City of London Investment Group PLC Trading Update (0648C)
17 January 2018 - 6:00PM
UK Regulatory
TIDMCLIG
RNS Number : 0648C
City of London Investment Group PLC
17 January 2018
RNS Number:
City of London Investment Group PLC
17 January 2018
CITY OF LONDON INVESTMENT GROUP PLC
("City of London", "the Group" or "the Company")
FUNDS UNDER MANAGEMENT AS AT 31 December 2017,
TRADING UPDATE
City of London (LSE: CLIG) announces that total funds under
management (FuM) at the Group's half year on 31 December 2017 were
US$5.3 billion (GBP3.9 billion). This compares with US$4.7 billion
(GBP3.6 billion) at the Company's year-end on 30 June 2017. A
breakdown by strategy follows:
FuM ($mn) Strategy Index
% inc % inc
Jun-17 Dec-17 / Net /
(estimate) dec Flows dec
EM 4,202 4,660 11% (89) MSCI EM 16%
DEV 179 337 88% 129 MSCI ACWI 11%
ACWI/Barclays
GTAA 110 139 26% 20 Global Agg 7%
Frontier 172 193 12% 2 MSCI Frontier 12%
4,663 5,329 62
---------- ------- ----------- ------ ------ --------------- ------
Positive relative investment performance was recorded across
Developed, GTAA and Frontier strategies. Generally, a combination
of strong NAV performance, discount narrowing and opportunistic
participation in event driven US situations drove relative
performance. The EM strategy underperformed due to widening
discounts and an underweight to the Chinese IT sector which posted
very strong returns. Net flows were positive in aggregate over the
period, particularly in the Developed strategy which continues to
benefit from a focused marketing strategy and excellent long term
investment results.
In addition, we have to date received notification of $110
million net inflows in aggregate across all strategies, which we
expect to fund over the next quarter.
With regards to business development, the Group continues to
maintain an active pipeline across all of its major CEF offerings
with an increased interest in the diversification CEF strategies.
In total the active pipeline is in excess of US$400 million, these
include opportunities that are spread across Emerging and Developed
Markets, Global Tactical Asset Allocation, Tactical Income, and
Frontier CEF strategies.
Operations
The Group's income currently accrues at a weighted average rate
of approximately 82 basis points of FuM, net of third party
commissions. "Fixed" costs are cGBP1.0 million per month, and
accordingly the current run-rate for operating profit, before
profit-share of 30% and an estimated EIP charge of 2%, is
approximately GBP1.7 million per month based upon current FuM and a
US$/GBP exchange rate of US$1.35 to GBP1 as at 31 December
2017.
The Group estimates the unaudited profit before taxation for the
six months ended 31 December 2017 to be approximately GBP6.6
million, which compares with GBP5.8 million for the equivalent
period to 31 December 2016.
The Company is currently in a close period which will end with
the publication of results for the six months ended 31 December
2017 on 19 February 2018.
Dividend
The Board has decided to declare an interim dividend of 9 pence
(2017: 8 pence). The dividend will be paid on 16 March 2018 to
shareholders registered at the close of business on 2 March
2018.
Template
Please see the attached graph which is based on the following
assumptions and includes the estimated quarterly cost of a
maintained dividend:
http://www.rns-pdf.londonstockexchange.com/rns/0648C_1-2018-1-16.pdf
Key assumptions:
(June 2017 comparatives in Italics)
-- Starting point Current FuM (end December 2017)
-- Net increase for the remainder of this financial year (straight-lined to June 2018):
- emerging market CEF strategy US$100m (US$250m over full year)
- non-emerging market CEF strategies US$125 (US$250m over full year)
-- Net increase in 2018/2019 (straight-lined to June 2019):
- emerging market CEF strategy US$100m
- non-emerging market CEF strategies US$250m
-- Operating margin adjusted monthly for change in product mix and commission run-off
-- Market growth: 0%
-- Overheads for 2017/18: +4% compared to 2016/17 (+3%)
-- Overheads for 2018/19: +7% compared to 2016/17
-- EIP cost for 2017/18: 2% of operating profit (2%)
-- EIP cost for 2018/19: 4% of operating profit
-- Corporation tax based on an estimated average rate of 23% (23%)
-- Exchange rate assumed to be GBP1/$1.35 for entire period (GBP1/US$1.30)
-- Number of CLIG Shares in issue (26.9m) less those held by the
ESOP Trust (1.4m) as at 31 December (26.9m CLIG shares in issue
less 1.5m ESOP Trust holding)
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 Green
Zeus Capital Limited
Financial Adviser & Broker
Tel: +44 (0)20 3829 5000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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