AUM closed FY22 (30 Sep) on £35.7bn, 3.3% up over Q4 (30 Jun 22: £34.5bn) and 4.1% down y-o-y (30 Sep 21: £37.2bn). The sharp market falls over 2022, particularly in growth-oriented sustainability stocks, will understandably dominate any review of the year. Indeed, the FTSE Environmental Opportunities All-Share Index fell 28.1% over Jan-Sep 22, which contributed to a -£4.4bn AUM impact from market movements and investment performance over FY22.
At a company-fundamental level, what characterises FY22 is how well Impax’s ability to attract and retain client assets has held up, despite unhelpful market conditions. Net inflows totalled +£2.9bn in FY22 (+£606m in Q4), with only one quarter of relatively minor net outflows during FY22 (Apr-Jun, a period of the sharpest market falls, when net outflows were £186m).
However, our fundamental valuation per shares adjusts to 960p per share from 1050p, purely because of the jump in the 10-year Gilt yield (the risk-free rate used in our DCF valuation) which is now 4.2% (2.1% at the time of our previous forecast in July). Additionally, given its strong growth prospects, Impax’s PER of 14.3, only just above a peer group median of 13.0, is in our view, too low.
