20th Jan 2014 11:27
LONDON (Alliance News) - City of London Investment Group PLC Monday said it has seen a a turnaround it its investment performance, buoyed by its emerging markets closed-end fund team's performance.
The company's shares were Monday quoted at 243.00 pence, up 8.25 pence, or 3.5%.
Chief Executive Barry Olliff said the emerging markets closed-end fund team's expected performance should place the company in the top of the second quartile for calendar 2013.
In a statement announcing its half-year results for the six months to November 30, 2013, City of London Investment Group confirmed the guidance it gave in its December 2 pre-close trading update that estimated half-year pretax profit would amount to GBP3.3 million against GBP4.7 million for the corresponding period in 2012.
Funds under management declined, as guided in December, to USD3.5 billion, from USD3.9 billion in November 2012, but up since the USD3.4 billion reported on September 30. The decline meant revenues for the half-year were 22% lower at GBP11.8 million.
"Following on from my comments at the year end, I can confirm the steady if unspectacular improvement in much of our business. Whilst there are external pressures on fees across the industry, we are countering with containment of our own costs and working hard on converting significant new business opportunities," David Cardale, chairman, said in a statement. "In the light of this I am happy to repeat my earlier statement in the Annual Report that I anticipate a satisfactory outcome for the financial period as a whole," the chairman added.
City of London Investment Group also took a leaf out of a the Federal Reserve's book, with Chief Executive Barry Olliff setting out his own brand of forward guidance.
"If the Federal Reserve can provide forward guidance as a result of its analysis of the US (and World?) economy then I am sure that CLIG can too," Olliff said in a statement.
In a research note, Canaccord Genuity analyst Robin Savage said the forward guidance suggests that the dividend is sustainable at 24 pence a share.
City of London Investment Group maintained its interim dividend at 8 pence a share.
Table with assumptions (below) including the quarterly estimated cost of a maintained dividend:
Dividend cover - actual and assumed 2013 -2015 |
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| 2012/2013 - £0.2m to Reserves | 2013/2014 - £0.8m from Reserves | 2014/2015 - £0.5m to Reserves | |||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||
Post Tax Profit (£) | 1,735 | 1,574 | 1,675 | 1,282 | 1,157 | 1,263 | 1,176 | 1,588 | 1,423 | 1,534 | 1,734 | 1,869 | ||
Present Dividend Breakeven (£) | 1,515 | 1,515 | 1,515 | 1,515 | 1,508 | 1,508 | 1,508 | 1,508 | 1,508 | 1,508 | 1,508 | 1,508 | ||
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To/(From) Reserves (£) | 220 | 59 | 160 | (233) | (351) | (245) | (332) | 80 | (85) | 26 | 226 | 361 | ||
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Actual figures (£'000s) in bold | ||||||||||||||
Source: City of London Investment Group interim report to 30 November 2013
City of London Investment Group changed the date of its financial year end to June 30 from the previous date of May 31, bringing it into line with its clients and competitors because the mismatch had made quarterly announcements "significantly more complicated than necessary".
By Samuel Agini; [email protected]; @samuelagini
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