A heavy exposure to emerging markets – which were hindered by stronger US growth and ongoing trade disputes – hampered City of London Investment Group’s (CLIG) performance during the last six months of 2018. Emerging market strategies suffered $156m (£121m) in net outflows, which the popularity of developed market strategies with clients failed to offset, resulting in group net outflows of $43m. Together with negative market movements, that pushed funds under management down 10 per cent during the first half to $4.6bn, reducing net management fee income.
After lagging the MSCI Emerging Markets Index (MXEF) benchmark during the start of 2018, the core emerging market strategy managed a 0.2 per cent outperformance by the end of last year. However, management plans to change the group’s benchmark – which has been the total return of its peers' share prices – from the time of its full-year results, attempting to double the total return of the MXEF index and compound the total return of its shares by 7.5 per cent to 12.5 per cent on an annualised basis.
The group – which invests via a series of closed-ended funds – also continued to diversify its funds, establishing an international and emerging market real estate investment trust with a combined market value of $5.5m.
Analysts at house broker Zeus Capital are forecasting adjusted pre-tax profits of £13.5m for the year to June 2019, giving EPS of 40.4p (from £12.8m and 39.3p in FY2018).
| CITY OF LONDON INVESTMENT GROUP (CLIG) | ||||
| ORD PRICE: | 397p | MARKET VALUE: | £106m | |
| TOUCH: | 390-397p | 12-MONTH HIGH: | 459p | LOW: 350p |
| DIVIDEND YIELD: | 6.8% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 77p | NET CASH: | £13.8m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 17.1 | 6.6 | 20.2 | 9 |
| 2018 | 15.6 | 5.2 | 16.3 | 9* |
| % change | -9 | -21 | -19 | - |
| Ex-div: | 07 Mar | |||
| Payment: | 22 Mar | |||
| *Excludes special dividend of 13.5p a share | ||||
