REG - Liontrust Asset Mgmt - Trading Statement
19/04/2023 07:00
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RNS Number : 6665W Liontrust Asset Management PLC 19 April 2023
LEI: 549300XVXU6S7PLCL855
For immediate release
19 April 2023
Stock Exchange Announcement
LIONTRUST ASSET MANAGEMENT PLC
Trading Update
Liontrust Asset Management Plc ("Liontrust", or the "Company"), the specialist
independent fund management group, today issues its trading update for both
the twelve months ended 31 March 2023 (the "Financial Year") and the three
months ended 31 March 2023 (the "Period").
Highlights
· Adjusted profit before tax to be ahead of market expectations for the
Financial Year and will be not less than £86 million.
· Net outflows of £2.0 billion(1) in the Period and £4.8 billion(1)
for the Financial Year.
· Assets under management and advice ("AuMA") were £31.4 billion as at
31 March 2023, a decrease of 3.6% over the Period.
· AuMA as at 17 April 2023 were £31.8 billion.
(1) Includes £608 million related to the termination of a life company
advisory agreement for the Multi Asset team and £149 million related to the
termination of the agreement with Majedie Investments Plc (as at 31 January
2023) for the Global Fundamental team.
Commenting, John Ions, Chief Executive, said:
"It has been a challenging year for Liontrust in terms of net outflows and
mixed performance for our funds. But this has to be set against a backdrop of
the industry in aggregate suffering UK retail net outflows in 10 out of the 12
months last year, according to the Investment Association ("IA"). Despite
these headwinds, Liontrust has delivered impressive financial performance.
The strength of a business and the robustness of its strategy is best
demonstrated when it is tested in difficult times. Liontrust has shown that
the business as a whole is operating well and we will continue to broaden our
products and distribution channels while the adherence to process, focus in
distribution and strong brand ensure we will emerge well positioned for future
expansion.
The Liontrust brand remains strong and will be a key driver of the growth of
the business. The brand has risen in the rankings in the UK (to 6th) as well
as across the rest of Europe according to Broadridge's annual survey of asset
management brands, which was released in March 2023.
It is a year since we acquired Majedie Asset Management with a final purchase
price of £41 million(2). Over the financial year, the investment team who
joined from Majedie generated performance fees of £12 million, out of a total
of at least £17 million for Liontrust as a whole.
The acquisition of Majedie has broadened our investment capability, including
in alternative investments and global equity funds. In February 2023, we
announced the consolidation of our global investment teams to provide greater
focus. This led to the Global Equity team and funds becoming part of the
Global Fundamental team, with the former reporting to Tom Record, who is
responsible for global equities within the enlarged Global Fundamental team.
Liontrust was honoured to take on the management of the prestigious £1.1
billion Edinburgh Investment Trust through the Majedie acquisition. The end of
March 2023 marked the three-year anniversary of James de Uphaugh becoming
Portfolio Manager of the Trust, during which time its NAV delivered a
cumulative total return of 65.9% against 47.4% by the FTSE All-Share index(3).
The discount of the Trust has narrowed from 11.5% at 31 March 2020 to 7.5% at
31 March 2023(3).
Our Multi-Asset range has been refocused and enhanced to continue to ensure it
offers vital consistency and meets the suitability requirements of advisers
and their clients. The team is currently presenting to advisers at more than
50 venues throughout the UK.
The financial strength of Liontrust, superior brand recognition and
disciplined focus on investment processes in a very challenging environment is
testament to the strong operating platform of the business. This gives me
great confidence about the future of Liontrust."
(2) Excluding deal and restructuring costs.
(3) Source: Morningstar. Past performance is not a guide to future
performance, investments can result in total loss of capital.
Market expectations
Liontrust announces that it expects revenues and adjusted profit before tax to
be ahead of market expectations for the Financial Year. Adjusted profit before
tax will be not less than £86 million, driven primarily by stronger than
expected performance fee revenues during the Financial Year of at least of
£17.0 million (2022: £12.6 million) received across three of our investment
teams (Global Fundamental team, Cashflow team and Sustainable Investment
team), the Global Fundamental team contributing £11.9 million.
Assets under management and advice
On 31 March 2023, our AuMA stood at £31,430 million and were broken down by
type and investment process as follows:
Process Total Institutional Accounts & Funds Investment Trusts UK Retail Funds & MPS Alternative Funds International Funds & Accounts
(£m) (£m) (£m) (£m) (£m) (£m)
Sustainable Investment 11,210 347 - 10,286 - 577
Economic Advantage 7,896 430 - 7,242 - 224
Multi-Asset 5,052 - - 4,810 242 -
Global Innovation 619 - - 619 - -
Cashflow Solution 1,437 543 - 747 140 7
Global Fundamental 4,855 1,074 1,139 1,886 702 54
Global Fixed Income 361 - - 131 - 230
Total 31,430 2,394 1,139 25,721 1,084 1,092
AuMA as at 17 April 2023 were £31.760 million.
Flows
The net outflows over the Period were £2,024 million(2) (2021: £432
million). A reconciliation of fund flows and AuMA over the Period is as
follows:
Total Institutional Accounts & Funds Investment Trusts UK Retail Funds & MPS Alternative Funds International Funds & Accounts
(£m) (£m) (£m) (£m) (£m) (£m)
Opening AuMA - 1 January 2023 32,614 2,673 1,163 26,639 959 1,180
Net flows(4) (2,024) (382) (79) (1,610) 99 (53)
Market and Investment performance 840 103 55 692 26 (35)
Closing AuMA - 31 March 2023 31,430 2,394 1,139 25,721 1,084 1,092
The net outflows over the Financial Year were £4,842 million(4) (2021: net
inflows £2,488 million). A reconciliation of fund flows and AuMA over the
Financial Year is as follows:
Total Institutional Accounts & Funds Investment Trusts UK Retail Funds & MPS Alternative Funds International Funds & Accounts
(£m) (£m) (£m) (£m) (£m) (£m)
Opening AuMA - 1 April 2022 33,548 1,408 - 30,113 370 1,657
Net flows(4) (4,842) (1,148) (89) (3,185) 274 (693)
Market and Investment performance (2,424) (177) (11) (2,085) 45 (197)
Majedie acquisition 5,148 2,311 1,239 878 395 325
Closing AuMA - 31 March 2023 31,430 2,394 1,139 25,721 1,084 1,092
(4) Includes £608 million related to the termination of a life company
advisory agreement for the Multi Asset team and £149 million related to the
termination of the agreement with Majedie Investments Plc (as at 31 January
2023) for the Global Fundamental team.
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 1 3 1 25/03/2009
Liontrust Special Situations Fund 1 1 3 3 10/11/2005
Liontrust UK Smaller Companies Fund 1 1 2 2 08/01/1998
Liontrust UK Micro Cap Fund 1 1 1 1 09/03/2016
Sustainable Future funds
Liontrust SF Monthly Income Bond Fund 1 2 1 2 12/07/2010
Liontrust SF Managed Growth Fund 2 1 2 4 19/02/2001
Liontrust SF Corporate Bond Fund 1 3 2 3 20/08/2012
Liontrust SF Cautious Managed Fund 1 2 4 4 23/07/2014
Liontrust SF Defensive Managed Fund 1 1 4 4 23/07/2014
Liontrust SF European Growth Fund 3 4 4 4 19/02/2001
Liontrust SF Global Growth Fund 3 1 4 4 19/02/2001
Liontrust SF Managed Fund 2 1 3 4 19/02/2001
Liontrust UK Ethical Fund 3 3 4 4 01/12/2000
Liontrust SF UK Growth Fund 3 3 4 4 19/02/2001
Global Innovation funds
Liontrust Global Dividend Fund 2 1 3 4 20/12/2012
Liontrust Global Innovation Fund 1 4 4 4 31/12/2001
Liontrust Global Technology Fund 3 2 3 4 15/12/2015
Global Fundamental Global Equity funds(5)
Liontrust Balanced Fund 1 1 3 4 31/12/1998
Liontrust China Fund 4 4 3 3 31/12/2004
Liontrust Emerging Market Fund 3 4 4 4 30/09/2008
Liontrust Global Smaller Companies Fund 1 3 4 4 01/07/2016
Liontrust Global Alpha Fund 1 1 3 4 31/12/2001
Liontrust India Fund 4 3 1 2 29/12/2006
Liontrust Japan Equity Fund 2 2 1 1 22/06/2015
Liontrust Latin America Fund 3 3 4 4 03/12/2007
Cashflow Solution funds
Liontrust European Dynamic Fund(6) 1 1 1 2 15/11/2006
Global Fixed Income funds
Liontrust Strategic Bond Fund 3 - 3 2 08/05/2018
Global Fundamental funds(7)
Liontrust UK Equity Fund 1 3 3 2 27/03/2003
Liontrust UK Focus Fund 1 3 3 3 29/09/2003
Liontrust Income Fund 1 1 2 2 31/12/2002
Liontrust UK Equity Income Fund 2 4 4 4 19/12/2011
Liontrust US Opportunities Fund 2 3 3 4 31/12/2002
Edinburgh Investment Trust Plc(8) 1 - 1 1 27/03/2020
Liontrust Global Equity Fund 2 2 2 3 30/06/2014
Liontrust Global Focus Fund 2 2 2 2 30/06/2014
Liontrust GF US Equity Fund 3 2 2 3 26/06/2014
Liontrust GF UK Equity Fund 4 3 3 2 03/03/2014
Liontrust GF International Equity Fund 2 - 3 3 17/12/2019
Source: Financial Express to 31 March 2023 as at 5th April 2023, bid-bid,
total return, net of fees, based on primary share classes. Edinburgh
Investment Trust Plc NAV source: Morningstar. 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, OEICs, Irish authorised OEICs
(primary share class) or UK listed investment trusts.
(5) Liontrust Russia Fund is not included as it is currently suspended and in
an IA sector that is not rankable (e.g., Specialist) so it would not be a fair
comparison to make.
(6) Liontrust European Growth Fund changed its name to Liontrust European
Dynamic Fund on 11 July 2022.
(7) The onshore and offshore Tortoise funds are not included as they are not
in IA sectors.
(8) Edinburgh Investment Trust Plc uses the IT UK Equity Income sector.
Update on Majedie acquisition total final consideration
In December 2021 we announced the proposed acquisition of Majedie Asset
Management Limited for total considetation of up to £120 million(9)
consisting of:
· £80 million satisfied through the issue of 3,683,241 new Ordinary
Shares to Majedie Shareholders at Completion ("Initial Consideration Shares");
· Up to £8.3 million, with up to £5.3 million being satisfied with
the issue of 244,014 new Ordinary Shares ("Excess NAV Shares") and up to £3.0
million in cash to be issued when the net asset value of Majedie is agreed and
exceeds a specified minimum, to Majedie Shareholders ("Excess NAV");
· Up to £11.7 million satisfied through the issue of 538,674 new
Ordinary Shares ("Conditional Consideration Shares") to Majedie Shareholders
within 30 business days of 30 June 2025 dependent on minimum AuMA for the
period from Completion to 31 March 2023 and performance fees earned for the
period from Completion to 31 March 2025; and
· Up to £20 million satisfied in cash ("Pipeline Consideration") to be
paid to Majedie Shareholders dependent on achieving certain institutional
growth targets from their existing new business pipeline over a period of up
to three years
The proposed acquisition completed on 1 April 2022 and the final determination
of the total consideration excluding consideration paid on a "cash for cash"
basis is detailed below:
Tranche Calculation Consideration(9)
Initial Consideration Shares 3,683,241 shares at 1274p(10) minus £5.5m of cash for regulatory capital £41.4 million
Excess NAV Shares Only a cash for cash payment due Nil
Conditional Consideration Shares Condition not satisfied Nil
Pipeline Consideration Shares Condition not satisfied Nil
Total Consideration £41.4 million
The structuring of the consideration for the acquisition has provided
Liontrust shareholders with protection against challenging market conditions.
(9) Exluding deal and restructuring costs.
(10) Liontrust share price as at close of business on 31 March 2022 was
1274p.calculated as 3.683 million multiplied by £12.74 minus £5.5 million
equals £41.4 million. Source: Liontrust.
Full year results
Liontrust will be announcing its full year results for the financial year
ended 31 March 2023 on Wednesday, 21 June 2023.
For further information please contact:
Teneo (Tel: 020 7353 4200, Email: liontrust@teneo.com)
Tom Murray or Stephanie Mackrell
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: Stephen Jones
Corporate Advisory: Dominic Morley
Forward Looking Statements
This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and businesses and plans of
Liontrust. 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. As a result, the Liontrust's actual
future financial condition, results of operations and business and plans may
differ materially from the plans, goals and expectations expressed or implied
by these forward-looking statements. Liontrust undertakes no obligation
publicly to update or revise forward-looking statements, except as may be
required by applicable law and regulation (including the Listing Rules of the
Financial Conduct Authority). Nothing in this announcement should be
construed as a profit forecast or be relied upon as a guide to future
performance.
Other information
The release, publication, transmission or distribution of this announcement
in, into or from jurisdictions other than the United Kingdom may be restricted
by law and therefore persons in such jurisdictions into which this
announcement is released, published, transmitted or distributed should inform
themselves about and observe such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities laws of any such
jurisdiction.
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