Last checked at 3 Oct 2011 07:00
CITY OF LONDON INVESTMENT GROUP PLC
("City of London", 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 31 May 2011 to 30 September 2011. City of London's Annual General Meeting is being held today.
Emerging markets have been turbulent throughout the summer, culminating in sharp declines in recent weeks. While this clearly impacts revenues adversely, the volatility has provided significant opportunities with respect to investment performance. Clients have continued to maintain their Emerging Market allocations, and a number have taken the opportunity to top up their investments, with confirmed net new assets since 1 September totalling US$60 million.
Funds under Management
As at 30 September 2011, FuM were US$4.5 billion (£2.9 billion). This compares to US$5.8 billion (£3.5 billion) at the Company's year end on 31 May 2011. In US dollar terms, the decrease of 22% compares with a fall of 24% in the MSCI Emerging Markets Index over the same period.
Operations
The Group's income accrues at a weighted average rate of approximately 86 basis points, net of commissions. "Fixed" costs remain in line with budget at £0.9 million per month, and accordingly the current run-rate for operating profit, before profit-share at 30%, is approximately £1.2 million per month based upon current FuM and a US$/£ exchange rate of US$1.56 to £1.
At the start of this financial year the Group recruited two further experienced marketing executives - one to broaden our reach in the US and the other to focus on European markets. While market conditions, as well as seasonal factors, have created a difficult environment for marketing, the Group has won four new mandates for the Natural Resources product, totalling US$30 million, and has also raised the profile of other diversification products which have performed well, including the Developed Closed-End Fund product, the Frontier product, and the Global Absolute Return Fund.
Dividends
The final dividend of 16 pence per share, subject to approval at today's AGM, will be paid on 21 October 2011, bringing the total dividend for the financial year 2010-11 to 24 pence. The Group estimates that post-tax profit for the first four months of the year will be approximately £2.7 million.
The Board expects to maintain or increase the dividend during the current year unless there is a further very significant deterioration in markets over the remainder of the year. This may require a relaxation of the Group's 1.5x dividend cover policy, which the Group is well placed to accommodate in terms of both capital adequacy and liquidity.
Half year results for the six months to 30 November 2011 will be announced on 23 January 2012.
For further information, please visit www.citlon.co.uk or contact:
Doug Allison (Finance Director) | Simon Hudson / Andrew Dunn |
City of London Investment Group Plc | Tavistock Communications |
Tel: +44 (0) 20 7860 8347 | Tel: +44 (0)20 7920 3150 |
Jeff Keating | Simon Bridges |
Singer Capital Markets Limited | Cannacord Genuity Limited |
Financial Adviser & Joint Broker | Joint Broker |
Tel: +44 (0)20 3205 7500 | Tel: +44 (0)20 7050 6500 |
This announcement contains forward-looking statements with respect to the financial condition, results and business of City of London Investment Group PLC. By their nature, forward looking statements involve risk and uncertainty and there may be subsequent variations to estimates. City of London Investment Group PLC's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as or is intended to be a solicitation for or an offer to provide investment advisory services.