TIDMCLIG

RNS Number : 8856S

City of London Investment Group PLC

19 July 2022

City of London Investment Group PLC

19 July 2022

The information contained within this announcement is deemed by the Group to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

CITY OF LONDON INVESTMENT GROUP PLC

("City of London" or "the Group" or "the Company" or "CLIG")

PRE-CLOSE TRADING UPDATE for the year to 30 June 2022

City of London (LSE: CLIG), a leading specialist asset management group offering a range of institutional and retail products investing primarily in closed-end funds ("CEFs"), provides a pre-close trading update for its financial year ended 30 June 2022. The numbers that follow are unaudited.

On a consolidated basis, Funds under Management (FuM) were US$9.2 billion (GBP7.6 billion) at 30 June 2022. This compares with US$11.4 billion (GBP8.3 billion) at the Group's year end on 30 June 2021. A breakdown by strategy follows:

 
                  FuM ($ million)                     Strategy Index 
               Jun-22   Jun-21         %     Net                                % 
           (estimate)            inc/dec   Flows                          inc/dec 
 EM             3,703    5,393     (31%)   (316)   MSCI EM Net TR         (25.3%) 
 KIM            3,433    3,919     (12%)   (110)   Not applicable 
 INTL           1,812    1,880      (4%)     453   MSCI ACWI ex US        (19.4%) 
                                                   ACWI/Barclays Global 
 OV               193      231     (16%)       1    Agg                   (15.2%) 
 Other*            83       26      218%      74 
                9,224   11,449               102 
          -----------  -------            ------ 
 
 

* includes Frontier, REIT and seed investments

Investment performance was behind relevant benchmarks for the bulk of CLIM's assets due to a combination of country allocation in the Emerging Market strategy and NAV performance at the underlying closed-end funds in the International and Opportunistic Value strategies. KIM's equity and fixed-income strategies outperformed their market indices over the period, while US equity lagged its benchmark.

Net investment flows were US$102 million for the Group over the period, with CLIM posting net gains, while KIM saw net outflows as clients reduced exposure to markets due to ongoing volatility in the second half of the year. After a pause in 2020 a renewed marketing emphasis over the period, combined with the excellent long term track record was rewarded for the International CEF Strategy.

With regard to business development, the Group continues to develop an active pipeline across all of its major CEF offerings.

Operations

The Group's income currently accrues at a weighted average rate of approximately 73 basis points of FuM, net of third party commissions.

The Group's overheads for the year to 30 June 2022 are expected to be GBP19.7 million (2021: GBP16.8 million). "Fixed" costs are c.GBP1.7 million per month, and accordingly the run-rate for operating profit, before profit-share and amortisation of intangibles is approximately GBP2.8 million per month based upon current FuM and a US$/GBP exchange rate of US$1.2178 to GBP1 as at 30 June 2022.

For the year to 30 June 2022, the Group estimates that the unaudited profit before amortisation of intangibles and taxation to be approximately GBP27.2 million, including non-controlling interest ("NCI") loss of GBP0.1 million (2021: GBP27.2 million profit before amortisation of intangibles, exceptional merger costs of c. GBP1.7 million and taxation, NCI profit of nil) (2021: GBP25.5 million profit before amortisation and taxation).

Profits after an anticipated tax charge of GBP5.0 million (representing 22% of profits before taxation) will be approximately GBP18.1 million (2021: profits of GBP17.0 million after a tax charge of GBP5.3 million, representing 19% of profits before exceptional merger costs and taxation). Basic and fully diluted earnings per share are expected to be 37.1p and 36.6p respectively (2021: 39.4p and 38.8p).

Dividend

The Board is proposing to recommend a final dividend of 22p per share (2021: 22p), subject to approval by shareholders at the Company's Annual General Meeting to be held on 31 October 2022. This would bring the total dividend payment for the year to 46.5p, including the special dividend of 13.5p paid in March (2021: 33p, special dividend nil). Rolling five-year dividend cover, excluding the special dividend equates to 1.22 times (2021: 1.29 times).

The Board confirms the final dividend timetable for the year to 30 June 2022:

 
 -- ex-dividend date:                   29 September 2022 
 -- dividend record date:               30 September 2022 
 -- DRIP election date/ deadline        7 October 2022 
  for currency election: 
 -- announcement of USD dividend        21 October 2022 
  conversion rate: 
 -- dividend payment date: 4 November   4 November 2022 
  2022 
 

City of London expects to announce its final results alongside publication of its Accounts for the year to 30 June 2022 on 19 September 2022. The Group's Annual General Meeting will be held on 31 October 2022.

City of London Investment Group is a UK registered company, listed on the London Stock Exchange and declares its dividends in GBP. Shareholders based in the US can now elect to receive dividends in USD, should they wish to do so. The currency conversion rate from GBP to USD will be fixed two weeks before the dividend payment date. The currency election form can be found on our website at https://www.clig.com/investor-reports/Currency-Election-Form-2022.pdf

Alternatively, overseas shareholders may be able to use the International Payment Service (IPS) and receive dividend payments direct to their bank account in local currency. Further information regarding the IPS including terms and conditions, costs and forms for signing up are available from Link Group at https://ww2.linkgroup.eu/ips .

Dividend cover template

Please see dividend cover template attached here.

http://www.rns-pdf.londonstockexchange.com/rns/8856S_1-2022-7-18.pdf

The dividend cover template shows the quarterly estimated cost of dividend against actual post-tax profits for last year, the current year and the assumed post-tax profit for next financial year based upon specified assumptions.

For further information, please visit https://www.clig.com/ or contact:

Tom Griffith, CEO

City of London Investment Group PLC

Tel: 001-610-380-0435

Martin Green

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20-3829-5000

This release includes forward-looking statements, which may differ from actual results. Any forward-looking statements are based on certain factors and assumptions, which may prove incorrect, and are subject to risks, uncertainties and assumptions relating to future events, the Group's operations, results of operations, growth strategy and liquidity.

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END

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July 19, 2022 02:00 ET (06:00 GMT)

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