8 Sep 2011 07:00
City of London Group plc ("COLG")
Chairman's Statement to AGM
The following is the text of the statement to be read out by Henry Lafferty, Chairman of the City of London Group plc, at the Company's General Meeting at 10.00 today.
"I would like to take this opportunity to update shareholders on our current prospects and ambitions following our Interim Management Statement on 19th August 2011.
Since we raised additional equity in April this year of £6m gross we have, as reported, established our third investment platform, Credit Asset Management Limited ("CAML"). This group is now administering our lease finance platform for SME's and also separately making loans to professional practices to include doctors, dentists, legal practices and accountants. They started writing business in July and have already seen a large demand for lending on good margins. We now face the challenge of raising additional third party funds and bank lines to meet this demand.
Our other investment platform for lending to SME's - Trade Finance Partners Limited ("TFPL") also continues to see a strong pipeline of business and is in the process of constructive discussions with a number of fund providers, including some well-known private banks. We expect to report progress on these when legal agreements are in place.
Finally our litigation funding platform, Therium, continues to see a strong pipeline of cases for funding and we are in advanced discussions with numerous parties about managing further funds to commit to this pipeline. Current commitments to 10 ongoing cases are over £6.3m of which approximately £2.3m is supported by COLG directly. At the same time we have now arrived at an important stage, with two cases where we have £1.8m invested capital, and both have reached maturity. We also have a third smaller case where we have received a negative decision at a tribunal and for which we have agreed to support an Appeal.
Of the two significant cases, we have one case which has just this week achieved a partial out of court settlement with some of the defendants. This settlement will result in very strong returns to COLG and other funders. Details of the final settlement numbers will be available in the coming weeks.
The second case has now concluded a trial hearing and a final judgement is expected in the near future. We do, however, remain very cautious about the outcome of this case, particularly as some unfavourable evidence was presented during the trial. We have directly invested in this case a sum approaching £1.5m and regard this as very high risk at this stage. We shall report fully on each case as soon as the full financial implications are known.
On other matters, we are well advanced with a range of product terms to offer to the market place to attract third party monies to our platforms. We have also activated our FSA regulated subsidiary company, City of London Financial Services Limited ("COLFS"), and have succeeded in adding staff to be regulated for the purposes of raising and administering third party funds. We continue to see significant opportunities to offer excellent investment returns which are uncorrelated to equity or bond markets.
In the short term, therefore, we are focusing very heavily on the work needed to attract third party funds under management so as to develop shareholder value in our three major investment platforms. Over the longer term we hope to exploit the opportunities more widely in alternative fund management."
Henry Lafferty
8 September 2011
Enquiries:
City of London Group plc | 020 7628 5518 |
Eric Anstee, Chief Executive |
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College Hill | 020 7457 2020 |
Roddy Watt | 077 6699 8915 |
Tony Friend |
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Singer Capital Markets | 0203 205 7500 |
Jonathan Marren |
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Jeff Keating |
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