City of London Investment Group shares dip on mixed results

Specialist asset management company City of London Investment Group PLC (LON: CLIG) sees increased funds under management but reduced pre-tax profits.

The Company focuses on emerging markets and closed-end funds. In its trading update for the full year ended 30 June 2019, City of London Investment Group stated that its funds under management were up 6% from £3.9 billion to £4.2 billion year on year.

However, the Company’s overheads also grew from £12.5 million to £12.9 million on-year, and pre-tax profits fell from £12.8 million to £11.4 million for the year ended 30 June.

The Company noted these results were unaudited.

City of London Investment Group statement

The Company’s update continued with the following strategic and financial updates,

“The core EM strategy outperformed (by approximately 300 bps, net of fees) for the full year as discounts narrowed and country allocation was positive. The Developed, Opportunistic Value (formerly GTAA) and Frontier strategies all recorded negative relative performance due to a combination of negative NAV and country allocation effects.”

“For the year to 30 June 2019, the Group expects that pre-tax profits will be approximately £11.4 million, including NCI profit of £0.2million, (2018: £12.8 million, NCI nil). Profits after an anticipated tax charge of £2.4 million (21% of pre-tax profits) will be approximately £9.0 million (2018: profits of £10.1 million after a tax charge of £2.7 million, representing 21% of pre-tax profit) of which £8.8m will be attributable to shareholders of the Company. Basic and fully diluted earnings per share are expected to be 34.9p and 34.1p respectively (2018: 39.5p and 39.3p).”

“The Board is recommending a final dividend of 18p per share (2018: 18p). This would bring the total dividend payment for the year to 40.5p, including the special dividend of 13.5p paid in March (2018: 27p, special nil). Dividend cover, excluding the special dividend, equates to 1.3 times (2018: 1.47 times).”

Investor notes

After dipping by over 2.7%, the Company’s shares are currently not live; they closed at 430.00p per share 16/07/19 13:46 BST.

Elsewhere in wealth management, there have been updates from; Miton Group PLC (LON: MGR), Walker Crips Group plc (LON: WCW), Liontrust Asset Management PLC (LON: LIO), Mattioli Woods (LON:MTW), Intermediate Capital Group plc (LON:ICP) and Babcock International Group PLC (LON:BAB).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.