Release Date: May 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Impax Asset Management Group PLC (IPXAF, Financial) is capitalizing on the growing demand for sustainable investment strategies, positioning itself as a leader in this niche market.
- The company has improved its investment performance significantly, with 71% of assets under management outperforming their benchmarks since the start of the year.
- Impax has successfully completed its second acquisition in fixed income within the last 12 months, expanding its product range and enhancing growth potential.
- The company has implemented cost reduction measures, reducing its run rate cost by about 11 million pounds, which helps offset revenue losses.
- Impax is maintaining a strong focus on efficiency and cost control, which positions it well despite challenging market conditions.
Negative Points
- Impax Asset Management Group PLC (IPXAF) reported a drop in revenue, operating margin, and profit due to challenging market conditions and significant outflows.
- The loss of the St. James's Place mandates resulted in a 6.2 billion pounds reduction in assets under management, significantly impacting the company's financials.
- The company's dividend payout is expected to be at the lower end or just above the threshold for fiscal year 2025, indicating financial strain.
- Despite cost-cutting efforts, the company is still facing a challenging environment with negative net flows and reduced revenue.
- The market situation remains uncertain, with potential headwinds from geopolitical and economic factors affecting client sentiment and investment flows.
Q & A Highlights
Q: How is the team morale following the staff cuts, and is Impax considering launching active ETFs, especially in the US?
A: The management is focused on maintaining team motivation, with about 100 employees owning shares, which helps in resilience. The level of departures has been minimal. Regarding ETFs, Impax is actively exploring opportunities, particularly in the US, due to favorable tax conditions, though nothing is confirmed yet. (Respondent: Unidentified_1)
Q: Can you provide more details on growth plans in private markets and the potential impact of US renewable energy credits on your strategy?
A: Impax plans organic expansion in private markets, focusing on real assets like real estate and infrastructure. They are open to partnerships with teams or boutiques. Regarding US renewable energy credits, Impax is monitoring opportunities, with a current focus on Europe, which is moving towards deeper energy security. (Respondent: Unidentified_1)
Q: What is driving the improved trend with BNP Paribas, and what are clients currently focused on in terms of flows?
A: BNP Paribas's flows are driven by their asset allocation decisions, with a recent positive shift towards equities and sustainability. Clients are divided between those looking at historical performance and those anticipating a recovery, with ongoing concerns about US economic policy and potential recession. (Respondent: Unidentified_1)
Q: Are there any imminent mandates or inflows expected in the second half, and have recent events delayed these processes?
A: Institutional mandates typically follow a set rhythm and are not significantly delayed by market events. The wholesale business is less predictable, with flows influenced by sentiment, but no specific delays have been noted. (Respondent: Unidentified_1)
Q: How is the M&A landscape, and are potential sellers holding back due to market volatility?
A: The M&A environment remains challenging, with a focus on integrating recent fixed income acquisitions. There is no significant change in the number of opportunities, but cultural fit remains a critical factor in potential deals. (Respondent: Unidentified_2)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
