City of LondonInvGrp Sees FY Funds Under Management $4.38M

14th Jun 2010 07:30

LONDON (Dow Jones)--City of London Investment Group PLC (CLIG.LN), an emerging markets asset management group, announced Monday for the financial year ended May. 31, it has a funds under management of $4.38 billion (GBP3.01 billion), representing an increase since May. 31, 2009 of $0.88 billion, or 25% (GBP0.84 billion, 38%). MAIN FACTS: -Over the same period the MSCI Emerging Markets Index (MXEF) increased by 20%, with the difference of 5% representing net new money from clients. -In addition, as at the year end, mandates which had been awarded but had not yet funded represented a further $0.19 billion. -For the year to May. 31, 2010, City of London expects that pre-tax profits will be GBP10.4 million (2009: GBP5.4 million), and that profits after an anticipated tax charge of GBP3.4 million (33% of pre-tax profits) will be GBP7.0 million (2009: profits of GBP3.8 million after a tax charge of GBP1.6 million, representing 29% of pre-tax profit). -Basic and fully diluted earnings per share are expected to be 28.5 pence and 26.9 pence respectively (2009: 16.1 pence and 15.0 pence). -The Group's policy is to pay dividends which are covered 1.5 times by earnings per share, although exceptional market circumstances in 2008-9 prompted a temporary reduction in the cover level, and the Group stated at that time an intention to return to 1.5 times cover within a two year period. -Accordingly, the Board is recommending a final dividend of 15 pence per share (2009: 10 pence), which would bring the total for the year to 22 pence (2009: 15 pence), covered 1.30 times by earnings per share (2009:1.07 times). -Looking forward, marketing efforts are primarily focused on the equity business, as well as global developed closed end funds and the frontier emerging markets strategy, all of which continue to attract interest from investment consultants. -In the U.K., a senior fund manager specializing in global closed end funds was appointed to manage an absolute return strategy that takes advantage of discount anomalies on a hedged basis. -In Singapore, we have appointed an experienced Asian equities manager to complement the existing team. As is always the case, these products will only be marketed once they have established a strong and clear track record. -The process of internalizing the Group's marketing function continues, with the strategy of extending the Group's contacts for new business with the consultant community remaining at its core. -During the period, a number of the Group's equity products were approved by three global investment consultants for consideration by their institutional clients. -The Group is optimistic with regard to future mandates and now has dedicated marketing resources in place in London and Singapore, as well as in the U.S.. -In 2008 the Group announced plans to migrate its shares from AIM to the Full List of the London Stock Exchange, although these plans were subsequently put on hold as a result of extreme market turbulence. -The Board now considers that the time is right to re-activate the listing plan, and the current intention is that subject, inter alia, to shareholder approval, the move to the Main Market will take place in October 2010. -Shares closed Friday at 278 pence. -By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; [email protected] (END) Dow Jones Newswires June 14, 2010 02:30 ET (06:30 GMT)