City Lon Inv Regulatory News (CLIG)

11 Jun 2007 07:01

City of London Investment Group PLC11 June 2007 For release at 0700h, 11 June 2007 CITY OF LONDON INVESTMENT GROUP PLC ("City of London" or "the Group") TRADING UPDATE FOR THE YEAR TO 31 MAY 2007 City of London Investment Group PLC (AIM: CLIG), a leading emerging market andclosed end fund asset management group, today provides a trading update for thefinancial year ended 31 May 2007. The Group's funds under management (FUM) increased by 38% during the year toUS$3.792 billion at 31 May 2007 (US$2.748 billion at the end of May 2006). For the year to 31 May 2007, City of London expects that pre-tax profits will beapproximately 41% higher at £7.3 million (2006: £5.2 million) and that profitsafter tax of £2.4 million will be approximately £4.9 million (2006: £2.9 millionafter AIM admission costs of £0.5 million and tax of £1.8 million). The Group's dividend policy is based on paying dividends to shareholders thatare twice covered by earnings and to pay one third of the annual total as aninterim dividend and two thirds as a final dividend. In March 2007, City ofLondon paid an interim dividend of 3p per share, implying a final dividend of 6punder the policy adopted by the Group. In the event, it is the Board'sintention to recommend a final dividend of 7p per share as a result of thefinancial performance of the Group in the second half of the financial year. Notwithstanding City of London's performance over the past year it is theGroup's intention over the next year, subject to market conditions, to continueto grow and diversify the business organically. Progress in the US isanticipated regarding the equity business and the intention is to focusresources in the area of marketing the Natural Resource fund. Additionally, twonew spokes will be added to the Group's Dublin based OEIC, The World Fund. Theseare Natural Resources and Emerging Markets Yield. With regard to the traditional emerging markets closed end fund business,further growth is expected from winning new mandates, particularly in Europe, asa result of the successful focus upon outperformance relative to benchmarks.Another area of diversification and focus over the next year will be regardingclosed end funds that provide global exposure. Financial discipline is being maintained. As a result of tight control ofoverhead, the cost-income ratio, excluding variable commissions andprofit-share, reduced from 38% to 34%, and the portion of gross income which iscarried to the bottom line (pre-tax) increased from 37% to 40%. City of London expects to announce full year results for the year to 31 May 2007on 17 September 2007. Summary and Trading Update 31.05.06 31.05.07Funds under Management (at period end) $2.8bn $3.8bnTurnover (plus investment income) £14.2m £18.4mAdministrative expenses £9.5m £11.1mProfit before tax £4.7m £7.3mProfit after tax £2.9m £4.9mEPS: Basic 13.5p 19.9p Diluted 11.7p 17.5p Financials - P&L Account Year to 31 May£'000 2006 2007Fee income 14,119 18,317Interest & other 109 230Finder's commission (2,180) (2,723)Custody & Administration (523) (613)Total net income 11,525 15,211 Costs:Human resources 2,588 2,998Premises 220 217Communications & IT 617 645Business development 229 283General 501 583Total costs 4,155 4,726Operating profit 7,370 10,485 AIM listing costs 483 0Profit-share 2,160 3,153Pre-tax profit 4,727 7,332 Tax (1,784) (2,478)Post-tax profit 2,943 4,854Dividends (2,283) (736)*Retained 660 4,118 * Shows interim dividend only; final dividend to be approved. -ends- City of London Investment Group is today hosting a seminar on the background toits results, focusing on the macroeconomic outlook for emerging markets, currenttrends in corporate governance in the closed end funds sector and City ofLondon's approach and strategy, at the offices of Tavistock Communications, 131Finsbury Pavement, London EC2A 1NT. The seminar will commence at 1000h, finishat 1300h and will conclude with an informal discussion over lunch. The outputfrom the seminar will be available upon request from client.servicing@citlon.com(tel: 020 7860 8329). For further information, please visit www.citlon.co.uk or contact: Doug Allison (Finance Director) Simon Hudson / John West / Andrew DunnCity of London Investment Group PLC Tavistock CommunicationsTel: 020 7860 8347 Tel: 020 7920 3150 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$3.8 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