22nd Feb 2023 14:03
(Alliance News) - City of London Investment Group PLC on Wednesday reported a fall in interim profit as net fee income declined and costs increased, while funds under management shrank.
The investor in London-listed equities said funds under management at December 31 were USD9.2 billion, down 17% from USD11.1 billion a year prior, citing a "challenging" environment and "choppy markets". It added that FuM have since recovered by 6.5% to USD9.8 billion at January 31.
Pretax profit for the six months ended December 31 was 30% to GBP9.5 million from GBP13.6 million a year prior. Diluted earnings per share decreased 31% to 14.7p from 21.2p.
Net fee income fell 8.5% to GBP27.3 million from GBP29.8 million, while administrative expenses went the other way, rising 10% to GBP15.7 million from GBP14.3 million.
The company maintained an interim dividend of 11 pence per share.
Regarding its near-term future, City of London Investment said: "While a degree of uncertainty continues to weigh on capital markets in the early weeks of 2023, the expectation that both inflation and interest rates will stabilise in the nearer term is gaining traction among forecasters. Equally important for CLIG is the fact that, following the sharp swings in the GBP/USD rate towards the end of 2022, a degree of calm appears to have returned."
Looking ahead, Chair Barry Aling said he expects that inflation "will moderate progressively". He added: "If, as indicated in recent weeks, inflation subsides in the coming months, policy makers are likely to be more willing to rein back from further monetary tightening, thereby easing the growing wage inflation pressures that otherwise threaten a return to trend growth in 2023.
"Thus, while it may be premature to voice optimism for the year ahead, there are sufficient green shoots to suggest that the significant dislocation to the global economy, which was the feature of 2022, will prove transitory."
City of London Investment shares were trading flat at 447.50 pence each in London on Wednesday afternoon. The stock is down 15% over the past year.
By Tom Budszus, Alliance News reporter
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