AUM closed FY24 (1 Oct 23 - 30 Sep 24) on £37.2bn, 0.6% down y-o-y. Net outflows over FY24 totalled £5.8bn, largely offset by a positive investment performance of +£5.3bn and a contribution of +£0.3bn from the acquisition of Absalon Capital Management in Q4.
As flagged, outflows were heavily impacted during the year by Impax’s largest distribution partner, BNP Paribas, and some other clients in European private wealth, reducing their clients’ weighting to equities in favour of money market funds, to take advantage of higher interest rates.
However, Q4 (1 Jul – 30 Sep) showed improved flows of -£1.2bn, considerably less than the -£1.9bn of Q3. Investment performance added £1.1bn. Impax noted that redemptions in European private wealth had dropped sharply in Q4 (with further improvements in flows expected as interest rates fall), it had experienced stronger market conditions more generally, and that its outlook is positive.
AUM on 30 Sep of £37.2bn is only a fraction below our forecast of £37.3bn and we maintain our FY24 forecasts. We do however reduce FY25 forecasts as a return to positive net flows looks likely to take a little longer than previously anticipated.
Our fundamental valuation adjusts to 750p / share (from 800p). Yet we see no logic in Impax’ PER of 12.3 being at the median of a UK-listed peer group, whilst also noting the shares yield a hefty 7.4%.
