26th Jun 2024 10:35
(Alliance News) - Liontrust Asset Management PLC is likely to continue grappling with outflows for now, though it is on decent footing for when investor confidence returns, German bank Berenberg said.
Liontrust reported a full-year decline in assets under management and advice, due to sizeable net outflows, though it has "started to see signs of a change in investor sentiment".
The asset manager said assets under management and advice at its March 31 year-end amounted to GBP27.82 billion, down 11% from GBP31.43 billion 12 months earlier. Net outflows during the year totalled GBP6.08 billion.
Chief Executive Officer John Ions said: "We have started to see signs of a change in investor sentiment and this is likely to move significantly when more central banks reduce interest rates and there is greater political and fiscal certainty in the UK. There is no doubt that the amount individuals are investing has been negatively impacted by the cost of living, the reductions in Covid savings and tax rises. With more stability will come greater recognition of valuation opportunities, especially in the UK stock market."
Revenue in the year totalled GBP197.89 billion, falling 19% from GBP243.34 billion. It swung to a pretax loss of GBP579,000 from profit of GBP49.3 million.
It maintained its second interim dividend at 50.0 pence per share, giving an unchanged total dividend of 72.0p per share.
"Profit before tax was in line with consensus, with lower-than-expected revenue broadly offset by lower-than-expected costs. The company sustained outflows in FY24, in a challenging market environment, in our view, given Liontrust’s mid- and small cap equity and UK retail client focus. The business has focused on diversifying its product range as well as expanding its distribution. While short-term flows are challenging to predict and we expect the business to remain in net outflows at the start of FY25, we believe that it will be well positioned when investor sentiment returns to the UK equity market," Berenberg analysts commented.
It rates the stock at 'hold' with a 750 pence price target. Liontrust shares were 2.9% lower at 729.00 pence each in London on Wednesday morning.
By Eric Cunha, Alliance News news editor
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