TIDMCLIG
RNS Number : 0093H
City of London Investment Group PLC
25 July 2023
City of London Investment Group PLC
25 July 2023
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" or "the Company" or "CLIG")
PRE-CLOSE TRADING UPDATE for the year to 30 June 2023
City of London (LSE: CLIG), a leading specialist asset
management group offering a range of institutional and retail
products investing primarily in closed-end funds ("CEFs"), provides
a pre-close trading update for its financial year ended 30 June
2023. The numbers that follow are unaudited.
On a consolidated basis, Funds under Management (FuM) were
US$9.4 billion (GBP7.4 billion) at 30 June 2023. This compares with
US$9.2 billion (GBP7.6 billion) at the Group's year end on 30 June
2022. A breakdown by strategy follows:
FuM ($ million) Strategy Index
Jun-23 Jun-22 % Net %
(estimate) inc/dec Flows inc/dec
EM 3,580 3,703 (3%) (206) MSCI EM Net TR 1.7%
KIM 3,520 3,433 3% (129) Not applicable
INTL 1,983 1,812 9% (51) MSCI ACWI ex US 12.7%
ACWI/Barclays Global
OV 244 193 26% 35 Agg 7.5%
Other* 97 83 17% (6)
9,424 9,224 (357)
----------- ------- ------
* includes Frontier, REIT and seed investments
Although wider discounts were a headwind for all CEF strategies,
investment performance was ahead of benchmark for the bulk of
CLIM's assets due to strong NAV performance in the Emerging Market
strategy. The International strategy was slightly behind benchmark
over the period while the Opportunistic Value strategy
outperformed. KIM's taxable fixed income, conservative balanced and
SPAC strategies outperformed their market indices over the period,
while equity strategies lagged their benchmarks.
Net investment outflows were US$357 million for the Group over
the period as clients reduced exposure to markets due to ongoing
volatility, pension fund de-risking and competition from cash
products. Attractive discounts across the strategies will be the
focus of marketing efforts in the second half of 2023.
Operations
The Group's income currently accrues at a weighted average rate
of approximately 71 basis points of FuM, net of third party
commissions.
The Group's overheads for the year to 30 June 2023 are expected
to be GBP22.5 million (2022: GBP19.7 million), primarily as a
result of weaker sterling against USD as well as higher employee
retention and retirement costs during the year. "Fixed" costs are
c.GBP1.9 million per month, and accordingly the run-rate for
operating profit, before profit-share and amortisation of
intangibles is approximately GBP2.6 million per month based upon
current FuM and a US$/GBP exchange rate of US$1.2703 to GBP1 as at
30 June 2023.
For the year to 30 June 2023, the Group estimates that the
unaudited profit before amortisation of intangibles and taxation to
be approximately GBP23.4 million (2022: GBP27.2 million profit
before amortisation of intangibles).
Profits after an anticipated tax charge of GBP3.9 million
(representing 21% of profits before taxation) will be approximately
GBP14.8 million (2022: profits of GBP18.1 million after a tax
charge of GBP5.0 million, representing 22% of profits before
taxation). Basic and fully diluted earnings per share are expected
to be 30.4p and 29.8p respectively (2022: 36.9p and 36.4p).
Dividend
The Board is proposing to recommend a final dividend of 22p per
share (2022: 22p), subject to approval by shareholders at the
Company's Annual General Meeting to be held on 23 October 2023.
This would bring the total dividend payment for the year to 33p
(2022: 33p, special dividend 13.5p). Rolling five-year dividend
cover based on underlying profits, excluding the special dividend
equates to 1.24 times (2022: 1.34 times).
The Board confirms the final dividend timetable for the year to
30 June 2023:
-- Ex-dividend date: 28 September 2023
-- Dividend record date: 29 September 2023
-- DRIP election date/ deadline 6 October 2023
for currency election:
-- Announcement of USD dividend 13 October 2023
conversion rate:
-- Dividend payment date: 27 October 2023
City of London expects to announce its final results alongside
publication of its Accounts for the year to 30 June 2023 on 18
September 2023. The Group's Annual General Meeting will be held on
23 October 2023.
City of London Investment Group is a UK registered company,
listed on the London Stock Exchange and declares its dividends in
GBP. Shareholders based in the US can now elect to receive
dividends in USD, should they wish to do so. The currency
conversion rate from GBP to USD will be fixed two weeks before the
dividend payment date. The currency election form can be found on
our website at
https://www.clig.com/investor-reports/Currency-Election-Form-2022.pdf
Alternatively, overseas shareholders may be able to use the
International Payment Service (IPS) and receive dividend payments
direct to their bank account in local currency. Further information
regarding the IPS including terms and conditions, costs and forms
for signing up are available from Link Group at
https://ww2.linkgroup.eu/ips .
Dividend cover template
Please see dividend cover template attached here.
http://www.rns-pdf.londonstockexchange.com/rns/0093H_1-2023-7-24.pdf
The dividend cover template shows the quarterly estimated cost
of dividend against actual post-tax profits for last year, the
current year and the assumed post-tax profit for next financial
year based upon specified assumptions.
Functional and reporting currency change
The functional currency of the Company and the presentational
currency of the Group will change to US dollars with effect from 1
July 2023.
The Group's revenue is almost entirely US dollar based and the
Board believes that this change will provide investors and other
stakeholders with greater transparency of the Group's performance
and reduced foreign exchange volatility.
There will be no change in the Group's dividend policy, and
dividends will continue to be declared in GBP with an option for
shareholders based in the US to elect to receive dividends in
USD.
Following the change in the Group's presentational currency with
effect from 1 July 2023, the Group's interim results for the
six-month period ended 31 December 2023, and all subsequent
financial information, will be prepared using US dollars as the
presentational currency. Comparative information will also be
provided in US dollars as required by the relevant Accounting
Standards.
For further information, please visit https://www.clig.com/ or
contact:
Tom Griffith, CEO
City of London Investment Group PLC
Tel: 001-610-380-0435
Martin Green, James Hornigold
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.
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END
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