REG - City of Lon Inv Grp - PRE-CLOSE TRADING UPDATE for year to 30 June 2022

City of London InvestmentAnnouncement

19/07/2022 07:00

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RNS Number : 8856S  City of London Investment Group PLC  19 July 2022

City of London Investment Group PLC

19 July 2022

 

The information contained within this announcement is deemed by the Group to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.



CITY OF LONDON INVESTMENT GROUP PLC

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

 

PRE-CLOSE TRADING UPDATE for the year to 30 June 2022

 

City of London (LSE: CLIG), a leading specialist asset management group
offering a range of institutional and retail products investing primarily in
closed-end funds ("CEFs"), provides a pre-close trading update for its
financial year ended 30 June 2022. The numbers that follow are unaudited.

 

On a consolidated basis, Funds under Management (FuM) were US$9.2 billion
(£7.6 billion) at 30 June 2022.  This compares with US$11.4 billion (£8.3
billion) at the Group's year end on 30 June 2021.  A breakdown by strategy
follows:

 

         FuM ($ million)                             Strategy Index
         Jun-22      Jun-21  %            Net                                      %
         (estimate)          inc/dec      Flows                                    inc/dec
 EM      3,703       5,393   (31%)        (316)      MSCI EM Net TR                (25.3%)
 KIM     3,433       3,919   (12%)        (110)      Not applicable
 INTL    1,812       1,880   (4%)         453        MSCI ACWI  ex US              (19.4%)
 OV      193         231     (16%)        1          ACWI/Barclays Global Agg      (15.2%)
 Other*  83          26      218%         74
         9,224       11,449               102

* includes Frontier, REIT and seed investments

 

Investment performance was behind relevant benchmarks for the bulk of CLIM's
assets due to a combination of country allocation in the Emerging Market
strategy and NAV performance at the underlying closed-end funds in the
International and Opportunistic Value strategies. KIM's equity and
fixed-income strategies outperformed their market indices over the period,
while US equity lagged its benchmark.

 

Net investment flows were US$102 million for the Group over the period, with
CLIM posting net gains, while KIM saw net outflows as clients reduced exposure
to markets due to ongoing volatility in the second half of the year. After a
pause in 2020 a renewed marketing emphasis over the period, combined with the
excellent long term track record was rewarded for the International CEF
Strategy.

 

With regard to business development, the Group continues to develop an active
pipeline across all of its major CEF offerings.

 

Operations

 

The Group's income currently accrues at a weighted average rate of
approximately 73 basis points of FuM, net of third party commissions.

 

The Group's overheads for the year to 30 June 2022 are expected to be £19.7
million (2021: £16.8 million). "Fixed" costs are c.£1.7 million per month,
and accordingly the run-rate for operating profit, before profit-share and
amortisation of intangibles is approximately £2.8 million per month based
upon current FuM and a US$/£ exchange rate of US$1.2178 to £1 as at 30 June
2022.

 

For the year to 30 June 2022, the Group estimates that the unaudited profit
before amortisation of intangibles and taxation to be approximately £27.2
million, including non-controlling interest ("NCI") loss of £0.1 million
(2021: £27.2 million profit before amortisation of intangibles, exceptional
merger costs of c. £1.7 million and taxation, NCI profit of nil) (2021:
£25.5 million profit before amortisation and taxation).

 

Profits after an anticipated tax charge of £5.0 million (representing 22% of
profits before taxation) will be approximately £18.1 million (2021: profits
of £17.0 million after a tax charge of £5.3 million, representing 19% of
profits before exceptional merger costs and taxation). Basic and fully diluted
earnings per share are expected to be 37.1p and 36.6p respectively (2021:
39.4p and 38.8p).

 

Dividend

 

The Board is proposing to recommend a final dividend of 22p per share (2021:
22p), subject to approval by shareholders at the Company's Annual General
Meeting to be held on 31 October 2022. This would bring the total dividend
payment for the year to 46.5p, including the special dividend of 13.5p paid in
March (2021: 33p, special dividend nil). Rolling five-year dividend cover,
excluding the special dividend equates to 1.22 times (2021: 1.29 times).

 

The Board confirms the final dividend timetable for the year to 30 June 2022:

 

 ·    ex-dividend date:                                       29 September 2022
 ·    dividend record date:                                   30 September 2022
 ·    DRIP election date/ deadline for currency election:     7 October 2022
 ·    announcement of USD dividend conversion rate:           21 October 2022
 ·    dividend payment date: 4 November 2022                  4 November 2022

 

City of London expects to announce its final results alongside publication of
its Accounts for the year to 30 June 2022 on 19 September 2022. The Group's
Annual General Meeting will be held on 31 October 2022.

 

City of London Investment Group is a UK registered company, listed on the
London Stock Exchange and declares its dividends in GBP.  Shareholders based
in the US can now elect to receive dividends in USD, should they wish to do
so. The currency conversion rate from GBP to USD will be fixed two weeks
before the dividend payment date. The currency election form can be found on
our website at
https://www.clig.com/investor-reports/Currency-Election-Form-2022.pdf
(https://www.clig.com/investor-reports/Currency-Election-Form-2022.pdf)

 

Alternatively, overseas shareholders may be able to use the International
Payment Service (IPS) and receive dividend payments direct to their bank
account in local currency. Further information regarding the IPS including
terms and conditions, costs and forms for signing up are available from Link
Group at https://ww2.linkgroup.eu/ips (https://ww2.linkgroup.eu/ips) .

 

Dividend cover template

 

Please see dividend cover template attached here.

http://www.rns-pdf.londonstockexchange.com/rns/8856S_1-2022-7-18.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8856S_1-2022-7-18.pdf)

 

The dividend cover template shows the quarterly estimated cost of dividend
against actual post-tax profits for last year, the current year and the
assumed post-tax profit for next financial year based upon specified
assumptions.

 

For further information, please visit https://www.clig.com/ or contact:

 

Tom Griffith, CEO

City of London Investment Group PLC

Tel: 001-610-380-0435

 

Martin Green

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20-3829-5000

 

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.

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