There may be more caution towards emerging markets since the US election, but investors in City of London Investment Group (CLIG) can take some succour from these full-year results. A significant uplift in post-tax profit gave management the confidence to raise the final dividend for the first time in seven years.
With almost all revenue earned in US dollars and 40 per cent of costs sterling-denominated, improved profitability was largely due to favourable currency effects. Funds under management grew 17 per cent to $4.7bn (£3.5bn), thanks to investment gains. However, this was below the 24 per cent improvement achieved by the underlying MSCI emerging markets total return index. Its core emerging markets strategies – which account for 90 per cent of funds under management – suffered net outflows of $306m as intuitional investors banked profits, management said.
Diversification products – which increased to 10 per cent of total funds under management – won $26m in net new business. These strategies include global tactical asset allocation and developed markets closed-ended funds.
Analysts at house broker Zeus Capital expect adjusted pre-tax profit of £12.9m for the 12 months to June 2018, giving EPS of 39p (from £11.6m and 36.7p in 2017).
| CITY OF LONDON INVESTMENT GROUP (CLIG) | ||||
| ORD PRICE: | 395p | MARKET VALUE: | £106m | |
| TOUCH: | 395-405p | 12-MONTH HIGH: | 429p | LOW: 331p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 67p | NET CASH: | £13.9m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 29.4 | 8.9 | 24.9 | 24 |
| 2014* | 24.2 | 7.4 | 21.1 | 24 |
| 2015 | 25.4 | 8.9 | 26.4 | 24 |
| 2016 | 24.4 | 8.0 | 23.3 | 24 |
| 2017 | 31.3 | 11.6 | 36.9 | 25 |
| % change | +28 | +46 | +58 | +4 |
| Ex-div: | 12 Oct | |||
| Payment: | 31 Oct | |||
| *13-month period, restated | ||||
