City Lon Inv Regulatory News (CLIG)

7th October 2013

CITY OF LONDON INVESTMENT GROUP PLC

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

INTERIM MANAGEMENT STATEMENT

AGM Trading Update

City of London (LSE: CLIG), a leading emerging markets asset management group, provides an Interim Management Statement for the period 31st May 2013 to 30th September 2013. City of London's Annual General Meeting is being held today.

Funds under Management

As at 30th September 2013, FuM were US$3.4 billion (£2.1 billion). This compares to US$3.7 billion (£2.4 billion) at the Company's year-end on 31st May 2013. In US dollar terms, allowing for client withdrawals, this represents a fall of 8% against the MSCI Emerging Markets Index, which fell by 1% over the same period. With the September reopening of the core emerging markets strategy we are able to report the first major mandate win, with expected funding in the fourth quarter of 2013.

Operations

The Group's income accrues at a weighted average rate of approximately 92 basis points, net of commissions. Costs remain under control with "fixed" costs in line with budget at £0.8 million per month, and accordingly the current run-rate for operating profit, before profit-share at 30%, is approximately £0.8 million per month based upon current FuM and a US$/£ exchange rate of US$1.6 to £1. The Group estimates that post-tax profit for the first four months of the year will be approximately £1.6 million.

We continue to raise the profile of the diversification products with prospects and consultants. This includes the China A Share CEF strategy, where we are awaiting approval for our second tranche of US$100 million in Qualified Foreign Institutional Investor quota.

Dividends

The final dividend of 16 pence per share, subject to approval at today's AGM, will be paid on 25th October 2013, bringing the total dividend for the financial year 2012-13 to 24 pence. Encouraged by both recent marketing success and a recovery in emerging markets, the Board is hopeful that run-rate profits will be sufficient to maintain the dividend during the current year, although this is likely to require a continued relaxation of the Group's 1.5 x dividend cover policy.

Remuneration Policy

The Board is aware of understandable concerns by shareholders with regard to the firm's remuneration policy.

Firstly as regards the compensation payments paid to the former CEO and FD, these were made after very extensive consultation and negotiation and were, in the unanimous opinion of the Board, made in the best interests of the company and its shareholders. Regrettably the Compromise Agreements entered into prevent the disclosure of any further information in connection with those payments. 

Secondly, as regards the firm's ESOP programme, the Board is again unanimous that it is in the best interests of CLIG. It should be noted that the shares issued are non-dilutive as they are purchased in the market, no new shares are issued, and, most importantly, our clients continue to emphasise the desirability of significant staff participation in the equity of CLIG.

Board composition

As previously announced, Barry Aling joined the Board on 1st August 2013. He has assumed the role of Audit Committee Chair. Allan Bufferd is the Senior Independent Director and Chairs the Remuneration Committee. Rian Dartnell is the Nominations Committee Chair.

Half year results for the six months to 30th November 2013 will be announced on 20th January 2014.

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

Barry Olliff (CEO)

City of London Investment Group PLC

Tel: 001 610 380 2911

 Martin Green

 Canaccord Genuity Limited

 Financial Adviser & Broker

Tel: +44 (0)20 7523 8000