REG - City of Lon Inv Grp - Half Year Results
25/02/2025 07:00
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RNS Number : 2739Y City of London Investment Group PLC 25 February 2025
25th February 2025
CITY OF LONDON INVESTMENT GROUP PLC
("City of London", "CLIG", "the Group" or "the Company")
HALF YEAR RESULTS TO 31ST DECEMBER 2024 AND DIVIDEND DECLARATION
City of London (LSE: CLIG) announces that it has today made available on its
website, https://www.clig.com/ (https://www.clig.com/) , the Half Year Report
and Financial Statements for the six months ended 31st December 2024.
The above document will be uploaded to the National Storage Mechanism, in
accordance with UKLR 6.4.1R, and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
HALF YEAR SUMMARY
- Funds under Management (FuM) of $9.9 billion at 31st December 2024. This
compares with $10.2 billion at the beginning of this financial year on 1st
July 2024 and $9.6 billion at 31st December 2023
- FuM at 31st January 2025 of $10.1 billion
- Net fee income representing the Group's management fees on FuM was $35.3
million (31st December 2023: $32.2 million)
- Underlying profit before tax* was $15.2 million (31st December 2023: $13.3
million). Profit before tax was $12.6 million (31st December 2023: $11.1
million)
- Maintained interim dividend of 11p per share (31st December 2023: 11p) payable
on 3rd April 2025 to shareholders on the register on 7th March 2025
*This is an Alternative Performance Measure (APM). Please refer to the CEO
review for more details on APMs.
For access to the full interim report, please follow the link below:
http://www.rns-pdf.londonstockexchange.com/rns/2739Y_2-2025-2-24.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2739Y_2-2025-2-24.pdf)
This release includes forward-looking statements, which may differ from actual
results. Any forward-looking statements are based on certain factors and
assumptions, which may prove incorrect, and are subject to risks,
uncertainties and assumptions relating to future events, the Group's
operations, results of operations, growth strategy and liquidity.
Dividend
The Board declares an interim dividend of 11 pence per share, which will be
paid on 3rd April 2025 to shareholders registered at the close of business on
7th March 2025 (2024: 11 pence).
Shareholders may choose to reinvest their dividends using the Company's
Dividend Reinvestment Plan, to do this please visit www.signalshares.com
(http://www.signalshares.com) or if you hold your shares through a broker
please contact them. The deadline to lodge your election is 14th March 2025.
The Board confirms the following interim dividend timetable:
· ex-dividend date: 6 March 2025
· dividend record date: 7 March 2025
· DRIP election date 14 March 2025
· dividend payment date: 3 April 2025
Dividend cover template
Please see dividend cover template attached here.
http://www.rns-pdf.londonstockexchange.com/rns/2739Y_1-2025-2-24.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2739Y_1-2025-2-24.pdf)
The dividend cover template shows the quarterly estimated cost of dividend
against actual post-tax profits for last year, the current six months and the
assumed post-tax profit for the remainder of the current year and the next
financial year based upon specified assumptions.
For further information, please visit www.clig.co.uk or contact:
Tom Griffith, CEO
City of London Investment Group PLC
Tel: 001-610-380-0435
Martin Green / James Hornigold
Zeus Capital Limited
Financial Adviser & Broker
Tel: +44 (0)20 3829 5000
CHAIR'S STATEMENT
Introduction
CLIG is an investment-led organisation, focused on providing our teams with
the resources they need to continue to provide strong long-term performance
for our clients. Our investment teams produced good absolute and relative
performance across most strategies in the period from 1st July 2024 to 31st
December 2024 and for the full calendar year 2024, augmenting our long-term
track records. Our business development team was active in increasing outreach
to clients and prospects and launched an effort to enhance communications.
Group management continue to look for ways to run the business more
efficiently and are on track for reducing annualised costs.
Assets
Funds under management (FuM) averaged $10.3 billion in the period from 1st
July 2024 to 31st December 2024, approximately 12% higher than the same period
in 2023. This higher FuM level during the period improved cashflows and
allowed CLIG to accumulate reserves and increase our dividend cover.
Investment performance was good across almost all strategies, but net flows
from 1st July 2024 through 31st December 2024 were negative. FuM were $9.9
billion at 31st December 2024, a decrease of c.3% as compared to $10.2 billion
at 30th June 2024.
We were happy with asset growth progression over the past year, but witnessed
several outflows as we approached year end. These coincided with talk of
tariffs and trade wars as the prospect of a second Trump presidency was
absorbed by markets. In the short term, this underpinned the US and sparked a
sell-off in international and emerging markets. Contrast these fourth quarter
performances: S&P 500 +2.4%, NASDAQ Composite +6.4%, MSCI World -0.27%,
MSCI Emerging Markets -8.0% (source: Bloomberg).
For added perspective, consider the Group's FuM growth over the past five and
ten years from $3.9 billion as at 30th June 2014 to $5.4 billion at 30th June
2019 and $10.2 billion as at 30th June 2024. We are pleased with this healthy
growth in assets. While this upward stair step pattern appears very orderly in
hindsight, FuM volatility was a constant feature throughout the period - such
is the nature of markets.
It is important to note that not only have FuM grown at CLIG, but the
composition of funds managed has also changed meaningfully. Four factors have
largely driven this change. First, the merger with Karpus Investment
Management (KIM) in 2020 means that about 40% of Group assets are now being
managed by KIM (out of that 65.5% in fixed income products and 34.5% in
equities). Second, assets managed by our excellent International team have
grown to 21% of Group FuM. Third, Emerging Markets, which have been out of
favour for a protracted period, decreased to 35% from c.90% back in 2014.
Lastly, our diversification assets, made up of a variety of strategies
including Opportunistic Value (OV), Listed Private Equity (LPE), High Yield
and Global are taking root and have grown to nearly 5% of Group FuM. For many
years, your team at CLIG has worked diligently to manage the migration from a
sole focus in EM to now having about two thirds of FuM outside EM. This
dynamic transformation, organic and inorganic, improves the risk profile of
the Group and opens up new avenues for growth and further diversification.
Performance
Several of our shareholders have asked for more information on performance, so
I am taking this opportunity to go into some detail. Our OV team at CLIM
delivered strong absolute returns and outperformed their indices by between 6%
and 16%. Exceptional KIM performance deserves to be highlighted as well,
particularly the team's Taxable Fixed Income and Tax-Sensitive strategies,
comprising c.26% of Group FuM. These products outperformed their indices by
6.2% and 7.7% in 2024, a staggering feat in fixed income. The vast majority of
our CLIM and KIM-managed International mandates nicely outperformed their
various indices by between 1% and 3%. Similarly, most of our EM mandates
outperformed their indices in a range of 0.2% and 1.7%. And our LPE strategies
performed strongly, with the composite delivering 20.9% on an absolute basis
net of fees, outperforming their hurdle rate by 12.9% points.
ESG
Historically, we have secured renewable energy for our London and Rochester NY
offices. It is heartening to know that this past year, the energy consumed by
CLIM's West Chester, Pennsylvania office came from renewable sources. This
improvement began in February 2024 and is ongoing. You will find more detail
in the CEO Review.
Business travel increased during the period with growth in our marketing
efforts as the team met clients and prospects. To offset the impact of
increased business travel, the Group will continue with its carbon offset
programme.
All employees regularly receive a training programme directed towards
diversity, equity and inclusion. To reinforce awareness of their role in
protecting our network infrastructure, all employees receive monthly training
on the critical issue of cybersecurity.
Alongside adherence to CLIG's governance obligations at Board level, the Group
is strongly committed to regular workforce engagement sessions to develop a
closer relationship between employees and the Non-Executive Directors (NEDs).
We encourage good relations between the NEDs and employees.
Your Board
Tom Griffith (CEO), Peter Roth (Senior Independent Director and Chairman of
Audit and Risk Committee), Sarah Ing (Chair of Remuneration Committee) and I
are the members of your Board of Directors. Our working relationship remains
constructive and our focus continues to be on ensuring a stable and supportive
environment for our teams and efficient management of the business for all
stakeholders. We are in the late stages of recruiting another NED and look
forward to providing you a timely update as we have it.
Dividends
Your Board is declaring an unchanged interim dividend of 11p per share. We
continue to believe that the 1.2 times dividend cover policy based on a
rolling five-year period provides a prudent template that serves to protect
shareholders from volatility that can affect profits of asset management
companies. The Board applies this policy using Underlying Profits†. The
interim dividend will be paid on 3rd April 2025 to those shareholders
registered at the close of business on 7th March 2025.
Shareholder engagement
During 2024, our executive team took a number of constructive steps to
facilitate engagement with our existing and potential shareholders. Most
recently in November 2024, our CEO, CFO and Head of Business Development
hosted an effective meeting for hundreds of existing and prospective
shareholders in CLIG. The session was on the Investor Meet Company platform
and can be viewed by going to the Resources/Video Content section on our
website www.clig.co.uk. Please take the time to watch as the team successfully
conveys a number of important elements about CLIG.
Outlook
2024 was CLIG's 33rd year in operation and its 18th year as a public company.
We merged with KIM in October 2020, it having started in 1986. 2024 therefore
marked its 38th year. Over this long span, the Group encountered all manner of
markets, learning and adapting along the way. Predicting markets is like
predicting the weather, but what we can look at and extrapolate from with some
confidence is closed-end fund (CEF) discounts and these continue to be quite
wide, providing attractive entry points. Please refer to Figure 4 on page 9 of
the interim report within the CEO Review for a graph detailing investment
trust discount levels since 1990.
Many markets outside the US have been under a cloud while the US has attracted
huge interest and capital flows. It is not surprising, therefore, that we are
hearing about attractive valuations and opportunities from our international
and EM teams. In addition, our investment teams at CLIM and KIM continue to
successfully engage in corporate governance initiatives, working with CEF
Boards to narrow discounts. Our teams are active, highly focused and we remain
constructive on the outlook for performance at CLIG.
Conclusion
CLIG continues to strive for excellence for all its stakeholders while
exercising care and patience in managing the business. Management and your
Board continue to look for ways to improve processes and efficiency at your
Company. Investment performance for the rolling six months and the calendar
year was strong in the large majority of the Group's investment strategies. It
is our performance record that will assist with client retention and in
converting prospects into long-term supporters.
I would like to thank our teams for their continued fine work and all our
stakeholders for their support. Thank you for your interest in City of London
Investment Group.
Sincerely yours,
Rian Dartnell
Chair
24th February 2025
†This is an Alternative Performance Measure (APM). Please refer to CEO
review for more details on APMs.
CHIEF EXECUTIVE OFFICER'S REVIEW
Monetary easing
In September 2024, the US Federal Reserve began to lower US interest rates by
a larger than expected 50 basis points, followed in both November and December
by 25 basis point cuts, reducing the Federal Funds rate to 4.25%-4.50% by year
end. The theme of monetary easing is one that global capital markets have
embraced, after eleven US rate hikes since March 2022, while the US dollar
continues to trade strongly against most global currencies.
The Trump administration has threatened tariffs and other protectionist trade
measures. Trading partners are eyeing the trade measures nervously, while
international and emerging markets are hoping for a weaker US dollar which
should increase demand for commodities, including oil, and boost foreign
financial asset returns when converted to US dollars. After more than a decade
of US exceptionalism in bond and equity markets, there might be a valuation
opportunity for international and emerging markets to attract capital from US
investors.
While threats of a full-blown trade war are being raised, the most likely
scenario is for significant negotiation to take place among global trading
partners and for "managed trade" to become the norm. If progress can also be
made on ending the wars in Ukraine and the Middle East, expect financial
markets to trade higher in 2025. The mid-January ceasefire in the Middle East
can be viewed as a tentative start in terms of reducing tensions in the
region.
FuM & flows
As shareholders will have seen from our interim trading update (announced on
20th January 2025) and the monthly release of data on our website
www.clig.co.uk, Funds under Management (FuM) have decreased over the six
months to the end of the calendar year (see Figure 1 below) due to net
outflows, as shown in Figure 2 below.
The marketing team is focused on raising assets based on the good long-term
performance of the Group's investment management subsidiaries. Ten-year
quartile charts of strategies managed by both operating subsidiaries are
reflected in Figure 3 on page 8 of the interim report.
Client interest for our Listed Private Equity (LPE) strategy, managed by City
of London Investment Management (CLIM) where an investment trust structure
provides liquid access to private equity exposure with the transparency of
regularly published net asset values, remains strong. We will split out the
LPE strategy in our Q3 Trading Update and the FY 2025 Annual Report &
Accounts, as LPE is a further avenue for diversification for the Group.
Additionally, within CLIM, we had positive inflows in our Opportunistic Value
strategy, as institutional clients are looking for specific tradeable
opportunities that the team provides. Net outflows were seen in our two
flagship strategies, Emerging Markets (EM) and International Equity (INTL),
which is not surprising considering the increasing demand for US assets based
on the outperformance of the US equity market and the strong dollar. At CLIM,
the focus continues to be on ensuring that current clients are looked after
from a performance perspective, so that when the overall environment turns
towards non-US equity assets, our strategies retain their compelling long-term
performance metrics.
As shown in Figure 3 on page 8 of the interim report, the Karpus Investment
Management (KIM) team continues to outperform their peers over the ten-year
period. KIM's overall FuM increased over the six months due to outperformance
of the underlying asset classes although net flows were negative as shown in
Figure 2 below. Over the six months, we have continued to bolster the
marketing and relationship management teams at KIM, in order to find new
avenues for growth and clients.
Currently, for US retail investors, interest rates in fixed rate bank deposits
or money market vehicles offered by financial institutions remain higher than
in recent memory and are in competition to an active fixed income manager.
KIM's outflows during the six months fall into one of three primary
categories: 1) the retail client base who are required to withdraw retirement
assets by calendar year end due to US regulations, 2) high-net-worth clients
with considerable wealth who withdrew assets to deploy capital for life events
and/or business opportunities, and 3) institutional pension plan clients that
were impacted by regulation changes which drove the outflows.
Figure 1. CLIG - FuM by line of business ($m)
CLIM 30 Jun 2021 30 Jun 2022 30 Jun 2023 30 Jun 2024 31 Dec 2024
$m % of CLIM total % of CLIM total* $m % of CLIM total % of CLIG total $m % of CLIM total % of CLIG total $m % of CLIM total % of CLIG total $m % of CLIM total % of CLIG total
Emerging Markets 5,393 72% 47% 3,703 64% 40% 3,580 61% 38% 3,568 56% 35% 3,471 58% 35%
International 1,880 25% 17% 1,812 32% 20% 1,983 34% 21% 2,394 38% 23% 2,091 35% 21%
Opportunistic Value 231 3% 2% 193 3% 2% 244 4% 3% 251 4% 3% 286 5% 3%
Frontier 13 0% 0% 9 0% 0% 9 0% 0% 10 0% 0% 11 0% 0%
Other/REIT 13 0% 0% 74 1% 1% 88 1% 1% 94 2% 1% 140 2% 1%
CLIM total 7,530 100% 66% 5,791 100% 63% 5,904 100% 63% 6,317 100% 62% 5,999 100% 60%
KIM 30 Jun 2021 30 Jun 2022 30 Jun 2023 30 Jun 2024 31 Dec 2024
$m % of KIM total % of KIM total* $m % of KIM total % of CLIG total $m % of KIM total % of CLIG total $m % of KIM total % of CLIG total $m % of KIM total % of CLIG total
Retail 2,804 72% 24% 2,419 70% 26% 2,441 69% 26% 2,655 68% 26% 2,760 70% 28%
Institutional 1,115 28% 10% 1,014 30% 11% 1,079 31% 11% 1,269 32% 12% 1,187 33% 12%
KIM total 3,919 100% 34% 3,433 100% 37% 3,520 100% 37% 3,924 100% 38% 3,947 100% 40%
CLIG total 11,449 100% 9,224 100% 9,424 100% 10,241 100% 9,946 100%
Figure 2. Net investment flows ($'000)
CLIM FYE Jun 2021 FYE Jun 2022 FYE Jun 2023 FYE Jun 2024 HYE Dec 2024
Emerging Markets (275,493) (315,770) (205,924) (424,101) (157,416)
International (14,145) 452,554 (50,824) 153,371 (332,208)
Opportunistic Value (102,663) 617 34942 (33,237) 23,300
Frontier (168,843) (4,748) - - -
Other/REIT - 79,133 (5,709) (12,290) 40,000
CLIM total (561,144) 211,786 (227,515) (316,257) (426,324)
KIM FYE Jun 2021* FYE Jun 2022 FYE Jun 2023 FYE Jun 2024 HYE Dec 2024
Retail (104,222) (106,444) (141,952) (39,587) (19,193)
Institutional (130,911) (3,302) 12,530 35,749 (118,257)
KIM total (235,133) (109,746) (129,422) (3,838) (137,450)
CLIG total (796,277) 102,040 (356,937) (320,095) (563,774)
* Includes net investment flows for Retail (24,407) and Institutional (20,264)
pertaining to period before 1st October (pre-merger).
Value in closed-end funds
Our two operating subsidiaries continue to see value and opportunities in
their various closed-end funds (CEFs) investment universes. Discounts in
US-listed CEFs that invest in non-US equities remain wide due to the ongoing
outperformance of assets offering US exposure, despite a strong year of
relative and absolute performance. Discounts in UK-listed investment trusts
also remain wide as the expansion of passive options in the UK marketplace
provide competition to the c.150-year-old investment trust industry. Figure 4
on page 9 of the interim report provides a long-term view of the investment
trust discount with the universe of investment trusts excluding 3i (blue line)
remaining historically wide.
There are two positive outcomes we have seen over the past year: 1) an
increase in corporate governance activity driven by CLIM and KIM as well as
other investors, and 2) an increase in non-traditional offerings via
investment trusts. The Association of Investment Companies (AIC) released
findings that 25 years ago (1999), 88% of investment trusts were invested in
equities. In 2024, that figure has fallen to 55%, as investment trusts are now
deploying their capital in under-invested avenues, such as private credit,
infrastructure, and property. These asset classes that need a longer-term time
horizon are tailor-made for the investment trust structure, where the manager
does not have to be concerned with managing daily cash flows or raising money
for redemptions.
Financial results
Net fee income rose by 10% in the first six months of FY2025 to $35.3 million
compared to the same period in FY2024 ($32.2 million) due to higher average
FuM of $10.3 billion over the current period compared to $9.2 billion in the
first six months of FY2024.
The Group's profit before tax increased c.14% for the six months ended 31st
December 2024 to $12.6 million as compared to $11.1 million for the six months
ended 31st December 2023. Underlying profit before tax† for the six months
ended 31st December 2024 was also higher by c.14% at $15.2 million as compared
to $13.3 million for the six months ended 31st December 2023.
EPS for the six months ended 31st December 2024 increased by c.12% to 19.0¢
(14.7p†) per share from 16.9¢ (13.4p†) per share for the six months ended
31st December 2023. Underlying EPS† for the six months ended 31st December
2024 increased by c.12% to 22.9¢ (17.8p) per share from 20.4¢ (16.2p) per
share for the six months ended 31st December 2023.
The Group's fee income and the bulk of expenses are incurred in US dollars;
however, c.32% of Group overheads are incurred in sterling that are subject to
USD/GBP currency rate fluctuations. On average, US dollars weakened by c.2%
against sterling to 1.287 for the six months ended 31st December 2024 from
1.256 for the six months ended 31st December 2023. The weaker US dollar meant
that our sterling-denominated expenses cost more in dollar terms.
We continue to review expenses across the Group. Total administrative expenses
for the six months ended 31st December 2024 were c.6% higher at $23.6 million
as compared to $22.2 million for the six months ended 31st December 2023. The
increase primarily relates to higher legal & professional fees, additional
marketing resources, an increase in travel costs to meet clients and
prospects, and the impact of US dollar weakening over costs denominated in
sterling. From a cost reduction perspective, we are on track to reduce our
costs by c.$3 million on an annualised basis.
Dividend cover chart
We have provided an illustrative framework on our website at
https://clig.com/dividend-cover/ to enable interested parties to calculate our
post-tax profits based upon some key assumptions. The dividend cover chart
shows the quarterly estimated cost of a maintained dividend against actual
post-tax profits for last year, the current year and the assumed post-tax
profit for next financial year based upon assumptions included in the chart.
Alternative Performance Measures
The Directors use the following Alternative Performance Measures (APMs) to
evaluate the performance of the Group as a whole:
Earnings per share in pence - Earnings per share in US dollars as per the
income statement is converted to sterling using the average exchange rate for
the period. Refer to note 6 in the interim financial statements.
Underlying profit before tax - Profit before tax, adjusted for gain/loss on
investments and amortisation of intangibles. This provides a measure of the
profitability of the Group for management's decision-making.
Underlying earnings per share in pence - CLIG's shares are quoted on the
London Stock Exchange therefore the dividend is declared in sterling.
Underlying profit before tax, adjusted for tax as per the income statement and
the tax effect of adjustments, are divided by the weighted average number of
shares in issue as at the period end. Underlying earnings per share is
converted to sterling using the average exchange rate for the period. Refer to
the reconciliation on note 6 in the financial statements.
Six months ended Six months ended Year ended
31st Dec 2024 31st Dec 2023 30th Jun 2024
$'000 $'000 $'000
Profit before tax 12,592 11,069 22,621
Add back/(deduct):
Gain on investments (234) (560) (1,051)
Amortisation on acquired intangibles 2,799 2,799 5,599
Underlying profit before tax 15,157 13,308 27,169
CLIG KPI
We retain the share price KPI to show the total return of CLIG over a market
cycle. The goal of this KPI is for the total return (share price plus
dividends) to compound annually in a range of 7.5% to 12.5% over a five-year
period.
As seen in Figure 5 on page 11 of the interim report, for the five years ended
31st December 2024, CLIG's cumulative total return was 35.1%, or 6.2%
annualised.
For the full 2024 calendar year, CLIG's cumulative total return, inclusive of
dividends, was 36.6% in the currency of listing (sterling). The share price,
excluding dividends, ended the calendar year at 395 pence, which was an
increase of 24.6% from the starting price of 317 pence.
Since listing in April 2006 through 31st December 2024, CLIG's cumulative
total return was 765%, or 12.2% annualised. Please note that all figures are
sourced from Bloomberg.
Corporate Governance and stakeholders
In last year's interim statement, we reiterated comments from our previous
Chair, Barry Aling, that "CLIG is committed to meeting the standards of our UK
listing although it has created a meaningful burden in terms of human and
financial resources." CLIG remains committed to the UK market and our UK
listing, but we would be remiss if we did not again reiterate the reality of
the situation around UK public markets. Bluntly stated, the regulatory burden
of remaining listed in London is real. We are monitoring the other UK
companies that are announcing plans to move their primary listing to non-UK
exchanges, and we continue to monitor the lack of growth in new listings in
London.
We have made changes from a corporate perspective over the past two years to
be more transparent of our unique situation. Last year, we converted our
reporting currency to US dollars, reflecting that c.99% of our revenues were
in dollars, and on 2nd December 2024, we announced that CLIG is qualified to
trade on the OTCQX ® Best Market under the symbol "CLIUF". Our goal is to
enhance our visibility and improve access for our US investors, which include
four of our nine largest shareholders (excluding current employees).
Additionally, we have increased our efforts to communicate directly with our
UK-based individual shareholders via Investor Meet, to ensure that they have
opportunities to receive updates on the CLIG story directly from management.
Regarding Board composition, we announced alongside our FY2024 annual results
that Tazim Essani would not seek re-election at the October AGM. We
appreciated Tazim's advice, counsel, and oversight during her tenure as a CLIG
Director.
The Nomination Committee will provide an update to all shareholders on the
future composition of the Board when appropriate.
Environmental reporting update
Employees and management of the Group are committed to protecting the
environment in which we operate. We provide investment management services to
our clients which have a relatively modest direct environmental impact. As
noted within our FY2024 Annual Report and Accounts, we plan to reduce
emissions where we can, and we implemented a program to offset emissions where
we cannot reduce. Below are descriptions of actions taken at the Group level
to 1) reduce carbon emissions and 2) offset carbon emissions.
In terms of reducing carbon emissions, the electricity supplied to our three
largest offices in London (UK), Rochester (US) and West Chester (US) is either
powered primarily by renewable sources or is supplied via contracts backed by
renewable energy sources.
In terms of offsetting carbon emissions, we provided a review of our carbon
offset programme within our Task Force on Climate-Related Financial
Disclosures (TCFD) section (pages 37-45) in the FY2024 Annual Report &
Accounts. We will continue to use the TCFD section in our Annual Reports &
Accounts to provide detail on our environmental initiatives. Unlike FY2024,
where we completed two rounds of carbon offsets, in FY2025, we are going to
complete one purchase at the end of the financial year, to simplify reporting.
Cybersecurity update
Employee education on cybersecurity risks, combined with a project to reduce
the complexity of our IT infrastructure, remained our priorities during the
prior six months. From an employee education perspective, our colleagues
continue to receive monthly training on a rotating list of cybersecurity
topics and risks. Additionally, we have worked with our external education
vendor to fine-tune and improve the impact of our internal email phishing
tests that are sent to employees monthly. From an IT infrastructure
perspective, our IT department continued making progress on their goal to
reduce network complexity by removing unnecessary servers and streamlining
internal processes.
CLIG outlook
As an active investment manager, our priority of delivering investment
outperformance against a relevant benchmark for our clients is paramount.
Throughout the calendar year 2024, our investment teams delivered
outperformance for our clients, which sets the stage for our marketing and
client servicing efforts in calendar year 2025. CEF discounts remain wide,
which allow for existing and potential clients to understand and evaluate the
value in the investment universe. Additionally, the potential for corporate
governance activity provides a compelling opportunity.
CLIG continues to position our investment teams in a manner to take advantage
of client demand in various asset classes, including listed private equity
investment trusts in the UK, listed international CEFs, and municipal CEFs in
the US. We have been patiently waiting for the US-centric investment focus to
wane, which may be driven by further monetary easing and/or the shift that may
come from the second Trump administration.
Success rarely happens/occurs in a straight line, particularly in the volatile
asset management business. While client flows during the previous quarter did
not meet our expectations, management and our colleagues are committed to
growth in FuM through the continued performance of our underlying strategies.
As a Group, we will continue to go further together, working on behalf our
clients, colleagues, and shareholders.
Tom Griffith
Chief Executive Officer
24th February 2025
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31ST DECEMBER 2024
Six months ended Six months ended Year ended
31st Dec 2024 31st Dec 2023 30th June 2024
(restated)
(unaudited) (unaudited) (audited)
Note $'000 $'000 $'000
Revenue
Gross fee income 2 36,973 33,788 69,453
Commissions payable (978) (876) (1,811)
Custody fees payable (699) (725) (1,475)
Net fee income 35,296 32,187 66,167
Administrative expenses
Employee costs 15,408 14,991 30,925
Other administrative expenses 4,871 3,898 8,177
Depreciation and amortisation 3,275 3,284 6,574
(23,554) (22,173) (45,676)
Operating profit 11,742 10,014 20,491
Finance income 3 815 697 1,460
Finance expense 4 (199) (202) (381)
Gain on investments 5 234 560 1,051
Profit before taxation 12,592 11,069 22,621
Income tax expense (3,301) (2,854) (5,506)
Profit for the period 9,291 8,215 17,115
Profit attributable to:
Equity shareholders of the parent 9,291 8,215 17,115
Basic earnings per share (cents) 6 19.0 16.9 35.1
Diluted earnings per share (cents) 6 18.7 16.5 34.4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31ST DECEMBER 2024
Six months ended Six months ended Year ended
31st Dec 2024 31st Dec 2023 30th June 2024
(restated)
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Profit for the period 9,291 8,215 17,115
Other comprehensive income:
Items that may be subsequently reclassified to income statement
Foreign currency translation difference - (1) (1)
Total comprehensive income for the period 9,291 8,214 17,114
Attributable to:
Equity shareholders of the parent 9,291 8,214 17,114
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31ST DECEMBER 2024
31st Dec 2024 31st Dec 2023 30th June 2024
(restated)
(unaudited) (unaudited) (audited)
Note $'000 $'000 $'000
Non‐current assets
Property and equipment 2 1,028 1,241 1,128
Right-of-use assets 2 4,747 5,196 5,076
Intangible assets 2,7 120,086 125,657 122,853
Other financial assets 12 5,949 5,396 5,750
Deferred tax asset 1,681 1,096 1,879
133,491 138,586 136,686
Current assets
Trade and other receivables 7,888 10,356 8,380
Current tax receivable - 396 167
Cash and cash equivalents 30,198 25,912 33,738
38,086 36,664 42,285
Current liabilities
Trade and other payables (7,239) (9,014) (10,432)
Lease liabilities (483) (421) (526)
Current tax payable (7) - -
Creditors, amounts falling due within one year (7,729) (9,435) (10,958)
Net current assets 30,357 27,229 31,327
Total assets less current liabilities 163,848 165,815 168,013
Non‐current liabilities
Lease liabilities (4,975) (5,263) (5,207)
Deferred tax liability (8,451) (9,210) (9,162)
Net assets 150,422 151,342 153,644
Capital and reserves
Share capital 644 644 644
Share premium account 2,866 2,866 2,866
Merger relief reserve 128,984 128,984 128,984
Investment in own shares 8 (7,165) (9,073) (9,227)
Share option reserve 198 165 187
EIP share reserve 1,325 1,664 2,046
Foreign currency translation reserve (1,011) (1,011) (1,011)
Capital redemption reserve 33 33 33
Retained earnings 24,548 27,070 29,122
Attributable to:
Equity shareholders of the parent 150,422 151,342 153,644
Total equity 150,422 151,342 153,644
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31ST DECEMBER 2024
Total
Foreign currency translation Capital redemption attributable
Share premium account Investment Share option reserve EIP reserve reserve to
Share capital $'000 Merger relief reserve in own $'000 share $'000 $'000 Retained share-
$'000 $'000 shares reserve earnings holders
$'000 $'000 $'000 $'000
At 30th June 2024 644 2,866 128,984 (9,227) 187 2,046 (1,011) 33 29,122 153,644
Profit for the period - - - - - - - - 9,291 9,291
Other comprehensive income - - - - - - - - - -
Total comprehensive income - - - - - - - - 9,291 9,291
Transactions with owners
Share option exercise - - - 81 3 - - - (3) 81
Purchase of own shares - - - (266) - - - - - (266)
Share-based payment - - - - 8 498 - - - 506
EIP vesting/forfeiture - - - 2,247 - (1,219) - - - 1,028
Deferred tax on share options - - - - - - - - 4 4
Dividends paid - - - - - - - - (13,866) (13,866)
Total transactions with owners
- - - 2,062 11 (721) - - (13,865) (12,513)
As at
31st December 2024 644 2,866 128,984 (7,165) 198 1,325 (1,011) 33 24,548 150,422
Total
Foreign currency translation attributable
Share premium account Investment Share option reserve EIP reserve Capital redemption to
Share capital $'000 Merger relief reserve in own $'000 share $'000 reserve Retained share-
$'000 $'000 shares reserve $'000 earnings holders
$'000 $'000 $'000 $'000
At 1st July 2023 644 2,866 128,984 (10,301) 170 2,200 (1,010) 33 31,882 155,468
Profit for the period - - - - - - - - 8,215 8,215
Other comprehensive income - - - - - - (1) - - (1)
Total comprehensive income
- - - - - - (1) - 8,215 8,214
Transactions with owners
Share option exercise - - - 154 (18) - - - 18 154
Purchase of own shares - - - (1,112) - - - - - (1,112)
Share-based payment - - - - 22 567 - - - 589
EIP vesting/forfeiture - - - 2,186 - (1,103) - - - 1,083
Deferred tax on share options - - - - (9) - - - (24) (33)
Current tax on share options - - - - - - - - 27 27
Foreign exchange translation - - - - - - - - 1 1
Dividends paid - - - - - - - - (13,049) (13,049)
Total transactions with owners
- - - 1,228 (5) (536) - - (13,027) (12,340)
As at
31st December 2023 (restated) 644 2,866 128,984 (9,073) 165 1,664 (1,011) 33 27,070 151,342
Total
Foreign currency translation Capital redemption attributable
Share premium account Investment Share option reserve EIP reserve reserve to
Share capital $'000 Merger relief reserve in own $'000 share $'000 $'000 Retained share-
$'000 $'000 shares reserve earnings holders
$'000 $'000 $'000 $'000
At 1st July 2023 644 2,866 128,984 (10,301) 170 2,200 (1,010) 33 31,882 155,468
Profit for the period - - - - - - - - 17,115 17,115
Other comprehensive income - - - - - - (1) - - (1)
Total comprehensive income - - - - - - (1) - 17,115 17,114
Transactions with owners
Share option exercise - - - 154 (9) - - - 9 154
Purchase of own shares - - - (1,315) - - - - - (1,315)
Share-based payment - - - - 35 1,039 - - - 1,074
EIP vesting/forfeiture - - - 2,235 - (1,193) - - - 1,042
Deferred tax on share options - - - - (9) - - - (22) (31)
Current tax on share options - - - - - - - - 27 27
Dividends paid - - - - - - - (19,889) (19,889)
Total transactions with owners - - - 1,074 17 (154) - - (19,875) (18,938)
As at 30th June 2024 644 2,866 128,984 (9,227) 187 2,046 (1,011) 33 29,122 153,644
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31ST DECEMBER 2024
Six months ended Six months ended
Year ended
31st Dec 2024 31st Dec 2023 30th June 2024
(restated)
(unaudited) (unaudited) (audited)
Note $'000 $'000 $'000
Cash flow from operating activities
Profit before taxation 12,592 11,069 22,621
Adjustments for:
Depreciation of property and equipment 140 140 293
Depreciation of right-of-use assets 330 339 672
Amortisation of intangible assets 7 2,805 2,805 5,609
Share-based payment charge 9 22 35
EIP-related charge 741 1,044 1,438
Gain on investments 5 (234) (560) (1,051)
Interest receivable 3 (815) (697) (1,460)
Interest payable 4 6 17 24
Interest payable on lease liabilities 4 193 185 357
Translation adjustments 533 (142) 29
Cash generated from operations before changes in working capital
16,300 14,222 28,567
(Increase)/decrease in trade and other receivables (7) 498 (302)
(Decrease)/increase in trade and other payables (1,882) (1,131) 365
Cash generated from operations 14,411 13,589 28,630
Interest received 3 815 697 1,460
Interest paid 4 (6) (17) (24)
Interest paid on leased assets 4 (193) (185) (357)
Taxation paid (3,694) (4,773) (8,122)
Net cash generated from operating activities 11,333 9,311 21,587
Cash flow from investing activities
Purchase of property and equipment and intangibles (79) (460) (500)
Purchase of non-current financial assets (1,096) (722) (4,594)
Proceeds from sale of non-current financial assets 1,097 3,258 9,997
Net cash (used in)/generated from investing activities (78) 2,076 4,903
Cash flow from financing activities
Ordinary dividends paid 9 (13,866) (13,049) (19,889)
Purchase of own shares by employee benefit trust (266) (1,112) (1,315)
Proceeds from sale of own shares by employee benefit trust 81 154 154
Payment of lease liabilities (268) (80) (231)
Net cash used in financing activities (14,319) (14,087) (21,281)
Net (decrease)/increase in cash and cash equivalents (3,064) (2,700) 5,209
Cash and cash equivalents at start of period 33,738 28,569 28,569
Effect of exchange rate changes (476) 43 (40)
Cash and cash equivalents at end of period 30,198 25,912 33,738
NOTES
1 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
The financial information contained herein is unaudited and does not comprise
statutory financial information within the meaning of section 434 of the
Companies Act 2006. The information for the year ended 30th June 2024 has been
extracted from the latest published audited accounts which have been delivered
to the Registrar of Companies. The report of the independent auditor on those
financial statements contained no qualification or statement under s498(2) or
(3) of the Companies Act 2006.
These interim financial statements have been prepared in accordance with the
International Accounting Standard 34, "Interim Financial Reporting" as
contained in UK-adopted International Accounting Standards and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial Conduct
Authority. The accounting policies adopted and the estimates and judgements
used in the preparation of the unaudited consolidated financial statements are
consistent with those set out and applied in the statutory accounts of the
Group for the year ended 30th June 2024, which were prepared in accordance
with UK-adopted International Accounting Standards.
The consolidated financial information contained within this report
incorporates the results, cash flows and financial position of the Company and
its subsidiaries for the period to 31st December 2024.
Group companies are regulated and perform annual capital adequacy and
liquidity assessments, which incorporates stress testing based on loss of
revenue on the Group's financial position over a three-year period. The Group
has performed additional stress tests using several different scenario levels,
over a three-year period on the Group's financial position from 31st December
2024.
The Group's financial projections, capital adequacy and liquidity assessments
provide comfort that the Group has adequate financial and regulatory resources
to continue in operational existence for the foreseeable future. Accordingly,
the Directors continue to adopt the going concern basis of accounting in
preparing the interim financial statements.
New or amended accounting standards and interpretations adopted
The Group has adopted all the new or amended accounting standards and
interpretations issued by the International Accounting Standards Board (IASB)
that are mandatory for the current reporting period. Any new or amended
accounting standards that are not mandatory have not been early adopted. None
of the standards not yet effective are expected to have a material impact on
the Group's financial statements.
2 SEGMENTAL ANALYSIS
The Directors consider that the Group has only one reportable segment, namely
asset management, and hence only analysis by geographical location is given.
Europe (ex UK)
USA Canada UK $'000 Other Total
$'000 $'000 $'000 $'000 $'000
Six months to 31st Dec 2024
Gross fee income 35,728 761 - 415 69 36,973
Non-current assets:
Property and equipment 830 - 181 - 17 1,028
Right-of-use assets 3,843 - 812 - 92 4,747
Intangible assets 120,034 - 52 - - 120,086
Six months to 31st Dec 2023 (restated)
Gross fee income 32,473 722 - 549 44 33,788
Non-current assets:
Property and equipment 975 - 247 - 19 1,241
Right-of-use assets 4,131 - 1,040 - 25 5,196
Intangible assets 125,633 - 24 - - 125,657
Year to 30th June 2024
Gross fee income 66,885 1,465 - 1,001 102 69,453
Non-current assets:
Property and equipment 901 - 205 - 22 1,128
Right-of-use assets 4,030 - 925 - 121 5,076
Intangible assets 122,833 - 20 - - 122,853
3 FINANCE INCOME
Six months ended Six months ended
31st Dec 2024 31st Dec 2023 Year ended
30th June 2024
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Interest on cash and cash equivalents 815 697 1,460
4 FINANCE EXPENSE
Six months ended Six months ended
31st Dec 2024 31st Dec 2023 Year ended
30th June 2024
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Interest payable on lease liabilities 193 185 357
Interest payable other 6 17 24
199 202 381
5 GAIN ON INVESTMENTS
Six months ended Six months ended
31st Dec 2024 31st Dec 2023 Year ended
30th June 2024
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Unrealised gain on investments 174 44 180
Realised gain on investments 60 516 871
234 560 1,051
6 EARNINGS PER SHARE
The calculation of earnings per share is based on the profit for the period
attributable to the equity shareholders of the parent divided by the weighted
average number of ordinary shares in issue for the six months ended 31st
December 2024.
As set out in note 8 the Employee Benefit Trust held 1,396,147 ordinary shares
in the Company as at 31st December 2024. The Trustees of the Trust have waived
all rights to dividends associated with these shares. In accordance with IAS
33 "Earnings per share", the ordinary shares held by the Employee Benefit
Trust have been excluded from the calculation of the weighted average number
of ordinary shares in issue.
The calculation of diluted earnings per share is based on the profit for the
period attributable to the equity shareholders of the parent divided by the
diluted weighted average number of ordinary shares in issue for the six months
ended 31st December 2024.
Reported earnings per share
Six months ended Six months ended
31st Dec 2024 31st Dec 2023 Year ended
30th June 2024
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Profit attributable to the equity shareholders of the parent for basic 9,291 8,215 17,115
earnings
Number of shares Number of shares Number of shares
Issued ordinary shares as at 1st July 50,679,095 50,679,095 50,679,095
Effect of own shares held by EBT (1,653,585) (1,939,759) (1,875,340)
Weighted average shares in issue 49,025,510 48,739,336 48,803,755
Effect of movements in share options and EIP awards 735,272 953,028 978,997
Diluted weighted average shares in issue 49,760,782 49,692,364 49,782,752
Basic earnings per share (cents) 19.0 16.9 35.1
Diluted earnings per share (cents) 18.7 16.5 34.4
Basic earnings per share (pence)^ 14.7 13.4 27.8
Diluted earnings per share (pence)^ 14.5 13.2 27.3
Underlying earnings per share*
Underlying earnings per share is based on the underlying profit after tax*,
where profit after tax is adjusted for gain/loss on investments, amortisation
of acquired intangibles and their related tax impact.
Underlying profit for calculating underlying earnings per share
Six months ended Six months ended
31st Dec 2024 31st Dec 2023 Year ended
30th June 2024
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Profit before tax 12,592 11,069 22,621
Add back/(deduct):
- Gain on investments (234) (560) (1,051)
- Amortisation on acquired intangibles 2,799 2,799 5,599
Underlying profit before tax 15,157 13,308 27,169
Tax expense as per the consolidated income statement (3,301) (2,854) (5,506)
Tax effect on fair value adjustment 58 141 261
Unwinding of deferred tax liability (672) (672) (1,344)
Underlying profit after tax for the calculation of underlying earnings per 11,242 9,923 20,580
share
Underlying earnings per share (cents) 22.9 20.4 42.2
Underlying diluted earnings per share (cents) 22.6 20.0 41.3
Underlying earnings per share (pence)^ 17.8 16.2 33.5
Underlying diluted earnings per share (pence)^ 17.6 15.9 32.8
^ Converted to sterling using the average exchange rate for the relevant
period.
* This is an Alternative Performance Measure (APM). Please refer to the CEO
review for more details on APMs.
7 INTANGIBLE ASSETS
31st December 2024 31st Dec 2023 30th Jun 2024
Goodwill Direct customer relationships Distribution channels Trade name Long term software Total Total Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Cost
At start of period 90,072 46,052 6,301 1,405 914 144,744 144,744 144,744
Additions - - - - 38 38 - -
At close of period 90,072 46,052 6,301 1,405 952 144,782 144,744 144,744
Amortisation charge
At start of period - 17,270 3,376 351 894 21,891 16,282 16,282
Charge for the period - 2,302 450 47 6 2,805 2,805 5,609
At close of period - 19,572 3,826 398 900 24,696 19,087 21,891
Net book value 90,072 26,480 2,475 1,007 52 120,086 125,657 122,853
Goodwill, direct customer relationships, distribution channels and trade name
acquired through a business combination relate to the merger with KIM on 1st
October 2020.
The fair values of KIM's direct customer relationships and the distribution
channels have been measured using a multi-period excess earnings method. The
model uses estimates of annual attrition driving revenue from existing
customers to derive a forecast series of cash flows, which are discounted to a
present value to determine the fair values of KIM's direct customer
relationships and the distribution channels.
The fair value of KIM's trade name has been measured using a relief from
royalty method. The model uses estimates of royalty rate and percentage of
revenue attributable to the trade name to derive a forecast series of cash
flows, which are discounted to a present value to determine the fair value of
KIM's trade name.
The total amortisation charged to the income statement for the six months
ended 31st December 2024 in relation to direct customer relationships,
distribution channels and trade name, was $2,799k (year ended 30th June 2024:
$5,599k; six months ended 31st December 2023: $2,799k).
Impairment
Goodwill acquired through business combination is in relation to the merger
with KIM and relates to the acquired workforce and future expected growth of
the Cash Generating Unit (CGU).
The Group's policy is to test goodwill arising on acquisition for impairment
annually, or more frequently if changes in circumstances indicate a possible
impairment. The Group has considered whether there have been any indicators of
impairment during the six months ended 31st December 2024 which would require
an impairment review to be performed. The Group has considered indicators of
impairment with regard to a number of factors, including those outlined in IAS
36 'Impairment of assets'. No indications of impairment of individual
intangible assets have been identified.
8 INVESTMENT IN OWN SHARES
Investment in own shares relates to City of London Investment Group PLC shares
held by an Employee Benefit Trust on behalf of City of London Investment Group
PLC.
At 31st December 2024 the Trust held 517,035 ordinary 1p shares (30th June
2024: 695,988; 31st December 2023: 593,236), of which 221,000 ordinary 1p
shares (30th June 2024 - 238,500; 31st December 2023: 241,000) were subject to
options in issue.
The Trust also held in custody 879,112 ordinary 1p shares (30th June 2024:
1,133,649; 31st December 2023: 1,196,133) for employees in relation to
restricted share awards granted under the Group's Employee Incentive Plan
(EIP).
The Trust has waived its entitlement to receive dividends in respect of the
total shares held (31st December 2024: 1,396,147; 30th June 2024: 1,829,637;
31st December 2023: 1,789,369).
9 DIVIDENDS
A final dividend of 22p per share (2023: 22p) (gross amount payable £11,149k;
net amount paid £10,757k ($13,866k)*) in respect of the year ended 30th June
2024 was paid on 7th November 2024.
An interim dividend of 11p per share (2024: 11p) (gross amount payable
£5,575k; net amount payable £5,421k*) in respect of the year ending 30th
June 2025 will be paid on 3rd April 2025 to members registered at the close of
business on 7th March 2025.
* Difference between gross and net amounts is due to shares held at EBT that
do not receive dividend.
10 PRINCIPAL RISKS AND UNCERTAINTIES
In the course of conducting its business operations, the Group is exposed to a
variety of risks including market, liquidity, operational and other risks that
may be material and require appropriate controls and on-going oversight.
The principal risks to which the Group will be exposed in the second half of
the financial year are substantially the same as those described in the last
annual report (see page 28 and 29 of the Annual Report and Accounts for the
year ended 30th June 2024), being the potential for loss of FuM as a result of
poor investment performance, client redemptions, breach of mandate guidelines
or material error, loss of key personnel, technology/IT, cybersecurity and
business continuity and legal and regulatory risks.
Changes in market prices, such as foreign exchange rates and equity prices
will affect the Group's income and the value of its investments.
Most of the Group's revenues, and a significant part of its expenses, are
denominated in US dollars. However, exchange rate movements will impact the
portion of Group expenses that are incurred in non-US dollars.
11 RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Company and its subsidiary
undertakings carry out transactions with related parties as defined under IAS
24 Related Party Disclosures. Material transactions are set out below:
(i) Transactions with key management personnel
Key management personnel are defined as Directors (both Executive and
Non-Executive) of City of London Investment Group PLC.
(a) The compensation paid to the Directors as well as their shareholdings in
the Group and dividends paid, did not affect the financial position or the
performance of the Group for the current reporting period. There were no
changes to the type and nature of the related party transactions from those
that were reported in the FY2024 Annual Report and Accounts.
(b) One of the Group's subsidiaries manages funds for one of its key
management personnel, for which it receives a fee. All transactions between
key management and their close family members and the Group's subsidiary are
on terms that are available to all employees of that Company. The amount
received in fees during the period was $7k (2023: $3k). There were no fees
outstanding as at the period end.
(c) A close member of a key management's personnel provides professional
services to the Group. The amount paid during the period for these services
was $11k. The amount outstanding at the period end was $0.4k.
(ii) Person with significant influence
One of the Group's subsidiaries manages funds for a person with significant
influence based on his shareholding in the Group. The amount received in fees
during the period was $49k (2023: $39k).
12 FINANCIAL INSTRUMENTS
The Group's financial assets include cash and cash equivalents, investments
and other receivables.
Its financial liabilities include accruals and other payables. The fair value
of the Group's financial assets and liabilities is materially the same as the
book value.
Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into levels
1 to 3 based on the degree to which the fair value is observable.
- Level 1: fair value derived from quoted prices (unadjusted) in active markets
for identical assets and liabilities.
- Level 2: fair value derived from inputs other than quoted prices included
within level 1 that are observable for the assets or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: fair value derived from valuation techniques that include inputs for
the asset or liability that are not based on observable market data.
The fair values of the financial instruments are determined as follows:
- Investments for hedging purposes are valued using the quoted bid price and
shown under level 1.
- Investments in own funds are determined with reference to the net asset value
(NAV) of the fund. Where the NAV is a quoted price the fair value is shown
under level 1, where the NAV is not a quoted price the fair value is shown
under level 2.
The level within which the financial asset or liability is classified is
determined based on the lowest level of significant input to the fair value
measurement.
31st December 2024 Level 1 Level 2 Level 3 Total
$'000 $'000 $'000 $'000
Financial assets at fair value through profit or loss
Investment in other non-current financial assets 5,897 52 - 5,949
Total 5,897 52 - 5,949
31st December 2023 Level 1 Level 2 Level 3 Total
$'000 $'000 $'000 $'000
Financial assets at fair value through profit or loss
Investment in other non-current financial assets 5,348 48 - 5,396
Total 5,348 48 - 5,396
30th June 2024 Level 1 Level 2 Level 3 Total
$'000 $'000 $'000 $'000
Financial assets at fair value through profit or loss
Investment in other non-current financial assets 5,700 50 - 5,750
Total 5,700 50 - 5,750
There were no financial liabilities at fair value at any of the reporting
periods.
Where there is an impairment in the investment in own funds, the loss is
reported in the income statement. No impairment was recognised during the
period or the preceding year.
13 GENERAL
The interim financial statements for the six months ended 31st December 2024
were approved by the Board on 24th February 2025. These financial statements
are unaudited, but they have been reviewed by the auditors, having regard to
International Standard on Review Engagements (UK) 2410 (ISRE (UK) 2410)
"Review of Interim Financial Information performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board.
Copies of this statement are available on our website www.clig.co.uk.
STATEMENT OF DIRECTOR'S RESPONSIBILITIES
The Directors confirm that to the best of our knowledge:
- The condensed set of financial statements has been
prepared in accordance with IAS34 Interim Financial Reporting as adopted by
the UK; and
- The Half Year Report includes a fair review of the
information required by:
DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The Directors of City of London Investment Group PLC are as listed in the
Annual Report and Accounts 2023/2024. A list of current Directors is
maintained at www.clig.co.uk.
By order of the Board
Tom Griffith
Chief Executive Officer
24th February 2025
INDEPENDENT REVIEW REPORT TO CITY OF LONDON INVESTMENT GROUP PLC
Conclusion
We have been engaged by City of London Investment Group plc (the 'company') to
review the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2024 which comprises the
Consolidated Income Statement, Consolidated Statement of Comprehensive income,
the Consolidated Balance sheet, Consolidated Cash Flow Statement and the
Consolidated Statement of Changes in Equity. We have read the other
information contained in the half-yearly financial report which compromises of
the Half Year Summary, Chair's statement, Chief Executive Officer's review and
notes to the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2024 is not prepared, in
all material respects, in accordance with UK-adopted International Accounting
Standard (IAS) 34, 'Interim Financial Reporting'.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by Financial Reporting Council
for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK-adopted international accounting standards. The
condensed set of financial statements included in this half yearly financial
report has been prepared in accordance with UK-adopted International
Accounting Standard 34, 'Interim Financial Reporting'.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK), however future events or conditions may cause the entity to
cease to continue as a going concern.
In our evaluation of the Directors' conclusions, we considered the inherent
risks associated with the group's business model including effects arising
from macro-economic uncertainties such as such as the impact of the Russian
invasion of Ukraine, rising inflation and geopolitical instability in the
Middle East, we assessed and challenged the reasonableness of estimates made
by the Directors and the related disclosures and analysed how those risks
might affect the group's financial resources or ability to continue operations
over the going concern period.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with UK-adopted International
Accounting Standard (IAS) 34, 'Interim Financial Reporting'.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report.
Our conclusion, including our Conclusions relating to going concern, are based
on procedures that are less extensive than audit procedures, as described in
the Basis for conclusion paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our review work has been undertaken so that we might state to the company
those matters we are required to state to it in an independent review report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our
review work, for this report, or for the conclusion we have formed.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants London
24th February 2025
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