CITY OF LONDON INVESTMENT GROUP PLC HALF YEAR RESULTS TO 31ST DECEMBER 2024 AND DIVIDEND DECLARATION
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HALF YEAR SUMMARY
- Funds under Management (FuM) of
$9.9 billion at31st December 2024 . This compares with$10.2 billion at the beginning of this financial year on1st July 2024 and$9.6 billion at31st December 2023 - FuM at
31st January 2025 of$10.1 billion - Net fee income representing the Group's management fees on FuM was
$35.3 million (31st December 2023 :$32.2 million ) - Underlying profit before tax* was
$15.2 million (31st December 2023 :$13.3 million ). Profit before tax was$12.6 million (31st December 2023 :$11.1 million ) - Maintained interim dividend of 11p per share (
31st December 2023 : 11p) payable on3rd April 2025 to shareholders on the register on7th March 2025
*This is an Alternative Performance Measure (APM). Please refer to the CEO review for more details on APMs.
For access to the full interim report, please follow the link below:
http://www.rns-pdf.londonstockexchange.com/rns/2739Y_2-2025-2-24.pdf
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.
Dividend
The Board declares an interim dividend of
Shareholders may choose to reinvest their dividends using the Company's Dividend Reinvestment Plan, to do this please visit www.signalshares.com or if you hold your shares through a broker please contact them. The deadline to lodge your election is
The Board confirms the following interim dividend timetable:
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• ex-dividend date: |
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• dividend record date: |
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• DRIP election date |
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• dividend payment date: |
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Dividend cover template
Please see dividend cover template attached here. http://www.rns-pdf.londonstockexchange.com/rns/2739Y_1-2025-2-24.pdf
The dividend cover template shows the quarterly estimated cost of dividend against actual post-tax profits for last year, the current six months and the assumed post-tax profit for the remainder of the current year and the next financial year based upon specified assumptions.
CHAIR'S STATEMENT
Introduction
CLIG is an investment-led organisation, focused on providing our teams with the resources they need to continue to provide strong long-term performance for our clients. Our investment teams produced good absolute and relative performance across most strategies in the period from
Assets
Funds under management (FuM) averaged
We were happy with asset growth progression over the past year, but witnessed several outflows as we approached year end. These coincided with talk of tariffs and trade wars as the prospect of a second Trump presidency was absorbed by markets. In the short term, this underpinned the US and sparked a sell-off in international and emerging markets. Contrast these fourth quarter performances: S&P 500 +2.4%, NASDAQ Composite +6.4%,
For added perspective, consider the Group's FuM growth over the past five and ten years from
It is important to note that not only have FuM grown at CLIG, but the composition of funds managed has also changed meaningfully. Four factors have largely driven this change. First, the merger with
Performance
Several of our shareholders have asked for more information on performance, so I am taking this opportunity to go into some detail. Our OV team at CLIM delivered strong absolute returns and outperformed their indices by between 6% and 16%. Exceptional KIM performance deserves to be highlighted as well, particularly the team's Taxable Fixed Income and Tax-Sensitive strategies, comprising c.26% of Group FuM. These products outperformed their indices by 6.2% and 7.7% in 2024, a staggering feat in fixed income. The vast majority of our
ESG
Historically, we have secured renewable energy for our
Business travel increased during the period with growth in our marketing efforts as the team met clients and prospects. To offset the impact of increased business travel, the Group will continue with its carbon offset programme.
All employees regularly receive a training programme directed towards diversity, equity and inclusion. To reinforce awareness of their role in protecting our network infrastructure, all employees receive monthly training on the critical issue of cybersecurity.
Alongside adherence to CLIG's governance obligations at Board level, the Group is strongly committed to regular workforce engagement sessions to develop a closer relationship between employees and the Non-Executive Directors (NEDs). We encourage good relations between the NEDs and employees.
Your Board
Dividends
Your Board is declaring an unchanged interim dividend of 11p per share. We continue to believe that the 1.2 times dividend cover policy based on a rolling five-year period provides a prudent template that serves to protect shareholders from volatility that can affect profits of asset management companies. The Board applies this policy using Underlying Profits†. The interim dividend will be paid on
Shareholder engagement
During 2024, our executive team took a number of constructive steps to facilitate engagement with our existing and potential shareholders. Most recently in
Outlook
2024 was CLIG's 33rd year in operation and its 18th year as a public company. We merged with KIM in
Many markets outside the US have been under a cloud while the US has attracted huge interest and capital flows. It is not surprising, therefore, that we are hearing about attractive valuations and opportunities from our international and EM teams. In addition, our investment teams at CLIM and KIM continue to successfully engage in corporate governance initiatives, working with CEF Boards to narrow discounts. Our teams are active, highly focused and we remain constructive on the outlook for performance at CLIG.
Conclusion
CLIG continues to strive for excellence for all its stakeholders while exercising care and patience in managing the business. Management and your Board continue to look for ways to improve processes and efficiency at your Company. Investment performance for the rolling six months and the calendar year was strong in the large majority of the Group's investment strategies. It is our performance record that will assist with client retention and in converting prospects into long-term supporters.
I would like to thank our teams for their continued fine work and all our stakeholders for their support. Thank you for your interest in
Sincerely yours,
Rian Dartnell
Chair
†This is an Alternative Performance Measure (APM). Please refer to CEO review for more details on APMs.
CHIEF EXECUTIVE OFFICER'S REVIEW
Monetary easing
In
The Trump administration has threatened tariffs and other protectionist trade measures. Trading partners are eyeing the trade measures nervously, while international and emerging markets are hoping for a weaker US dollar which should increase demand for commodities, including oil, and boost foreign financial asset returns when converted to US dollars. After more than a decade of US exceptionalism in bond and equity markets, there might be a valuation opportunity for international and emerging markets to attract capital from US investors.
While threats of a full-blown trade war are being raised, the most likely scenario is for significant negotiation to take place among global trading partners and for "managed trade" to become the norm. If progress can also be made on ending the wars in
FuM & flows
As shareholders will have seen from our interim trading update (announced on
The marketing team is focused on raising assets based on the good long-term performance of the Group's investment management subsidiaries. Ten-year quartile charts of strategies managed by both operating subsidiaries are reflected in Figure 3 on page 8 of the interim report.
Client interest for our Listed Private Equity (LPE) strategy, managed by
As shown in Figure 3 on page 8 of the interim report, the
Currently, for US retail investors, interest rates in fixed rate bank deposits or money market vehicles offered by financial institutions remain higher than in recent memory and are in competition to an active fixed income manager. KIM's outflows during the six months fall into one of three primary categories: 1) the retail client base who are required to withdraw retirement assets by calendar year end due to US regulations, 2) high-net-worth clients with considerable wealth who withdrew assets to deploy capital for life events and/or business opportunities, and 3) institutional pension plan clients that were impacted by regulation changes which drove the outflows.
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Figure 1. CLIG – FuM by line of business ($m) |
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|
CLIM |
|
|
|
|
|
|
||||||||||||||
|
|
$m |
% of CLIM total |
% of CLIM total* |
$m |
% of CLIM total |
% of CLIG total |
$m |
% of CLIM total |
% of CLIG total |
$m |
% of CLIM total |
% of CLIG total |
$m |
% of CLIM total |
% of CLIG total |
|
||||
|
Emerging Markets |
5,393 |
72 % |
47 % |
3,703 |
64 % |
40 % |
3,580 |
61 % |
38 % |
3,568 |
56 % |
35 % |
3,471 |
58 % |
35 % |
|
||||
|
International |
1,880 |
25 % |
17 % |
1,812 |
32 % |
20 % |
1,983 |
34 % |
21 % |
2,394 |
38 % |
23 % |
2,091 |
35 % |
21 % |
|
||||
|
Opportunistic Value |
231 |
3 % |
2 % |
193 |
3 % |
2 % |
244 |
4 % |
3 % |
251 |
4 % |
3 % |
286 |
5 % |
3 % |
|
||||
|
Frontier |
13 |
0 % |
0 % |
9 |
0 % |
0 % |
9 |
0 % |
0 % |
10 |
0 % |
0 % |
11 |
0 % |
0 % |
|
||||
|
Other/REIT |
13 |
0 % |
0 % |
74 |
1 % |
1 % |
88 |
1 % |
1 % |
94 |
2 % |
1 % |
140 |
2 % |
1 % |
|
||||
|
CLIM total |
7,530 |
100 % |
66 % |
5,791 |
100 % |
63 % |
5,904 |
100 % |
63 % |
6,317 |
100 % |
62 % |
5,999 |
100 % |
60 % |
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|
|
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|
|
|
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KIM |
|
|
|
|
|
|
||||||||||||||
|
|
$m |
% of KIM total |
% of KIM total* |
$m |
% of KIM total |
% of CLIG total |
$m |
% of KIM total |
% of CLIG total |
$m |
% of KIM total |
% of CLIG total |
$m |
% of KIM total |
% of CLIG total |
|
||||
|
Retail |
2,804 |
72 % |
24 % |
2,419 |
70 % |
26 % |
2,441 |
69 % |
26 % |
2,655 |
68 % |
26 % |
2,760 |
70 % |
28 % |
|
||||
|
Institutional |
1,115 |
28 % |
10 % |
1,014 |
30 % |
11 % |
1,079 |
31 % |
11 % |
1,269 |
32 % |
12 % |
1,187 |
33 % |
12 % |
|
||||
|
KIM total |
3,919 |
100 % |
34 % |
3,433 |
100 % |
37 % |
3,520 |
100 % |
37 % |
3,924 |
100 % |
38 % |
3,947 |
100 % |
40 % |
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||||
|
CLIG total |
11,449 |
|
100 % |
9,224 |
|
100 % |
9,424 |
|
100 % |
10,241 |
|
100 % |
9,946 |
|
100 % |
|
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Figure 2. Net investment flows ($'000) |
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|
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|
CLIM |
FYE |
FYE |
FYE |
FYE |
HYE |
|
Emerging Markets |
(275,493) |
(315,770) |
(205,924) |
(424,101) |
(157,416) |
|
International |
(14,145) |
452,554 |
(50,824) |
153,371 |
(332,208) |
|
Opportunistic Value |
(102,663) |
617 |
34942 |
(33,237) |
23,300 |
|
Frontier |
(168,843) |
(4,748) |
- |
- |
- |
|
Other/REIT |
- |
79,133 |
(5,709) |
(12,290) |
40,000 |
|
CLIM total |
(561,144) |
211,786 |
(227,515) |
(316,257) |
(426,324) |
|
|
|
|
|
|
|
|
KIM |
FYE |
FYE |
FYE |
FYE |
HYE |
|
Retail |
(104,222) |
(106,444) |
(141,952) |
(39,587) |
(19,193) |
|
Institutional |
(130,911) |
(3,302) |
12,530 |
35,749 |
(118,257) |
|
KIM total |
(235,133) |
(109,746) |
(129,422) |
(3,838) |
(137,450) |
|
CLIG total |
(796,277) |
102,040 |
(356,937) |
(320,095) |
(563,774) |
|
* Includes net investment flows for Retail (24,407) and Institutional (20,264) pertaining to period before 1st October (pre-merger). |
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Value in closed-end funds
Our two operating subsidiaries continue to see value and opportunities in their various closed-end funds (CEFs) investment universes. Discounts in US-listed CEFs that invest in non-US equities remain wide due to the ongoing outperformance of assets offering US exposure, despite a strong year of relative and absolute performance. Discounts in
There are two positive outcomes we have seen over the past year: 1) an increase in corporate governance activity driven by CLIM and KIM as well as other investors, and 2) an increase in non-traditional offerings via investment trusts.
Financial results
Net fee income rose by 10% in the first six months of FY2025 to
The Group's profit before tax increased c.14% for the six months ended
EPS for the six months ended
The Group's fee income and the bulk of expenses are incurred in US dollars; however, c.32% of Group overheads are incurred in sterling that are subject to USD/GBP currency rate fluctuations. On average, US dollars weakened by c.2% against sterling to 1.287 for the six months ended
We continue to review expenses across the Group. Total administrative expenses for the six months ended
Dividend cover chart
We have provided an illustrative framework on our website at https://clig.com/dividend-cover/ to enable interested parties to calculate our post-tax profits based upon some key assumptions. The dividend cover chart shows the quarterly estimated cost of a maintained dividend against actual post-tax profits for last year, the current year and the assumed post-tax profit for next financial year based upon assumptions included in the chart.
Alternative Performance Measures
The Directors use the following Alternative Performance Measures (APMs) to evaluate the performance of the Group as a whole:
Earnings per share in pence – Earnings per share in US dollars as per the income statement is converted to sterling using the average exchange rate for the period. Refer to note 6 in the interim financial statements.
Underlying profit before tax – Profit before tax, adjusted for gain/loss on investments and amortisation of intangibles. This provides a measure of the profitability of the Group for management's decision-making.
Underlying earnings per share in pence – CLIG's shares are quoted on the
|
|
Six months ended
|
Six months ended
|
Year ended
|
|
$'000 |
$'000 |
$'000 |
|
|
Profit before tax |
12,592 |
11,069 |
22,621 |
|
Add back/(deduct): |
|
|
|
|
Gain on investments |
(234) |
(560) |
(1,051) |
|
Amortisation on acquired intangibles |
2,799 |
2,799 |
5,599 |
|
Underlying profit before tax |
15,157 |
13,308 |
27,169 |
CLIG KPI
We retain the share price KPI to show the total return of CLIG over a market cycle. The goal of this KPI is for the total return (share price plus dividends) to compound annually in a range of 7.5% to 12.5% over a five-year period.
As seen in Figure 5 on page 11 of the interim report, for the five years ended
For the full 2024 calendar year, CLIG's cumulative total return, inclusive of dividends, was 36.6% in the currency of listing (sterling). The share price, excluding dividends, ended the calendar year at
Since listing in
Corporate Governance and stakeholders
In last year's interim statement, we reiterated comments from our previous Chair,
We have made changes from a corporate perspective over the past two years to be more transparent of our unique situation. Last year, we converted our reporting currency to US dollars, reflecting that c.99% of our revenues were in dollars, and on
Regarding Board composition, we announced alongside our FY2024 annual results that
The Nomination Committee will provide an update to all shareholders on the future composition of the Board when appropriate.
Environmental reporting update
Employees and management of the Group are committed to protecting the environment in which we operate. We provide investment management services to our clients which have a relatively modest direct environmental impact. As noted within our FY2024 Annual Report and Accounts, we plan to reduce emissions where we can, and we implemented a program to offset emissions where we cannot reduce. Below are descriptions of actions taken at the Group level to 1) reduce carbon emissions and 2) offset carbon emissions.
In terms of reducing carbon emissions, the electricity supplied to our three largest offices in
In terms of offsetting carbon emissions, we provided a review of our carbon offset programme within our
Cybersecurity update
Employee education on cybersecurity risks, combined with a project to reduce the complexity of our IT infrastructure, remained our priorities during the prior six months. From an employee education perspective, our colleagues continue to receive monthly training on a rotating list of cybersecurity topics and risks. Additionally, we have worked with our external education vendor to fine-tune and improve the impact of our internal email phishing tests that are sent to employees monthly. From an IT infrastructure perspective, our IT department continued making progress on their goal to reduce network complexity by removing unnecessary servers and streamlining internal processes.
CLIG outlook
As an active investment manager, our priority of delivering investment outperformance against a relevant benchmark for our clients is paramount. Throughout the calendar year 2024, our investment teams delivered outperformance for our clients, which sets the stage for our marketing and client servicing efforts in calendar year 2025. CEF discounts remain wide, which allow for existing and potential clients to understand and evaluate the value in the investment universe. Additionally, the potential for corporate governance activity provides a compelling opportunity.
CLIG continues to position our investment teams in a manner to take advantage of client demand in various asset classes, including listed private equity investment trusts in the
Success rarely happens/occurs in a straight line, particularly in the volatile asset management business. While client flows during the previous quarter did not meet our expectations, management and our colleagues are committed to growth in FuM through the continued performance of our underlying strategies.
As a Group, we will continue to go further together, working on behalf our clients, colleagues, and shareholders.
Tom Griffith
Chief Executive Officer
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CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED |
||||
|
|
||||
|
|
Six months ended |
Six months ended |
Year ended |
|
|
|
(restated) |
|
||
|
(unaudited) |
(unaudited) |
(audited) |
||
|
|
Note |
$'000 |
$'000 |
$'000 |
|
Revenue |
|
|
|
|
|
Gross fee income |
2 |
36,973 |
33,788 |
69,453 |
|
Commissions payable |
|
(978) |
(876) |
(1,811) |
|
Custody fees payable |
|
(699) |
(725) |
(1,475) |
|
Net fee income |
|
35,296 |
32,187 |
66,167 |
|
Administrative expenses |
|
|
|
|
|
Employee costs |
|
15,408 |
14,991 |
30,925 |
|
Other administrative expenses |
|
4,871 |
3,898 |
8,177 |
|
Depreciation and amortisation |
|
3,275 |
3,284 |
6,574 |
|
|
|
(23,554) |
(22,173) |
(45,676) |
|
Operating profit |
|
11,742 |
10,014 |
20,491 |
|
Finance income |
3 |
815 |
697 |
1,460 |
|
Finance expense |
4 |
(199) |
(202) |
(381) |
|
Gain on investments |
5 |
234 |
560 |
1,051 |
|
Profit before taxation |
|
12,592 |
11,069 |
22,621 |
|
Income tax expense |
|
(3,301) |
(2,854) |
(5,506) |
|
Profit for the period |
|
9,291 |
8,215 |
17,115 |
|
Profit attributable to: |
|
|
|
|
|
Equity shareholders of the parent |
|
9,291 |
8,215 |
17,115 |
|
Basic earnings per share (cents) |
6 |
19.0 |
16.9 |
35.1 |
|
Diluted earnings per share (cents) |
6 |
18.7 |
16.5 |
34.4 |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED |
|||
|
|
|||
|
|
Six months ended |
Six months ended |
Year ended |
|
|
(restated) |
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
$'000 |
$'000 |
$'000 |
|
|
Profit for the period |
9,291 |
8,215 |
17,115 |
|
Other comprehensive income: |
|
|
|
|
Items that may be subsequently reclassified |
|
|
|
|
Foreign currency translation difference |
- |
(1) |
(1) |
|
Total comprehensive income for the period |
9,291 |
8,214 |
17,114 |
|
Attributable to: Equity shareholders of the parent |
9,291 |
8,214 |
17,114 |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
||||
|
|
||||
|
|
|
|
(restated) |
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
Note |
$'000 |
$'000 |
$'000 |
|
|
Non–current assets Property and equipment |
2 |
1,028 |
1,241 |
1,128 |
|
Right-of-use assets |
2 |
4,747 |
5,196 |
5,076 |
|
Intangible assets |
2,7 |
120,086 |
125,657 |
122,853 |
|
Other financial assets |
12 |
5,949 |
5,396 |
5,750 |
|
Deferred tax asset |
|
1,681 |
1,096 |
1,879 |
|
|
|
133,491 |
138,586 |
136,686 |
|
Current assets Trade and other receivables |
|
7,888 |
10,356 |
8,380 |
|
Current tax receivable |
|
- |
396 |
167 |
|
Cash and cash equivalents |
|
30,198 |
25,912 |
33,738 |
|
|
|
38,086 |
36,664 |
42,285 |
|
Current liabilities Trade and other payables |
|
(7,239) |
(9,014) |
(10,432) |
|
Lease liabilities |
|
(483) |
(421) |
(526) |
|
Current tax payable |
|
(7) |
- |
- |
|
Creditors, amounts falling due |
|
(7,729) |
(9,435) |
(10,958) |
|
Net current assets |
|
30,357 |
27,229 |
31,327 |
|
Total assets less current liabilities |
|
163,848 |
165,815 |
168,013 |
|
Non–current liabilities |
|
|
|
|
|
Lease liabilities |
|
(4,975) |
(5,263) |
(5,207) |
|
Deferred tax liability |
|
(8,451) |
(9,210) |
(9,162) |
|
Net assets |
|
150,422 |
151,342 |
153,644 |
|
Capital and reserves |
|
|
|
|
|
Share capital |
|
644 |
644 |
644 |
|
Share premium account |
|
2,866 |
2,866 |
2,866 |
|
Merger relief reserve |
|
128,984 |
128,984 |
128,984 |
|
Investment in own shares |
8 |
(7,165) |
(9,073) |
(9,227) |
|
Share option reserve |
|
198 |
165 |
187 |
|
EIP share reserve |
|
1,325 |
1,664 |
2,046 |
|
Foreign currency translation |
|
(1,011) |
(1,011) |
(1,011) |
|
Capital redemption reserve |
|
33 |
33 |
33 |
|
Retained earnings |
|
24,548 |
27,070 |
29,122 |
|
Attributable to: Equity shareholders of the parent |
|
150,422 |
151,342 |
153,644 |
|
Total equity |
|
150,422 |
151,342 |
153,644 |
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED |
||||||||||
|
|
||||||||||
|
|
Share capital $'000 |
Share premium account $'000 |
Merger relief reserve $'000 |
Investment in own shares $'000 |
Share option reserve $'000 |
EIP share reserve $'000 |
Foreign currency translation reserve $'000 |
Capital redemption reserve $'000 |
Retained earnings $'000 |
Total attributable to share- holders $'000 |
|
At |
644 |
2,866 |
128,984 |
(9,227) |
187 |
2,046 |
(1,011) |
33 |
29,122 |
153,644 |
|
Profit for the period |
– |
– |
– |
– |
– |
– |
– |
– |
9,291 |
9,291 |
|
Other comprehensive income |
– |
– |
– |
– |
– |
– |
- |
– |
– |
- |
|
Total comprehensive income |
– |
– |
– |
– |
– |
– |
– |
– |
9,291 |
9,291 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Share option exercise |
– |
– |
– |
81 |
3 |
– |
– |
– |
(3) |
81 |
|
Purchase of own shares |
– |
– |
– |
(266) |
- |
– |
– |
– |
– |
(266) |
|
Share-based payment |
– |
– |
– |
- |
8 |
498 |
– |
– |
– |
506 |
|
EIP vesting/forfeiture |
– |
– |
– |
2,247 |
- |
(1,219) |
– |
– |
– |
1,028 |
|
Deferred tax on share options |
– |
– |
– |
– |
- |
– |
– |
– |
4 |
4 |
|
Dividends paid |
– |
– |
– |
– |
– |
– |
– |
– |
(13,866) |
(13,866) |
|
Total transactions with owners |
- |
– |
- |
2,062 |
11 |
(721) |
- |
– |
(13,865) |
(12,513) |
|
As at
|
644 |
2,866 |
128,984 |
(7,165) |
198 |
1,325 |
(1,011) |
33 |
24,548 |
150,422 |
|
|
||||||||||
|
|
||||||||||
|
|
Share capital $'000 |
Share premium account $'000 |
Merger relief reserve $'000 |
Investment in own shares $'000 |
Share option reserve $'000 |
EIP share reserve $'000 |
Foreign currency translation reserve $'000 |
Capital redemption reserve $'000 |
Retained earnings $'000 |
Total attributable to share- holders $'000 |
|
At |
644 |
2,866 |
128,984 |
(10,301) |
170 |
2,200 |
(1,010) |
33 |
31,882 |
155,468 |
|
Profit for the period |
– |
– |
– |
– |
– |
– |
– |
– |
8,215 |
8,215 |
|
Other comprehensive income |
– |
– |
– |
– |
– |
– |
(1) |
– |
– |
(1) |
|
Total comprehensive income |
– |
– |
– |
– |
– |
– |
(1) |
– |
8,215 |
8,214 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Share option exercise |
– |
– |
– |
154 |
(18) |
– |
– |
– |
18 |
154 |
|
Purchase of own shares |
– |
– |
– |
(1,112) |
– |
– |
– |
– |
– |
(1,112) |
|
Share-based payment |
– |
– |
– |
– |
22 |
567 |
– |
– |
– |
589 |
|
EIP vesting/forfeiture |
– |
– |
– |
2,186 |
– |
(1,103) |
– |
– |
– |
1,083 |
|
Deferred tax on share options |
– |
– |
– |
– |
(9) |
– |
– |
– |
(24) |
(33) |
|
Current tax on share options |
– |
– |
– |
– |
- |
– |
– |
– |
27 |
27 |
|
Foreign exchange translation |
– |
– |
– |
– |
– |
– |
- |
– |
1 |
1 |
|
Dividends paid |
– |
– |
– |
– |
– |
– |
– |
– |
(13,049) |
(13,049) |
|
Total transactions with owners |
– |
– |
– |
1,228 |
(5) |
(536) |
- |
– |
(13,027) |
(12,340) |
|
As at
|
644 |
2,866 |
128,984 |
(9,073) |
165 |
1,664 |
(1,011) |
33 |
27,070 |
151,342 |
|
|
||||||||||
|
|
||||||||||
|
|
Share capital $'000 |
Share premium account $'000 |
Merger relief reserve $'000 |
Investment in own shares $'000 |
Share option reserve $'000 |
EIP share reserve $'000 |
Foreign currency translation reserve $'000 |
Capital redemption reserve $'000 |
Retained earnings $'000 |
Total attributable to share- holders $'000 |
|
At |
644 |
2,866 |
128,984 |
(10,301) |
170 |
2,200 |
(1,010) |
33 |
31,882 |
155,468 |
|
Profit for the period |
– |
– |
– |
– |
– |
– |
– |
– |
17,115 |
17,115 |
|
Other comprehensive income |
– |
– |
– |
– |
– |
– |
(1) |
– |
– |
(1) |
|
Total comprehensive income |
– |
– |
– |
– |
– |
– |
(1) |
– |
17,115 |
17,114 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
Share option exercise |
– |
– |
– |
154 |
(9) |
– |
– |
– |
9 |
154 |
|
Purchase of own shares |
– |
– |
– |
(1,315) |
– |
– |
– |
– |
– |
(1,315) |
|
Share-based payment |
– |
– |
– |
– |
35 |
1,039 |
– |
– |
– |
1,074 |
|
EIP vesting/forfeiture |
– |
– |
– |
2,235 |
– |
(1,193) |
– |
– |
– |
1,042 |
|
Deferred tax on share options |
– |
– |
– |
– |
(9) |
– |
– |
– |
(22) |
(31) |
|
Current tax on share options |
– |
– |
– |
– |
– |
– |
– |
– |
27 |
27 |
|
Dividends paid |
– |
– |
– |
– |
– |
|
– |
– |
(19,889) |
(19,889) |
|
Total transactions with owners |
– |
– |
– |
1,074 |
17 |
(154) |
- |
– |
(19,875) |
(18,938) |
|
As at |
644 |
2,866 |
128,984 |
(9,227) |
187 |
2,046 |
(1,011) |
33 |
29,122 |
153,644 |
|
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED |
||||
|
|
||||
|
|
|
Six months |
Six months |
Year ended |
|
|
|
(restated) |
|
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
Note |
$'000 |
$'000 |
$'000 |
|
|
Cash flow from operating activities Profit before taxation |
|
12,592 |
11,069 |
22,621 |
|
Adjustments for: |
|
|
|
|
|
Depreciation of property and equipment |
|
140 |
140 |
293 |
|
Depreciation of right-of-use assets |
|
330 |
339 |
672 |
|
Amortisation of intangible assets |
7 |
2,805 |
2,805 |
5,609 |
|
Sharebased payment charge |
|
9 |
22 |
35 |
|
EIP-related charge |
|
741 |
1,044 |
1,438 |
|
Gain on investments |
5 |
(234) |
(560) |
(1,051) |
|
Interest receivable |
3 |
(815) |
(697) |
(1,460) |
|
Interest payable |
4 |
6 |
17 |
24 |
|
Interest payable on lease liabilities |
4 |
193 |
185 |
357 |
|
Translation adjustments |
|
533 |
(142) |
29 |
|
Cash generated from operations before changes in working capital |
|
16,300 |
14,222 |
28,567 |
|
(Increase)/decrease in trade and other receivables |
|
(7) |
498 |
(302) |
|
(Decrease)/increase in trade and other payables |
|
(1,882) |
(1,131) |
365 |
|
Cash generated from operations |
|
14,411 |
13,589 |
28,630 |
|
Interest received |
3 |
815 |
697 |
1,460 |
|
Interest paid |
4 |
(6) |
(17) |
(24) |
|
Interest paid on leased assets |
4 |
(193) |
(185) |
(357) |
|
Taxation paid |
|
(3,694) |
(4,773) |
(8,122) |
|
Net cash generated from operating activities |
|
11,333 |
9,311 |
21,587 |
|
Cash flow from investing activities Purchase of property and equipment and intangibles |
|
(79) |
(460) |
(500) |
|
Purchase of noncurrent financial assets |
|
(1,096) |
(722) |
(4,594) |
|
Proceeds from sale of non-current financial assets |
|
1,097 |
3,258 |
9,997 |
|
Net cash (used in)/generated from investing activities |
|
(78) |
2,076 |
4,903 |
|
Cash flow from financing activities Ordinary dividends paid |
9 |
(13,866) |
(13,049) |
(19,889) |
|
Purchase of own shares by employee benefit trust |
|
(266) |
(1,112) |
(1,315) |
|
Proceeds from sale of own shares by employee benefit trust |
|
81 |
154 |
154 |
|
Payment of lease liabilities |
|
(268) |
(80) |
(231) |
|
Net cash used in financing activities |
|
(14,319) |
(14,087) |
(21,281) |
|
Net (decrease)/increase in cash and cash equivalents |
|
(3,064) |
(2,700) |
5,209 |
|
Cash and cash equivalents at start of period |
|
33,738 |
28,569 |
28,569 |
|
Effect of exchange rate changes |
|
(476) |
43 |
(40) |
|
Cash and cash equivalents at end of period |
|
30,198 |
25,912 |
33,738 |
NOTES
1 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
The financial information contained herein is unaudited and does not comprise statutory financial information within the meaning of section 434 of the Companies Act 2006. The information for the year ended
These interim financial statements have been prepared in accordance with the International Accounting Standard 34, "Interim Financial Reporting" as contained in
The consolidated financial information contained within this report incorporates the results, cash flows and financial position of the Company and its subsidiaries for the period to
Group companies are regulated and perform annual capital adequacy and liquidity assessments, which incorporates stress testing based on loss of revenue on the Group's financial position over a three-year period. The Group has performed additional stress tests using several different scenario levels, over a three-year period on the Group's financial position from
The Group's financial projections, capital adequacy and liquidity assessments provide comfort that the Group has adequate financial and regulatory resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the interim financial statements.
New or amended accounting standards and interpretations adopted
The Group has adopted all the new or amended accounting standards and interpretations issued by the
2 SEGMENTAL ANALYSIS
The Directors consider that the Group has only one reportable segment, namely asset management, and hence only analysis by geographical location is given.
|
|
$'000 |
$'000 |
$'000 |
$'000 |
Other $'000 |
Total $'000 |
|
Six months to Gross fee income |
35,728 |
761 |
– |
415 |
69 |
36,973 |
|
Noncurrent assets: |
|
|
|
|
|
|
|
Property and equipment |
830 |
– |
181 |
– |
17 |
1,028 |
|
Right-of-use assets |
3,843 |
– |
812 |
– |
92 |
4,747 |
|
Intangible assets |
120,034 |
– |
52 |
– |
– |
120,086 |
|
Six months to Gross fee income |
32,473 |
722 |
– |
549 |
44 |
33,788 |
|
Noncurrent assets: |
|
|
|
|
|
|
|
Property and equipment |
975 |
– |
247 |
– |
19 |
1,241 |
|
Right-of-use assets |
4,131 |
– |
1,040 |
– |
25 |
5,196 |
|
Intangible assets |
125,633 |
– |
24 |
– |
– |
125,657 |
|
Year to Gross fee income |
66,885 |
1,465 |
– |
1,001 |
102 |
69,453 |
|
Noncurrent assets: |
|
|
|
|
|
|
|
Property and equipment |
901 |
– |
205 |
– |
22 |
1,128 |
|
Right-of-use assets |
4,030 |
– |
925 |
– |
121 |
5,076 |
|
Intangible assets |
122,833 |
– |
20 |
– |
– |
122,853 |
3 FINANCE INCOME
|
|
Six months
|
Six months
|
Year ended
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
$'000 |
$'000 |
$'000 |
|
|
|
Interest on cash and cash equivalents |
815 |
697 |
1,460 |
|
4 FINANCE EXPENSE
|
|
Six months
|
Six months
|
Year ended
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
$'000 |
$'000 |
$'000 |
|
|
|
Interest payable on lease liabilities |
193 |
185 |
357 |
|
|
Interest payable other |
6 |
17 |
24 |
|
|
|
199 |
202 |
381 |
|
5 GAIN ON INVESTMENTS
|
|
Six months
|
Six months
|
Year ended
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
$'000 |
$'000 |
$'000 |
|
|
|
Unrealised gain on investments |
174 |
44 |
180 |
|
|
Realised gain on investments |
60 |
516 |
871 |
|
|
|
234 |
560 |
1,051 |
|
6 EARNINGS PER SHARE
The calculation of earnings per share is based on the profit for the period attributable to the equity shareholders of the parent divided by the weighted average number of ordinary shares in issue for the six months ended
As set out in note 8 the
The calculation of diluted earnings per share is based on the profit for the period attributable to the equity shareholders of the parent divided by the diluted weighted average number of ordinary shares in issue for the six months ended
Reported earnings per share
|
|
Six months
|
Six months
|
Year ended
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
$'000 |
$'000 |
$'000 |
|
|
Profit attributable to the equity shareholders of the parent for basic earnings |
9,291 |
8,215 |
17,115 |
|
|
|
|
|
|
|
Number of |
Number of |
Number of |
|
Issued ordinary shares as at 1st July |
50,679,095 |
50,679,095 |
50,679,095 |
|
Effect of own shares held by EBT |
(1,653,585) |
(1,939,759) |
(1,875,340) |
|
Weighted average shares in issue |
49,025,510 |
48,739,336 |
48,803,755 |
|
Effect of movements in share options and EIP awards |
735,272 |
953,028 |
978,997 |
|
Diluted weighted average shares in issue |
49,760,782 |
49,692,364 |
49,782,752 |
|
Basic earnings per share (cents) |
19.0 |
16.9 |
35.1 |
|
Diluted earnings per share (cents) |
18.7 |
16.5 |
34.4 |
|
Basic earnings per share (pence)^ |
14.7 |
13.4 |
27.8 |
|
Diluted earnings per share (pence)^ |
14.5 |
13.2 |
27.3 |
Underlying earnings per share*
Underlying earnings per share is based on the underlying profit after tax*, where profit after tax is adjusted for gain/loss on investments, amortisation of acquired intangibles and their related tax impact.
Underlying profit for calculating underlying earnings per share
|
|
Six months
|
Six months
|
Year ended
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
$'000 |
$'000 |
$'000 |
|
|
Profit before tax |
12,592 |
11,069 |
22,621 |
|
Add back/(deduct): |
|
|
|
|
- Gain on investments |
(234) |
(560) |
(1,051) |
|
- Amortisation on acquired intangibles |
2,799 |
2,799 |
5,599 |
|
Underlying profit before tax |
15,157 |
13,308 |
27,169 |
|
Tax expense as per the consolidated income statement |
(3,301) |
(2,854) |
(5,506) |
|
Tax effect on fair value adjustment |
58 |
141 |
261 |
|
Unwinding of deferred tax liability |
(672) |
(672) |
(1,344) |
|
Underlying profit after tax for the calculation of underlying earnings per share |
11,242 |
9,923 |
20,580 |
|
Underlying earnings per share (cents) |
22.9 |
20.4 |
42.2 |
|
Underlying diluted earnings per share (cents) |
22.6 |
20.0 |
41.3 |
|
Underlying earnings per share (pence)^ |
17.8 |
16.2 |
33.5 |
|
Underlying diluted earnings per share (pence)^ |
17.6 |
15.9 |
32.8 |
|
|
|||
|
^ Converted to sterling using the average exchange rate for the relevant period. * This is an Alternative Performance Measure (APM). Please refer to the CEO review for more details on APMs.
|
|||
7 INTANGIBLE ASSETS
|
|
|
31st Dec |
30th Jun |
||||||
|
|
|
Direct customer relationships |
Distribution channels |
Trade name |
Long term software |
Total |
Total |
Total |
|
|
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
At start of period |
90,072 |
46,052 |
6,301 |
1,405 |
914 |
144,744 |
144,744 |
144,744 |
|
|
Additions |
- |
- |
- |
- |
38 |
38 |
- |
- |
|
|
At close of period |
90,072 |
46,052 |
6,301 |
1,405 |
952 |
144,782 |
144,744 |
144,744 |
|
|
Amortisation charge |
|
|
|
|
|
|
|
|
|
|
At start of period |
– |
17,270 |
3,376 |
351 |
894 |
21,891 |
16,282 |
16,282 |
|
|
Charge for the period |
– |
2,302 |
450 |
47 |
6 |
2,805 |
2,805 |
5,609 |
|
|
At close of period |
– |
19,572 |
3,826 |
398 |
900 |
24,696 |
19,087 |
21,891 |
|
|
Net book value |
90,072 |
26,480 |
2,475 |
1,007 |
52 |
120,086 |
125,657 |
122,853 |
|
|
|
|
|
|
|
|
|
|
|
|
The fair values of KIM's direct customer relationships and the distribution channels have been measured using a multi-period excess earnings method. The model uses estimates of annual attrition driving revenue from existing customers to derive a forecast series of cash flows, which are discounted to a present value to determine the fair values of KIM's direct customer relationships and the distribution channels.
The fair value of KIM's trade name has been measured using a relief from royalty method. The model uses estimates of royalty rate and percentage of revenue attributable to the trade name to derive a forecast series of cash flows, which are discounted to a present value to determine the fair value of KIM's trade name.
The total amortisation charged to the income statement for the six months ended
Impairment
The Group's policy is to test goodwill arising on acquisition for impairment annually, or more frequently if changes in circumstances indicate a possible impairment. The Group has considered whether there have been any indicators of impairment during the six months ended
8 INVESTMENT IN OWN SHARES
Investment in own shares relates to
At
The Trust also held in custody 879,112 ordinary 1p shares (
The Trust has waived its entitlement to receive dividends in respect of the total shares held (
9 DIVIDENDS
A final dividend of 22p per share (2023: 22p) (gross amount payable £11,149k; net amount paid £10,757k (
An interim dividend of 11p per share (2024: 11p) (gross amount payable £5,575k; net amount payable £5,421k*) in respect of the year ending
* Difference between gross and net amounts is due to shares held at EBT that do not receive dividend.
10 PRINCIPAL RISKS AND UNCERTAINTIES
In the course of conducting its business operations, the Group is exposed to a variety of risks including market, liquidity, operational and other risks that may be material and require appropriate controls and on-going oversight.
The principal risks to which the Group will be exposed in the second half of the financial year are substantially the same as those described in the last annual report (see page 28 and 29 of the Annual Report and Accounts for the year ended
Changes in market prices, such as foreign exchange rates and equity prices will affect the Group's income and the value of its investments.
Most of the Group's revenues, and a significant part of its expenses, are denominated in US dollars. However, exchange rate movements will impact the portion of Group expenses that are incurred in non-US dollars.
11 RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Company and its subsidiary undertakings carry out transactions with related parties as defined under IAS 24 Related Party Disclosures. Material transactions are set out below:
(i) Transactions with key management personnel
Key management personnel are defined as Directors (both Executive and Non-Executive) of
(a) The compensation paid to the Directors as well as their shareholdings in the Group and dividends paid, did not affect the financial position or the performance of the Group for the current reporting period. There were no changes to the type and nature of the related party transactions from those that were reported in the FY2024 Annual Report and Accounts.
(b) One of the Group's subsidiaries manages funds for one of its key management personnel, for which it receives a fee. All transactions between key management and their close family members and the Group's subsidiary are on terms that are available to all employees of that Company. The amount received in fees during the period was
(c) A close member of a key management's personnel provides professional services to the Group. The amount paid during the period for these services was
(ii) Person with significant influence
One of the Group's subsidiaries manages funds for a person with significant influence based on his shareholding in the Group. The amount received in fees during the period was
12 FINANCIAL INSTRUMENTS
The Group's financial assets include cash and cash equivalents, investments and other receivables.
Its financial liabilities include accruals and other payables. The fair value of the Group's financial assets and liabilities is materially the same as the book value.
Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable.
- Level 1: fair value derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.
- Level 2: fair value derived from inputs other than quoted prices included within level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: fair value derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.
The fair values of the financial instruments are determined as follows:
- Investments for hedging purposes are valued using the quoted bid price and shown under level 1.
- Investments in own funds are determined with reference to the net asset value (NAV) of the fund. Where the NAV is a quoted price the fair value is shown under level 1, where the NAV is not a quoted price the fair value is shown under level 2.
The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.
|
|
Level 1 $'000 |
Level 2 $'000 |
Level 3 $'000 |
Total $'000 |
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
Investment in other non-current financial assets |
5,897 |
52 |
- |
5,949 |
|
Total |
5,897 |
52 |
- |
5,949 |
|
|
Level 1 $'000 |
Level 2 $'000 |
Level 3 $'000 |
Total $'000 |
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
Investment in other non-current financial assets |
5,348 |
48 |
- |
5,396 |
|
Total |
5,348 |
48 |
- |
5,396 |
|
|
Level 1 $'000 |
Level 2 $'000 |
Level 3 $'000 |
Total $'000 |
|
Financial assets at fair value through profit or loss |
|
|
|
|
|
Investment in other non-current financial assets |
5,700 |
50 |
– |
5,750 |
|
Total |
5,700 |
50 |
– |
5,750 |
There were no financial liabilities at fair value at any of the reporting periods.
Where there is an impairment in the investment in own funds, the loss is reported in the income statement. No impairment was recognised during the period or the preceding year.
13 GENERAL
The interim financial statements for the six months ended
Copies of this statement are available on our website www.clig.co.uk.
STATEMENT OF DIRECTOR'S RESPONSIBILITIES
The Directors confirm that to the best of our knowledge:
- The condensed set of financial statements has been prepared in accordance with IAS34 Interim Financial Reporting as adopted by the
UK ; and - The Half Year Report includes a fair review of the information required by:
DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so.
The Directors of
By order of the Board
Tom Griffith
Chief Executive Officer
INDEPENDENT REVIEW REPORT TO
Conclusion
We have been engaged by
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with this ISRE (
In our evaluation of the Directors' conclusions, we considered the inherent risks associated with the group's business model including effects arising from macro-economic uncertainties such as such as the impact of the Russian invasion of
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with
In preparing the half-yearly financial report, the Directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report.
Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (
Grant Thornton
Statutory Auditor, Chartered Accountants London
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