15th Sep 2014 12:11
LONDON (Alliance News) - City of London Investment Group PLC Monday reported an increase in funds under management, driven by emerging markets together with significant net new subscriptions, but results were hurt by the strength of sterling against the dollar.
In a statement, the group said funds under management decreased by 6% to USD3.5 billion in the six months to the end of November 2013, before a turnaround in its fortunes led to the figure rising to USD3.9 billion at the end of June 2014, up slightly from a year earlier. This was due to improved market conditions and net new client subscriptions, the group said.
In sterling terms, funds under management fell by 6% to GBP2.3 billion.
Revenue, representing management charges on funds under management, fell to GBP24.2 million in the 13 months to June 30 from GBP29.4 million a year before. Pretax profit fell to GBP7.2 million from GBP8.9 million. City of London Investment Group said the strength of the pound during the recent period created a headwind of about GBP500,000.
A change of financial year end to June 30 from May 31 means the current year results were recorded over a 13-month period.
Meanwhile, Chief Executive Barry Olliff, who has agreed to continue in the role for a further five years, confirmed he intends to sell a number of shares in the group, which he founded in 1991. He proposed the sale of 500,000 shares at 350 pence, 500,000 at 400p, and another 500,000 at 450p, the same amounts and prices referenced in a July trading update.
Following the three disposals, Olliff will continue to be interested in 1.6 million shares, 5.9% of the total.
"I founded CLIG as an asset management business in 1991 and from the outset, I have always sought to align my interests with those of the group's shareholders, both before and subsequent to the public listing in 2006. The consequence of this is that, as the largest shareholder and the chief executive of CLIG, a significant proportion of my personal resources remain invested in the company, and I believe it is appropriate and prudent, for both the company and me personally, that I should gradually reduce my holding," Olliff said.
He also outlined the group's strategy around five headings: outperform; retain staff; increase funds under management from long-term institutional investors; remain open in dealings with shareholders; and to keep costs down.
City of London Investment Group left its full-year dividend flat at 24p per share.
The group's shares were Monday quoted up 0.6% at 322.00p.
By Samuel Agini; [email protected]; @samuelagini
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