 $12.3 12 $11.6 $11.4 $10.9 $10.4 $9.9 £9.8 10 £9.3 £8.3 £8.3 £7.9 £7.7 8 $7.2 £7.2 £7.3 £7.0 6 $5.3 $5.1 £4.7 $3.9 $3.9 4 $3.1 £3.2 £3.3 $2.5 £2.4 £2.5 $1.9 £1.7 £1.9 2 $1.5 £1.0 £1.2 0 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-1
Slide 5: Fund Flows
Fund Flows For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 5
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2017 £7.25bn Gross inflows quarter 1 [long 316m hedge 64m] quarter 2 [long 344 hedge 108] quarter 3 [long 861 hedge 56] quarter 4 [long 934 hedge 66] Gross outflows quarter 1 [long 756 hedge 80] quarter 2 [long 715 hedge 44] quarter 3 [long 544 hedge 59] quarter 4 [long 655
Slide 7: Fund Flows 12 Months To March 2017
Fund Flows 12 Months To March 2017 Inflows Outflows Technology £88.7m Japan £837.9m Healthcare £233.8m Europe L/S £166.3m Financials £337.4m North America £234.5m Convertibles £73.3m GEMS £65.1m Global £12.1m UK Absolute £77.6m European Income £87.2m UK Value £163.6m Source: Polar Capital, 31 March
Slide 8: AUM Growth Analysis
AUM Growth Analysis 31 March 2016 31 March 2017 % Increase £’m £’m Year on Year Japan 1,513 968 -36% Long Only (ex Japan) Technology 1,375 2,190 59% North America 1,522 1,744 14% Healthcare 916 1,430 56% Financials 731 1,319 80% GEMs 357 394 10% Global Alpha 70 105 49% European Income 31 128 317% UK
Slide 9: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography Long Only 91.1% UK 67.4% Alternative 8.9% Europe 28.8% USA 1.6% Other 2.2% AUM split by business unit Investor mix by holdings Technology 23.6% Bank 22.6% North American 18.8% Polar Investment Trusts 19.1% Healthcare 15.4% Private Wealth M
Slide 10: Performance
Performance For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 10
Slide 11: Lipper Figures For Long And Alternative UCITS Funds
Lipper Figures For Long And Alternative UCITS Funds As at 31 May 2017 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 Qua
Slide 12: Lipper Figures For Regional Funds
Lipper Figures For Regional Funds As at 31 May 2017 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 Quartile universe tot
Slide 13: Alternative Strategies
Alternative Strategies As at 31 May 2017 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (AX EUR) 1 August 2003 9.80% 1.26% 4.92% 9.08% Conviction (EUR) 1 April 2006 2.11% -1.42% 1.21% 3.86% Source: Polar Capital. Basis: Net of fees. Currency as stated. Past perfor
Slide 14: Fund Performance Since Inception Versus Benchmark
Fund Performance Since Inception Versus Benchmark As at 28 April 2017 Return net of all Benchmark return1 Difference Costs % % Global Technology 247.5 174.0 +73.5 Japan 131.0 60.3 +70.8 Japan Alpha 119.6 126.0 -6.0 Healthcare Opportunities 173.5 77.5 +96.0 Biotechnology 97.0 45.3 +51.7 Healthcare Bl
Slide 15: Industry
Industry For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 15
Slide 16: Industry Outlook
Industry Outlook • Regulation • Pricing • Consolidation For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 16
Slide 17: Leadership Change
Leadership Change For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 17
Slide 18: Leadership Change
Leadership Change • Gavin Rochussen, previously CEO of J O Hambro, will take over CEO role on 17 July 2017 • Tim Woolley will become a non-executive director • Gavin has an exceptional record of success as CEO of a global asset management boutique • Appointment well received by PMs and investment st
Slide 19: Financial Review
Financial Review For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 19
Slide 20: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2017 £9.3bn from £7.3bn at March 2016 • Profitability – Pre-tax (pre SBP) profits £24.5m (2016: £26.9m) – Core operating profit excluding performance fees £21.8m (2016: £23.6m) • EPS and Dividend – Adjusted diluted EPS 20.4p (2016: 22.0p)1 – Total
Slide 21: Identification of accounting changes
Financial Review Identification of accounting changes • Adjusted EPS: – Previous metric excluded all IFRS SBP costs of (a) options as well as (b) preference shares – Now adjusted EPS only excludes IFRS preference share cost. Option and LTIP costs now included in adjusted EPS (2017: £0.9m) – Because
Slide 22: Profitability – by year
Financial Review Profitability – by year Year Year Year to March ’15 to March ’16 to March ’17 Average AUM £8.2bn £7.7bn £8.0bn Core operating profit £27.7m £23.6m £21.8m Performance fee profit £5.2m £3.0m £1.2m Interest and similar income £0.8m £0.3m £1.5m PBT pre S.B.P. £33.7m £26.9m £24.5m Source
Slide 23: Financial Review Costs
Financial Review Costs Year Year Year to March 15 to March 16 to March 17 Comments Salaries, bonuses and other Reduced discretionary bonus pool £16.7m £16.6m £16.9m but small increase in headcount staff costs Core distributions £19.5m £17.2m £14.8m Decrease in core profits Core cash compensation £36
Slide 24: Other operating costs
Financial Review Other operating costs Year to Year to Year to March 15 March 16 March 17 Comments Increase in number and rate IT £3.9m £4.2m £4.7m of Bloomberg terminals Rent and rates £1.7m £2.7m £2.6m Professional fees £0.7m £0.8m £1.0m Insurance £0.5m £0.5m £0.5m Travel and entertainment £1.3m £
Slide 25: Cash and investments
Financial Review Cash and investments March 2016 March 2017 £m £m Cash £48.8m £58.5m Investments Alternative fund investment £15.3m £9.5m Long only seed £24.8m £12.6m £40.1m £22.1m Total cash and investments £88.9m £80.6m • Reasons for fall: – Uncovered dividend £5.3m – Additional funding of EBT £3m
Slide 26: Shareholder analysis at March 2017
Financial Review Shareholder analysis at 31 March 2017 Holding Percentage Directors, founders and staff 26.7m 29% Caledonia 7.5m 8% XL 7.0m 8% EBT 1.5m 2% Hargreave Hale 9.6m 10% Blackrock 4.4m 5% Artemis 3.0m 3% Free Float = 53% Unicorn 2.8m 3% Others 26.7m 32% Total shares in issue 91.4m 100% At S
Slide 27: Dividend
Dividend For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 27
Slide 28: Dividend
Dividend • Total dividend for the year 25.0p (2016: 25.0p) – Second dividend payable 19.5p (2016: 19.5p) – Policy of full, not progressive, dividend unchanged. No desire to cut dividend • 2018 dividend if kept at 25p is expected to be covered – Evidence of a return to growth in 2018 and beyond • Gen
Slide 29: Outlook
Outlook For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 29
Slide 30: Outlook For Fiscal 2018
Outlook For Fiscal 2018 Challenges • Active v Passive • Regulation - continues to increase adding cost and complexity • Markets - political uncertainty, Brexit Opportunities • Long Only – Technology, Japan, Healthcare, North America, Financials, European Income, UK Value • Absolute – Europe L/S, Con
Slide 31: 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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