Polar Capital under target despite small profit increase in first half

Ollie Gordon
BRITISH investment firm Polar Capital yesterday reported a small rise in first-half profits, despite being hamstrung by a poor performing Japan.

In its first-half interims, Polar recorded pre-tax profits of £11.6m – up 15 per cent year-on-year. The company also saw its assets under management increase one per cent to £13.4bn, and its earnings per share inflate 23 per cent to 10.8p.

Despite the increases, however, Panmure Gordon analysts Keith Baird and Jeremy Grime said the firm underperformed expectations as a result of higher commission costs, a £1.2m hit from market-to-market losses on investment seeding of funds, and first-half outflows from Japan – where Polar has a third of its assets under management.

Chief executive Tim Woolley said: “The first six months of our financial year have been challenging. Since 31 March, we have seen growth in assets under man­agement across most portfolios, but this has been offset by outflows from Japan. The success of our Japan team over recent years has led in the short term to our assets under management being unusually sensitive to the direction of and allocations to the Japanese market which suffered a reversal in the first six months of our new financial year. Over the shorter term, our results will continue to be influenced by events in Japan and allocations to or away from our Japanese funds.

“However, we continue to invest in the business for the longer term and have added two new teams during our first half. We remain optimistic on the longer-term opportunities for the business and see considerable scope for many of the other strategies beyond Japan to grow substantially in time.”