City of London Investment Group PLC PRE-CLOSE TRADING UPDATE for year to 30 June 21 (9932E)

TIDMCLIG

RNS Number : 9932E

City of London Investment Group PLC

13 July 2021

City of London Investment Group PLC

13 July 2021

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 2021

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 ("CEF"), provides a pre-close trading update for its financial year ended 30 June 2021. The numbers that follow are unaudited.

On a consolidated basis, Funds under Management (FuM) were US$11.4 billion (GBP8.3 billion) at 30 June 2021. This compares with US$5.5 billion (GBP4.4 billion) at the Group's year end on 30 June 2020, which was before the merger with Karpus Management Inc. ("KIM") on 1 October 2020 (the "Completion Date"). A breakdown by strategy follows:

 
                  FuM ($ million)                     Strategy Index 
               Jun-21   Jun-20         %     Net                                % 
           (estimate)            inc/dec   Flows                          inc/dec 
 EM             5,393    3,828       41%   (275)   MSCI EM Net TR           40.9% 
 KIM            3,919    3,578       10%   (213)   Not applicable 
 INTL           1,938    1,244       56%    (14)   MSCI ACWI ex US          35.7% 
                                                   ACWI/Barclays Global 
 OV               173      256     (32%)   (103)    Agg                     19.8% 
 Other*            26      175     (85%)   (169) 
               11,449    9,081             (774) 
          -----------  -------            ------ 
 
 

* includes Frontier, REIT and seed investments

KIM FuM as at 1 October 2020 (date of merger)

Strong investment performance across CLIG's investment strategies resulted from strong NAV performance at the underlying closed end funds and positive discount effects.

At year end, both CLIG operating subsidiaries hit all-time FuM highs following the significant equity market gains of recent months and strong relative performance. This was tempered by the high levels of client rebalancing and liquidations, leading to net outflows of circa US$774 million across the Group's strategies.

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 74 basis points of FuM, net of third party commissions.

The Group's overheads for the year to 30 June 2021 are expected to be GBP16.8 million (2020: GBP13.0 million). "Fixed" costs are c.GBP1.6 million per month, and accordingly the run-rate for operating profit, before profit-share and amortisation of intangibles is approximately GBP3.3 million per month based upon current FuM and a US$/GBP exchange rate of US$1.3831 to GBP1 as at 30 June 2021.

For the year to 30 June 2021, the Group estimates that the unaudited profit before amortisation of intangibles, exceptional merger costs and taxation to be approximately GBP27.2 million, including non-controlling interest ("NCI") profit of nil (2020: GBP10.7 million, NCI loss of GBP0.2 million).

Profits after an anticipated tax charge of GBP5.3 million (representing 22% of profits before exceptional merger costs and taxation) will be approximately GBP17.0m (2020: profits of GBP7.6million after a tax charge of GBP2.0 million, representing 19% of profits before exceptional merger costs and taxation). Basic and fully diluted earnings per share are expected to be 39.4p and 38.8p respectively (2020: 30.3p and 29.5p).

Dividend

The Board is proposing to recommend a final dividend of 22p per share (2020: 20p), subject to approval by shareholders at the Company's Annual General Meeting to be held on 18 October 2021. This would bring the total dividend payment for the year to 33p (2020: 30p). Rolling five-year dividend cover equates to 1.29 times (2020: 1.24 times).

The Board confirms the final dividend timetable for the year to 30 June 2021:

 
 -- ex-dividend date: 7 October 2021 
  -- dividend record date: 8 October 
  2021 
  -- payable: 29 October 2021 
 

City of London expects to announce its final results alongside publication of its Accounts for the year to 30 June 2021 on 13 September 2021. The Group's Annual General Meeting will be held on 18 October 2021.

Dividend cover template

Please see dividend cover template attached here.

http://www.rns-pdf.londonstockexchange.com/rns/9932E_1-2021-7-12.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: [phone]

Martin Green/Pippa Hamnett

Zeus Capital Limited

Financial Adviser & Broker

Tel: [phone]

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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July 13, 2021 02:00 ET (06:00 GMT)