Polar Capital Regulatory News (POLR)

Polar Capital Holdings plc ("Polar Capital" or "the Group")

Interim results for six months ended 30 September 2015

11 December 2015

Financial Highlights

· Assets under Management ("AUM") at 30 September 2015 were US$10.9bn (31 March 2015: US$12.3bn)

· Core operating profit, excluding performance fees, £12.4m (30 September 2014: £13.9m)

· Profit before share-based payments £13.3m (30 September 2014: £12.7m)

· Pre-tax profit £11.7m (30 September 2014: £11.6m)

· Basic earnings per share 10.44p (30 September 2014: 10.55p) and adjusted* diluted earnings per share 11.46p (30 September 2014: 10.75p)

· Interim dividend per ordinary share of 5.5p declared (2014: 5.5p) to be paid in January 2016

· Shareholders' funds £69.7m (31 March 2015: £75.2m and 30 September 2014: £65.5m) including cash and investments of £75.1m (31 March 2015: £93.1m and 30 September 2014: £63.4m)

* Adjusted to exclude cost of share-based payments

Corporate Highlights

· Long only European (ex-UK) Income UCITS Fund launched in June 2015

Current Trading

· AUM at 30 November 2015 were US$12.0bn

Tim Woolley, Chief Executive Officer, commented:

"This proved another challenging half year for us. During the last six months we saw a significant fall in global equity markets in late summer and further redemptions from our Japan Fund, although recent performance has improved markedly. These two headwinds more than offset some good inflows seen on Global Convertibles, Financials and Healthcare.

Our long-term fund performance remains strong, with our two new strategies of UK Absolute and European Income also delivering good performance in their first year. Whilst global stock markets are likely to be volatile in the face of near-term geopolitical concerns, we believe that we remain well positioned to resume growth again over the medium-term."

Polar Capital Holdings plc is a specialist investment management company offering professional and institutional investors a range of fundamentally research-driven funds diversified by asset class, geographical and sectoral specialisation. Since its foundation in 2001, the Group has steadily grown and currently supports 11 investment teams managing 24 funds and 4 managed accounts across a range of long-only and alternative products.

Polar Capital Holdings plc was listed in London on the Alternative Investment Market in February 2007. It trades under the ticker 'POLR.LN'.

Consistent with Polar Capital's founding strategy of fostering an equity culture amongst its staff and providing a high level of transparency to clients, 34% of the equity is held by directors, founders and staff. Polar Capital Holdings plc has two key corporate investors: Caledonia Investments plc, a London-listed investment trust with a notable track record of backing emerging companies in the financial sector, owns 9% and XL Group plc, an Irish-domiciled NYSE-listed company, which through its subsidiaries and under the XL Catlin brand, provides insurance and re-insurance worldwide and has a proven pedigree of taking minority interests in alternative asset managers, holds 8%. Polar Capital is principally located in London and maintains offices with investment staff in Edinburgh, Tokyo, Connecticut, Jersey and Geneva.

Our Funds/Strategies

(In chronological order)

*Including managed accounts run off the same strategy

Analysis of Changes in Asset Types for the six months to 30 September 2015

Analysis of AUM by Business Unit and Type of Funds as at 30 September 2015

Chief Executive's Statement

This proved another challenging half year for us with assets under management (AUM) falling 11% over the six months from our financial year end in March 2015 and 19% from the AUM level twelve months ago. Core operating profit, excluding performance fees, fell 11% in comparison with the same period last year.

Profit before share-based payments and tax increased marginally to £13.3m over the period, compared with £12.7m in the six months to September 2014, and adjusted diluted earnings per share increased 7% over the comparable six months, helped by an improvement in the net returns from our investment and seeding program and related hedging strategies resulting in higher finance income over the period.

The Company continues to be comfortable with its policy of the first interim dividend for any year being predicated on half of the first half year's core earnings and in light of this position the interim dividend payment in January 2016 will be 5.5p (2014: 5.5p). In addition the Board wish to take the opportunity to advise shareholders that in 2016 it is considering bringing forward the second interim dividend from July to March.

As I cautioned in my outlook at the financial year end, our short term results would remain heavily influenced by the direction of our Japanese assets and the direction of overall global equity markets given that over 90% of our AUM is in long only products. During the last six months we saw a significant fall in global equity markets in late summer and further redemptions from our Japan Fund. These two headwinds more than offset some good inflows seen on Global Convertibles, Financials and Healthcare.

It is worth noting that the bulk of the redemptions from the Japan Fund occurred in the first quarter and there are encouraging signs that the worst may now be behind us as performance on the Fund has improved markedly. On a rolling twelve months to the end of October, the Fund is again top quartile in the Lipper peer rankings. The long-term performance of the Fund remains exceptional with the Fund ranking 9th out of 193 funds over ten years in its Lipper peer group.

The two new legs that we added last year, UK Absolute and European Income have delivered good performance in their first year and we are optimistic that both strategies will start to raise assets in the coming twelve months. The UK Absolute Equity UCITS Fund was up an exceptional 27% in its first year whilst the European Income UCITS Fund outperformed its index by just over 4%. The European Income team had a further boost during this half-year with a number of clients seeding the launch of a second fund for the team, a European ex-UK Income UCITS Fund which we launched in June.

Since the end of September markets have recovered some of their summer losses, the pace of redemptions on our Japan Fund has slowed compared with the nadir of earlier in the year and we have seen good inflows elsewhere. This positive combination of factors has allowed AUM at the end of November to bounce back to US$12.0bn, although performance fee profits remain unpredictable until the end of December when the majority of the Group's performance fees are due.

Whilst global stock markets are likely to be volatile in the face of near-term geopolitical concerns, the long-term performance across our funds remains strong and we believe that we remain well positioned to resume growth again over the medium-term.

Tim Woolley

Chief Executive 10 December 2015

Interim Consolidated Income Statement for the six months to 30 September 2015

All of the items in the above statements are derived from continuing operations.

Interim Consolidated Statement of Comprehensive Income for the six months to 30 September 2015

Interim Consolidated Balance Sheet as at 30 September 2015

Interim Consolidated Statement of Changes in Equity for the six months to 30 September 2015

Interim Consolidated Statement of Cash Flow for the six months to 30 September 2015

Notes to the Unaudited Interim Consolidated Financial Statements

For the six months to 30 September 2015

1. General Information, Basis of Preparation and Accounting Policies

Polar Capital Holdings plc ("the Company") is a public limited Company registered in England and Wales.

The unaudited interim condensed consolidated financial statements to 30 September 2015 have been prepared in accordance with IAS 34: Interim Financial Reporting.

The unaudited interim condensed consolidated financial statements do not include all the information and disclosures required in annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 March 2015 which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those used in the preparation of the Group's annual financial statements for the year ended 31 March 2015.

2. Revenue

3 Profit on Ordinary Activities Before Taxation

b) Auditors' remuneration:

4. Dividends

5. Earnings Per Ordinary Share

The calculation of basic earnings per ordinary share is based on the profit for the period of £9,217,800 (September 2014: profit £9,078,624); and on 88,255,362 (September 2014: 86,077,915) ordinary shares, being the weighted number of ordinary shares.

The calculation of diluted earnings per ordinary share is based on the profit for the period of £9,217,800 (September 2014: profit £9,078,624) and 94,356,332 (September 2014: 94,919,336) ordinary shares, being the weighted average number of ordinary shares allowing for all options of 5,683,882 (September 2014: 8,007,244) which are dilutive as well as shares granted under a crystallisation event but not yet issued of 417,088 (September 2014: 834,177).

The calculation of adjusted earnings per ordinary share is based on a profit for the period of £9,217,800 (September 2014: profit of £9,078,624) but adjusted for the share-based payments charge of £1,597,500, (September 2014: share base payments charge of £1,121,755) and 94,356,332 (September 2014: 94,919,336) ordinary shares being the weighted average number of ordinary shares allowing for all dilutive options and as well as shares granted during the period under a crystallisation event but not yet issued.

6. Assets at fair value through profit or loss

7. Assets held for sale

8. Notes to the Cash Flow Statement

Reconciliation of profit before taxation to cash generated from operations

9. Related Party Transactions

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not included in this note.

B J D Ashford-Russell is a member of Polar Capital LLP and a director of the Polar Capital Technology Trust plc (the Trust). Polar Capital LLP is the appointed investment manager of the Trust. The total fees received by the Group as investment manager of the Trust were £3,912,500 (September 2014: £3,237,883). The amounts receivable at period end in this respect were £1,284,900 (March 2015: £1,289,200).

At the end of the period, the Group had an outstanding loan due of £890,500 (March 2015: £961,735) from the Polar Capital Employee Benefit Trust, which was set up in 2002 to hold ordinary shares in Polar Capital Holdings plc for the benefit of employees.

10. The Publication of Non-Statutory Accounts

The financial information contained in this unaudited half year report does not constitute statutory accounts as defined in S434 of the Companies Act 2006. The financial information for the six months ended 30 September 2015 and 2014 has not been audited. The information for the year ended 31 March 2015 has been extracted from the latest published audited accounts, which have been filed with the Registrar of Companies. The audited accounts filed with the Registrar of Companies contain a report of the independent auditor dated 19 June 2015. The report of the independent auditor on those financial statements contained no qualification or statement under S498 of the Companies Act 2006.

Directors

Dividend

A first interim dividend of 5.5p per share has been declared for the year to 31 March 2016. This will be paid on 15 January 2016 to shareholders on the register on 29 December 2015. The shares will trade ex-dividend from 24 December 2015.

Remuneration Code

Disclosure of the group's Remuneration Code will be made alongside its Pillar 3 disclosure which is available on the Company's website

Nominated Advisor

Canaccord Genuity

Joint Corporate Brokers

Canaccord Genuity

Peel Hunt

Half Year Report 

The Half Year report will be posted to shareholders in late December 2015. Copies of this announcement and of the Half Year report will be available from the Secretary at the Registered Office, 16 Palace Street, London SW1E 5JD and from the Company's website at www.polarcapital.co.uk 

Neither the contents of the Company's website nor the contents of any website accessible from the hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.

ENDS