The turbulence of emerging markets has made for a tricky period for City of London Investment Group (CLIG). Funds under management fell 11 per cent in the first half, and since the end of the period have deteriorated further to $3.5bn (£2.5bn) at the end of January.
Chief executive Barry Olliff is taking the long view, saying that as long as the funds were outperforming the benchmark "our clients will be happy". That benchmark, the MSCI Emerging Markets Index, fell 17 per cent over the period. The manager's good relative performance, as well as new mandates won from investors seeing value in its markets, cushioned the blow.
The market outlook is not particularly positive, which will not be a surprise to anyone who has been reading the financial pages. But a larger worry for shareholders is the future of the annual dividend, which has been constant at 24p for some years. For now, this is covered by current earnings, and the group has cash in the bank.
Analysts at Canaccord Genuity reduced their forecasts post results and are anticipating adjusted pre-tax profit of £7.6m and EPS of 22.3p for the full 2016 financial year, compared with £8.9m and 26.2p in FY2015.
| CITY OF LONDON INVESTMENT GROUP (CLIG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 301p | MARKET VALUE: | £81m | |
| TOUCH: | 292p-305p | 12-MONTH HIGH: | 380p | LOW: 265p |
| DIVIDEND YIELD: | 8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 48p | NET CASH: | £8.38m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 12.2 | 4.30 | 12.7 | 8 |
| 2015 | 11.8 | 3.58 | 10.6 | 8 |
| % change | -3 | -17 | -17 | - |
Ex-div: 25 Feb Payment: 11 Mar £1=$1.43 | ||||
