FY21 (to 30 Sept) saw Impax continuing to scale at a pace unmatched by any UK-listed asset manager, and the broader sustainable investing market. AUM reached £37.2bn, 84% up from 30 Sep 20 (£20.2bn). By 31 Oct 21 AUM grew another 4.6% to £38.9bn.
Financial results for FY21 were hugely impressive with revenue up 64% to £143.1m (higher than our previous forecast of £139.4m) and adjusted operating profit* up 140% to £55.8m (again higher than our previous forecast of £49.7m, and providing evidence of substantial operational leverage). Cash reserves grew 87% to £70.1m, and the full-year dividend increased by 140% to 20.6p
Impax’s impeccable sustainability credentials, backed up by a track-record of delivering superior investment returns, and its established and successful distribution channels in the major capital markets of the US, Europe and Asia, leads us to conclude that its growth trajectory is likely to remain strong.
On the basis of this AUM outlook and higher than expected revenue and profits for FY21, we raise our fundamental valuation from 1300p to 1450p, noting that our forecast AUM growth over the next five years (CAGR of 19%) is less than some estimates of the growth of the overall sustainable investing market.
Audio summary of note here:
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