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RNS

Trading Update

Released 07:00 17-Jul-2018

RNS Number : 8098U
City of London Investment Group PLC
17 July 2018
 

 

 

City of London Investment Group PLC

17 July 2018

 

The information contained within this announcement is deemed by the Group to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.



CITY OF LONDON INVESTMENT GROUP PLC

("City of London" or "the Group")

 

PRE-CLOSE TRADING UPDATE for the year to 30 June 2018

 

City of London (LSE: CLIG), a leading specialist asset management group focused on emerging markets and closed-end funds, provides a pre-close trading update for its financial year ended 30 June 2018. The numbers that follow are all unaudited.

 

Funds under management were US$5.1 billion (£3.9 billion) at 30 June 2018 (2017: US$4.7 billion or £3.6 billion), representing a 10% increase in US$ terms for the year.  A breakdown by strategy follows:

 

 

FuM ($mn)

 

 

 

Strategy Index

 

 

 

 

 

 

 

 

 

 

 

Jun-18

Jun-17

%

 

Net

 

 

%

 

(estimate)

 

inc/dec

 

Flows

 

 

inc/dec

EM

        4,207

        4,202

0%

 

(215)

 

MSCI EM

8%

DEV

           481

           179

169%

 

   279

 

MSCI ACWI

11%

OV*

           174

           110

58%

 

     54

 

ACWI/Barclays Global Agg

6%

Frontier

           245

           172

42%

 

     67

 

MSCI Frontier

2%

 

        5,107

      4,663

 

 

   185

 

 

 

 

*Opportunistic Value formerly Global Tactical Asset Allocation, GTAA

 

The core EM strategy underperformed (by approximately 330bps, net of fees) for the full year as discounts widened (cost approximately 200bps) and an underweight to China, specifically the IT sector detracted from performance.  The Developed, Opportunistic Value (formerly GTAA) and Frontier strategies all recorded positive relative performance due to a combination of positive discount and allocation effects.

 

The Group's overhead for the year to 30 June 2018 is expected to be £12.5 million (2017: £11.9 million) and the current monthly run-rate is c £1.1m.

 

For the year to 30 June 2018, the Group expects that pre-tax profits will be approximately £12.8 million (2017: £11.6 million), and that profits after an anticipated tax charge of £2.7 million (21% of pre-tax profits) will be approximately £10.1 million (2017: profits of £9.1 million after a tax charge of £2.5 million, representing 22% of pre-tax profit).  Basic and fully diluted earnings per share are expected to be 39.5p and 39.3p respectively (2017: 36.9p and 36.7p).

 

The Board is recommending an increased final dividend of 18p per share (2017: 17p). This would bring the total for the year to 27p (2017: 25p), for dividend cover of 1.47 times (2017: 1.46 times).

 

The Board confirms the final dividend timetable for the year to 30 June 2018:

 

·     ex-dividend date:                     11 October 2018

·     dividend record date:             12 October 2018

·     payable:                                     30 October 2018

 

City of London expects to announce final results alongside publication of its Accounts for the year to 30 June 2018 on 17 September 2018. The Group's Annual General Meeting will be held on 22 October 2018.   

 

Template

 

Please see the attached graph which is based on the following assumptions and includes the estimated cost of a maintained dividend:

 

http://www.rns-pdf.londonstockexchange.com/rns/8098U_1-2018-7-16.pdf

 

 

Assumptions:

§ Starting point Current FuM (end June 2018)

§ Net increase in FuM in 2018/2019 (straight-lined to June 2019):

·     emerging market strategies zero

·     diversification strategies $250m

§ Operating margin adjusted monthly for change in product mix and commission run-off

§ Market growth: 0%

§ Increase in overheads: 3%

§ EIP charge: 4%

§ Corporation tax based on an estimated average rate of 20%

§ Exchange rate assumed to be £1/$1.32 for entire period

§ Number of CLIG Shares in issue (26.9m) less those held by the Employee Benefit Trust (1.5m) as at 30 June 2018

 

This can also be found on our website at:

https://www.citlon.com/investor-relations/dividend-cover.php

 

 

For further information, please visit http://www.citlon.co.uk/ or contact:

 

Barry Olliff, CEO

City of London Investment Group PLC

Tel: 001 215 313 3774

 

Martin R Green

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20 3829 5000

 

This release includes forward-looking statements, which may differ from actual results.  Any forward-looking statements are based on certain factors and assumptions, which may prove incorrect, and are subject to risks, uncertainties and assumptions relating to future events, the Group's operations, results of operations, growth strategy and liquidity.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Trading Update - RNS