Impax Asset Management has seen a recovery in its assets under management in recent months after net inflows slumped earlier this year as rising inflation and geopolitical instability weakened sentiment.
In its financial results for the year to September 30, 2022 published today (November 30), the Aim-listed company said its net inflows were positive, reaching £2.9bn.
Many asset managers have struggled with outflows this year due to volatile markets.
Though positive and ahead of analyst expectations, Impax’s £2.9bn in net inflows this year was down 73 per cent from the £10.7bn seen in 2021.
The drop in inflows saw the company's assets fall by 4.1 per cent, from £37.2bn to £35.7bn. But assets have already recovered in recent months.
At the end of October, two months following this results period, Impax said its assets had bounced back to £37.4bn.
The specialist investor has also appointed a new chief financial officer in Karen Cockburn, following the announcement of Charlie Ridge’s retirement. Cockburn will enter her post in January.
The asset manager focuses on investing which aligns with the transition to net zero. It said inflows remained well diversified by sales channel and by geography, with 79 per cent of its assets coming from outside the UK.
Cockburn will join following a year of revenue growth. Revenue increased by £32.3mn this financial year, from £143.1mn to £175.4mn.
Current CFO Ridge said growth was driven by positive net inflows across the business seen in the current and prior year, but was offset in part by market falls during the period.
Adjusted profit before tax was £68.4mn, up from £54.9 mn last year.
Over the past year, the firm has gone on a hiring spree which has driven up operating costs from £87.3mn to £108mn.
Impax said these costs cover hires made in 2021 as well as further hires made during 2022. “We expect costs to increase further in the next financial year as a result of inflation and further investment in the group's infrastructure and people,” said Ridge.
As a result of its revenue and profit growth, Ridge said the board had decided to recommend a final dividend of 22.9 pence. This would be an increase in the total dividend for the year of 7 pence, or 34 per cent.
Analyst Peel Hunt said it believed Impax could take advantage of the longer term demand for sustainable investments and valued it “ahead of the sector” at £965mn. Shares were up more than 2 per cent this morning.
Operating profits beat Peel Hunt’s expectation of £61.5m, with both revenues and costs about £3mn better than the analyst had assumed.
ruby.hinchliffe@ft.com