REG - Liontrust Asset Mgmt - Half-year Report
01/12/2021 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211201:nRSA0900Ua&default-theme=true
RNS Number : 0900U Liontrust Asset Management PLC 01 December 2021
Embargoed until 0700 hours, Wednesday 1 December 2021
LIONTRUST ASSET MANAGEMENT PLC
HALF YEAR REPORT FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2021
Liontrust Asset Management Plc ("Liontrust", the "Company", or the "Group"),
the independent fund management group, today announces its Half Year Report
for the six months ended 30 September 2021.
Results:
· Adjusted profit before tax(1) of £43.1 million (2020: £22.3
million), an increase of 93% compared to the equivalent period last year.
· Profit before tax of £31.1 million (2020: £6.9 million), an
increase of 352% compared to the equivalent period last year. This includes
costs of £12.1 million (2020: £15.4 million) relating to acquisitions and
associated restructuring costs; the amortisation of the related intangible
assets; and other non-cash and non-recurring costs (see note 6 below).
· Gross profit of £108.5 million (2020: £63.0 million), an increase
of 72% compared to the equivalent period last year.
· Adjusted diluted EPS(1) of 56.94 pence (2020: 30.74 pence), an
increase of 85% compared to the equivalent period last year.
Dividend:
· First Interim dividend per share of 22.0 pence (2020: 11.0 pence), an
increase of 100% compared to the equivalent payment last year.
Assets under management and advice:
· On 30 September 2021, assets under management and advice ("AuMA")
were £35.7 billion, an increase of 15% since the start of the financial year
and 73% compared to AuMA on 30 September 2020.
· AuMA as at close of business on 26 November 2021 were £36.5 billion.
Inflows:
· Net inflows for the six months ended 30 September 2021 of £2.1
billion (2020: £1.7 billion), an increase of 19% compared to the equivalent
period last year.
Awards:
· During the period from the start of our financial year, Liontrust won
the following awards:
a. "Asset Manager of the Year" awarded by Financial News Asset
Management Awards 2021;
b. "Best Fund Group" awarded by Shares Awards 2021; and
c. "Global Group of the Year" awarded by Investment Week Fund Manager
of the Year Awards 2021.
(1) This is an Alternative Performance Measure, see note 2 below.
Commenting on the results, John Ions, Chief Executive, said:
"Liontrust has delivered another strong six months of sales and financial
performance. Our net inflows of £1 billion and above for each of the last
three quarters demonstrate the excellence of our investment teams, long-term
performance, distribution, communications and power of the brand.
We have maintained this momentum into the new quarter of our financial year,
with Liontrust's AuMA reaching £36.5 billion on 26 November.
The latest industry sales statistics reiterate Liontrust's continued success.
In the third quarter of 2021, Liontrust had the second highest net retail
sales in the UK (source: Pridham Report). The same report showed that
Liontrust had the fifth highest gross retail sales in the UK over the same
three-month period.
Liontrust has gained further independent recognition through another two
prestigious awards that cover different distribution channels. First,
Liontrust was named Asset Manager of the Year at the Financial News Awards, a
publication for institutional investors. We have continued to make progress in
the institutional market and are seeking to build our business further among
these investors. We also won the Best Fund Group of the Year Award at the
Shares Awards, which are voted for by private investors who read Shares
magazine.
These follow Liontrust winning the Global Group of the Year Award at
Investment Week's Fund Manager of the Year Awards in the summer. This magazine
is read by wealth managers and financial advisers and reiterates the growing
strength and breadth of our distribution and brand across all these channels.
Over the past six months, we have moved from virtual communications to being
able to have face-to-face meetings with clients again. This has enabled us to
present our Multi-Asset proposition at physical events for the first time
since we acquired the Architas UK Investment Business last year.
We have been holding a Liontrust roadshow, the World Market Review ("WMR"),
around the UK and taken part with three other asset managers in the
Multi-Manager Forum this autumn. So far, with the WMR continuing, we have
presented to around 450 advisers.
Last week, the Liontrust Sustainable Investment team, whose AuMA now exceeds
£13 billion, held a client event reviewing COP26 and what the outcomes mean
for investors. One thing COP26 has reiterated is the vital role asset
management has to play in allocating capital to great businesses with the
innovation and technology to help us tackle massive challenges like climate
change.
Asset management can also benefit the wider society through democratising
savings and community engagement. We have a responsibility to enable as many
people as possible to boost their savings and future prospects by making
investments as simple to understand and as easy to access as possible.
Even with the return of physical events, Liontrust continues to develop and
expand our communications with investors and our capability of delivering
these digitally to different audiences. We have generated 66,000 views for our
recent investment videos, for example, and have seen a 77% increase in website
traffic from the third quarter in 2020 to the third quarter in 2021.
Our continued successful progress over the past six months is thanks to the
hard work of everyone at Liontrust and the loyalty of our clients and
investors. Liontrust is well positioned to maintain the momentum into the
future as we seek to broaden sales across distribution channels."
For further information please contact:
Liontrust Asset Management Plc (Tel: 020 7412 1700, Website: liontrust.co.uk)
John Ions: Chief Executive
Vinay Abrol: Chief Financial Officer & Chief Operating Officer
Simon Hildrey: Chief Marketing Officer
David Boyle: Head of Corporate Development
Singer Capital Markets (Tel: 020 7496 3000)
Corporate Broking: Tom Salvesen
Corporate Finance: Justin McKeegan
Panmure Gordon (Tel: 020 7886 2500)
Corporate Broking: Charles Leigh-Pemberton
Corporate Advisory: Antoine Dupont-Madinier
Chairman's Statement
I am delighted to report on the success of your Company over the past six
months. This is thanks to the excellence and dedication of the management of
the business and all employees and members at Liontrust.
The management expertly guided the business through the pandemic in 2020 and
into 2021 and has now overseen the transition back to an increasing proportion
of face-to-face meetings. All the while sales have continued to be strong with
net inflows of £2.1 billion over the last six months, a 19% increase over the
same period in 2020.
The success has led to strong financial performance for your Company. Adjusted
profit before tax has increased by 93% to £43.1 million and there has been a
rise of 85% in the adjusted diluted EPS of 56.94 pence.
As a result, your Company is to pay a first interim dividend per share of 22.0
pence. This represents a 100% increase on the dividend payment compared to the
same six-month period last year and reflects the excellent management of the
business, the success of the acquisitions of the past few years, the strong
net inflows Liontrust has continued to deliver, and to create more balance
between the first and second Interim dividends.
As well as the management of Liontrust, the Board are pleased with the
stewardship of the business. One of our key strategies is to be a responsible
company and investor and the Sustainability Report for 2021 is available on
the Company's website outlining the developments in and performance of
Liontrust in four areas of ESG (environmental, social and governance) over the
past year. These are being a responsible investor, doing our part on climate
change, developing a diverse and talented staff, and being a good corporate
citizen.
Liontrust recognises that good governance and stewardship, sustainability and
social impact are important considerations in choosing and monitoring
investments and longer-term performance.
We have committed to integrating sustainability appropriately throughout the
business. This includes publishing our Responsible Investment policy, which
provides details of our engagement-led approach and how we manage our
stewardship at both the company level and for individual investment teams.
Liontrust's second full Assessment of Value Report will be published in
December and will include all the Company's UK-domiciled funds including the
Multi-Asset ranges that joined last year as part of the acquisition of the
Architas UK Investment Business. This report evaluates whether our funds are
delivering value to investors. We recommend investors read this report, which
will be available on the Liontrust website and highlights all the areas in
which the Company is seeking to add value.
Key to this of course is investment performance and meeting investor
expectations. We believe the excellence of our fund management teams, their
investment processes and long-term performance demonstrates our ability to
deliver this.
The success of our investment management, along with distribution,
communications and the brand, is reflected in the three asset management group
of the year awards Liontrust has won over the past six months, along with fund
awards for the Sustainable, Multi-Asset and Global Equity investment teams.
I am delighted to welcome Rebecca Shelley who joined the Liontrust Board as a
Non-executive Director on 1 November. Rebecca has a wealth of experience,
knowledge and insights in financial services that will be an invaluable
addition for us as Liontrust continues to expand its investment capabilities
and proposition.
Results
Liontrust has delivered profit before tax of £31.063 million (2020: £6.874
million), an increase of 352% compared to the equivalent period last year.
The adjusted profit before tax was £43.128 million (2020: £22.296 million),
an increase of 93%. Adjusted profit before tax is disclosed in order to give
shareholders an indication of the profitability of the Group excluding
non-cash expenses (share incentivisation, depreciation and intangible asset
amortisation), and non-recurring expenses (acquisition related and associated
restructuring and severance compensation related).
See note 6 below for a reconciliation of adjusted profit (or loss) before tax.
Dividend
In accordance with the Company's dividend policy, and to create more balance
between the first and second Interim dividends, the Board is declaring a first
Interim dividend of 22.0 pence per share (2020: 11.0 pence), an increase of
100%, which will be payable on 14 January 2022 to shareholders who are on the
register as at 10 December 2021, the shares going ex-dividend on 9 December
2021. Last day for Dividend Reinvestment Plan elections is 22 December 2021.
Shareholder services
Link Group (a trading name of Link Market Services Limited and Link Market
Services Trustees Limited) may be able to provide you with a range of services
relating to your shareholding. To learn more about the services available to
you please visit the shareholder portal at www.signalshares.com or call 0371
664 0300. Calls outside the UK will be charged at the applicable
international rate. Lines are open Monday to Friday, 9.00 am to 5.30 pm, UK
time, excluding public holidays in England and Wales.
Assets under management and advice
On 30 September 2021, our AuMA stood at £35,659 million and were broken down
by type and investment process as follows:
Process Total Institutional UK Retail Multi-Asset Offshore
(£m) (£m) (£m) (£m) (£m)
Sustainable Investment 13,243 151 12,203 0 889
Economic Advantage 10,116 469 9,168 0 479
Multi-Asset 7,357 0 0 7,357 0
Global Equity 3,060 195 2,865 0 0
Cashflow Solution 1,032 689 289 0 54
Global Fixed Income 851 0 367 0 484
Total 35,659 1,504 24,892 7,357 1,906
On 26 November 2021, our AuMA was £36,492 million.
Inflows
The net inflows over the six months to 30 September 2021 are £2,088 million
(2020: £1,748 million). A reconciliation of fund flows and AuMA over the six
months to 30 September 2021 is as follows:
Total Institutional UK Retail Multi-Asset Offshore
(£m) (£m) (£m) (£m) (£m)
Opening AuMA - 1 April 2021 30,929 1,488 20,627 7,139 1,675
Net flows 2,088 (63) 2,038 (26) 139
Market and Investment performance 2,642 79 2,227 244 92
Closing AuMA - 30 September 2021 35,659 1,504 24,892 7,357 1,906
Awards
During the period from the start of our financial year, Liontrust won the
following awards:
Group or team awards
· "Asset Manager of the Year" awarded by Financial News Asset
Management Awards 2021;
· "Best Fund Group" awarded by Shares Awards 2021;
· "Best Multi-Manager Provider" awarded by Investment Life &
Pensions Moneyfacts Awards 2021; and
· "Global Group of the Year" awarded by Investment Week Fund Manager of
the Year Awards 2021.
Fund related awards
· "Best Sustainable & ESG Equity Fund" for Liontrust SF Global
Growth Fund awarded by Investment Week Sustainable & ESG Awards 2021;
· "Best Sustainable & ESG Multi-Asset Fund" for Liontrust SF
Managed Fund Awarded by Investment Week Sustainable & ESG Awards 2021;
· "Global Growth Fund of the Year" for Liontrust SF Global Growth
awarded by Investment Week Fund Manager of the Year Awards 2021;
· "Global Income Fund of the Year" for Liontrust Global Dividend Fund
awarded by Investment Week Fund Manager of the Year Awards 2021;
· "Managed - Flexible Investment" for Liontrust SF Managed Growth Fund
awarded by Investment Week Fund Manager of the Year Awards 2021; and
· "Managed 40-85% Shares" for Liontrust SF Managed Fund awarded by
Investment Week Fund Manager of the Year Awards 2021.
UK Retail Fund Performance (Quartile ranking)
Quartile ranking - Since Launch/Manager Appointed Quartile ranking - 5 year Quartile ranking - 3 year Quartile ranking - 1 year Launch Date/ Manager Appointed
Economic Advantage funds
Liontrust UK Growth Fund 1 2 2 3 25/03/2009
Liontrust Special Situations Fund 1 1 1 3 10/11/2005
Liontrust UK Smaller Companies Fund 1 1 1 3 08/01/1998
Liontrust UK Micro Cap Fund 1 1 1 1 09/03/2016
Sustainable Future funds
Liontrust Monthly Income Bond Fund 2 1 3 1 12/07/2010
Liontrust SF Managed Growth Fund 1 1 1 2 19/02/2001
Liontrust SF Corporate Bond Fund 1 1 2 1 20/08/2012
Liontrust SF Cautious Managed Fund 1 1 1 3 23/07/2014
Liontrust SF Defensive Managed Fund 1 1 1 3 23/07/2014
Liontrust SF European Growth Fund 1 1 1 2 19/02/2001
Liontrust SF Global Growth Fund 2 1 1 3 19/02/2001
Liontrust SF Managed Fund 1 1 1 1 19/02/2001
Liontrust UK Ethical Fund 2 1 1 2 01/12/2000
Liontrust SF UK Growth Fund 2 1 1 2 19/02/2001
Global Equity funds(1)
Liontrust Balanced Fund 1 1 1 4 31/12/1998
Liontrust China Fund 3 3 3 3 31/12/2004
Liontrust Emerging Market Fund 3 3 3 3 30/09/2008
Liontrust Global Smaller Companies Fund 1 1 1 2 01/07/2016
Liontrust Global Alpha Fund 1 1 1 1 31/12/2001
Liontrust Global Dividend Fund 2 1 1 2 20/12/2012
Liontrust Global Innovation Fund 1 1 1 4 31/12/2001
Liontrust Global Technology Fund 3 2 3 3 15/12/2015
Liontrust Income Fund 1 1 2 4 31/12/2002
Liontrust Japan Equity Fund 2 3 2 3 22/06/2015
Liontrust US Opportunities Fund 1 1 2 1 31/12/2002
Cashflow Solution funds
Liontrust European Growth Fund 1 1 1 1 15/11/2006
Global Fixed Income funds
Liontrust Strategic Bond Fund 3 - 3 3 08/05/2018
Source: Financial Express to 30 September 2021 as at 5 October 2021, bid-bid,
total return, net of fees, based on primary share classes. The Liontrust Asia
Income Fund and funds previously managed by the European Income investment
team are excluded. Past performance is not a guide to future performance,
investments can result in total loss of capital. The above funds are all UK
authorised unit trusts or UK authorised ICVCs (primary share class).
(1 )Liontrust Latin America Fund, Liontrust Russia Fund and Liontrust India
Fund are not included as they are in IA sectors that are not rankable (e.g.
Specialist and Unclassified) as it would not be a fair comparison to make.
Liontrust US Income Fund is not included as it merged into Liontrust Global
Dividend Fund on 8 October 2021, and Liontrust Japan Opportunities Fund is not
included as it merged into Liontrust Japan Equity Fund ion 8 November 2021.
Outlook
The last six months has demonstrated the strength of Liontrust across the
business. This includes the quality of our investment capability, breadth of
our client base, strong sales and client service, great communications,
distinct brand and robust infrastructure. As a result, the Board are confident
about the continued growth of your Company over the coming months and that we
continue to trade in line with market expectations.
Alastair Barbour
Non-executive Chairman
Consolidated Statement of Comprehensive Income
Six months ended 30 September 2021
Six Six Year
months to months to ended
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (restated and unaudited) (audited)
Notes £'000 £'000 £'000
Revenue* 4 114,893 69,082 175,080
Cost of sales* 4 (6,348) (6,026) (11,321)
Gross profit 108,545 63,056 163,759
Realised profit on sale of financial assets 50 - 250
Unrealised gain on financial assets - 316 672
Administration expenses 5 (77,486) (56,436) (129,646)
Operating profit 31,109 6,936 35,035
Interest receivable 3 4 7
Interest payable (49) (66) (113)
Profit before tax 31,063 6,874 34,929
Taxation ** 7 (4,852) (1,588) (7,257)
Profit for the period 26,211 5,286 27,672
Other comprehensive income - - -
Total comprehensive income 26,211 5,286 27,672
Pence Pence Pence
Basic earnings per share 8 43.27 9.21 47.02
Diluted earnings per share 8 42.72 9.00 46.25
All of the results are derived from continuing operations.
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
* The revenue of the six months to 30 September 2020 has been restated to
reflect rebates being reclassified as a reduction in revenue rather than a
cost of sales (see note 1d). This restatement has no impact on Gross profit,
nor on net asset balances.
** The tax charge for the six months to 30 September 2020 has been restated to
reflect deferred taxation on the share option charge that was not previously
recognised (see note 1d).
Consolidated Balance Sheet
As at 30 September 2021
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (restated and unaudited) (audited)
Notes £'000 £'000 £'000
Assets
Non current assets
Intangible assets 9 79,992 36,565 84,812
Goodwill 10 27,577 19,626 27,577
Property, plant and equipment 5,346 6,875 5,257
112,915 63,066 117,646
Current assets
Trade and other receivables 11 240,935 186,119 289,805
Financial assets 12 4,107 1,859 2,188
Cash and cash equivalents 82,837 98,602 71,898
Total current assets 327,879 286,580 363,891
Liabilities
Non current liabilities
Deferred tax liability * (12,467) (4,599) (13,436)
Lease liability (5,024) (6,668) (3,418)
Total non current liabilities (17,491) (11,267) (16,854)
Current liabilities
Trade and other payables (252,314) (190,679) (298,007)
Corporation tax payable (1,853) (1,314) (3,288)
Total current liabilities (254,167) (191,993) (301,295)
Net current assets 73,712 94,587 62,596
Net assets 169,136 146,386 163,388
Shareholders' equity
Ordinary shares 611 606 610
Share premium 64,370 121,809 64,370
Capital redemption reserve 19 19 19
Retained earnings * 109,626 29,142 104,207
Own shares held (5,490) (5,190) (5,818)
Total equity 169,136 146,386 163,388
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
The unaudited condensed interim financial statements were approved by the
Board of Directors on 30 November 2021 and signed on their behalf by: Vinay
Abrol
* The 30 September 2020 deferred taxation and retained earnings have been
restated to reflect deferred taxation on the share option charge that was not
previously recognised (see note 1d).
Consolidated Cash Flow Statement
Six months ended 30 September 2021
Six Six Year
months to months to ended
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash flows from operating activities
Cash inflow from operations 114,775 74,765 141,409
Cash outflow from operations* (71,972) (70,046) (95,913)
Cash inflow from changes in unit trust receivables and payables 1,453 2,357 4,554
Net cash generated from operations* 44,256 7,076 50,050
Interest received 3 4 7
Tax paid (7,500) (1,316) (6,416)
Net cash from operating activities 36,759 5,764 43,641
Cash flows from investing activities
Purchase of property, plant and equipment (310) (99) (254)
Acquisition of Architas net of cash required - - (54,124)
Purchase of financial assets (3,124) - -
Sale of financial assets - 1,334 1,334
Purchase of seeding investments (34) (47) (117)
Net cash (used in) / from investing activities (3,468) 1,188 (53,161)
Cash flows from financing activities
Payment of lease liabilities* (839) (1,044) (2,263)
Purchase of own shares - - (812)
Sale of own shares 328 672 852
Issue of shares - 66,170 64,421
Dividends paid (21,841) (14,442) (21,074)
Net cash (used in) / from financing activities* (22,352) 51,356 41,124
Net increase in cash and cash equivalents 10,939 58,308 31,604
Opening cash and cash equivalents 71,898 40,294 40,294
Closing cash and cash equivalents 82,837 98,602 71,898
Cash and cash equivalents consist only of cash balances.
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
* The cash flow statement to 30 September 2020 has been represented to show
the payment of lease liabilities as an item in financing activities rather
than in operating activities in accordance with IAS7.
Consolidated Statement of Change in Equity (unaudited)
Six months ended 30 September 2021
Share Share Capital Retained Own shares Total
capital premium redemption earnings held Equity
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000
Balance at 1 April 2021 brought forward 610 64,370 19 104,207 (5,818) 163,388
Profit for the period - - - 26,211 - 26,211
Total comprehensive income for the period - - - 26,211 - 26,211
Dividends paid - - - (21,841) - (21,841)
Shares issued 1 - - (1) - -
Sale of own shares - - - - 328 328
Equity share options issued - - - 1,541 - 1,541
Equity share options settled - - - (244) - (244)
Deferred tax on option charge taken to equity - - - (247) - (247)
Balance at 30 September 2021 611 64,370 19 109,626 (5,490) 169,136
Consolidated Statement of Change in Equity (unaudited and restated)
Six months ended 30 September 2020
Share Share Capital Retained Own shares Total
capital premium* redemption earnings* held Equity
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000
Balance at 1 April 2020 brought forward* 555 57,439 19 37,888 (5,862) 90,039
Profit for the period - - - 5,286 - 5,286
Total comprehensive income for the period - - - 5,286 - 5,286
Dividends paid - - - (14,442) - (14,442)
Shares issued 51 64,370 - - - 64,421
Sale of own shares - - - - 672 672
Equity share options issued - - - 823 - 823
Equity share options issued settled - - - (532) - (532)
Deferred tax on option charge taken to equity* - - - 119 - 119
Balance at 30 September 2020 606 121,809 19 29,142 (5,190) 146,386
Consolidated Statement of Change in Equity (audited)
Year ended 31 March 2021
Ordinary Share Capital Retained Own shares Total
shares premium redemption earnings held Equity
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000
Balance at 1 April 2020 brought forward * 555 57,439 19 37,888 (5,862) 90,039
Profit for the year - - - 27,672 - 27,672
Total comprehensive income for the year - - - 27,672 - 27,672
Dividends paid - - - (21,074) - (21,074)
Capital reorganisation - (57,439) - 57,439 - -
Shares issued 55 64,370 - - - 64,425
Sale/(purchase) of own shares - - - - 44 44
Equity Share options issued - - - 2,636 - 2,636
Equity share options settled - - - (518) - (518)
Deferred tax on option charge taken to equity - - - 164 - 164
Balance at 31 March 2021 610 64,370 19 104,207 (5,818) 163,388
The accompanying notes form an integral part of these unaudited condensed
interim financial statements.
* The 1 April 2020 opening balance has been restated to reflect the historic
deferred taxation on share options charge that was not previously recognised
(see note 1d)
Notes to the Financial Statements
1 Principal Accounting policies
a) Basis of preparation
The Group financial information for the six months ended 30 September 2021 has
been prepared in accordance with the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority and with IAS 34 Interim Financial
Reporting. This condensed set of financial statements has been prepared
applying the accounting policies and presentation that were applied in the
preparation of the Group's published consolidated financial statements for the
year ended 31 March 2021. These are consistent with IFRSs issued by the
International Accounting Standards Board as adopted by the UK Endorsement
Board for use in the United Kingdom.
This Half Yearly Report is unaudited and does not constitute statutory
accounts within the meaning of s434 of the Companies Act 2006. The financial
information for the half years ended 30 September 2021 and 2020 has not been
audited by the auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information. Therefore, these half year accounts
should be read in conjunction with the statutory accounts for the year ended
31 March 2021, which were prepared in accordance with International Financial
Reporting Standards, which comprise standards and interpretations issued by
either the International Accounting Standards Board or the IFRS
Interpretations Committee or their predecessors as adopted by the European
Union ('IFRS') adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union, those parts of the Companies Act 2006 applicable to
companies reporting under IFRS; and in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006 ("Adopted IFRS"). KPMG reported on the 31 March 2021 financial
statements, and their report was unmodified and did not contain a statement
under Section 498(2) or (3) of the Companies Act 2006 in the UK.
The preparation of financial statements in conformity with IFRS requires the
directors of the Company to make significant estimates and judgements that
affect the reported amounts of assets and liabilities and disclosure of
contingencies at the date of the financial information and the reported income
and expense during the reporting periods. Although these judgements and
assumptions are based on the directors' best knowledge of the amount, events
or actions, actual results may differ from these estimates. The accounting
policies set out below have been used to prepare the financial information.
All accounting policies have been consistently applied.
b) Going concern
The financial information presented within these financial statements has been
prepared on a going concern basis under the historical cost convention (except
for the measurement of financial assets at fair value through profit and loss
and DBVAP liability which are held at their fair value). The Group is reliant
on cash generated by the business to fund its working capital. The Directors
have assessed the prospects of the Group and parent company over the
forthcoming 12 months, including an assessment of current trading; budgets,
plans and forecasts; the adequacy of current financing arrangements;
liquidity, cash reserves and regulatory capital; and potential material risks
to these forecasts and the Group strategy. This assessment includes a review
of the ongoing impact of the Covid-19 pandemic on the business; and
consideration of a severe but plausible downside scenario in which AuMA falls
due to a market event by 20%. The Directors confirm that as a result of this
assessment they have a reasonable expectation that the Group and parent
company will continue to operate and meet its liabilities as they fall due for
at least 12 months from the date of signing these accounts.
c) Accounting estimates and judgements
The preparation of the financial statements in conformity with IFRS requires
the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's accounting
policies. Estimates and judgements used in preparing the financial statements
are periodically evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable. The resulting accounting estimates may not equal the related
actual results. There are no significant judgements. The estimates and
assumptions that have a significant effect on the carrying amounts of assets
and liabilities are set out as follows:
(i) Impairment of Goodwill
Goodwill arising on acquisitions is capitalised in the consolidated balance
sheet. Goodwill is carried at cost less provision for impairment. The carrying
value of goodwill is not amortised but is tested annually for impairment or
more frequently if any indicators of impairment arise. Goodwill is allocated
to a cash generating unit (CGU) for the purpose of impairment testing, with
the allocation to those CGUs that are expected to benefit from the business
combination in which the goodwill arose (see note 14 of the Financial
Statements to 31 March 2021).
Impairment losses on goodwill, where these are identified, are not reversed.
Impairment is tested through measuring the recoverable amount against the
carrying value of the related goodwill. The recoverable amount is the higher
of the fair value less costs to sell the CGU and its value in use. Value in
use is assessed using a multi-period excess earnings model which requires a
number of inputs requiring management estimates and judgements, the most
significant of which are: future business performance and growth (including
fund sales, redemptions and market growth), operating costs, synergies, and
the cost of capital/discount rate.
Due to the strong performance and growth of the Sustainable Investment team
(acquired as part of the ATI acquisition) and the Global Equity team (acquired
as part of the Neptune acquisition) there is no significant estimation in
relation to the impairment of the related goodwill allocated to the
Sustainable and Global Equity Investment teams' CGU. Due to the relatively
recent acquisition of the Archtias UK Investment Business (Multi-Asset team
CGU) and development of the Multi-Asset team products, goodwill and its
impairment is a significant estimate therefore in relation to the Architas
intangible (Multi-Asset team CGU).
(ii) Impairment of intangible assets
Details of the impairment policy for intangible assets and their estimated
useful lives can be found in note 1h) of the Financial Statements to 31 March
2021.
Due to the relatively recent acquisition of Architas (Multi-Asset team CGU)
and development of the Multi-Asset team products, intangible impairment is a
significant estimate in relation to the Architas intangible Asset (Multi-Asset
team CGU).
d Restatement
The 30 September 2020 financial statements have been restated to reflect:
(1) the corrected treatment of the deferred tax asset arising from the issue
of employee share options due to the timing difference between the service
period and the future tax deduction when the options are exercised. The
restatement increased opening deferred tax assets and retained earnings at 1
April 2019 by£990,000. In the year ended 31 March 2020 the restatement
increased deferred tax assets by a further £489,000 to £1,479,000, with
£237,000 crediting retained earnings and £252,000 crediting taxation in the
Statement of Comprehensive Income. The restatement increased profit and total
comprehensive income for the year ended 31 March 2020 by £252,000 to
£13,216,000 and increased net assets at 31 March 2020 by £1,479,000 to
£90,039,000. The Statement of Comprehensive Income, Balance sheet, Statement
of Changes in Equity and related notes were updated to reflect this
restatement; and
(2) contractual rebates due to customers being reclassified as a reduction in
revenue rather than a cost of sales (see note 4) as they do not represent a
payment for distinct goods or services. This restatement reduced revenue and
cost of sales by £15,209,000 and has no impact on Gross profit, total profit,
total comprehensive income for the year ended 31 March 2020 or net assets at
31 March 2020 and does not impact brought forward reserves at 1 April 2020.
These restatements do not have an impact on basic and diluted earnings per
share.
The accounting policies applied in this Half Yearly Report are consistent with
those applied in the Group's most recent annual accounts.
2 Alternative Performance measures
The Group assess its performance using a variety of measures that are not
defined under IFRS and are therefore termed alternative performance measures
('APMs'). The APMs that we use may not be directly comparable with similarly
named measures used by other companies.
The Group uses the APM's to present its financial performance, in a manner
which is aligned with the requirements of our stakeholders. By presenting
these APM's it enables comparison with our peers who may use different
accounting policies.
The Group uses the following APMs:
Alternative Performance Measure Definition Reconciliation
Adjusted profit before tax Profit before taxation, depreciation, amortisation, net IFRS16 finance costs, Note 6
share incentivisation expenses and non-recurring items*
This is used to present a measure of profitability of the Group which is
aligned to the requirements of shareholders, potential shareholders and
financial analysts, and which removes the effects of financing and capital
investment, which eases the comparison with the Group's competitors who may
use different accounting policies and financing methods.
Specifically, calculation of Adjusted profit before tax excludes share
incentivisation expenses for similar reasons to above, and in particular
provides shareholders, potential shareholders and financial analysts a
consistent year on year basis of comparison of a "profit before tax number",
when comparing the current year to the previous year and also when comparing
multiple historical years to the current year, of how the underlying business
is performing without the effects of share incentivisation expenses which can
be influenced by other factors such as timing of grants due to prohibited
periods, shareholder approval of share incentivisation plans, and other
factors.
Adjusted operating profit Profit before interest, depreciation and amortisation, share incentivisation Note 6
expenses and non-recurring items*
This is used to present a measure of profitability of the Group which is
aligned to the requirements of shareholders, potential shareholders and
financial analysts, and which removes the effects of financing and capital
investment, which eases the comparison with the Group's competitors who may
use different accounting policies and financing methods. Specifically,
calculation of Adjusted operating profit before tax excludes share
incentivisation expenses for similar reasons to above, and in particular
provides shareholders, potential shareholders and financial analysts a
consistent year on year basis of comparison of a "profit before tax number",
when comparing the current year to the previous year and also when comparing
multiple historical years to the current year, of how the underlying business
is performing without the effects of share incentivisation expenses which can
be influenced by other factors such as timing of grants due to prohibited
periods, shareholder approval of share incentivisation plans, and other
factors.
Gross profit excluding performance fees Gross profit less any revenue attributable to Note 4
performance related fees.
This is used to present a consistent year on year measure of revenues within
the business, removing the element of revenue that may fluctuate year on year.
Adjusted earnings per share Adjusted profit before tax divided by the weighted average number of shares in n/a
issue for the period
This is used to present a measure of profitability per share in line with the
adjusted operating profit as detailed above.
Adjusted diluted earnings per share Adjusted profit before tax divided by the diluted weighted average number of n/a
shares in issue for the period
This is used to present a measure of profitability per share in line with the
adjusted operating profit as detailed above.
*Non-recurring items include acquisition related and associated restructuring
costs, and severance compensation related expenses.
3 Segmental reporting
The Group operates only in one business segment - Investment management.
The Group offers different fund products through different distribution
channels. All financial, business and strategic decisions are made centrally
by the Board, which determines the key performance indicators of the Group.
The Group reviews financial information presented at a Group level. The Board,
is therefore, the chief operating decision-maker for the Group. The
information used to allocate resources and assess performance is reviewed for
the Group as a whole. On this basis, the Group considers itself to be a
single-segment investment management business.
4 Revenue
Six Six Year
months to months to ended
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Revenue
- Revenue * 114,893 69,082 161,388
- Performance fee revenue - - 13,692
Total Revenue 114,893 69,082 175,080
Cost of sales * (6,348) (6,026) (11,321)
Gross Profit 108,545 63,056 163,759
* Following a review, Management Fees are shown net of contractual rebates
with customers, see note 1d.
Revenue from earnings includes:
- Investment management on unit trusts, open-ended investment
companies sub-funds, portfolios and segregated account.
- Performance fees on unit trusts, open-ended investment companies
sub-funds, portfolios and segregated accounts.
- Fixed administration fees on unit trusts and open-ended investment
companies sub-funds.
- Net value of sales and repurchases of units in unit trusts and
shares in open-ended investment companies (net of discounts).
- Net value of liquidations and creations of units in unit trusts
and shares in open-ended investment companies sub-fund.
- Box profits on unit trusts - the "at risk" trading profit or loss
arising from changes in the valuation of holdings of units in Group Unit
Trusts to help manage client sales into, and redemptions from the trust.
- Foreign currency gains and losses.
- Less contractual rebates paid to customers.
The cost of sales includes:
- Operating expenses including (but not limited to) keeping a record
of investor holdings, paying income, sending annual and interim reports,
valuing fund assets and calculating prices, maintaining fund accounting
records, depositary and trustee oversight and auditors.
- Sales commission paid or payable to third parties.
- External investment advisory fees paid or payable.
5 Administration expenses
Six Six Year
months to months to ended
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Employee related expenses
Wages and salaries 20,060 11,710 25,817
Social security costs 2,864 3,508
Pension costs 866 656 1,480
Share incentivisation expense 2,974 2,049 4,693
DBVAP expense ((1)) 1,344 856 1,656
Severance compensation 4 214 1,793
28,112 15,485 38,947
Non-employee related expenses
Members' drawings charged as an expense 24,314 16,387 41,986
Members' share incentivisation expense 971 1,045 1,471
Members' severance 114
Professional services((2)) 3,255 10,047 15,025
Depreciation and Intangible asset amortisation 5,779 2,429 7,448
Other administration expenses 14,941 11,043 24,769
Total administration expenses 77,486 56,436 129,646
(1) For the financial year ended 31 March 2021 (going forward) management
have reviewed their assessment of adjustments and have removed the DBVAP
expense and the share incentive plan expense from its adjusted profit measure.
(2) Includes acquisition related and restructuring costs for the
Architas and Neptune.
6 Adjusted profit before tax
Adjusted profit before tax is reconciled in the table below:
Six Six Year
months to months to ended
30-Sep-21 30-Sep-20 31-Mar-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit before tax for the period 31,063 6,874 34,929
Share incentivisation expense 3,734 3,094 5,776
Unrealised (Gain) on DBVAP asset - - (525)
DBVAP expense net of gain((1)) - 540 -
Severance compensation 118 214 1,793
Net IFRS 16 finance costs (821) (902) 112
Gain on sale of Asia Income Fund - (250)
-
Professional services((2)) 3,255 10,047 15,025
Depreciation, Intangible asset amortisation and impairment 5,779 2,429 7,448
Adjustments 12,065 15,422 29,379
Adjusted profit before tax 43,128 22,296 64,308
Interest receivable (3) (4) (7)
Interest payable - - -
Adjusted operating profit 43,125 22,292 64,301
Adjusted basic earnings per share 57.67 31.46 88.52
Adjusted diluted earnings per share 56.94 30.74 87.06
(1) For the financial year ended 31 March 2021 ( and going forward)
management have reviewed their assessment of adjustments and have removed the
DBVAP expense and the share incentive plan expense from its adjusted profit
measure.
(2) Includes acquisition related and restructuring costs for
Architas/Neptune.
7 Taxation
The half year tax charge has been calculated at the estimated full year
effective UK corporation tax rate of 19% (30 September 2020: 19%).
8 Earnings per share
The calculation of basic earnings per share is based on profit after taxation
and the weighted average number of Ordinary Shares in issue for each period.
The weighted average number of Ordinary Shares for the six months ended 30
September 2021 was 60,570,438 (30 September 2020 57,406,615; 31 March 2021:
58,846,929). Shares held by the Liontrust Asset Management Employee Trust are
not eligible for dividends and are treated as cancelled for the purposes of
calculating earnings per share.
Diluted earnings per share is calculated on the same bases as set out above,
after adjusting the weighted average number of Ordinary Shares for the effect
of options to subscribe for new Ordinary Shares that were in existence during
the six months ended 30 September 2021. The adjusted weighted average number
of Ordinary Shares so calculated for the period was 61,356,243 (30 September
2020: 58,757,394; 31 March 2021: 59,831,128). This is reconciled to the actual
weighted number of Ordinary Shares as follows:
30-Sep-21 30-Sep-20 31-Mar-21
Weighted average number of Ordinary Shares 60,570,438 57,406,615 58,846,929
Weighted average number of dilutive Ordinary shares under option:
- to Liontrust Long Term Incentive Plan 757,386 1,323,491 959,895
- to the Liontrust CSOP 28,419 27,288 24,304
Adjusted weighted average number of Ordinary Shares 61,356,243 58,757,394 59,831,128
9 Intangible assets
Intangible assets represent investment management contracts that have been
capitalised upon acquisition and are amortised on a straight-line basis over a
period of 10 years. The intangible asset on the balance sheet represents
investment management contracts as follows:
30-Sep-21 30-Sep-20 31-Mar-21
£'000 £'000 £'000
Investment management contracts acquired from ATI 6,600 7,800 7,200
Investment management contracts acquired from Neptune 24,223 28,765 25,737
Investment management contracts acquired from Architas 49,168 - 51,874
79,991 36,565 84,811
10 Goodwill
Goodwill is allocated to the CGU to which it relates as the underlying funds
acquired in each business acquisition are clearly identifiable to the ongoing
investment team that is managing them. The ATI Goodwill on acquisition is
allocated to the Sustainable Funds team CGU and at 30 September 2021 was
£11,873,000 (2020: £11,873,000). At 31 March 2021 an assessment was made in
relation to impairment of the goodwill where the recoverable amount, based on
a value in use, was calculated using an earnings model which used key
assumptions such as the discount rate (12.8%, 2020: 13.0%), terminal growth
rate (2%, 2020: 2%) and net AuMA growth (5%, 2020: 5%). Sensitivity analysis
was carried out on this model which significantly reduced the forecast net
AuMA growth. These changes in estimates would not lead to any impairment in
the carrying value of this goodwill.
The Neptune Goodwill on acquisition is allocated to the Global Equities team
CGU and at 30 September 2021 was £7,753,000 (2020: £7,753,000). At 31 March
2021 an assessment was made in relation to impairment of the goodwill where
the recoverable amount, based on a value in use, was calculated using an
earnings model with reference to the projected cashflows relating to the CGU
over a period of 5 years, which used key assumptions such as net AuMA growth,
comprising net sales of £150 million and market growth rate (5%, 2020: 2.5%
per annum), terminal growth rate (2%, 2020: 2%) and a discount rate (12.8%,
2020: 13.0%). Based on these reasonable estimates there was no indication of
impairment and headroom over the carrying value of goodwill of £5.9 million.
Sensitivity analysis was carried out on this model which included changing the
discount rate and reducing the net AuMA growth. The discount rate could be
increased by 1% without impacting goodwill and resulted in a £5.1 million
reduction in headroom. If the terminal growth rate reduced by 0.6% the
headroom would be reduced by £2.2 million but would not lead to an
impairment. However, reducing the fund inflows to nil would result in the
carrying value of goodwill being fully impaired. Management consider this to
be a reasonably possible scenario, however the five year modelling timeframe
would give ample time for management action. The "breakeven" point for
impairment is net flows of £104 million. Given the strong current investment
performance, and net inflows for the Global Equity funds in the period ended
30 September 2021 management have concluded that no impairment of the goodwill
is required. An assessment of the goodwill will be reperformed at the
financial year end.
The Architas Goodwill on acquisition is allocated to the Multi Asset team CGU.
At 31 March 2021 an assessment was made in relation to impairment of the
goodwill where the recoverable amount, based on a value in use, was calculated
using an earnings model with reference to the projected cashflows relating to
the CGU over a period of 5 years, which used key assumptions such as net
sales, net AuMA growth rates (4% per annum), terminal growth rate (2%) and a
discount rate of 12.8%. Based on this assessment there was no indication of
impairment.
Sensitivity analysis was carried out on this model which included changing the
discount rate and reducing the market growth. A reasonably possible change in
the key assumptions would not lead to an impairment. In a severe scenario of
nil market growth and nil net sales over the five year model the goodwill
would be impaired. Management consider this to be a highly unlikely scenario
and management would take action in such a scenario. Further, given this
relatively recent acquisition and satisfactory performance in the period since
acquisition management have concluded that no impairment of the goodwill is
required. An assessment of the goodwill will be reperformed at the financial
year end.
£'000
ATI - Sustainable investment team 11,873
Neptune - Global Equity investment team 7,753
Architas - Multi-Asset team 7,951
27,577
11 Trade and other receivables
30-Sep-21 30-Sep-20 31-Mar-21
£'000 £'000 £'000
Trade receivables:
- Fees receivable 22,703 13,749 33,118
- Unit Trust sales and cancellations 211,316 164,871 254,006
Prepayments and accrued income 6,916 7,499 2,681
240,935 186,119 289,805
All financial assets listed above are non-interest bearing. The carrying
amount of these non-interest bearing trade and other receivables approximates
their fair value.
As at 30 September 2021, trade receivables of £nil (2020 : £nil) were past
due but not impaired. Expected credit losses are immaterial.
12 Financial assets
The Group holds financial assets that have been categorised within one of
three levels using a fair value hierarchy that reflects the significance of
the inputs into measuring the fair value. These levels are based on the degree
to which the fair value is observable and are defined as follows:
Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets and liabilities;
Level 2 fair value measurements are those derived from inputs other than
quoted prices included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices);
Level 3 fair value measurements are those derived from valuation techniques
that include inputs for the asset or liability that are not based on
observable market data.
As at the balance sheet date all financial assets are categorised as Level 1.
Under IFRS9 all financial assets are categorised as Assets held at fair value
through profit and loss.
The financial assets consist of units held in the Group's collective
investment schemes as part of a 'manager's box, assets held by the EBT in
respect of the Liontrust DBVAP and assets held in Liontrust Global Funds plc
to assist administration. The holdings are valued on a mid or bid basis.
13 Related party transactions
During the six months to 30 September 2021 the Group received fees from unit
trusts and ICVCs under management of £116,146,000 (2020: £59,466,000).
Transactions with these funds comprised creations of £3,980,800,000 (2020:
£3,021,616,000) and liquidations of £2,195,098,000 (2020: £1,405,734,000).
As at 30 September 2021 the Group owed the unit trusts £211,545,000 (2020:
£175,286,000) in respect of unit trust creations and was owed £231,108,000
(2020: £165,831,000) in respect of unit trust cancellations and fees.
During the six months to 30 September 2021 the Group received fees from
offshore funds under management of £5,655,000 (2020: £3,044,000).
Transactions with these funds comprised purchases of £0 (2020: £40,000) and
sales of £nil (2020: £nil). As at 30 September 2021 the Group was owed
£753,000 (2020: £546,000) in respect of management fees.
Directors and management can invest in funds managed by the Group on
commercial terms that are no more favourable than those available to staff in
general.
14 Post balance sheet date event
There were no post balance sheet events.
15 Key risks
The Directors have identified the risks and uncertainties that affect the
Group's business and believe that they will be substantially the same for the
second half of the year as the current risks as identified in the 2021 Annual
Report. These can be broken down into risks that are within the management's
influence and risks that are outside it.
Risks that are within management's influence include areas such as the
expansion of the business, prolonged periods of under-performance, loss of key
personnel, human error, poor communication and service leading to reputational
damage and fraud.
Risks outside the management's influence include falling markets, terrorism, a
deteriorating UK economy, investment industry price competition and hostile
takeovers.
Management monitor all risks to the business, they record how each risk is
mitigated and have warning flags to identify increased risk levels. Management
recognise the importance of risk management and view it as an integral part of
the management process which is tied into the business model and is described
further in the Risk management and internal control section on page 50 of the
2021 Annual Report and Note 2 "Financial risk management" on page 111 of the
2021 Annual Report.
16 Contingent assets and liabilities
The Group can earn performance fees on some of the segregated and fund
accounts that it manages. In some cases a proportion of the fee earned is
deferred until the next performance fee is payable or offset against future
underperformance on that account. As there is no certainty that such deferred
fees will be collectable in future years, the Group's accounting policy is to
include performance fees in income only when they become due and collectable
and therefore the element (if any) deferred beyond 30 September 2021 has not
been recognised in the results for the period.
17 Directors' responsibilities
The Directors confirm that:
i. This condensed set of interim financial statements has been
prepared in accordance with UK-adopted IAS 34;
ii. The Half Year Report herein includes a fair review of the
information required by DTR 4.2.7, being an indication of important events
that have occurred during the first six months of the current financial year
and their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties faced by the company and
the undertakings included in the consolidation taken as a whole for the
remaining six months of the year; and
iii. The Half Year Report includes, as required by DTR 4.2.8 a fair view
of 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 and
Accounts that could have a material effect on the financial position or
performance of the Group in the past six months of the current financial year.
There has been a change to the board of directors during the six month period
ended 30 September 2021. A list of current directors is maintained on the
Liontrust Asset Management Plc website.
By Order of the Board
John S.
Ions
Vinay K. Abrol
Chief
Executive
Chief Operating Officer and
Chief Financial Officer
30 November 2021
Forward Looking Statements
This report contains certain forward-looking statements with respect to the
financial condition, results of operations and businesses and plans of the
Group. These statements and forecasts involve risk and uncertainty because
they relate to events and depend upon circumstances that have not yet
occurred. There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied by these
forward-looking statements and forecasts. Nothing in this report should be
construed as a profit forecast. These forward-looking statements are made only
as at the date on which such statements are made and the Group does not
undertake to update forward-looking statements contained in this announcement
or any other forward-looking statement it may make.
ENDS
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BLBDBBGXDGBGRecent news on Liontrust Asset Management
See all newsREG - Liontrust Asset Mgmt Spectris PLC - Form 8.3 - SPECTRIS PLC
AnnouncementREG - Liontrust Asset Mgmt Alpha Group Intl PLC - Form 8.3 - ALPHA GROUP INTERNATIONAL PLC
AnnouncementREG - Liontrust Asset Mgmt Spectris PLC - Form 8.3 - SPECTRIS PLC
AnnouncementREG - Liontrust Asset Mgmt Craneware plc - Form 8.3 - CRANEWARE PLC
AnnouncementREG - Liontrust Asset Mgmt GlobalData PLC - Form 8.3 - GLOBALDATA PLC
Announcement