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Impax Asset Management Group plc
19 May 2010
Impax Asset Management Group plc
("Impax" or the "Company")
Interim results for the six month period ended 31 March 2010
Impax, the AIM quoted specialist investment manager dedicated to the environmental markets sector, today announces its
interim results for the six month period ended 31 March 2010.
Highlights
· Assets under management and advisory ("AUM") increased 40 per cent from £1,263 million on 30 September 2009 to £1,767
million on 31 March 2010 and rose further to £1,909 million by 30 April 2010.
· Revenue in the first half of the year, which does not yet include the full effect of significant AUM inflows occurring
towards the end of the period, increased to £6.31 million. This compares favourably to revenue for the same period last
year of £4.50 million (plus £0.95 million of exceptional, non-recurring fees).
· Unaudited profit before tax in the first half was £1.67 million, compared to profit for the same period last year of
£1.02 million (plus £0.52 million from exceptional, non-recurring fees).
· Impax-managed quoted equity funds continued to outperform global equity markets.
· Fundraising for Impax's second private equity fund was successful, attracting E141 million of capital on 23 March
2010.
Commenting on the results, Ian Simm, Chief Executive of Impax, said:
"I am pleased to report significant progress during the first half of Impax's financial year. Our proven business model of
investing in high growth, inefficiently priced environmental markets has gained further traction. In addition, the
legislative backdrop has continued to advance, benefiting many of the companies in which we invest.
"With an experienced, committed management team, a broad network of clients and partners and a business model that is
already generating rapidly rising earnings, I am confident that Impax is well positioned to take advantage of the
significant opportunities in environmental markets."
For further information please contact:
Penrose FinancialGay Collins Shona Prendergast Impax Asset Management Group plcIan Simm, Chief Executive Execution Noble & Company LimitedJohn Riddell, Director 020 7786 4882 impax@penrose.co.uk020 7786 4884 impax@penrose.co.uk 020 7432 2619 020 3429 1426
CHIEF EXECUTIVE'S STATEMENT
Evidence of improving macroeconomic conditions, particularly in the United States and in the Asia-Pacific region, has
resulted in continued recovery in equity markets in recent months and strengthening investor confidence. In this context,
I am pleased to report that Impax Asset Management Group plc ("Impax" or the "Company") has made further significant
progress during the first half of its financial year (the "Period" between 1 October 2009 and 31 March 2010) and our proven
business model of investing in high growth, inefficiently priced environmental markets has gained further traction.
The legislative backdrop to environmental markets has continued to advance. Notwithstanding the inconclusive outcome to
December's international negotiation in Copenhagen on global warming policy, many governments have moved ahead to implement
targets for the adoption of renewable energy technologies; for example, China reconfirmed its commitment to sourcing 15 per
cent of its electric power from renewable energy by 2020, laying the foundation for a capital expenditure programme of ca.
US$180 billion. In parallel, the Obama administration announced several policies to improve energy efficiency throughout
the economy, particularly in the areas of vehicle fuel consumption and energy management in buildings.
AUM and financial results for the Period
Impax's assets under management and advisory ("AUM") increased 40 per cent from £1,263 million on 30 September 2009 to
£1,767 million on 31 March 2010. By 30 April 2010, AUM had increased further to £1,909 million.
Revenue for the six months to 31 March 2010, which does not yet include the full effect of significant AUM inflows
occurring towards the end of the Period, increased to £6.31 million (2009: £4.50 million plus £0.95 million of exceptional,
non-recurring private equity management fees). The unaudited net result for the Period was a profit before tax of £1.67
million (2009: £1.02 million (restated) plus £0.52 million profit from exceptional, non-recurring fees).
At the Annual General Meeting on 10 February 2010, Impax shareholders approved payment of a dividend of 0.4 pence per share
(2009: 0.35 pence). In line with previous statements, the Board expects to continue to recommend annual dividend payments
in the future.
Quoted equities
During the Period, funds and accounts under our management that were invested in quoted equities continued to perform well
relative to benchmarks. We are now managing four distinct "quoted equity" strategies: a "Specialists" strategy focusing
on small and mid cap stocks that have a majority of their business activity in environmental markets; a "Leaders" strategy
that includes both larger companies and more diversified businesses where we believe that their exposure to environmental
markets should lead to earnings outperformance; a "Water" strategy encompassing technology providers, service companies and
utilities; and lastly an "Asia-Pacific" strategy targeting the rapid and sustained growth anticipated from companies active
in the environmental sector that are based in the region.
Funds and accounts following these strategies have continued to deliver strong investment performance. In the 12 months to
31 March 2010, the Specialists strategy returned 53.7 per cent and the Water strategy gained 48.3 per cent, outperforming
the MSCI World Index, which increased by 44.0 per cent. The Leaders strategy, which was up 38.7 per cent over the same
period, has performed strongly in the first four months of 2010. These funds also have compelling longer term performance;
for example, in the five years to 31 March 2010, the Specialists strategy returned 88.3 per cent while the MSCI World Index
was up 43.7 per cent.
We have been particularly encouraged by the performance of our Asia-Pacific portfolio. As noted in the Annual Report, we
commenced management of Impax Asian Environmental Markets plc ("IAEM plc") on 23 October 2009, following a successful
initial public offering that attracted £104.5 million of capital from UK investors. Between launch and 31 March 2010, this
trust's net asset value per share increased by 18.8 per cent, a significant outperformance against the MSCI AC Asia-Pacific
ex Japan index, which was up by 14.1 per cent. We have recently launched an open-ended sister fund to IAEM plc on our
open-ended funds platform in Ireland.
Private equity
Impax's private equity team has also achieved an important milestone during the Period. On 23 March 2010, we announced the
launch and fund raising (with E141 million of capital commitments) for Impax New Energy Investors II LP ("Fund II"), our
second private equity fund, which will invest equity capital in renewable energy power generation facilities and related
assets in Europe. Impax became a limited partner in Fund II with a commitment of E2 million. This fund raising was
supported by institutional investors, the majority of whom had invested in our first fund (Impax New Energy Investors LP,
"Fund I"), which raised E125 million during 2005 and 2006. We expect to attract additional capital into Fund II in due
course.
During the Period, the Company disbursed additional funds to Fund I, and has now made cumulative disbursements from the
Company's cash reserves of E2.75 million out of its overall E3.76 million commitment.
Fund flows
In addition to funds raised for IAEM plc and for Impax New Energy Investors II LP, we received net inflows during the
Period of £165 million of which £21 million came into "Impax Label" funds, which we typically manage for UK investors,
attracting annual fees in the region of 0.9 to 1.5 per cent. Third party funds/accounts, where fees tend to be lower,
received net inflows of £144 million.
Infrastructure and support
Our policy is to expand our capabilities in compliance, risk management, finance, operations and marketing in line with
regulatory requirements and the anticipated short-to-medium term development of the Impax business. During the Period, our
headcount of permanent staff increased from 34 to 39, including two new hires into the marketing team.
Fund distribution
Our network of distribution partners continues to strengthen. In April 2010, the merger of BNP Paribas Investment Partners
and Fortis Investment Management was completed, and the combined entity, which retains the BNP Paribas Investment Partners
name, has already produced notable inflows for us in the Benelux and Australia, and has generated strong prospects
elsewhere.
As reported in the 2009 Annual Report, we have increased our focus on the marketing of our products in North America with
the appointment of Titanium Asset Management as a third party distributor. We are currently servicing this relationship,
and other clients such as Pax World, from London, but will review in due course whether to establish a client service
presence in the United States.
In the UK, we have extended our distribution through a new agreement with Skandia Investment Group to take over the
management of Skandia Investment Management Limited's Ethical Fund in June, subject to FSA approval. Skandia has asked us
to reorient this fund, which had net assets of ca. £77 million on 30 April 2010, to follow a strategy based on our Leaders
portfolio.
Business Property Relief
We understand that shares in Impax Asset Management Group plc are "relevant business property" for UK Inheritance Tax
Business Property Relief purposes (noting that any application is a matter between the investor, or their advisor, and
HMRC).
Prospects
At the time of writing, European sovereign debt markets are volatile and equities are showing signs of contagion.
Nevertheless, the companies in which we invest will typically benefit from further recovery in the world economy, while
some will also gain from the fiscal stimulus spending that was announced during 2008 and 2009 to accelerate the adoption of
cleaner, more efficient infrastructure, products and services.
Over the past few years, Impax has been able to consolidate its position as one of the leading investment managers in the
environmental markets sector, focusing on designing and delivering strong returns from institutional quality investment
products and mapping out a distribution strategy to target pockets of demand around the world. With an experienced,
committed management team, a broad network of clients and partners and a business model that is already generating rapidly
rising earnings, I am confident that Impax is well positioned for further long term profitable expansion.
Ian Simm
18 May 2010
Impax Asset Management Group plc
Condensed consolidated statement of comprehensive income for the six months ended 31 March 2010 Note Six months ended Six months ended Year ended 31 March 2010 31 March 2009 30 September 2009 (restated) (restated) £'000 £'000 £'000 Revenue 6 6,313 5,452 10,391 Operating costs: Long-term incentive scheme charge - (275) (551) Other operating osts (4,787) (3,722) (7,842) Fair value gains/(losses) on investments 168 (26) 326 Change in third party interest in consolidated funds (55) - (113) Profit from
operations 1,639 1,429 2,211 Investment income 31 110 262 Profit before taxation 1,670 1,539 2,473 Taxation (468) (352) (192) Profit for the period 1,202 1,187 2,281 Other comprehensive income Exchange differences on consolidation (4) - (3) Total other comprehensive income (4) - (3) Total comprehensive income for the period attributable to equity holders of the parent 1,198 1,187 2,278
Note Six months ended Six months ended Year ended
31 March 2010 31 March 2009 30 September 2009
(restated) (restated)
£'000 £'000 £'000
Revenue 6 6,313 5,452 10,391
Operating costs:
Long-term incentive scheme charge - (275) (551)
Other operating osts (4,787) (3,722) (7,842)
Fair value gains/(losses) on investments 168 (26) 326
Change in third party interest in consolidated funds (55) - (113)
Profit from operations 1,639 1,429 2,211
Investment income 31 110 262
Profit before taxation 1,670 1,539 2,473
Taxation (468) (352) (192)
Profit for the period 1,202 1,187 2,281
Other comprehensive income
Exchange differences on consolidation (4) - (3)
Total other comprehensive income (4) - (3)
Total comprehensive income for the period attributable to equity holders of the parent 1,198 1,187 2,278
Basic earnings per share 1.10p 1.10p 2.12p
Diluted earnings per share 1.05p 1.03p 1.97p
Impax Asset Management Group plc
Condensed consolidated statement of financial position as at 31 March 2010
Note As at As at As at
31 March 2010 31 March 2009 30 September 2009
(restated) (restated)
£'000 £'000 £'000
ASSETS
Non - current assets
Goodwill 9 1,629 1,629 1,629
Intangible assets 108 148 143
Property, plant and equipment 354 460 422
Other financial assets 10 759 1,178 792
Investments 17 14 14
Trade and other receivables 65 65 65
Deferred tax asset 279 - 364
3,211 3,494 3,429
Current assets
Trade and other receivables 3,957 2,423 2,716
Other financial assets 10 478 380 452
Investments 11 5,043 2,979 3,927
Current tax asset - - 22
Cash and cash equivalents 12 6,054 5,564 10,284
15,532 11,346 17,401
-
TOTAL ASSETS 18,743 14,840 20,830
EQUITY AND LIABILITIES
Equity
Ordinary shares 1,156 1,156 1,156
Share premium 78 78 78
Exchange translation reserve (161) (154) (157)
Own shares (59) (78) (59)
Treasury shares (453) - -
Retained earnings 13,600 11,482 12,832
TOTAL EQUITY 14,161 12,484 13,850
Current liabilities
Trade and other payables 1,484 2,024 4,609
Third party interest in consolidated funds 1,987 - 1,687
Short-term borrowings 12 1,065 - 684
Current tax liability 46 332 -
4,582 2,356 6,980
TOTAL EQUITY AND LIABILITIES 18,743 14,840 20,830
Impax Asset Management Group plc
Condensed consolidated statement of changes in equity for the six months ended 31 March 2010
Share capital Share premium Exchange translation reserve Own shares Treasury shares Retained earnings Minority interest TOTAL EQUITY
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 October 2008 as previously reported 1,156 78 (154) (78) - 10,396 1,168 12,566
Prior year adjustment - - - - - - (1,168) (1,168)
As at 1 October 2008 as restated 1,156 78 (154) (78) - 10,396 - 11,398
Profit for the period - - - - 1,187 1,187
Other comprehensive income for the period: exchange differences on consolidation - - - - - - - -
Total comprehensive income for the period - - - - - 1,187 - 1,187
Long-term incentive scheme charge - - - - - 276 - 276
Transactions with equity holders:
Dividends paid - - - - - (377) - ( 377)
As at 31 March 2009 1,156 78 (154) (78) - 11,482 - 12,484
Profit for the period - - - - - 1,094 - 1,094
Other comprehensive income for the period: exchange differences on consolidation - - (3) - - - - (3)
Total comprehensive income for the period - - (3) - - 1,094 1,091
Long-term incentive scheme charge - - - - - 275 - 275
Shares vested to employees from Employee Benefit Trust - - - 19 - (19) -
As at 30 September 2009 1,156 78 (157) (59) - 12,832 - 13,850
Profit for the period - - - - - 1,202 1,202
Other comprehensive income for the period: exchange differences on consolidation - - (4) - - - - (4)
Total comprehensive income for the period - - (4) - - 1,202 1,198
Transactions with equity holders:
Share buy back - - - - (453) - - (453)
Dividends paid - - - - - (434) - (434)
As at 31 March 2010 1,156 78 (161) (59) (453) 13,600 - 14,161
All equity is attributable to owners of the parent.
Impax Asset Management Group plc
Condensed consolidated statement of cash flows for the six months ended 31 March 2010
Note Six months ended Six months ended Year ended
31 March 2010 31 March 2009 30 September 2009
(restated) (restated)
£'000 £'000 £'000
Cashflows from operating activities
Profit before interest and taxation 1,639 1,429 2,211
Adjustments for:
Depreciation of property, plant and equipment 100 91 186
Amortisation of intangible assets 35 18 51
Fair value movement in investments (171) 26 (326)
Long-term incentive scheme charge - 275 551
Translation differences 20 (82) (87)
Increase in receivables (1,241) (857) (726)
Decrease in payables (2,825) (1,799) (737)
Interest received 31 110 149
Corporation tax paid (315) (274) (834)
Net cash (used in)/generated by operating activities (2,727) (1,063) 438
Investing activities:
Cash acquired on consolidation of investment - - 2,906
Proceeds on sale of investments 1,213 - -
Purchase of investments (2,161) - (289)
Purchase of intangible assets - (92) (121)
Purchase of property, plant and equipment (33) (15) (70)
Net cash (used in)/generated by investing activities (981) (107) 2,426
Financing activities:
Dividends paid 8 (434) (377) (377)
Repurchase of share capital (453) - -
Net cash used in financing activities (887) (377) (377)
Net (decrease)/increase in cash and cash equivalents (4,595) (1,547) 2,487
Cash and cash equivalents at the beginning of the period 9,600 7,029 7,029
Effect of foreign exchange rate changes (16) 82 84
Cash and cash equivalents at the end of the period 12 4,989 5,564 9,600
Notes to the Interim Accounts for the six months ended 31 March 2010
1 Reporting entity
Impax Asset Management
Group plc (the
"Company") is a
company domiciled in
the United Kingdom.
The condensed
consolidated interim
financial statements
of the Company at and
for the six months
ended 31 March 2010
comprise the Company
and its subsidiaries
(together referred to
as the "Group") and
the Group's interests
in associates and
jointly controlled
entities.
2 Statement of
compliance
The interim report is
unaudited and does not
constitute statutory
accounts within the
meaning of Section 435
of the Companies Act
2006. These condensed
consolidated interim
financial statements
have been prepared in
accordance with IFRS
34 "Interim Financial
Reporting" as adopted
by the EU and the AIM
rules. They do not
include all the
information required
for full annual
financial statements,
and should be read in
conjunction with the
consolidated financial
statements of the
Group as at and for
the year ended 30
September 2009.
The comparative
figures for the
financial year ended
30 September 2009 are
not the company's
statutory accounts for
that financial year.
Those accounts,
prepared in accordance
with IFRSs as adopted
by the EU, have been
reported on by the
company's auditors and
delivered to Companies
House. The report of
the auditors was (i)
unqualified, (ii) did
not include a
reference to matters
to which the auditors
drew attention by way
of emphasis without
qualifying their
report, and (iii) did
not contain a
statement under
section 498 (2) or (3)
of the Companies Act
2006. Copies of these
accounts are available
upon request from the
Company's registered
office at Mezzanine
Floor, Pegasus House,
37 - 43 Sackville
Street, London W1S 3EH
or at the Company's
website:
www.impax.co.uk.
These condensed
consolidated interim
financial statements
were approved by the
Board of Directors on
18 May 2010.
3 Significant accounting
policies
The accounting
policies applied by
the Group in these
condensed consolidated
interim financial
statements are the
same as those applied
by the Group in its
consolidated financial
statements as at and
for the year ended 30
September 2009, except
that with effect from
1 October 2009 the
Group adopted the
following new
standards and
interpretations:
IAS 1 (revised) -
Presentation of
Financial Statements.
IAS 1 (revised) has
resulted in some of
the titles of the
financial statements
changing. The 'balance
sheet' is now referred
to as a 'statement of
financial position'
and a 'cash flow
statement' is now a
'statement of cash
flows'. The income
statement has been
replaced by a
'statement of
comprehensive income'.
IFRS 8 - Operating
Segments. The Group
has two operating
segments: "Quoted
equities" and "Private
equity". The results
of these segments have
been aggregated into a
single operating
segment for the
purposes of these
financial statements
because they have
characteristics so
similar that they can
be expected to have
essentially the same
future prospects.
These segments have
common investors,
operate under the same
regulatory regimes and
their distribution
channels are
substantially the
same. Additionally
management allocates
the resources of the
Group as though there
is one operating unit.
IFRS - 3 Business
Combinations (2008)
and IAS 27 -
Consolidated and
Separate Financial
Statements (2008) for
business combinations
occurring in the
financial year
commencing 1 October
2009. All business
combinations occurring
on or after 1 October
2009 are accounted for
by applying the
acquisition method.
The change in
accounting policy was
applied prospectively
and had no material
impact on earnings per
share.
Adjustment for the
year ended 30
September 2009
The Group has made the
following adjustment
for the year ended 30
September 2009:
Amounts previously
classified in the
Income Statement and
the Statement of
Financial Position as
'Minority Interest'
have been classified
as 'Third party
interest in
consolidated funds' as
they represent
investments by third
parties in puttable
instruments as defined
by IAS 32 - Financial
instruments:
Presentation. The
effect of this
adjustment on the 30
September 2009
comparative figures is
as follows:
Effect on the statement of comprehensive income Effect on the statement of financial position
Dr/(Cr) Dr/(Cr)
£'000 £'000
Minority interest - 1,687
Third party interest - (1,687)
in consolidated funds
Minority interest 113 -
Change in third party (113) -
interest in
consolidated funds
Adjustments for the
period ended 31 March
2009
In addition to the
adjustment above for
the year ended 30
September 2009 the
Group has made the
following prior period
adjustments in order
to reflect those prior
year adjustments that
were applied by the
Group in its
consolidated financial
statements as at and
for the year ended 30
September 2009.
Foreign exchange
differences arising on
long-term inter
-company loans were
previously treated as
equity investments and
translated at period
-end rates with
differences taken to
reserves. However this
treatment was
incorrect and the
exchange differences
arising on long-term
inter-company loans
are now recognised in
the Statement of
Comprehensive Income.
The effect of this
adjustment on the 31
March 2009 comparative
figures is as follows:
Effect on the statement of comprehensive income Effect on the statement of financial position
Dr/(Cr) Dr/(Cr)
£'000 £'000
Operating costs (328) -
Exchange translation - (379)
reserve
Retained earnings - 707
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