Preliminary Group Results

Polar Capital Holdings PLC
26 June 2007

                           POLAR CAPITAL HOLDINGS plc
           Preliminary Group Results for the year ended 31 March 2007



26 June 2007



 Polar Capital Holdings plc ('Polar Capital'), the specialist asset management
       group, announces preliminary results ahead of expectations at IPO





FINANCIAL HIGHLIGHTS



•         Assets under management at 31 March 2007 up 36% at $3.4bn (2006:
          $2.5bn)

•         Pre tax core profitability up 42% at £2.7m (2006 £1.9m)

•         Pre tax post manager distribution performance fees £8m (after
          exceptionally strong 2006 £10.4m)

•         Pre tax profits before IPO costs of £11.7m (2006: £11.9m)

•         Basic undiluted earnings per share 14.7p (2006: 16.9p)

•         Adjusted diluted earnings per share (pre IPO costs) of 14.4p (2006:
          15.1p)

•         Second interim dividend of 5.5p making a total distribution for the
          year of 7.75p per share held.

•         Increase in shareholders funds to £31.5m (2006: £14.6m) including
          £31.4m of cash (2006:19.4m).



CONFIDENT OUTLOOK



•         Investment performance strong across the firm

•         Fund flows for the first two months of the year are encouraging with
          assets under management up to $3.8bn  at the end of May

•         Newer funds beginning to get traction

•         Considerable operating leverage potential

•         A number of new fund manager recruitment initiatives in place



Mark Kary, Chief Executive, commented:



'The past financial year witnessed significant development for Polar Capital,
culminating in our successful flotation in February. Achievements include the
finalisation of a seeding arrangement with XL Capital, considerable investment
in fund management teams and the addition of key personnel.



We believe we have built a strong business model and operational platform which
provides the opportunity to leverage growth in the current financial year.
Trends in the Asset Management industry and our own funds' performance support
this view and we look forward to the future with confidence.'


For further information on Polar Capital Holdings plc please contact:
Mark Kary,  Chief Executive or John Mansell,  Chief Operating Officer

[phone]
OR
Financial Dynamics
Ed Gascoigne-Pees [phone] / Felicity Murdoch  [phone]







Extracts from the Chief Executive's Statement



Review of the Year

The fiscal year 2006/7 has been an unusually busy year for Polar Capital,
dominated by a significant number of investments made to facilitate future
growth and by some important strategic management milestones.  Over the course
of the year we launched five new hedge funds and recruited three new investment
management teams. In the early part of the Spring 2006 we launched the European
equity long/short Conviction Fund, the FX/Macro Discovery Fund, the Russia/CIS
focused Elbrus Fund and the Latin America Fund. In the early Summer 2006 we
seeded our Asia equity long/short Lotus Fund and then in February 2007 the
Global Emerging Markets equity long/short Columbus Fund. We are very pleased
with the progress that these funds have made and believe that they represent
significant potential for the future.



We continued to make important investments in our infrastructure to ensure that
both our portfolio managers and investors in our funds are well supported.
During the year we recruited a Chief Portfolio Risk Officer a director of Sales
and Marketing.



At the end of October we finalised a seeding arrangement with a subsidiary of XL
Capital Ltd (NYSE: XL) whereby they undertook to provide US$175m in aggregate of
seed capital for a number of fund launches over the next two year period. They
also made a significant equity investment in Polar Capital. XL Capital is a
Bermuda based New York Stock Exchange listed insurance, reinsurance and risk
management business that is well known for taking a selective number of
strategic stakes in alternative asset management companies. We are delighted to
have them on board as a shareholder and seeding partner and access to such
capital should contribute significantly in our efforts to continue to recruit
talented managers to the Polar Capital platform.



On 7 February 2007 Polar Capital listed its shares on AIM raising approximately
£4.6m (net of expenses) of additional capital to facilitate Polar Capital's
ability to seed selectively future fund launches. The intention to float dated
back to when the Company was founded in 2001, the belief being that it would be
important for a company built around the ownership of equity to create both a
value and liquidity for that equity. We also believe that the transparency that
the listing brings should significantly enhance our brand and reputation.



Fund Performance

Assets under management during the year grew by 36% from $2.5bn to $3.4bn. Given
that 2006/7 was a year of significant investment we are very pleased with
progress made. Net inflows contributed $729m and performance $220m. Core
operating profit increased 42% from £1.9m in 2006, to £2.7m in 2007. As
expected, performance fees were down from £25.8m to £20.6m on a very difficult
comparison with 2005/6 and, net of performance fee distributions and bonuses,
from £10.4m to £8.0m.



At the individual fund level the trends are encouraging. Not only have we
established a number of new funds with considerable scope for growth, but there
have been further positive developments in longer standing funds. Most notably,
the Japan equity long/short fund has performed well in an especially difficult
environment for Japanese hedge funds and has seen its assets increase from $93m
to $407m over the year. The Paragon Fund has been spun out of the UK business
unit to form a new Global Opportunities unit; its assets under management have
grown from $254m to $437m over the year and it has enjoyed another year of
strong returns.



Dividend

The Board's dividend policy is to return surplus earnings to shareholders which
are over and above that required to fund the growth of the business. In the
absence of unforeseen circumstances this involves paying out a material portion
of net profits before performance fees together with a majority of net
performance fees.



The Board has declared a second interim dividend for the year of 5.5p.  The
interim dividend will be paid on 3 August 2007 to ordinary shareholders on the
Company's Register of members at the close of business on 6 July 2007.  The
ex-dividend date is 4 July 2007.



Current trading and Outlook

Although stock markets around the world have enjoyed very strong performance
over the last four years, our business is becoming increasingly less sensitive
to overall market direction. Over 50% of our assets are now in hedged strategies
and our long only business continues to become more differentiated and less
correlated. We believe that the traditional asset management industry is
undergoing a very meaningful long term change, firstly as investors increase
their allocations to absolute return strategies to seek better risk/return
ratios, and secondly as asset allocators increase commitments to more focused,
less benchmarked and less correlated long only investment strategies. We believe
that Polar Capital is well positioned to benefit from both of these important
trends. All this having been said, it should not be forgotten that we are today
a business very focused on equity markets and inevitably therefore at least
partly exposed to their direction.



Coming into the new fiscal year the business has strong momentum. Since the year
end assets under management have grown 12% to $3.8bn as at 31 May 2007 and now
comprise 39% in long only equity strategies, 54% in hedge funds and 7% in
advisory and managed accounts.  Our longer established businesses all have the
opportunity to grow significantly; our longer term investment outlook for the
Technology sector has become considerably more constructive; our Japanese
business is benefiting from the recruitment of additional research analysts in
Tokyo; and our UK business appears successfully to be rebuilding its performance
record after an indifferent year in 2006/7. Equally many of our newer funds have
now built initial track records which should permit successful marketing efforts
as the year progresses, most notably the European Conviction Fund, some of our
Emerging Market Funds, and the Global Utilities Fund. We calculate that in the
existing funds in the current environment we have approximately $4.5bn of spare
capacity.



Furthermore our strategy has been to try to launch one or two additional
business units each year; such additions will be focused on areas that have
synergies with our existing fundamental research based platform and are focused
on opportunities in hedge fund strategies in the sectoral and credit space, and
in the long only business on more differentiated value and thematic strategies.





Staff and shareholders

I would like to say a big thank you to all our staff for their efforts in what
has been an especially busy year, to our longer standing investors for all their
support, and to our new shareholders for joining us on what we think will be a
very exciting journey.



M R Kary

26 June 2006




Group profit & loss account
for the year ended 31 March 2007
                                                           Unaudited
                                                          Year ended              Year ended
                                                            31 March                31 March
                                                                2007                    2006
                                                               £'000                   £'000

Turnover                                                      41,269                  40,963

Operating Expenses                                          (16,045)                (14,416)

Operating (loss)/ profit                                      25,224                  26,547

Interest receivable and other income                           1,108                     347
Interest payable and similar charges                             (9)                       -
Loss on disposal of fixed assets                                 (6)                       -

Profit on ordinary activities before taxation                 26,317                  26,894

Taxation                                                     (2,537)                 (3,977)

Profit on ordinary activities after taxation                  23,780                  22,917

Minority Interest                                           (15,630)                (15,194)


Retained profit for the year                                   8,150                   7,723

Basic earning per ordinary share                               14.7p                   16.9p
Diluted earnings per ordinary share                            12.8p                   14.7p
Adjusted diluted earnings per ordinary share                   14.4p                   15.1p

All the above revenue and expense items arose from continuing operations


Group balance sheet
at 31 March 2007                                             Unaudited
                                                                 As at                As at
                                                         31 March 2007        31 March 2006
                                                                 £'000                £'000


Fixed assets
Tangible assets                                                    537                  595
Investments                                                      3,709                1,001
                                                                 4,246                1,596

Current assets
Debtors                                                          4,228                4,780
Deferred tax asset                                                   2                    -
Cash and short-term deposits                                    31,403               19,403
                                                                35,633               24,183

Total assets                                                    39,879               25,779
Creditors - amounts falling due within one year                (8,291)             (11,109)

Total assets less current liabilities                           31,588               14,670
Minority Interests                                                (64)                 (56)

Net assets                                                      31,524               14,614


Capital and Reserves
Called up share capital                                          1,673                1,271
Share premium account                                           15,050                1,016
Investments in own shares                                        (558)                (764)
Profit and loss account                                         14,804               12,482
Capital Reserve                                                    555                  609

Shareholders' funds                                             31,524               14,614



Group cash flow statement
for the year ended 31 March 2007
                                                                              Unaudited
                                                                          31 March 2007      31March 2006
                                                                                  £'000             £'000
Operating activities

Operating profit for the year                                                    25,224            26,547
Depreciation charge                                                                 228               160
(Increase)/ decrease in trade and other receivables                                 554           (2,524)
Increase/ (decrease) in trade and other payables                                (1,794)             (174)
Share based payment                                                                  52                38
Other non-cash reserve movements                                                   (55)              (79)
Net cash flow from operating activities                                          24,209            23,968

Returns on investment and servicing of finance
Interest received and similar income                                              1,108               347
Interest paid and similar charges                                                   (9)                 -
Issue of preference share capital by subsidiary undertaking                           7                10
Distributions to minority interests                                            (15,630)           (8,675)
Net cash inflow from returns on investments and servicing of finance           (14,524)           (8,318)

Taxation paid                                                                   (3,563)           (2,633)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                                         (176)             (520)
Payments to acquire fixed asset investments                                     (2,708)           (1,000)
Payment to acquire current asset investment                                       (550)             (945)
Receipts on disposal of current asset investments                                   756               752
                                                                                (2,678)           (1,713)

Dividend paid                                                                   (5,880)           (1,200)

Net cash inflow before financing                                                (2,436)            10,104

Financing
Issue of share capital                                                           14,436             1,020

Increase in cash and cash equivalents                                            12,000            11,124
Cash and cash equivalents at the beginning of the year                           19,403             8,279

Cash and cash equivalents at the end of the year                                 31,403            19,403






NOTES



General Information

Basis of preparation

The financial statements have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice and under the historical cost convention.
The Group financial statements consolidate the financial statements of the
Company and its subsidiaries drawn up to 31 March 2007.



Earnings per ordinary share

Earnings have been calculated by taking the profit on ordinary activities after
taxation less the minority interest.  The calculation of basic earnings per
ordinary share is based on the profit for the year as calculated per above of
£8,150,091 (2006: £7,723,297) and on 55,584,556 (2006:45,705,661) ordinary
shares, being the weighted average number of ordinary shares in issue during the
year. The calculation of diluted earnings per ordinary share is based on the
profit for the year as calculated per above of £8,150,091(2006:£7,723,297) and
63,634,996 (2006:52,630,271) ordinary shares, being the weighted average number
of ordinary shares allowing for all dilutive options and shares not yet issued
under a crystallisation event.



The calculation of adjusted diluted earnings per ordinary share is based on the
profit for the year before IPO costs of £9,180,385 (2006:£7,933,297) and
63,634,996 (2006: 52,630,271) ordinary shares, being the weighted average number
of ordinary shares allowing for all dilutive options and shares not yet issued
under a crystallisation event.


Geographical analysis  (based on the residency of the source)
                                                        Unaudited
                                                       Year ended                 Year ended
                                                    31 March 2007              31 March 2006
                                                            £'000                      £'000


UK                                                          3,731                      3,254

Ireland                                                     7,656                     14,769

Cayman                                                     29,072                     21,191

Canada                                                        454                        607

Other                                                         356                      1,142
                                                           41,269                     40,963






The analysis of turnover is as follows:
Investment management fees                                 20,184                     14,495

Investment advisory fees                                      490                        669

Investment performance fees                                20,595                     25,799
                                                           41,269                     40,963





                                                        Unaudited
                                                       Year ended                 Year ended
                                                    31 March 2007              31 March 2006
                                                            £'000                      £'000

Operating profit                                           25,224                     26,547

This is stated after charging:
Staff costs                                                 7,675                      7,545

Depreciation                                                  228                        160

Auditor's remuneration

Audit services                                                 40                         37

 Other services relating to                                    48                         40
taxation
Services relating to corporate                                215                         60
finance transactions

Other services                                                 42                         24


                                                        Unaudited
                                                       Year ended                 Year ended
                                                    31 March 2007              31 March 2006
                                                            £'000                      £'000


Summary financial information:

Net core revenues                                          18,514                     13,398
Total operating expenses                                 (15,737)                   (11,495)
Core operating profit                                       2,777                      1,903

Net performance fee                                         8,041                     10,365

Net operating profit                                       10,818                     12,268
Net interest                                                  914                        347
HMRC settlement                                              (15)                      (705)
Profit before tax & listing fees                           11,717                     11,910
Listing fees                                              (1,030)                      (210)

Profit before tax                                          10,687                     11,700
Taxation                                                  (2,537)                    (3,977)

Profit after tax                                            8,150                      7,723






Status of preliminary announcement

The financial information set out in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31 March 2007 or
2006.  The statutory accounts for the year ended 31 March 2007 have not been
delivered to the Registrar of Companies, nor have the auditors yet reported on
them.  The statutory accounts for the year ended 31 March 2007 will be finalised
on the basis of the information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies.



The statutory accounts for the year ended 31 March 2006 have been delivered to
the Registrar of Companies and included the report of the auditors which was
unqualified and did not contain a statement under either section 237(2) or
section 237(3) of the Companies Act 1985.



Copies of Report and Accounts

The full annual report and accounts will be posted to shareholders in July 2007
and copies will be available thereafter from the Company Secretary at the
Company's Registered Office, 4 Matthew Parker Street, London SW1H 9NP (020 7227
2700) or from the company's website at www.polarcapital.co.uk



Annual General Meeting

The Annual General Meeting will be held at 10.00 am on 19 September 2007 at the
St. Stephen's Club, 34 Queens Anne's Gate, London SW1H 9AB



Forward looking statements

This preliminary announcement contains certain forward looking statements with
respect to the financial condition, results of operations and businesses and
plans for Polar Capital Holdings plc.  These statements and forecasts involve
risk and uncertainty because they relate to events and depend upon circumstances
that have not yet occurred.  There are a number of different factors that could
cause actual results or developments to differ materially from those expressed
or implied by these forward looking statements.  Nothing in this statement
should be construed as a profit forecast.



The release, publication, transmission or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by law and
therefore persons in such jurisdictions into which this announcement is
released, published, transmitted or distributed should inform themselves about
and observe such restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities laws of any such jurisdiction.




                      This information is provided by RNS
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