Polar Capital sees sharp drop in full-year FuM, keeps dividend steady

Polar Capital Holdings experienced a sharp drop in full-year profits as its assets under management shrank significantly.

The investment management company saw its assets under management fall 12.0% from last year's level to reach £7.3bn, alongside a 22.0% fall in profits before tax £24.2m.

As of 31 May its AuM had fallen further, to reach £7.1bn.

AIM-listed Polar Capital highlighted the successful launch in July 2015 of its European (ex UK) Income UCITS fund and the decision of George Godber and Georgina Hamilton to join the UK's value team.

In a research note sent to clients, analysts at Canaccord Genuity hailed the positive operational results of the firm, reiterating both their 'buy' recommendation and 385p target price.

Weakness in Polar's European Fund in terms of Funds under Management had not been well-flagged at the company's fourth quarter results, the broker said, although weakness in Japanese and Emerging Market FuM had.

"While Polar may be becoming a more diversified business by design and default, uncertain financial markets are likely to mask a very solid underlying operational story. While further equity market and FX volatility could create further risks to flows and FUM forecasts, an unchanged 25p DPS and a prospective yield of 8.5% could provide a degree of valuation support as should a P/E of 12.4x," analysts Salvatore Caruso, Bill Barnard and James Ash said in a research report sent to clients.

The full-year dividend pay-out was kept at 25p per share.

As of 11:40 BST shares in Polar Capital Holdings were down by 7.61% to 276.25p.