In April, Impax reported AUM had fallen 14% over H126 to £22.3bn. This coincided with a period of very heavy outflows for equity funds generally, and for active and sustainable funds especially. So, the consequential hit to results is no surprise. Adjusted operating profit fell 45% y-o-y to £11.3m and profit after tax 57% to £5.4m. But the balance sheet and cash position remain robust (net cash £46m, and no debt). Impax cut adjusted operating costs by 15% y-o-y and is taking further cost reduction measures to reduce the impact of the AUM fall. Importantly, growth prospects are also starting to look a little brighter. Market conditions have turned more favourable for several group strategies, especially Thematic ones which make up 62% of AUM. YTD 70% of their AUM outperformed benchmark. We make only small adjustments to our forecasts, highlighting that Impax’s adj. PER is just 8.2x and our DCF valuation remains at 250p / share, more than twice the share price.