City of London Investment Group (CLIG) has published its latest financial results and reported assets, revenues and profits at their highest levels in the company’s history – helped by limited disruption during the pandemic.
According to the report, statutory pre-tax profits went up by 137% in the year ending 30 June to £22.2m, compared to £9.4m in 2020.
A further breakdown of the results on CLIG’s website reported Funds under Management (FuM) of $11.4bn (£8.3bn) – an increase compared to $5.5bn (£4.4bn) at the beginning of this financial year.
Net fee income was £52.5m, compared to £31.7m last year. While underlying profit before tax was £26.7m, compared to £11.5m in 2020 – and profit before tax was £22.2m, compared to £9.4 m last year.
Underlying basic earnings per share were up to 48.1p, compared to 38.2p last year and basic earnings per share were 39.4p, compared to 30.3pm in 2020.
CLIG said the positive results were helped by operating entities, CLIM and KIM, sustaining full and uninterrupted remote working functionality throughout the Covid-19 pandemic.
Factors behind the results
The group’s chair, Barry Aling, commented on the results in a statement.
“Combined FuM rose nearly 5% to $11.4bn in the six months to 30 June 2021.
“The group’s success in growing FuM was due in no small part to excellent investment performance, as detailed later in this report, with ten of the eleven investment strategies across the combined group achieving first or second quartile relative performance.
“Equally important is the significant change in the balance of assets over the last five years as a result of the rapid growth in the international equity strategies and the KIM merger,” he said.
Aling also said that although Emerging Markets (EM) assets have grown by nearly 50% over the last five years to $5.4bn, they now represent less than 50% of total FuM compared with 91% in 2016, giving the group a more diversified asset base.
“Given the capacity constraints existent within the EM closed-end fund space, further development of both the diversified strategies and KIM’s wealth management business is a key objective in realising long-term asset growth,” he added.
Payment to shareholders
The group also announced an increased final dividend to 22p per share, from 20p last year, which will be paid to shareholders on 29 October.
“As a result of the continued growth in profits through the second half of the year to June 2021, the board is able to recommend a final dividend to shareholders of 22p per share. Taken together with the increased interim payment,” the company said.
It brings the total dividends for the year to 33p, equivalent to a 10% increase year-on-year.
The company said the level of support intervention over the last 18 months has enabled macro economic indicators and asset markets, generally, to weather the pandemic with comparative ease, despite the disproportionate impact on specific sectors.
“The consensus Bloomberg forecast for GDP growth this year is 5.3% for developed economies and 6.6% for the emerging economies and, while this will slow a little in 2022, the existing consensus is for growth to remain above the long-term averages,” the company said in a statement.
“While it may be unrealistic to expect markets to continue their sharp climb over the last year, the recovery in economic activity should ensure that any correction will be a ‘soft landing’ rather than a full-blown bear market. Given the more diversified revenue base now enjoyed by the group, as highlighted earlier, we are therefore cautiously optimistic for the year ahead and believe we are prepared to manage any headwinds that may arise,” it added.
Despite the positive announcement, shares in CLIG were down 1.54% on Monday morning.