Impax Asset Mngmnt IPX Final Results

  Impax Asset Mngmnt (IPX) - Final Results

RNS Number : 2678S
Impax Asset Management Group plc
29 November 2012








                       Impax Asset Management Group plc

                          ("Impax" or the "Company")

                                      

     Impax delivers a robust performance for year ended 30 September 2012

              Strong cash flow and proposed increase in dividend



London, 29 November 2012 - Impax  Asset Management Group plc, ("Impax" or  the 
"Company"), the AIM listed  investment manager dedicated  to investing in  the 
opportunities created by the scarcity of natural resources and growing demands
for cleaner more efficient products and services, announces its final  audited 
results for the year to 30 September 2012.



Financial performance

· Revenue: £18.6 million (2011: £20.9 million)

· Operating earnings: £4.6 million^1 (2011: £6.2 million)

· Loss before tax: £4.7 million (2011: profit of £1.7 million). This
includes a charge of £8.7 million being the final component of charges related
to the Company's historical share-based incentive schemes

· Assets under management ("AUM") at year end: £1.83 billion (2011: £1.90
billion)

· Diluted earnings per share: 2.57 pence (adjusted^2) (2011: 3.74 pence
(adjusted^2))

· Shareholders' equity: £22.6 million (2011: £21.5 million) and cash
reserves^3 of £19.3 million (2011: £20.0 million)

· Board recommending an increased dividend of 0.75 pence per share (2011:
0.70 pence per share)

^1 revenue less operating costs

^2 adjusted to exclude the IFRS2 charge for share schemes satisfied by primary
shares

^3 includes cash invested in money market funds and long term deposit accounts



Keith Falconer, Chairman, commented:

"Impax has focused on the core business of managing portfolios of listed and
private securities on behalf of investors and has delivered a robust
performance in a challenging year. We are pleased to have performed well
against our peers and our environmental comparator indices. Our cash flow
remains strong and we are proposing a modest dividend increase for the year to
0.75 pence per share, in line with the Board's progressive dividend policy and
reflecting our confidence in the Group's future growth potential."

Ian Simm, Chief Executive, commented:

"In the wake of severe drought in the US, rising incidence of extreme weather
events and growing demand from urbanising populations around the world for
energy, water and waste management services, investors are increasingly
interested in backing companies that are providing solutions to resource
scarcity. With an investment track record dating back more than a decade,
Impax has continued to strengthen its capabilities to assist these investors."





Enquiries:



Impax Asset Management Group plc

Keith                                                Falconer 
ChairmanTel: +44 (0)
20 7434 1122

Ian                   Simm                   Chief 
ExecutiveTel:  +44  (0)  20  7434 
1122

Anne Gilding Head of Brand CommunicationsTel:
+44 (0) 20 7432 2602


Mobile: +44 (0) 7881 249612 (mobile)


Email: a.gilding@impaxam.com



Espirito Santo

John
Riddell
Tel: +44 (0) 20 7456 9191

James
StaveleyTel:
+44 (0) 20 7456
9191
 





Chairman's Statement

For the Year Ended 30 September 2012

The drivers behind resource efficiency and environmental markets have once
again strengthened, further underpinning the attractiveness of the investment
area in which Impax operates.

Over the past 12 months, the prospects for equity investors have remained
uncertain as growth in the global economy has been elusive and problems in the
Eurozone intractable. In spite of these headwinds, Impax has delivered a
robust performance and has continued to invest in order to position the
business for further growth.

During the Company's financial year from 1 October 2011 to 30 September 2012
(the "Period"), assets under discretionary and advisory management ("AUM")
initially rose from £1.90 billion to £2.03 billion at the end of the first
half, before falling back to £1.83 billion. Since the end of the Period,
equity markets have weakened further and AUM declined slightly, reaching £1.80
billion on 31 October 2012.

Notwithstanding sustained equity market volatility, the drivers behind
resource efficiency and environmental markets have once again strengthened,
further underpinning the attractiveness of the investment areas in which Impax
operates. For example, acute drought in the United States and the recent
impact of Hurricane Sandy have raised the likelihood that a re-elected
President Obama will promote additional investment in clean energy and water
infrastructure, while across the planet there has been a notable increase in
evidence pointing to faster than expected climate change, for example the
steep decline in the summer coverage of sea ice in the Arctic Ocean compared
to previous years.

Institutional investors are increasingly interested in analysing the risks and
opportunities arising from these changes, providing us with further
opportunity for dialogue and, we believe, the potential for increased
commitment of capital to our funds and accounts. Accordingly, we have
continued to invest incrementally in our capabilities, particularly in the
areas of client service in the United States and the development of investment
management expertise across the food and agriculture sectors.

Results for the year and proposed dividend

Revenue to 30 September 2012 was £18.6 million (2011: £20.9 million).
Operating earnings^1 for the year were £4.6 million (2011: £6.2 million) and
the associated operating margin was 24% (2011: 30%). The decrease in revenue
and profits compared to the corresponding 2011 financial year, reflect a
combination of lower average AUM for the year and a moderately higher fixed
cost base arising from the investment we have made in further strengthening
the Company's platform to manage additional sector regulation and to prepare
for further growth.

Profit before tax ("PBT") for the Period was a loss of £4.7 million (2011:
profit of £1.7 million). PBT was impacted by £8.7 million (2011: £5.4
million) of charges associated with the Company's historical share-based
incentive schemes. £1.0 million of this charge is directly offset by a
corresponding tax gain. PBT also included fair value losses of £0.7 million
arising primarily from the Company's investments into the Impax Green Markets
Fund which we have set up in the United States for domestic investors, and our
first private equity fund, in part due to the strengthening of Sterling
against the Euro and the Dollar.

The Board regards the most relevant measure of the year's earnings to be
diluted earnings per share ("EPS"). On this basis diluted EPS for the year was
2.57 pence (adjusted^2), including 0.42 pence due to the fair value losses.
For 2011, diluted EPS was 3.74 pence (adjusted^2). Diluted EPS before
adjustment was (4.32) pence in 2012 and 0.93 pence in 2011.

The Group's balance sheet strengthened during the year with continued cash
generation from operating activities. At the end of the financial year,
shareholders' equity had increased to £22.6 million (2011: £21.5 million) and
cash reserves held by operating entities of the Group were £19.3 million
(2011: £20.0 million). The slight decrease in cash included the impact of the
Company's US$5 million seed investment into the Impax Green Markets Fund.
Current asset investments held at the year-end were £8.7 million (2011: £3.9
million). The Group remained debt-free throughout the Period.

In light of the Company's sustained strong cash flow and progressive dividend
policy, the Board recommends an increased dividend of 0.75 pence per share
(2011: 0.70 pence per share). The dividend proposal will be submitted for
formal approval by shareholders at the forthcoming Annual General Meeting on
13 February 2013. If approved, the dividend will be paid on or around 20
February 2013. The record date for the payment of the proposed dividend will
be 25 January 2013 and the ex-dividend date will be 23 January 2013. In line
with the Company's stated policy, the Board does not currently intend to
recommend the payment of interim dividends.

Remuneration

In accordance with the Company's updated remuneration policy (which was
described in the 2011 Annual Report), during the Period the Board confirmed
the grant of five million Employee Share Option Plan ("ESOP") options to
management and staff in respect of their performance for the financial year
ended 30 September 2011. The strike price was set at 49.6 pence and the
options will vest on 31 December 2014.

Share Buy-backs and Share Issuance

During the Period the Board commenced the buyback of the Company's shares into
Treasury, with the aim of reducing the requirement to issue new shares to
satisfy the exercise of options awarded under the ESOP. To date, 3.5 million
shares have been purchased since the start of the buyback programme, and the
Company expects further purchases to be made from time to time while
continuing to evaluate attractive alternative uses of the Company's cash
resources. Separately, in accordance with the approval given by Shareholders
in January 2008, the Company plans shortly to issue 12.2 million shares which
will be available to satisfy exercises of vested option schemes, taking the
total shares in issue to 127.7 million.

Prospects

Since the end of the Period we have seen a clear outcome in the US elections
and evidence of a smooth leadership transition in China, but on-going
macro-economic problems in the Eurozone. Against this complex backdrop,
equity markets appear once again to be factoring in a significant risk of
disappointment in corporate earnings and outlook statements, and the potential
for increased allocations to equities by institutional investors is unclear.

Nevertheless, as the case for active investment in resource efficiency and
environmental markets becomes more compelling and better understood by
investors, demand for specialist investment management expertise should
continue to broaden and deepen. The Impax team has been successfully managing
investment portfolios targeting these markets for more than 14 years and has a
track record of planning for and delivering growth across a range of market
circumstances. I am therefore confident that the Company is well positioned
for further increase in shareholder value as conditions improve.

J Keith R Falconer
28 November 2012

^1revenue less operating costs excluding £8.7 million (2011: £5.4 million)
charge due to share incentive schemes

^2adjusted to exclude the IFRS2 charge for share schemes satisfied by primary
shares



Chief Executive's Report

For the Year Ended 30 September 2012

We continue to focus on delivering solid investment performance for our
clients while carefully extending our research coverage and distribution
channels.

During a financial year in which economic confidence has swung between
apparent complacency and despair, the Impax management team has continued to
focus on the core business of managing portfolios of listed and private
securities on behalf of institutional investors, while investing selectively
in expanding the Company's capabilities.

Sector developments

For many years, at the time of writing each semi-annual Impax report, a review
of recent developments in the sectors in which the Company is investing has
produced a wealth of evidence of strengthening market fundamentals: this
report is no different. Nevertheless, investor confidence in some of these
sectors, for example solar panel manufacturing, remains weak, and sector
benchmarks have underperformed generic indices during 2012. Since the interim
statement, when I summarised new policies to address climate change and
improve energy efficiency in several countries, further capital expenditure on
water management and treatment in China and additional regulations to curb
pollution in the United States, there have been several notable
announcements.

Probably most intriguing was the reaffirmation that, in the light of the
Fukushima disaster in Japan, Germany is committed to a full shutdown of all
nuclear power stations by 2022. This will require an investment of at least
€300 billion in renewable energy, energy efficiency and grid strengthening,
and has been the principal driver of sharp falls in the share prices of the
country's principal power utilities E.ON and RWE, which are unlikely to
receive full compensation for the premature shutdown of their nuclear assets.
Meanwhile, Japan's new energy policy continues to evolve, with latest
estimates suggesting a cumulative investment of US$1.5 trillion in renewables
and energy efficiency over the next 20 years.

Demand for energy efficient products and services and for renewable energy
continued to expand in most European countries. Although prospects for
renewable energy in the UK were called into question by some vocal
politicians, this sector once again grew rapidly as most countries sought to
encourage lower carbon power generation capacity.

In August, the Obama administration raised the automotive manufacturers'
average fuel efficiency standard from 35.5 miles per gallon by 2016 to 54.5
miles per gallon by 2025; in spite of Republican objections, this was widely
endorsed by the manufacturers themselves, who appreciated the policy certainty
over a time frame that allows them to manage their product development.

It is likely that the regulatory framework in the United States, which
underpins other sectors in which Impax invests, will continue to strengthen in
Obama's second term. The President has already announced that addressing
climate change is a priority, while analysts are also pointing to the
potential for tighter rules governing water abstraction in drought-prone
areas, investment in flood defence and several initiatives related to higher
energy efficiency.



Impax's target markets

The weakness of environmental stocks is illustrated by the performance of the
FTSE Environmental Opportunities All Share Index, which returned 3.4 per cent
(net, total return) between 1 January 2012 and 30 September 2012, compared to
the MSCI World Index which was up 8.8 per cent (net, total return) over the
same period.

During 2012, taking into account feedback from a range of our clients and
prospective investors, we have slightly broadened the definition of Impax's
target markets to encompass "resource efficiency", comprising environmental
markets and the wider food and agriculture value chain. Companies providing
products and services in the food and agriculture sectors have many similar
characteristics to those in alternative energy, water and waste management,
particularly growth linked to the rising demands of an expanding population,
limited resources and broad evidence of mis-pricing as a result of rapidly
changing technology, regulations and market structure.

This initiative is resonant with a number of high profile studies examining
the implications for investors of the themes in which Impax has expertise. In
November 2011, McKinsey & Company published "Resource Revolution: Meeting the
world's energy, materials, food and water needs", an in-depth study of a range
of new market opportunities. Subsequently, in August 2012, Towers Watson
published "Sustainability in Investment" which pointed to a potential
transformation in the investment landscape arising from emerging drivers
including "resource scarcity and climate change".

We are excited about the potential for offering additional investment services
and products in the broader resource efficiency area. As reported in the
interims, during 2012 we have recruited two experienced investment
professionals focused on global food and agriculture and, on 1 December 2012,
following test marketing, plan to launch the Impax Food and Agriculture Fund
under the existing Impax Funds (Ireland) plc platform with £2 million of seed
capital from the Company; this fund will be marketed primarily to UK
investors.

Assets under management and fund flows

During the Period, Listed Equity funds that we manage or advise had net
outflows of £136 million comprising £97 million from '"Impax-Label funds" and
£39 million from Third Party Funds and Accounts. Gross inflows across all
strategies were £143 million and performance contributed £97 million.
However, this was offset by outflows of £279 million. We believe that the net
outflows are broadly attributable to weakness of environmental stocks relative
to global equities, particularly over the past 18 months, and to investor
nervousness over the prospects for equity markets in general.



We saw continued progress in building our franchise in the United States. The
Pax World Global Green Fund (recently renamed the Pax World Global
Environmental Fund), which we sub-advise, attracted net inflows over the
Period expanding to US$52 million at the end of the Period. As previously
announced, in December 2011 we established Impax Green Markets Fund, a
Delaware-based private fund as a wrapper for our Specialists strategy.



Following the completion of fund raising for our second private equity fund in
September 2011, there were no additional flows in this division during the
Period. However, AUM (in sterling) declined due to the impact of the
weakening Euro.

Investment Performance

Listed Equity

During the Period our listed equity strategies generally beat their comparator
indices of environmental stocks, but some have trailed global indices.

We were particularly pleased by our Water strategy which sustained its
out-performance over the Period, returning 19.2 per cent (total return, GBP)
compared to 17.3 per cent (net return, GBP) for the MSCI World Index. The
strategy now has a strong three year track record, making it the best
performing fund in its peer group over this timeframe: since inception on 1
January 2008 to 30 September 2012, this strategy was up 77.5 per cent (total
return, GBP) while the MSCI World Index was up 52.1 per cent (net return,
GBP).

Our Specialists strategy, which invests in small and mid-cap stocks, returned
6.7 per cent (total return, GBP) over the Period compared to minus 0.8 per
cent (total return, GBP) for the corresponding period for the FTSE ET50 Index
which is representative of the universe of small and mid-cap environmental
stocks. Over the ten years to 30 September 2012, our Specialists strategy has
returned 162 per cent (total return, GBP) while the FTSE ET50 Index declined
61.5 per cent (total return, GBP) and the MSCI World Index was up 111 per cent
(net return, GBP).

Our Leaders strategy, which invests in both small-cap stocks as well as
larger, more diversified companies across the environmental markets universe,
returned 16.8 per cent over the Period (total return, GBP). From inception on
3 March 2008 to 30 September 2012, this strategy returned 24.9 per cent (total
return, GBP) while the MSCI World Index was up 23.4 per cent (net return, GBP)
and the FTSE Environmental Opportunities All Share Index gained 16.5 per cent
(total return, GBP).

Private Equity

Our private equity business made solid progress during the Period. 

The power generation projects owned by our first fund, Impax New Energy
Investors LP ("Fund I"), which has €125 million of commitments, have continued
to beat their budgets, and in June the Fund was able to make a further
distribution to investors. As previously reported, we will seek a full exit
from this fund when market conditions are supportive; to this end, we are
following closely the development of regulations affecting the energy sector
in Spain, where the majority of Fund I's residual assets are located.

Meanwhile, our team has continued to deploy the €330 million of capital in
Fund II, focusing on investing to fund the construction of onshore wind and
solar PV assets in the European Union and, potentially, North America. During
the Period, Fund II purchased 109MW of French and Polish wind assets, an
Italian solar PV investment and a 28MW wind park in Germany; approximately 40%
of Fund II is now invested or committed for investment.

Distribution

As set out in previous statements, our distribution strategy focuses on
building relationships with institutional investors around the world, offering
both direct investment management expertise as well as the sub-management of
funds established by third parties.

In the UK, our core market, from where 41 per cent of our AUM originates, we
have continued to build relationships with new institutional investors and
have begun a systematic outreach programme to family offices where Impax has
historically been under-represented. In consultation with the board of Impax
Environmental Markets plc, an investment trust with ca. £327 million of net
assets (as at 30 September 2012) and our largest client, we have established a
dedicated microsite (www.impaxenvironmentalmarkets.co.uk) to provide investors
with more detailed fund-specific information.

For many clients elsewhere in Europe, as well as in Asia and Australia, we
continue to work closely with BNP Paribas Investment Partners ("BNPP IP") to
improve the sales prospects for several funds that we sub-manage. Early next
month, two of the funds that follow the Leaders strategy will merge and will
also absorb a third fund, creating a vehicle with ca. €120 million of AUM, a
size which should widen the fund's appeal to a wide group of investors. In
addition, we are particularly pleased that BNPP IP has decided to extend the
marketing and sales of the BNP Paribas Aqua fund, which wraps our Water
strategy, beyond its established base in France to cover most of Europe.

Our direct sales strategy in the US market is to leverage our positive
consultant ratings in a small number of focussed channels covering endowments,
foundations and family offices, while also nurturing third party
relationships.To this end, we recently recruited a Head of Institutional
Sales and Client Service who has over 25 years' experience of selling to top
tier institutions and who is based in a new Impax office in New York City.

We were delighted to win three prestigious asset management awards in 2012.
In May, Impax was named as the winner of the "Sustainable, responsible,
ethical investment award" at the Financial Times Business Pension and
Investment Provider 2012 Awards. In October we were recognised as "Impact
Investor of the Year" by The Asset in Hong Kong, and in November as "Best Fund
Management Group" by Investment Week at their Climate Change & Ethical
Investment Awards.



Infrastructure and support

In addition to satisfying client expectations on operational matters, the
regulatory environment in which investment management firms operate is
becoming increasingly complex, and it is essential that we sustain an
effective Support Team across our offices in London, Hong Kong and the United
States.

In recent years we have consciously invested in operations, IT, finance,
legal, compliance and HR capabilities in order to establish a scalable
platform for growth. In principle, we are now adequately resourced in these
areas and can manage a significant volume of additional assets on this base.
At the time of writing, alongside other investment managers, we are working
with our clients to ensure appropriate compliance with the emerging
requirements of the European Union's Alternative Investment Fund Managers
Directive, and are also closely monitoring the implications of other
regulatory developments in the other markets in which we operate.

The hiring of our food and agriculture team, our Head of Distribution (who
joined on 1 October 2011) and our new Head of Institutional Sales in the
United States have contributed to a headcount increase: at the end of the
Period our total headcount was 56.5 full time equivalent staff, up from 50.4
at the start of the Period.

Outlook

Investors who had committed capital to equity markets at the start of 2012 and
are only now reviewing the result should be pleasantly surprised by the profit
they have made, but may also be concerned about the level of volatility of
their portfolio today. In particular, rising political instability in the
Eurozone and the pending US "fiscal cliff" have the potential to de-rail
confidence and, indirectly, erode corporate profitability.

Nevertheless, the outlook for resource efficiency and environmental markets is
gradually improving and most sectors have rallied in the last quarter, in some
cases out-performing generic indices. After a sustained period in which
corporate earnings expectations have been downgraded, results for many of our
holdings now appear to be improving, while a recent increase in M&A activity
may prove positive for sentiment over the coming months.

Given our mandates, Impax has delivered solid investment performance in the
year despite the fragile nature of global markets. We remain committed to our
core strategies and as we build on recent investments, we are confident in our
ability to deliver robust returns for shareholders when global economic
confidence returns.



Ian R Simm

28 November 2012



IMPAX ASSET MANAGEMENT GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2012
                                                                             
                                                                             
                                                              2012      2011 
                                                             £000      £000 
Revenue                                                     18,621    20,931 
Operating costs                                           (14,068)  (14,696) 
Share-based payment charge for EIA extension scheme        (7,757)   (3,647) 
Exceptional long-term incentive scheme NIC charge              112   (1,090) 
Other long-term incentive scheme related charges           (1,091)     (619) 
Fair value (loss)/gain on investments                        (722)       785 
Change in third party interest in consolidated fund           (25)     (117) 
Investment income                                              195       171 
(Loss)/Profit before taxation                              (4,735)     1,718 
Taxation                                                        86     (652) 
(Loss)/Profit for the year                                 (4,649)     1,066 
                                                                             
Other comprehensive income                                                   
Tax benefit on long-term incentive schemes                     178        46 
(Decrease)/Increase in value of cashflow hedges              (210)       213 
Tax on change in value of cashflow hedges                       54      (55) 
Exchange differences on translation of foreign               (271)           
operations                                                                20
Exchange differences on translation of foreign                 124         - 
 operations attributable to third party interests                           
Total other comprehensive income                             (125)       224 
Total comprehensive income for the period attributable                       
to equity holders of the Parent Company                    (4,774)     1,290
                                                                             
Basic earnings per share                                   (4.32)p     0.98p 
Diluted earnings per share                                 (4.32)p     0.93p 









IMPAX ASSET MANAGEMENT GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2012
                                                    2012          2011      
                                                   £000   £000   £000   £000 
                                                                             
Assets                                                                       
Goodwill                                          1,629         1,629        
Intangible assets                                   146            39        
Property, plant and equipment                       703           491        
Investments                                          17            18        
Total non-current assets                                 2,495         2,177 
                                                                             
Trade and other receivables                       2,814         3,173        
Derivative asset                                      3           213        
Investments                                       8,710         3,930        
Current tax asset                                    25            47        
Margin account                                      156             -        
Cash invested in money market funds and          14,094         8,546        
long-term deposit accounts
Cash and cash equivalents                         5,577        12,870        
Total current assets                                    31,379        28,779 
                                                                             
Total assets                                            33,874        30,956 
                                                                             
Equity and Liabilities                                                       
Ordinary shares                                   1,156         1,156        
Share premium                                        78            78        
Exchange translation reserve                      (283)         (136)        
Own shares                                         (19)          (59)        
Treasury shares                                 (1,932)         (453)        
Hedging reserve                                       2           158        
Retained earnings                                23,567        20,756        
Total equity                                            22,569        21,500 
                                                                             
Trade and other payables                          7,364         7,858        
Third party interest in consolidated fund         2,682             -        
Current tax liability                                46            12        
Total current liabilities                               10,092         7,870 
                                                                             
Deferred tax liability                            1,213         1,586        
Total non-current liabilities                            1,213         1,586 
                                                                             
Total equity and liabilities                            33,874        30,956 







IMPAX ASSET MANAGEMENT GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER
2012
                                                                                       
                                                                                       
             Share   Share    Exchange    Own Treasury Hedging Retained   Total
           capital premium translation shares   shares reserve earnings  Equity 
                               reserve
              £000    £000        £000   £000     £000    £000     £000    £000 
Balance at 1     
October 2010                                                                    
             1,156      78       (156)   (59)    (453)       -   16,337  16,903
Dividends        -       -           -      -        -       -    (651)   (651) 
paid
Long-term
incentive
                                                                                
scheme
charge           -       -           -      -        -       -    3,958   3,958
Tax benefit                                                                  
on long-term                                                                    
incentive                                                            46      46
schemes          -       -           -      -        -       -
Cashflow         -       -           -      -        -     213        -     213 
hedge
Tax benefit
on cashflow                                                                     
hedge            -       -           -      -        -    (55)        -    (55)
Exchange                             
differences
on                                                                             
translation
of foreign                          20
operations       -       -                  -        -       -        -      20
Profit for       -       -           -      -        -       -    1,066   1,066 
the year
Balance at
30 September                                                                    
2011         1,156      78       (136)   (59)    (453)     158   20,756  21,500
Dividends        -       -           -      -        -       -    (759)   (759) 
paid
Share            -       -           -      -  (1,479)       -        - (1,479) 
buy-back
Long-term
incentive                                                                       
scheme
charge           -       -           -      -        -       -    8,081   8,081
Tax benefit
on long-term                                                                    
incentive
schemes          -       -           -      -        -       -      178     178
Cashflow         -       -           -      -        -   (210)        -   (210) 
hedge
Tax benefit
on cashflow                                                                     
hedge            -       -           -                      54               54
Exchange                                                               
differences
on                                                                      
translation
of foreign       -       -       (271)      -        -       -        -   (271)
operations
Exchange                                                               
differences
on                                                                     
translation
of foreign                                                              
operations
attributable     -       -         124      -        -       -        -     124
to third
party
interests
Share awards     -       -           -     40        -       -     (40)       - 
(Loss) for       -       -           -      -        -       -  (4,649) (4,649) 
the year
Balance at
30 September                                                                    
2012         1,156      78       (283)   (19)  (1,932)       2   23,567  22,569











IMPAX ASSET MANAGEMENT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2012
                                                                2012    2011 
                                                                £000    £000 
                                                                             
Operating Activities:                                                        
(Loss)/Profit before taxation                                (4,735)   1,718 
Adjustments for:                                                             
Investment income                                              (195)   (171) 
Depreciation of property, plant & equipment                      308     243 
Amortisation of intangible assets                                 59      53 
Fair value losses/(gains)                                        722   (785) 
Share-based payment                                            8,081   3,958 
Exceptional long-term incentive scheme NIC charge              (112)   1,054 
Other long term incentive scheme related charges               1,091     619 
Change in third party interest in consolidated fund               25     117 
Operating cash flows before movement in working capital        5,244   6,806 
Decrease in receivables                                          357     741 
(Increase) in margin account                                   (156)       - 
(Decrease) in payables                                       (1,441)   (931) 
Cash generated from operations                                 4,004   6,616 
Corporation tax refunded                                           2     162 
Net cash generated from operating activities                   4,006   6,778 
                                                                             
Investing activities:                                                        
Investment income received                                       196      77 
Settlement of loans receivable                                     -   2,337 
Settlement of investment related hedges                        (388)       - 
Proceeds on sale/redemption of investments                        28     426 
Purchase of investments held by the consolidated funds       (7,336)       - 
Sale of investments held by the consolidated funds             1,797   3,489 
Purchase of investments                                        (355)    (53) 
Purchase of intangible assets                                  (167)    (16) 
Purchase of property, plant & equipment                        (523)   (437) 
Net cash (used in)/generated from investing activities       (6,748)   5,823 
                                                                             
Financing activities:                                                        
Dividends paid                                                 (759)   (651) 
Treasury shares acquired                                     (1,023)       - 
Increase in cash held in money market funds and long term                    
funds                                                        (5,548) (6,028)
Investment by third party into consolidated fund               2,781       - 
Redemption of preference shares issued by the consolidated                   
fund                                                               - (1,623)
Net cash (used in) financing activities                      (4,549) (8,302) 
Net (decrease)/increase in cash and cash equivalents         (7,291)   4,299 
Cash and cash equivalents at beginning of year                12,870   8,563 
Effect of foreign exchange rate changes                          (2)       8 
Cash and cash equivalents at end of year                       5,577  12,870 





NOTES



1. REVENUE

The Group has two reportable segments: "Listed Equity" and "Private Equity".
The results of these segments have been aggregated into a single reportable
segment for the purposes of these financial statements because they have
characteristics so similar that they can be expected to have essentially the
same future prospects. These segments have common investors, operate under the
same regulatory regimes and their distribution channels are substantially the
same. Additionally management allocates the resources of the Group as though
there is one operating unit.



Analysis of revenue by type of service:

                            2012   2011
                            £000   £000
Investment management    17,565 20,311
Transaction fees             800    192
Advisory fees               256    428
                         18,621 20,931



Analysis of the revenue by the location of customers:

                      2012   2011
                      £000   £000
UK                  13,008 14,532
Rest of the world    5,613  6,399
                    18,621 20,931



Analysis of 'Rest of the world' customer location:

               2012  2011
               £000  £000
Ireland       1,361 2,125
France          974 2,448
Luxembourg    1,229   282
Netherlands     744   844
Other         1,305   700
              5,613 6,399



Revenue from three of the Group's customers individually represented more than
10% of Group revenue (2011: two), equating to £2,176,000, £3,290,000 and
£6,355,000 (2011: £3,878,000 and £5,333,000).



Revenue includes £18,365,000 (2011: £20,660,000) from related parties.



All material non-current assets, excluding deferred tax assets and financial
instruments, are located in the UK.







2. OPERATING COSTS

                                                              2012   2011
                                                              £000   £000
Wages and salaries, social security and pension costs and
variable bonuses (see note 4)                                    8,736  9,214
2009 Share option plan share based payment charge (see note
3)                                                                 179    179
Employee share option plan share based payment charge (see
note 3)                                                            145    132
Other staff costs including contractors and Non-Executive
Directors' fees                                                    910    668
Depreciation of property, plant and equipment                      308    243
Amortisation of intangible assets                                59     53
Auditor's remuneration - subsidiary undertakings audit fees       43     43
Auditor's remuneration - parent company audit fees               45     45
Auditor's remuneration - tax compliance                           14     14
Auditor's remuneration - other                                   38     92
Premises related                                                972    519
Travel                                                          328    277
Information technology and communications                        726    704
Other costs                                                   1,565  2,513
                                                            14,068 14,696





3. SHARE BASED PAYMENT CHARGES AND OTHER LONG TERM INCENTIVE SCHEME CHARGES

Share-based payment charges

Employee Incentive Arrangement (Extension Scheme) ("EIA Extension")

Under this scheme, share-based payment awards were granted in April 2011 to
employees when the Trustee of the Impax Group Employee Benefit Trust 2004
("the EBT") agreed to allocate four million Ordinary Shares to a sub-fund of
the EBT of which Ian Simm, the Company's Chief Executive, and his family are
beneficiaries and when 14.05 million Long Term Incentive Plan ("LTIP") options
were awarded to other employees.



The awards allocated to the EBT sub-fund for Ian Simm and his family ceased to
be subject to revocation due to Ian Simm's continued employment by the Company
on 30 September 2012.



LTIP options have a 1p or nil exercise price and vested to individuals who
remained employed on 30 September 2012. They are exercisable over a period
from 1 October 2012 to 31 December 2020.



The Group accrues for the International Financial Reporting Standard ("IFRS")
2 Share-Based Payment charge for shares allocated under the EBT and LTIP
options from the date of grant, to the date of vesting. This charge is
excluded from the Group's definition of adjusted earnings as explained in note
7. The awards granted were valued at a weighted average price of 64p using
the Black Scholes Merton model with the following inputs:









Weighted average share price on grant 68p
Exercise price                        1p/0p
Expected volatility                   35%
Weighted average option life          5.2yrs
Expected dividend rate                1.00%
Risk free interest rate               1.68%



The expected volatility was determined by reviewing the historical volatility
of the Company and that of comparator companies.



The awards made to Ian Simm and his family were valued at 68p using the same
model and assumptions as described above except that the option life was 1.5
years.



2009 Share Option Plan

In December 2009 1,240,000 zero exercise price options over the Company's
shares were granted to certain employees. The awards vested on 30 September
2012 subject to the continued employment of the participant. The charge for
the year in relation to this scheme is offset by an equal reduction in the
total cash bonus pool paid to employees.



2011 Employee Share Option Plan

In November 2011, the Board approved the grant of 5,000,000 options over the
Company's shares to certain employees in respect of services provided from 1
October 2010. The strike price of the options was set at a 10% premium to the
average market price of the Company's shares for the 30 business days
following the announcement of the results for the year ended 30 September 2011
being 49.6p. The options do not have performance conditions but do have a
time vesting condition such that the options vest subject to continued
employment on 31 December 2014. The options granted were valued at a price of
9.1p using the Black Scholes Merton model. The charge for the year in
relation to this scheme is offset by an equal reduction in the total cash
bonus pool paid to employees.



2012 Employee Share Option Plan

In November 2012, the Board approved the grant of 3,000,000 options over the
Company's shares to certain employees in respect of services provided from 1
October 2011. The strike price of the options will be set at a 10% premium to
the average market price of the Company's shares for the 30 business days
following the announcement of the results for the year ended 30 September
2012. The options will not have performance conditions but will have a time
vesting condition such that the options vest subject to continued employment
on 31 December 2015. The options granted were valued at a price of 7.8p using
the Black Scholes Merton model. The charge for the year in relation to this
scheme is offset by an equal reduction in the total cash bonus pool paid to
employees. The employees will be notified of the key terms and conditions of
these awards shortly after the announcement of results for the year ended 30
September 2012.







An analysis of the options over the Company's shares is provided below:

                                      2012 Number of Weighted average
                                                      options exercise price p
Options outstanding at the start of    
the year                                           15,186,940              0.8
Options granted during the year*                 5,108,000             48.6
Options forfeited during  the         
year                                                        -               NA
Options  exercised  during  the       
year                                                        -               NA
Options  expired  during  the         
year                                                        -               NA
Options outstanding at the end of the  
year                                               20,294,940             12.8
Options exercisable at the end of the  
year                                               11,779,940              0.8

*As noted above a further 3,000,000 options were approved for grant in
November 2012.



For the options outstanding at the end of the period the exercise prices were
either nil, 1p or 49.6p and the weighted average remaining contractual life
was 5.97 years.



The total expense recognised for the year arising from share-based payment
transactions was £8,081,000 (2011: £3,958,000).



Exceptional long-term incentive scheme NIC charge

The Statement of Comprehensive Income for the year ended 30 September 2011
includes an exceptional charge of £1,090,000 in respect of Employer's National
Insurance Contributions ("NIC") in connection with the Group's Employee
Incentive Arrangement ("EIA Original Scheme"). The Statement of Comprehensive
Income for the year ended 30 September 2012 includes a credit of £112,000 in
respect of adjustments to the charge made arising from fluctuations in the
Company's share price.



Under the EIA Original Scheme, a total of 16,777,045 shares were allocated to
sub-funds for the benefit of employees and their families under the EBT.
These shares ceased to be subject to the risk of revocation for the employee
ceasing employment on 30 September 2007, 2008 and 2009. The Group recorded an
IFRS 2 Share-Based Payment charge in the periods to 30 September 2009 in
respect of these awards. During the year ended 31 December 2011, the
Government made various changes to taxation of awards delivered and yet to be
delivered under employee benefit trusts. In light of these changes the Group
now expects that some or all of the EBT beneficiaries will, at some stage,
request the EBT Trustee, at its discretion to transfer Impax Ordinary Shares
or other assets held in the name of employees and their families from the EBT
to one or more of the beneficiaries whereupon the Group would be required to
pay Employer's NIC on the value of the shares or other assets removed. In
line with the requirements of IFRS the Group has provided for these future
payments. Given its one-off nature and size, the charge and any subsequent
amendment to it are classified as exceptional.



If and when the EBT Trustee agrees to transfer assets held in the EBT to
beneficiaries and if the assets transferred are in the form of the Company's
ordinary shares, the Group also expects to be eligible for a corporation tax
deduction equal to the value of those ordinary shares. Where the Trustee has
transferred ordinary shares out of the Trust during the year, the benefit of
the tax deduction has been recognised in these financial statements. If the
amount of the tax deduction exceeds the cumulative share-based payment expense
the excess of the associated tax benefit is recognised in Other Comprehensive
Income. Any amount included in Other Comprehensive Income is included in the
Group's definition of adjusted earnings as explained in note 7. During the
year the Trustee transferred 2,850,000 shares out of the EBT giving rise to a
total tax benefit of £335,000 (2011: £60,000) with £157,000 (2011: £15,000)
recorded in loss for the period and £179,000 (2011: £46,000) in Other
Comprehensive Income. At the date of this report 12,228,781 shares awarded
under the EIA Original Scheme remained in the EBT.



Other long-term incentive scheme related charges

                             2012 2011
                             £000 £000
EIA Extension NIC Charge      548  333
Additional payments           543  286
                               1,091  619



EIA Extension NIC charge

The Group accrues for the Employer's NIC payable in respect of the EIA
Extension over the same period as the related share-based payment charge. The
amount accrued will vary according to the price of the underlying shares.



Additional payments

Individuals receiving LTIP Options are eligible for a retention payment
payable after the end of the financial year in which each employee exercises
his or her LTIP Options. The payment will be equal to the corporation tax
benefit realised by the Group on the exercise of the LTIP options minus the
amount of the Employer's NIC suffered by the Group on the exercise of the LTIP
options.



The Group accrues for this payment over the same period as the related
share-based payment charge.



The Group has also accrued for payments totalling £203,000 to individuals to
whom the Trustee of the EBT distributed Impax shares during the year ended 30
September 2012.



4. EMPLOYMENT COSTS

                                      2012  2011
                                      £000  £000
Wages, salaries and variable bonuses   7,014 7,609
Social security costs                   880   889
Pensions                                842   716
                                     8,736 9,214



The Group contributes to private pension schemes. The assets of the schemes
are held separately from those of the Group in independently administered
funds. The pension cost represents contributions payable by the Group to the
funds. Contributions totalling £669,000 (2011: £469,000) were payable to the
funds at the year end and are included in trade and other payables.



The average number of persons (excluding Non-Executive Directors and including
temporary staff), employed during the year was 55 (2011: 48).

                 2012 2011
                  No.  No.
Listed Equity       30   25
Private Equity      12   11
Group               13   12
                   55   48





5. INVESTMENT INCOME

                           2012 2011
                           £000 £000
Bank interest               123   77
Other investment income      72   94
                            195  171



6. TAXATION

                                         2012  2011
                                         £000  £000
(a) Analysis of charge for the year          
Current tax expense:                           
UK corporation tax                        178    46
Foreign taxes                              30    11
Adjustment in respect of prior years        25 (131)
Total current tax                         233  (74)
                                             
Deferred tax (credit)/expense:                 
(Charge)/Credit for the year            (427)   819
Adjustment in respect of prior years       108  (93)
Total deferred tax                      (319)   726
                                                 
Total income tax (credit)/expense          (86)   652



(b) Factors affecting the tax charge for the year

The tax assessment for the period is higher than the average rate of
corporation tax in the UK of 25% (2011: higher). The differences are explained
below:





                                                        2012  2011
                                                        £000  £000
(Loss)/Profit before tax                             (4,735) 1,718
                                                                
Effective tax (credit)/charge at 25% (2011: 27%)       (1,184)   464
                                                                
Effects of:                                                     
Non-deductible expenses and charges                     1,262   610
Non-taxable income                                      (35)     -
Tax effect of previously unrecognised tax losses        (132)  (45)
Adjustment in respect of previous years                   132 (224)
Effect of higher tax rates in foreign jurisdictions         4     4
Change in UK tax rates                                 (133) (157)
Total income tax credit/(expense)                       (86)   652





(c) Deferred tax

The deferred tax (liability) included in the Consolidated Statement of
Financial Position is as follows:

                                                                Share-
                    Accelerated       Other     Excess  Income   based
                        capital   temporary management not yet payment
                    allowances differences    charges taxable  scheme   Total
                          £000        £000       £000    £000    £000    £000
As at 1 October
2010                          6          64        196 (1,110)      39   (805)
Charge to equity             -          55          -       -       -      55
Charge/(credit) to
the income
statement                   (9)       (135)        196   1,178   (504)     726
As at 30 September
2011                         15         144          - (2,288)     543 (1,586)
(Credit) to equity           -        (54)          -       -       -    (54)
Charge/(credit) to
the income
statement                    24         (8)          -     357   (692)   (319)
As at 30 September
2012                        (9)         205          - (2,645)   1,235 (1,213)



As described in Note 3 if and when the EBT Trustee agrees to transfer assets
held in the EBT to beneficiaries and if the assets transferred are in the form
of the Company's ordinary shares, the Group expects to be eligible for a
corporation tax deduction equal to the value of those ordinary shares. The
Group has not recognised a deferred tax asset in respect of these amounts
which would amount to £1,417,000. The Group also has unrecognised capital
losses of £1,267,000 (2011: £1,498,000).



7. EARNINGS AND EARNINGS PER SHARE

Adjusted earnings

In order to better reflect the underlying economic performance of the Group,
an adjusted earnings has been calculated. The adjustment (i) excludes the
IFRS 2 Share-Based Payment charge in respect of schemes where shares awarded
are satisfied by the issue of new shares (EIA Original and EIA Extension
Schemes), and (ii) includes the tax benefit recognised in other comprehensive
income in respect of transfers out of the EBT and the exercising of options
over the Company's shares.





                                                                 2012  2011
                                                                 £000  £000
Earnings                                                       (4,649) 1,066
Share-based payment charge (see note 3)                           7,757 3,647
Tax benefit on long term incentive scheme included in other    
comprehensive income                                                 178    46
Adjusted earnings                                                3,286 4,759



The earnings per share on an IFRS and adjusted basis are as shown below.





Adjusted earnings per share

                   Adjusted earnings  No. of shares (weighted
                       for the year                   average) Earnings per
                              £000                      '000         share
2012                                                                    
Basic adjusted                3,286                   107,609         3.05p
               
Diluted                               
adjusted                      3,286                    127,748         2.57p
                                                                 
2011                                                              
Basic adjusted                4,759                   108,454         4.39p
                                                                       
Diluted                               
adjusted                      4,759                    127,356         3.74p



The number of ordinary shares for the purposes of adjusted diluted earnings
per share includes all shares awarded under the EIA Extension and reconciles
to the number of ordinary shares used in the calculation of basic adjusted
earnings per share as follows:

                                                             2012    2011
                                                             '000    '000
Weighted average  number  of  ordinary shares  used  in  the 
calculation of basic adjusted earnings per share              107,609 108,454
Weighted average number of treasury and own shares  intended     7,973   7,128
to be used to satisfy outstanding share awards               
Shares in issue                                            115,582 115,582
Shares intended to be issued to satisfy outstanding share
awards                                                          12,166  11,774
                                                                       
Weighted average  number  of  ordinary shares  used  in  the   127,748 127,356
calculation of diluted adjusted earnings per share           







IFRS earnings per share

           Earnings for the      No. of shares (weighted
                       year                      average) Earnings per share
                      £000                          '000                   
2012                                                    
Basic               (4,649)                       107,609             (4.32)p
Diluted             (4,649)                       107,609             (4.32)p
                                                       
2011                                                    
Basic                 1,066                       108,454               0.98p
Diluted               1,066                       114,433               0.93p



The weighted average number of Ordinary Shares for the purposes of diluted
earnings per share reconciles to the weighted average number of Ordinary
Shares used in the calculation of basic earnings per share as follows:

                                                            2012     2011
                                                            '000     '000
Weighted average  number of  ordinary  shares used  in  the   107,609  108,454
calculation of basic earnings per share                     
Additional dilutive shares re share schemes                       -*   19,187
Adjustment to reflect future service from employees
receiving awards                                                    - (13,208)
Weighted average  number of  ordinary  shares used  in  the 
calculation of diluted earnings per share                    107,609  114,433

* Since there is a loss after tax for the period there are no dilutive shares.



8. DIVIDEND

The Directors propose a dividend of 0.75p per share for the year ended 30
September 2012 (2011: 0.70p per share). The dividend will be submitted for
formal approval at the Annual General Meeting to be held on 13 February 2013.
These financial statements do not reflect this dividend payable, which will be
accounted for in shareholders' equity as an appropriation of retained earnings
in the year ended 30 September 2013.



The dividend for the year ended 30 September 2011 was paid on 6 February 2012,
being 0.70p per share. The Trustees of the EBT waived their rights to part of
this dividend, leading to a total dividend payment of £759,000. This payment
is reflected in the Statement of Changes in Equity.





9. CURRENT ASSET INVESTMENTS

                      Unlisted investments Listed investments   Total
                                      £000               £000    £000
At 1 October 2010                     2,481              4,526   7,007
Additions                                54                  -      54
Fair value movements                    679                106     785
Repayments/disposals                   (95)            (3,821) (3,916)
At 30 September 2011                  3,119                811   3,930
Additions                               355              6,795   7,150
Fair value movements                  (419)                148   (271)
Repayments/disposals                   (28)            (1,797) (1,825)
Exchange differences                      -              (274)   (274)
At 30 September 2012                  3,027              5,683   8,710



Listed investments

Listed investments held at 30 September 2012 include those held by the
consolidated subsidiary Impax Green Markets Fund LP ("IGMF") and at 30
September 2011 by the Impax Absolute Return Fund ("IARF"). These listed
investments are recorded at market value using quoted market prices that are
available at the Statement of Financial Position date. The quoted market price
is the current bid price.



Impax Green Markets Fund ("IGMF")

In December 2011 the Group launched IGMF and invested, from its cash reserves,
$5,000,000 into the fund. IGMF invests in listed equities using the Group's
Environmental Specialists Strategy. The Group's investment represented 53.8
per cent of the IGMF's net asset value ("NAV") from the date of launch to 30
September 2012 and accordingly IGMF has been consolidated throughout this
period with its underlying investments classified as listed investments in the
table above.



Impax Absolute Return Fund ("IARF")

On 21 May 2007, the Company made an investment of €2,200,000 (£1,507,000) in
IARF. This fund was managed by a subsidiary of the Company. The investment
took the form of a subscription of 22,000 Euro Class A shares in the IARF, at
€100 per share. During the year ended 30 September 2010, the shares were
redenominated as sterling shares. During the year ended 30 September 2011 the
fund Directors made the decision to close the fund to external investors and
accordingly redeemed their preference shares. The fund's trading activity
ceased during the year ended 30 September 2012 and the Group's seed capital
has been redeemed at a profit of £190,000.



Unlisted investments

The unlisted investments principally represent the Company's investment in
Impax New Energy Investors LP and Impax New Energy Investors II LP ("INEI" and
"INEI II"). The unlisted investments include £2,665,000 in related parties of
the Group (2011: £2,797,000).



10. CASH AND CASH EQUIVALENTS AND CASH INVESTED IN MONEY MARKET FUNDS AND
LONG-TERM DEPOSITS

In order to mitigate bank default risk and to access favourable interest rates
the Group invests part of its surplus cash in money market funds and long-term
deposits. The Group can redeem investments in the former within 24 hours;
long-term deposits range between 6 to 12 months. The Group considers its total
cash reserves to be the total of its cash at bank and in hand held by
operating entities of the Group, and cash invested in money market funds and
long-term deposit accounts. Amounts held are shown below.



Cash reserves:

                                                               2012   2011
                                                              £000   £000
Cash and cash equivalents                                        5,577 12,870
Cash invested in money market funds and long-term deposit
accounts                                                        14,094  8,546
                                                                19,671 21,416



For the purposes of the cash flow statement, cash and cash equivalents
includes the following:

                                                              2012   2011
                                                               £000   £000
Cash at bank and in
hand                                                                    
                        - Held by operating entities of the Group 5,240 11,499
                       - Held by the consolidated funds           337  1,371
                                                                5,577 12,870





11. SHARES

Options over 15.3 million of the Company's shares vested on 1 October 2012 and
option  holders  will  be  able  to  exercise  these  options  following   the 
announcement  of  these   financial  results   on  29   November  2012.   All 
incentivisation schemes prior to the ESOP  have now fully vested. If  approved 
by the  Board, and  subject to  the discretion  of the  trustee, 12.2  million 
shares will be issued to the Impax Asset Management Group plc Employee Benefit
Trust 2012 ("2012 EBT"), which will also purchase 4.7 million shares from  the 
Company being  the  entire current  holding  of Treasury  Shares.  The  share 
subscription and purchase will  be funded by a  loan of £10,000,000 which  has 
been granted by the Company to the 2012 EBT on commercial terms and will  have 
been drawn  down prior  to any  acquisition  of shares  (or right  to  acquire 
shares) by the trustee and  which has no net  effect on the Group's  financial 
position.

The 2012 EBT is expected to  conduct future market purchases of the  Company's 
shares, reducing the requirement  for the Company to  hold Treasury shares  to 
satisfy option exercises. Future option exercises will primarily be satisfied
by the 2012 EBT.

12. ACCOUNTING POLICIES

Basis of accounting

The financial statements have been prepared in accordance with International
Financial Reporting Standards adopted for use by the European Union.



The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and have concluded that it is
appropriate to adopt the going concern basis in preparing the financial
statements of the Group.



The financial statements have been prepared under the historical cost
convention, with the exception of the revaluation of certain investments.





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


FR UWOKRUWAAUAA -0- Nov/29/2012 07:00 GMT
 
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