Preliminary Results - Replace

RNS Number : 5001Y

Polar Capital Holdings PLC

07 July 2008

 



This announcement replaces the announcement released at 07.00 am on 4 July 2008 under RNS number 3115Y.  The revised announcement restates the diluted and adjusted diluted earnings per share numbers for the years ended 31 March 2008 and 31 March 2007.  This is due to a change in the number of ordinary shares used in the calculations.  This announcement also includes the dividend dates for the Company's second interim dividend. All other details remain unchanged.

Polar Capital Holdings Plc ('Polar Capital' or the 'Company'), the specialist asset management group, announces preliminary results 

'We believe that the good performance of a number of our funds positions them well for current and future marketing'

Financial Highlights

• Assets under management at 31 March 2008 down 8.8% at $3.1bn (March 2007: $3.4bn)

• Core operating profit, excluding performance fees, up over 110.0% to £6.0m  (March 2007: £2.8m)

• Pre tax profitability up 42.2% to £14.5m (March 2007:£10.2m)

• Basic earnings per share up 3.5% to 14.6p (March 2007:14.1p) and diluted earnings per share up 3.2% to 13.0p (March 2007:12.6p)

• Adjusted diluted earnings per share up 8.1% to 14.6p (March 2007: 13.5p), adjusted to exclude cost of share-based payments

• Second interim dividend of 7.0p per share (March 2007: 5.5p per share) making a total distribution for the year of 8.5p per share (March 2007: 7.75p per share)

• Increase in shareholders funds to £37.9m (March 2007: £32.6m) including cash and investments of £44.1m (March 2007: £35.3m).
  

New Business Units

• The Polar Capital Global Healthcare Opportunities Fund was launched in December 2007, the top performing healthcare fund for the 5 months to May 2008 (Source: lipper)

Outlook and Current AUM

• Challenging outlook presents opportunities for Polar Capital's uncorrelated and defensive sector strategies

• Opportunity to further diversify business with aim of adding one to two new business units each year 

• Current AUM as at 1 July 2008 approximately $3.3bn

Tom Bartlam, Chairman, commented:

'The new fiscal year has started as anticipated in much the same way as the last one ended. Investment markets and especially financial and consumer related stocks have generally been weak with the market focusing on a further and more protracted economic slowdown, stagflation and the rising price of oil. The performance of the majority of Polar Capital's funds has however been quite encouraging through this period with the performance of our long only funds being relatively strong and our hedge funds broadly preserving capital and performing well against the competitor universe.

We believe that the good performance of a number of our funds positions them well for current and future marketing.' 

Mark Kary, Chief Executive, commented:

'The first full fiscal year as a public company has seen Polar Capital operating in one of the most challenging periods in investment markets for many years.

While this underlying environment has inevitably created a headwind for some of our asset growth targets and has led to adjustments in our business, we enter the new fiscal year believing that markets will continue to be challenging but cautiously encouraged about our prospects.'

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]

Chief Executive's Statement 

The first full fiscal year as a public company has seen Polar Capital operating in one of the most challenging periods in investment markets for many years. While this underlying environment has inevitably created a headwind for some of our asset growth targets and has led to adjustments in our business, we enter the new fiscal year believing that markets will continue to be challenging but cautiously encouraged about our prospects.

Review of the year - the investment industry

The fiscal year has been dominated by the global credit crisis which began in July 2007 and which led to very difficult and volatile market conditions initially in August. There were a number of hedge funds in particular that performed poorly during this period. These disappointments were largely in quantitative strategies, but the 20-30% drawdowns in a number of previously well regarded and high profile funds sparked the first serious debate on the sustainability and reliability of hedge fund returns arguably since the collapse of Long-Term Capital Management during the Russian Crisis of August 1998. The deterioration of the US housing market, the dislocation in funding and capital markets, and the collapse of structured credit markets all led to significantly higher volatility levels from the benign levels of the past few years and the first sustained period of difficult equity market conditions since 2002. The large write downs by many of the world's largest banks and investment banks accentuated the crisis and eventually led to the failure of a number of high profile hedge funds and the rescue of Bear Stearns in March 2008. This crisis and the inevitable concerns over the spillover into corporate earnings and the real economy have caused developed global equity markets to fall around 25% from their 2007 autumn highs.

This crisis and especially the headline news on the closure and very poor performance of a number of hedge funds have led to investor concerns about their exposure to the asset class and the balance of their allocations. This has led in the short term to reduced inflows for the industry and the first quarter of 2008 saw the lowest quarterly net inflows into the hedge fund industry since 2004.

In the short term there is clearly some digestion going on in the hedge fund industry. Recent industry returns have been too volatile and too correlated to equity markets and to each other, and some of the positive expectations of diversification have not been achieved. Investors are starting to reallocate at least partly to less aggressive, less directional, more fundamentally driven, more consistent and less correlated strategies.

Review of the year - Polar Capital

Polar Capital's business has inevitably been challenged by this environment. Our assets under management which grew strongly in the first half of the year shrunk in the second half for a number of reasons: the 40% of our assets that are invested in long-only funds fell as world stock markets fell from their highs; the Japanese franchise has suffered in particular as the market has fallen around 27% from its July 2007 highs, as investors have aggressively de-allocated from the region, and following disappointing performance from our Japanese hedge fund; overall asset inflows have slowed as investors have taken stock of their allocations; and finally Polar  Capital announced early in the new year that it was closing three of its funds (Technology hedge fund, Asia hedge fund and Asia long-only). These funds represented approximately US$194m of assets and their closure stems from the Company's long held view that all its fund managers need to deliver strong and consistent risk adjusted investment performance. Inevitably difficult market conditions are more likely to expose the weakest funds and it will always be important that Polar Capital aims to achieve and maintain the highest standards.

In the autumn of 2007, we recruited Gareth Powell from Framlington and Dan Mahony from Morgan Stanley to develop the new Healthcare business unit. We launched their Global Healthcare Opportunities Fund in December 2007 and we are pleased with the performance and progress to date.

At the 31 March 2008, 64% of our assets were in hedge fund strategies and 36% in long-only. While our philosophy continues to be to build both businesses through the identification of talented managers we do think that the current skew to hedge funds better suits the environment that we are in and that in the medium term it is likely that this part of our business is likely to grow more quickly.

Investment performance

With the exception of the three funds now closed and our Japanese equity long/short fund, we are encouraged by the investment performance of our funds. Our goal for our long-only business is to protect assets to the extent possible in these difficult market conditions with differentiated product and performance and to ensure that the funds are well positioned for a resumption of the uptrend in markets.

Our hedge funds generally performed well in 2007 and again on a year to date basis in 2008. Particularly encouraging has been the performance of our Discovery, Paragon, Conviction, Forager, UK, Elbrus and Latam funds.  In an environment where many of the competitors have struggled, this would suggest these funds are well set to attract new assets.

Changes in the investment environment

Until the summer of 2007, the investment community had enjoyed a four year bull market in equity and credit virtually unparalleled in history. The recent turbulence has had the inevitable impact of shaking the tree very hard and the competitive landscape has and will continue to alter very markedly. What appears clear is that investors are slowly beginning to realise that the secular environment for financial markets may have changed, that the era of unrestricted access to cheap and plentiful finance may be over, and that a more discerning and conservative approach to asset allocation needs to take place. Some of the more directional and in hindsight more correlated allocations to real estate, long-only equities and private equity are being revisited, and arguably there may be a more guarded approach to commodities and emerging markets at least in the short to medium term. A logical conclusion would suggest that investors lower their bull market weightings to equities, and that in the hedge fund universe they seek out strategies that genuinely seek to protect capital and that have the ability to produce uncorrelated and positive returns in all environments.

In the short term there is clearly some indigestion going on amongst asset allocators. However, as investors revisit their strategies they will start to reallocate at least in part to less aggressive, less directional and less correlated funds on the one hand, and more fundamentally driven and consistent funds on the other.

Current outlook

While such an environment will clearly present challenges for the business, we do think there are several very important opportunities for the Company. Firstly the opportunity for market share gains is perhaps better than at any time. Investors are revising their allocations and the choice of strategies that have the potential to achieve either strong relative or absolute returns is more limited than for many years. We do believe that Polar Capital has a number of funds that are especially attractive in this environment; uncorrelated strategies like our FX/Macro Discovery Fund, products with a record of preserving capital in challenging times like UK Equity long/short Fund, more defensive sector strategies like Healthcare and Utilities, and funds positioned for more difficult times like the Paragon Fund all represent very differentiated marketing opportunities for us. At the same time there has been significant weakness in the smaller and medium capitalisation sectors especially in the UK, Europe and Japan creating investment opportunities which on a long-term basis look more compelling than for many years. The Forager and Conviction Funds specifically focus on these sectors in Europe, while our Japanese long-only business has a strong pedigree of operating in the smaller company space in Japan. While it is never going to be easy to predict market trends and investor sentiment we are encouraged with the potential demand for a number of our funds in this current environment.

The second opportunity is to further diversify the business. As we have indicated before we are encouraged that our European and Global Opportunities businesses continue to grow in importance, so that now with Technology and Japan they represent the more established units within the overall business. We would expect that during the course of the year that both the UK and Macro businesses can grow and that some of our other younger businesses will increasingly get traction. Furthermore we believe that the current climate will potentially present more attractive recruitment and bolt on acquisition opportunities; our aim continues to be to add one to two new business units each year.

The third opportunity is presented by the UCITS III regulatory environment.  We believe the UK Private Wealth Management industry has been rather slow and reluctant to embrace allocations to hedge funds. Historically this has been driven by the industry's lack of focus on third-party collectives, by a lack of familiarity and comfort with the asset class, by the positive tone to equity markets, and by tax and regulatory considerations. Today allocations to third-party collectives are rising significantly, there is generally more familiarity with the asset class although some of the more sensationalist headlines mean the scepticism will not disappear immediately, and equity market conditions have become more difficult. Importantly the European Union's so-called UCITS III Product Directive has expanded the range and type of financial instruments permitted in a UCITS fund. As a result, the UK Private Wealth Management industry can now for the first time access an open-ended regulated fund vehicle inside which a genuine absolute return capital preservation strategy can be managed. Polar Capital intends to capture this opportunity having launched a UK equity focused absolute return UCITS III fund. We already have a six year track record of running the identical strategy in an offshore Cayman Island structure where both the absolute and risk adjusted returns compared to the FTSE 100 have been impressive. While we expect this new business area to build gradually we are hopeful that this can become an important contributor to the business over a number of years.

Summary

From an investment market's standpoint, we are now seeing the financial crisis spilling over into a more prolonged downturn in the global economy. Despite this we are encouraged by the current positioning of the business. We have a number of the funds and strategies which should lend themselves well to current and expected investor demand. At the same time our fund performance has generally started the calendar year positively on a relative basis, and should permit us to raise assets in a number of different areas.  

Our infrastructure platform is arguably stronger than it has ever been with the investment we have made in sales and marketing resource starting meaningfully to pay off and with a significant new hire in the risk management space recently announced. 

We believe these market conditions, whilst undoubtedly challenging, represent a real opportunity for Polar Capital to demonstrate differentiated performance and continue to attract top talent.

Staff and shareholders

The market conditions have meant that this has been a difficult and challenging time for our staff and shareholders. I would like to thank them for their terrific loyalty and support, and would hope that there are enough exciting opportunities in the business today that we can all look forward to rather better times going forward.

Mark Kary

CEO

4 July 2008

Consolidated Income Statement
for the year ended 31 March 2008
	Unaudited
	Year ended		Year ended
	31 March 2008		31 March 2007
			Restated
	£'000		£'000
Revenue	47,569		41,269
Interest receivable and similar income	1,715		1,108
Gross income	49,284		42,377
Cost of sales	(1,896)		(2,165)
Net fees	47,388		40,212
Operating costs	(31,689)		(29,473)
Profit on ordinary activities before share based payments	15,699		10,739
Share based payments	(1,204)		(533)
Profit on ordinary activities before taxation	14,495		10,206
Taxation	(4,860)		(2,552)
Profit on ordinary activities after taxation	9,635		7,654
Basic earning per ordinary share	14.57p		14.05p
Diluted earnings per ordinary share	13.00p		12.64p
Adjusted diluted earnings per ordinary share	14.63p		13.53p
All the above revenue and expense items arose from continuing operations

Consolidated Statement of Recognised Income and Expense
for the year ended 31 March 2008
	Unaudited
	Year ended		Year ended
	31 March 2008		31 March 2007
			Restated
	£'000		£'000
Profit for the financial period	9,635		7,654
(Loss)/gain on the revaluation of available-for-sale financial assets	(332)		220
Gain on the fair valuation of hedging contracts	(42)		89
Deferred tax in respect of employee share options	(759)		706
Deferred tax in respect of available-for-sale financial assets	97		(65)
Total recognised gains and losses	8,599		8,604

Consolidated  Balance Sheet
at 31 March 2008	Unaudited
	As at		As at
	31 March 2008		31 March 2007
			Restated
	£'000		£'000
Fixed assets	396		537
Available-for-sale financial assets	12,779		3,929
Deferred tax assets	214		856
Total non-current assets	13,389		5,322
Current assets
Other financial assets	47		89
Receivables	8,162		4,228
Cash at bank and in hand	31,326		31,403
Total current assets	39,535		35,720
Total assets	52,924		41,042
Non-current liabilities
Deferred tax liabilities	-		66
Current liabilities
Trade and other payables	12,555		7,360
Current tax liabilities	2,509		995
Total current liabilities	15,064		8,355
Total Liabilities	15,064		8,421
Net assets	37,860		32,621
Capital and Reserves
Called up share capital	1,786		1,673
Share premium account	15,097		15,050
Investments in own shares	(558)		(558)
Other reserves	523		1,667
Retained earnings	21,012		14,789
Total Shareholders' funds - equity interests	37,860		32,621

Consolidated  Cash Flow Statement
for the year ended 31 March 2008
	Unaudited
	31 March 2008		31March 2007
			Restated
	£'000		£'000
Operating activities
Cash generated from operations	15,501		8,634
Tax paid	(3,432)		(3,562)
Net cash inflow generated from operating activities	12,069		5,072
Financing activities
Equity dividends paid	(4,616)		(5,880)
Issue of share capital	50		14,381
Issue of preference shares by subsidiary undertaking	2		7
Payments in relation to investment in own shares	-		(550)
Receipts in relation to disposal of own shares	-		756
Net cash (outflow) \ inflow from financing activities	(4,564)		8,714
Investing activities
Interest received and similar income	1,681		1,108
Interest paid and similar charges	-		(9)
Purchase of property, plant and equipment	(115)		(177)
Proceeds from sale of available-for-sale financial assets	11,828		-
Purchase of available-for-sale financial assets	(20,976)		(2,708)
Net cash outflow used in investing activities	(7,582)		(1,786)
Net (decrease) \ increase in cash and cash equivalents	(77)		12,000
Cash and cash equivalents at start of period	31,403		19,403
Cash and cash equivalents at end of period	31,326		31,403

NOTES

Principal accounting policies

Polar Capital Holdings plc is a public limited company registered in England and Wales. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. 

Adoption of International Financial Reporting Standards ('IFRS') in the financial year ending 31 March 2008

In the current year Polar Capital Holdings plc and is subsidiaries (together referred to as 'the Group') have adopted all the standards and interpretations issued by the international Accounting Standards Boards and the International Financial Reporting Interpretations Committee that are relevant to its operations and effective for the Group's financial year beginning on 1 April 2007.

Restatement

In prior years no charge has been made in relation to the Manager and Team Preference Shares share based payments.  As set out in note 20 a charge has been made for the year ended 31 March 2008 and the comparatives restated.  Also as set out in note 8 , the number of shares used in the calculation of earnings per ordinary share for the prior year have also been adjusted.

The adoption of these standards and interpretations has resulted in changes to the Group's accounting policies and the principal impact of the adoption of IFRS on the results of the year end 31 March 2007 are set out in note 23 to these financial statements.

Basis of preparation

The consolidated financial statements have been prepared in accordance with IFRS as adopted by the European Union and the Companies Act 1985 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets.

At the date of authorisation of these financial statements, IFRS 8 'Operating Segments' and IFRS 2 'Group & Treasury Share Transactions' were in issue but not yet effective. The Group has not adopted these standards and does not anticipate they will have any material impact on these financial statements when they come into effect.

In the prior year profit allocations to members of Polar Capital LLP were presented as minority interests in the Group profit and loss account. In the current year, these amounts are included in staff costs in the Consolidated income statement. Also in the prior year commission payable was included in operating expenses, whereas in the current year it has been separately identified as cost of sales in the Consolidated income statement. Comparative amounts (being £1,896,000 and £2,165,000 respectively) have been restated accordingly.

            Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiary undertakings). Where necessary adjustments are made to the financial statements of the subsidiaries to bring their accounting policies in line with the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Fixed assets

Fixed assets are stated at cost, less depreciation and accumulated impairment provisions. Depreciation is provided at rates calculated to write off the cost of each asset over its expected useful economic life. The carrying value of property, plant and equipment is assessed annually and any impairment is charged to the income statement.

Depreciation is charged on a straight line basis as follows:

Leasehold improvements 25%

Computer equipment 33%

Office furniture 33%

Financial assets and liabilities

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Available-for-sale financial assets

Financial assets are initially recognised at fair value, being the consideration given, together with any acquisition costs associated with the asset. The Group's investments in the funds that it manages are designated as 'available-for-sale' financial assets and are included in non-current assets. Such assets are subsequently carried at fair value, with any gains or losses arising from changes in fair value being recognised in equity. Available-for-sale financial assets are derecognised when sold, at which point a realised gain or loss is recognised in the income statement. This is calculated as the difference between the net sales proceeds and the original cost of the financial asset, with fair value gains or losses previously recognized directly in equity being recycled into the income statement.  

The Group assesses at each reporting date whether there is objective evidence that an investment is impaired. In the case of a financial asset classified as available-for-sale, a significant or prolonged decline in the fair value of the financial asset below its cost is considered as objective evidence that the asset is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that asset previously recognised in the income statement - is removed form equity and recognised in the income statement.

Impairment losses recognised in the income statement, if subsequently reversed, are taken through equity and not the income statement.

Derivative financial instruments

Forward currency contracts are used to hedge the risks associated with foreign currency fluctuations. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

Forward contracts used for currency hedging purposes are treated as cash flow hedges and the effective portion of the gain or loss on the hedging instrument is recognised directly in equity, while the ineffective portion is taken to the income statement. Amounts taken to equity are transferred to the income statement when the forward contracts expire.

Trade receivables

Trade receivables are initially recognised at fair value, and are subsequently carried at the lower of original fair value and their recoverable amount.

Pensions

The Group operates a defined contribution money purchase pension scheme covering the majority of its employees. The costs of the pension scheme are charged to the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and in hand, deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. 

Trade payables

Trade payables are initially recognised at fair value and subsequently at amortised cost.

Income recognition

Revenue

For the purpose of the consolidated cash flow statement revenue represents fees receivable (excluding value added tax) during the period for discretionary investment management and advisory services. Management fees and performance fees are recognised when receivable. Performance fees, which are based on the investment performance achieved for certain client portfolios relative to predefined benchmarks, are recognised as revenue at the end of the period over which the performance is measured.

Interest receivable and similar income

Interest receivable is recognised on an accruals basis using effective interest methods. Dividend income from investments is recognised on the date that the right to receive payment has been established.

Cost of sales

Cost of sales includes fees and commissions payable to third parties in respect of the management of investment management contracts. Commissions and distribution fees payable to third parties are recognised over the period for which the service is provided.

Operating leases

Amounts payable under operating leases are charged to the income statement on a straight-line basis over the lease term.

Taxation

The income tax expense represents the sum of the tax currently payable and deferred tax. 

The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Income tax relating to items charged or credited directly to equity is also dealt with in equity. 

Deferred tax is recognised on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available, against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Share-based payments

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions at the date of grant). The fair value determined at the grant date of the equity-settled share-based instrument is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.

Segmental reporting and functional currency

The directors are of the opinion that the Group is engaged in a single, unified, business of managing investments. No segmental reporting is therefore provided. The Group functional currency is Pounds Sterling, as the majority of its operating activities are based in the UK.

Judgements and key sources of estimation uncertainty

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are as follows:

Impairment of available-for-sale financial assets

The Group reviews any diminution in value to available-for-sale financial assets, and determines if this is diminution is permanent and therefore an impairment of the asset.

Deferred tax

Deferred tax is recognised based on differences between the carrying value of assets and liabilities and the tax value of assets and liabilities. Deferred tax assets are only recognised to the extent that the Group estimates that taxable profits will be available.

Share-based payments

The estimation of share-based payment cost requires the selection of an appropriate valuation model, consideration on appropriate input criteria for the model and an estimation as to the number of awards that will vest.

Foreign currency/ monetary balances

The individual financial statements of each subsidiary are presented in the functional currency of the Group. Balances are therefore reported in Sterling, which is the functional currency of all Group companies, and has been used as the presentation currency for the consolidated financial statements. 

Earnings per ordinary share

Earnings have been calculated by taking the profit on ordinary activities after taxation.

The calculation of basic earnings per ordinary share is based on the profit for the year of £9,634,665 (2007:£7,653,218 restated) and on 66,139,295 (2007:54,484,396) ordinary shares, being the weighted number of ordinary shares. The number of shares has been adjusted from that used in the calculation in the prior year financial statements of 55,584,556 which gave earnings per share of 14.7p based on the profits shown in the prior year's accounts.

The calculation of diluted earnings per ordinary share is based on the profit of the year of £9,634,665 (2007:£7,653,218 restated) and 74,101,201 (2007:60,528,572) ordinary shares, being the weighted average number of ordinary shares allowing for all dilutive options of 4,301,105 (2007:4,500,240) and shares not yet issued under a crystallized event of 3,365,190 (2007:2,178,160). The number has been adjusted from that used in the calculation in the prior year financial statements of 63,634,996 which gave earnings per share of 12.8p based on the profits shown in the prior year's accounts.

The calculation of adjusted earnings per ordinary share is based on profit for the year of £9,634,665 but adjusted for the cost of share-based payments of £1,204,271 (2007: Profit of £7,653,218 adjusted for the cost of share based payments of £533,481) and 74,101,201 (2007: 60,528,572) ordinary shares being the weighted average number of ordinary shares allowing for all dilutive options and shares not yet issued under a crystallisation event.

On 6 February 2007, there was a 40 for 1 share split, which is reflected in the share numbers above.

Geographical analysis (based on the residency of the source)
			Unaudited  Year ended  31 March 2008 £'000	Year ended  31 March2007 £'000
UK  Ireland  Cayman  Canada   Other			3,617 5,042 38,193 318 399	3,731  7,656  29,072 454 356
			47,569	41,269
The analysis of turnover is as follows:
Investment management fees  Investment advisory fees   Investment performance fees			26,122 354 21,093	20,184 490 20,595
			47,569	41,269

Dividend

A second interim dividend of 7.0p per share has been declared will be paid on 8 August 2008 to shareholders on the register on 18 July 2008. The shares will be quoted ex-dividend on 16 July 2008.

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 2008 or 2007. The statutory accounts for the year ended 31 March 2008 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 2008 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 2007 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 2008 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 11 September 2008 at Cayzer House, 30 Buckingham Gate, London SW1E 6NN

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. 

 

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