Polar Capital Holdings PLC (AIM:POLR) reported a return to positive investor flows in the past quarter after a number of quarters of net outflows.
Net inflows stood at £56 million during the final quarter of its financial year ended 31 March 2024, making a small dent in the total net outflows for the full year, which were still over £1.6 billion.
But the net inflow helped assets under management to increase 12% over the quarter to £21.9 billion and up 14% over the last 12 months, which was more boosted by investment performance of £2.3 billion in the quarter, or £4.3 billion over the year.
"Net flows during March 2024 have been particularly pleasing," said CEO Gavin Rochussen, with six of strategies benefitting from net inflows with an overall total of £228 million during the month.
"While the outlook for fund flows remains uncertain, positive momentum has continued into April 2024," he said.
Broker Peel Hunt said the closing AUM level was "well ahead of what we expected" and therefore it has upgraded full-year forecasts by 4% but a more significant 17% for next year.
Pre-tax profit of £54.3 million is forecast for the past year, "a much stronger performance than we expected".
The broker said: "In our view, Polar’s valuation remains attractive, with the EV/EBIT multiple remaining at circa 6x and the yield at circa 10%, albeit the dividend remains uncovered in the short-term. We remain at 'buy' and increase our target price from 535p to 665p."
Analyst Rae Maile at Panmure Gordon said: "Inflows are the route to warming the market’s heart, and that heart will be much warmed by a quarter’s inflows after eight consecutive quarters of outflows".
They acknowledged "it might be too early to definitively call the turn" but were sufficiently bullish to note that a decision on a second interim dividend is not due taken until late June and the required improvement in markets and flows “have come through and so there is more reason to trust in a maintained payment and hence the estimated 10% yield”.