Redemptions at fund manager City of London Investment Group (CLIG) helped funds under management fall 16 per cent to £2.4bn in the year to end-May. That included a single large withdrawal in November by a client that had decided to manage its emerging market exposure in-house. Consequently, earnings suffered as management fees fell from £34.1m to £29.4m.
By management's own admission, the impact of adverse market sentiment was exacerbated by poor investment decisions. The company was obliged to focus on addressing the sudden resignation of both the chief executive and finance director in April. However, steps have been taken to improve investment procedures and more favourable market conditions has left the group reopening to new investors - it will accept up to a total of $500m (£320m) by end-2014, which should go some way towards replacing the $1.3bn of assets lost in 2012 and 2013.
Custody payments, meanwhile - paid to third parties who introduce new business to City of London - continue to run down. While commission paid out fell from £5.2m to £4.2m and is expected to cease altogether by 2020.
Prior to these figures, broker Canaccord Genuity was forecasting pre-tax profit of £8m for 2014, giving EPS of 22.2p (2013: 24.6p).
| CITY OF LONDON (CLIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 220p | MARKET VALUE: | £59m | |
| TOUCH: | 220-228p | 12-MONTH HIGH: | 358p | LOW: 212p |
| DIVIDEND YIELD: | 10.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 55p | NET CASH: | £10.1m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 20.2 | 5.40 | 16.1 | 15.0 |
| 2010 | 30.0 | 10.4 | 28.5 | 22.0 |
| 2011 | 36.5 | 13.1 | 35.1 | 24.0 |
| 2012 | 34.1 | 11.5 | 33.8 | 24.0 |
| 2013 | 29.4 | 8.86 | 24.9 | 24.0 |
| % change | -14 | -23 | -26 | - |
Ex-div: 9 Oct Payment: 25 Oct | ||||
