# City of London Investment Group PLC Trading Update

- Link: https://www.directorstalkinterviews.com/city-london-investment-group-plc-trading-update/412754846
- Published: 2018-07-17T13:52:33+01:00
- Author: Amilia Stone

PRE-CLOSE TRADING UPDATE for the year to 30 June 2018

**City of London Investment Group PLC** (LON:CLIG), a leading specialist asset management
group focused on emerging markets and closed-end funds, has today provided a pre-
close trading update for its financial year ended 30 June 2018. The numbers that
follow are all unaudited.

Funds under management were US$5.1 billion (£3.9 billion) at 30 June 2018 (2017:
US$4.7 billion or £3.6 billion), representing a 10% increase in US$ terms for the
year.  A breakdown by strategy follows:

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**FuM ($mn)**

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**Strategy Index**

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Jun-18

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Jun-17

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%

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Net

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%

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(estimate)

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inc/dec

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Flows

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inc/dec

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EM

  |

        4,207

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        4,202

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0%

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 |

(215)

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 |

MSCI EM

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8%

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DEV

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           481

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           179

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169%

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   279

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MSCI ACWI

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11%

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OV*

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           174

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           110

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58%

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     54

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ACWI/Barclays Global Agg

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6%

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Frontier

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           245

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           172

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42%

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     67

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MSCI Frontier

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2%

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        5,107

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      4,663

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   185

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*Opportunistic Value formerly Global Tactical Asset Allocation, GTAA

The core EM strategy underperformed (by approximately 330bps, net of fees) for the
full year as discounts widened (cost approximately 200bps) and an underweight to
China, specifically the IT sector detracted from performance.  The Developed, Opportunistic
Value (formerly GTAA) and Frontier strategies all recorded positive relative performance
due to a combination of positive discount and allocation effects.

The Group’s overhead for the year to 30 June 2018 is expected to be £12.5 million(
2017: £11.9 million) and the current monthly run-rate is c £1.1m.

For the year to 30 June 2018, the Group expects that pre-tax profits will be approximately
£12.8 million (2017: £11.6 million), and that profits after an anticipated tax charge
of £2.7 million (21% of pre-tax profits) will be approximately £10.1 million (2017:
profits of £9.1 million after a tax charge of £2.5 million, representing 22% of 
pre-tax profit).  Basic and fully diluted earnings per share are expected to be 
39.5p and 39.3p respectively (2017: 36.9p and 36.7p).

The Board is recommending an increased final dividend of 18p per share (2017: 17p).
This would bring the total for the year to 27p (2017: 25p), for dividend cover of
1.47 times (2017: 1.46 times).

The Board confirms the final dividend timetable for the year to 30 June 2018:

·     ex-dividend date:                     11 October 2018

·     dividend record date:             12 October 2018

·     payable:                                     30 October 2018

City of London expects to announce final results alongside publication of its Accounts
for the year to 30 June 2018 on 17 September 2018. The Group’s Annual General Meeting
will be held on 22 October 2018.

 

**Template**

Please see the attached graph which is based on the following assumptions and includes
the estimated cost of a maintained dividend:

[http://www.rns-pdf.londonstockexchange.com/rns/8098U_1-2018-7-16.pdf](http://www.rns-pdf.londonstockexchange.com/rns/8098U_1-2018-7-16.pdf)

**Assumptions**:

 * Starting point Current FuM (end June 2018)
 * Net increase in FuM in 2018/2019 (straight-lined to June 2019):

·     emerging market strategies zero

·     diversification strategies $250m

 * Operating margin adjusted monthly for change in product mix and commission run-
   off
 * Market growth: 0%
 * Increase in overheads: 3%
 * EIP charge: 4%
 * Corporation tax based on an estimated average rate of 20%
 * Exchange rate assumed to be £1/$1.32 for entire period
 * Number of CLIG Shares in issue (26.9m) less those held by the Employee Benefit
   Trust (1.5m) as at 30 June 2018

This can also be found on our website at:

[https://www.citlon.com/investor-relations/dividend-cover.php](https://www.citlon.com/investor-relations/dividend-cover.php)

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