City Lon Inv Regulatory News (CLIG)

29 Oct 2007 07:00

City of London Investment Group PLC29 October 2007 For release at 0700h, 29 October 2007 CITY OF LONDON INVESTMENT GROUP PLC ("City of London", "the Company") ANNUAL GENERAL MEETING TRADING UPDATE AND NEW DIVIDEND POLICY At the Company's Annual General Meeting to be held at its offices at 10Eastcheap, London, EC3M 1LX today at 11.30 am., the Chairman of City of LondonInvestment Group (AIM: CLIG), Andrew Davison, will update shareholders asfollows: "The current financial year to 31 May 2008 has started positively for City ofLondon. Funds under management at today's date have increased to US$4.8billion from the US$3.8 billion at 31 May 2007. The increase is a reflection ofgood performance of the emerging markets in which the Company principallyinvests and the addition of further funds secured from both existing and newclients. "The strong performance of funds under management, our continued focus oncontrol of costs and the operational gearing inherent in the business, have fedthrough to a sharp increase in profitability. At the end of the first fivemonths of the current financial year, unaudited pre-tax profit has increased by73% to £4.5million, compared to £2.6 million for the same period last year. As aresult of the Company's performance in the year so far, the Directors believethat, subject to market conditions, City of London will exceed current marketexpectations for the year to 31 May 2008 in respect of both profitability andfunds under management. "The Company's dividend policy is based on paying dividends that are twicecovered by net earnings with the payout split one third/two thirds between theinterim and final dividend. As we have previously advised shareholders, City ofLondon is a cash generative business with little requirement for significantadditional capital or operating expenditure. This has not changed. Retained cashbalances have risen from £6.6 million at the year end to in excess of £8 milliontoday - (before the payment of the proposed final dividend for 2007 of 7p pershare, which will cost £1.7 million). The Board has determined that the level of cash in the Company is now, and isforecast to remain, significantly above the cash requirements of the business.Accordingly, it is intended that the distribution policy be based on earnings ofone and a half times instead of the current two times. Subject to November'sperformance, the Board intends to recommend an interim dividend of approximately6p per share for the current year, payable in March 2008. "The Company will next update shareholders with its quarterly announcement offunds under management as at 30 November in early December 2007." -ends- For further information contact:Doug Allison (Finance Director) Simon Hudson/Andrew DunnCity of London Investment Group PLC Tavistock CommunicationsTel: 020 7711 0771 Tel: 020 7920 3150 Jeff Keating / Fred Walsh / Simon BrownLandsbanki Securities (UK)Tel: 020 7426 9000 NOTES TO EDITORS City of London is an asset management group whose principal activity isproviding emerging market asset management products and services predominantlyto institutional investors via its principal operating company City of LondonInvestment Management Company Limited. The Group is based in the UK and also hasoffices in the US and Singapore. Clients include some of the US's leading bluechip institutions and endowment funds. With total funds under management of approximately US$4.8 billion, the Groupmanages several Open Ended Funds as well as a number of segregated accounts. TheGroup's fund mandates are mainly in emerging markets, although the Group hasmore recently diversified its asset management product portfolio by the launchof a natural resources fund and has also seeded three new funds: a global fund,a frontier fund and an emerging markets yield fund. The Group seeks to providecapital growth for clients through active country allocation and stockselection. This information is provided by RNS The company news service from the London Stock Exchange