Liontrust Asset Management Plc · LSE:LIO
Liontrust Asset Management — H1 FY25 Earnings Presentation
54 slides from Liontrust Asset Management's earnings presentation, November 2024
Slide 1: Liontrust Asset Management PLC Half Year Results H1 FY25
Liontrust Asset Management PLC Half Year Results H1 FY25 November 2024
Slide 2: Our Purpose
OUR PURPOSE To help clients enjoy a better financial future through the power of active management and distinct investment processes
Slide 3: Liontrust's values
Liontrust’s values COURAGE POWER PRIDE Liontrust does not follow the herd and Liontrust believes in the power of We take pride in seeking to act in the has the courage to have independence of promoting diversity and inclusion across best interests of clients and delivering thought the business, brin
Slide 4: Highlights
Highlights Net flows AuMA Adjusted profit Strong capital First Interim before tax position Dividend maintained £(2.1)bn £26.0bn £25.8m £59.6m 22.0p 6 months to 30 As at 30 September 6 months to Surplus capital as at Payable on 8 September 2024 2024 30 September 2024 30 September 2024 January 2025 So
Slide 5: Half Year Results highlights
Half Year Results highlights First Interim dividend per share maintained at 22.0 pence The Directors will target a dividend of at least 72 pence per share for the year ending 31 March 2025 A share buyback programme of up to £5 million, phased over the period to 31 March 2025 Business transformation
Slide 6: Market backdrop
Market backdrop Headwinds Opportunities Organic growth is scarce Golden era for active investors Low cost of passives Is the passive free ride over? Higher expected returns from alternatives Savings rates are too low Cash remains a competitor Greater need for alpha with outlook for lower index retur
Slide 7: Active management
Active management Liontrust has the dual discipline of active management and best in class distribution – to service our clients needs Remarkable period of the last 10 years of more than 10% compound return in S&P Dual forces of fundamental trade in innovation and disruption, combined with the techn
Slide 8: Financial performance
» LIONTRUST COURAGE - POWER: PRIDE Financial performance
Slide 9: Half Year Results | Half year ended 30 September 2024
Past performance does not predict future returns Half Year Results | Half year ended 30 September 2024 Strong capital position with surplus capital of £59.6 million as at 30 September 2024 (£79.1 million as at 31 March 2024) Gross Profit £81.1 million (30 September 2023: £98.6 million, which include
Slide 10: Reconciliation of adjusted profit to profit before tax
Reconciliation of adjusted profit to profit before tax | Year ended 30 September 2024 30 Sep 2024 30 Sep 2023 31 Mar 2024 Half year £’000 £’000 £’000 Change Profit/(Loss) before tax 12,504 (10,126) (579) Severance compensation and staff reorganisation costs 2,387 1,092 3,198 119% Professional servic
Slide 11: Income statement (adjusted)
Income statement (adjusted) 30 Sep 2024 30 Sep 2023 31 Mar 2024 Half year £’000 £’000 £’000 Change Revenue excluding performance fees 86,961 98,505 187,480 (12%) Cost of sales (5,973) (5,979) (11,828) 0% Gross profit excluding performance fees 80,988 92,526 175,652 (12%) Performance fees 78 6,042 10
Slide 12: Maintaining a strong capital position
Maintaining a strong capital position | Increasing surplus supporting growth and dividends Regulatory Capital The updated capital position for the Group is shown below: £m Sep-24 Mar-24 The ICARA process included a review of the capital calculation shown left. Capital after regulatory deductions1 82
Slide 13: Capital allocation framework
Capital allocation framework | Disciplined capital allocation policy Maintain appropriate net cash balance: Organic 1 investment Investment in selected growth areas, alongside cost discipline and driving efficiencies 2 Dividend Progressive dividend policy, aligned to growth in earnings 3 Share buyba
Slide 14: Business transformation programme
Business transformation programme Integrate the Global Strengthened our Rationalising fund Cutting the cost base Fixed Income (GFI) data management, ranges including • Reduction of into the Multi-Asset delivery and analysis closures, mergers and approximately 25 roles (MA) team in collaboration with
Slide 15: Fund performance
» LIONTRUST COURAGE - POWER: PRIDE Fund performance
Slide 16: Performance | Liontrust funds to 31 October 2024
Past performance does not predict future returns Performance | Liontrust funds to 31 October 2024 1 year 3 years 5 years Since inception/mgr inception 82% 80% 76% 77% 72% 73% 71% 68% 69% 61% 63% 56% 57% 52% 54% 51% 44% 40% 33% 30% 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020 2021 2022 2023
Slide 17: Liontrust Cashflow Solution team
Past performance does not predict future returns Liontrust Cashflow Solution team Liontrust European Dynamic Fund Liontrust GF European Strategic Equity Fund 500% 150% Liontrust European Dynamic I Inc Liontrust GF European Strategic Equity A4 Acc EUR 131.8% 424.8% 400% MSCI Europe ex UK 103.6% 100%
Slide 18: Liontrust Global Innovation Team
Past performance does not predict future returns Liontrust Global Innovation Team Global Dividend Fund Global Innovation Fund Global Technology Fund 140% 80% 100% 120% 100% 60% 80% 50% 40% 60% 40% 20% 0% 20% 0% 0% -20% -20% -50% 2017 2018 2019 2020 2021 2022 2023 2024 2019 2020 2021 2021 2022 2023 2
Slide 19: Liontrust Global Equities team
Liontrust Global Equities team David Goodman Kevin Kruczynski Pieran Maru Ruth Chambers Ewan Thompson Thomas Smith Mark Hawtin Investment Manager Investment Manager Investment Manager Fund Manager Fund Manager Fund Manager 37 years 24 years 7 years 11 years 18 years 15 years Head of Global Equities
Slide 20: Liontrust Economic Advantage team | 27 years of Economic Advantage
Past performance does not predict future returns Liontrust Economic Advantage team | 27 years of Economic Advantage Liontrust UK Liontrust UK Liontrust Liontrust UK Micro Cap Smaller Special Growth Companies Situations Annualised return 10.6% 11.1% 10.6% 11.1% since inception* Sharpe ratio 1/38 1/16
Slide 21: The UK market | The valuation opportunity
The UK market | The valuation opportunity Quest UK Market default valuation vs market capitalisation US market Market cap (aggregate) Equity value 39% 4.0 downside to intrinsic value £ trillion Europe ex UK market 2.0 0 3% upside to intrinsic 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Current valu
Slide 22: Edinburgh Investment Trust | Performance from March 2020
Edinburgh Investment Trust | Performance from 31 March 2020 to 30 June 2024 Past performance does not predict future returns Cumulative performance since manager inception Since Performance to manager 120% Edinburgh Investment Trust Share Price 30 June 2024 (%) 3 months 6 months 12 months inception
Slide 23: Liontrust Multi-Asset | Actively Different
Liontrust Multi-Asset | Actively Different Active Active Active Management Enhancements Adviser Support All stages of the MA Investment process are • Position funds and portfolios for the • Tailored support actively managed; future of investment markets • Fund manager access • Bespoke Strategic Asse
Slide 24: Liontrust Sustainable Future Team
Past performance does not predict future returns Liontrust Sustainable Future Team Quartile rankings to 30.09.24 Comparator benchmarks 1 Year 3 Years 5 Years 10 Years Sustainable Future Cautious Managed+ IA Mixed Investment 40-85% Shares 3 4 4 2 Sustainable Future Corporate Bond* IA Sterling Corpora
Slide 25: Core strength
Past performance does not predict future returns Brand | Distinctive and high profile Brand Liontrust is perceived as Liontrust ranks 2nd among the second-best manager financial advisers for for UK equities among brand familiarity and 4th wealth managers and Distribution among DFMs1 financial advise
Slide 26: Summary
» LIONTRUST COURAGE - POWER: PRIDE Summary
Slide 27: A compelling investment case
A compelling investment case Established Strong and Efficient and and evolving recognised scalable operating product set brand platform Leading UK Platform for Disciplined wholesale further capital allocation distribution consolidation 26
Slide 28: Appendices
Appendices 1. Board biographies 2. Core Strengths 3. Company information 4. Key metrics 5. Business Developments 6. Alternative Performance Measures (“APMs”)
Slide 29: Appendix 1 | Board biographies
Appendix 1 | Board biographies Luke Savage – Non-Executive Chair and Chair of the Nomination Committee Joined the Board in September 2024. Luke is an experienced Non-executive Director and Chair, as the Chair of Chesnara plc from February 2020 to date and a Non-executive Director of Deutsche Numis,
Slide 30: Appendix 1 | Board biographies
Appendix 1 | Board biographies Vinay Abrol – Chief Financial Officer Joined the Board in September 2004. Vinay is responsible for overseeing all finance, information technology, operations, risk and compliance of the Group. After obtaining a first-class degree in computing science from Imperial Coll
Slide 31: Appendix 1 | Company Secretary team
Appendix 1 | Company Secretary team Sally Buckmaster – Group Company Secretary and General Counsel Sally joined Liontrust in April 2023 as Group Company Secretary, having previously held the same position at River and Mercantile Group Plc and most recently at AssetCo Plc. Prior to that, Sally worked
Slide 32: Core Strengths
» LIONTRUST COURAGE - POWER: PRIDE Core Strengths
Slide 33: Appendix 2 | Liontrust – Core strengths
Appendix 2 | Liontrust – Core strengths Brand People, Planet & Society Investor experience Investment proposition Distribution Operating platform 32
Slide 34: Appendix 2 | Delivering our Strategic Objectives
Appendix 2 | Delivering our Strategic Objectives CORE STRENGTHS STRATEGIC OBJECTIVES RECENT ACTIVITY ⚫ 1,849 investors attended Liontrust roadshows in person in FY2024 Investment Continue to enhance proposition ⚫ Schedule of discretionary investor lunches, virtual conferences, one to one meetings, e
Slide 35: Appendix 3 | Company information and shareholders
Appendix 3 | Company information and shareholders £26.0bn Established 29 years. Headquartered in London Established and Eight distinct active £26.0 billion AuMA as at £284 million market Listed on the London with offices in experienced management investment teams 30 September 2024 capitalisation Sto
Slide 36: Appendix 4 | Key statistics
Past performance does not predict future returns Appendix 4 | Key statistics £bn £m 40 320 33.5 35 30.9 31.4 280 27.8 30 240 25 200 20 16.1 160 15 12.7 120 10.5 10 6.5 80 4.5 4.8 3.6 5 3.0 40 0 0 -5 -40 1 3 8 12 15 21 27 33 47 72 72 72 -10 -80 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 F
Slide 37: Appendix 4 | Key statistics – FY14 to September
Past performance does not predict future returns Appendix 4 | Key statistics – FY14 to September Growth in AuMA by organic growth and acquisition 40 Architas Majedie 35 0.1 2.5 (4.8) 30 5.5 5.1 (6.0) (2.4) 2.4 (2.0) 0.2 25 Neptune 5.8 £bn 20 3.5 33.5 15 ATI 30.9 31.4 2.7 (2.0) 2.7 27.8 0.4 26.0 1.8
Slide 38: Appendix 4 | Key statistics
Appendix 4 | Key statistics Acquisition timeline ATI Neptune Architas Majedie FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 H1 FY25 AuMA (£bn) 4.5 4.8 6.5 10.5 12.7 16.1 30.9 33.5 31.4 27.8 26.0 % change 25% 7% 35% 62% 21% 27% 92% 8% (6)% (12)% (7)% Revenue (£m) 36.8 44.9 51.6 76.8 84.6 106.6 16
Slide 39: Appendix | Key metrics
Appendix 4 | Key metrics Percentage of NAV by region Equity NAV by region Bond NAV by region Funds of Funds NAV by region 20% 8% 1% 25% 2% 31% 19% 57% £27.0bn 51% 2% 72% 69% 22% 22% Americas Asia Europe ex UK UK Source: Liontrust, 01.07.24 38
Slide 40: Appendix 4 | Key metrics
Appendix 4 | Key metrics Percentage of NAV by asset class1 13% 4% 10% By client type2 By product type3 74% Bonds Equities Funds Cash & Derivatives AuMA by investment team Economic Advantage £5.9bn Global Sustainable £0.8bn Innovation Investment £9.5bn £2.4bn Cashflow Solution Multi-Asset* £4.2bn £1.
Slide 41: Appendix 4 | Strategic objectives
Appendix 4 | Strategic objectives The investment focus of Liontrust – long-term active management with distinctive processes – remains as relevant as ever and are the foundations for future growth Our four strategic objectives will also be drivers of future growth: Continue to enhance the Further br
Slide 42: Appendix 4 | The Economic Advantage Team – Fund range
Past performance does not predict future returns Appendix 4 | The Economic Advantage Team – Fund range Liontrust UK Liontrust Liontrust UK Liontrust UK Smaller Special Micro Cap Growth Companies Situations £111m £934m £3.1bn £939m Inception: 09.03.16 Inception: 08.01.98* Inception: 10.11.05 Inceptio
Slide 43: Appendix 4 | Balance sheet 30 September 2024
Appendix 4 | Balance sheet 30 September 2024 30 Sep 2024 30 Sep 2023 31 Mar 2024 £’000 £’000 £’000 Assets Non-current assets 78,838 94,885 84,301 Current assets Trade and other receivables 172,716 194,665 229,586 Financial assets 5,752 9,710 8,157 Cash and cash equivalents 88,508 96,932 104,318 Tota
Slide 44: Appendix 4 | Non-current assets – amortisation and impairment breakdown
Appendix 4 | Non-current assets – amortisation and impairment breakdown 31 Mar 2024 30 September 2024 Non-current assets £’000 Amortisation Impairment £’000 Intangible assets 48,472 (4,553) - 43,919 Goodwill 32,110 - 32,110 Property, plant & equipment 3,719 2,809 84,301 (4,553) - 78,838 Intangible a
Slide 45: Appendix | UK equity flows (industry)
Appendix 4 | UK equity flows (industry) 1,500 1,000 ⚫ Includes UK All 500 Companies, UK Equity and UK Smaller 0 Companies IA sector funds £m -500 ⚫ 38 months of consecutive outflows -1,000 ⚫ 88 months of outflows -1,500 out of the last 103 (since March 2016) -2,000 ⚫ Average £1.2bn of outflows each
Slide 46: Appendix 5 | Business developments
Appendix 5 | Business developments 01 02 03 04 05 Strong Adjusted Global equities Strong Senior UK sales New front office operating team and fund long-term fund hires and systems and margin of 30.5% launches performance expanding technology and client international engagement distribution Source: Li
Slide 47: Appendix 6 | Alternative Performance Measures
Appendix 6 | Alternative Performance Measures (“APMs”) The Group uses the following APMs: Adjusted profit before tax* Definition: Profit before taxation, amortisation, impairment, and non-recurring items (which include: professional fees relating to acquisitions; restructuring and severance compensa
Slide 48: Appendix 6 | APMs (continued)
Appendix 6 | APMs (continued) Adjusted operating margin Definition: Adjusted operating profit divided by Gross profit. Reason for use: This is used to present a consistent year on year measure of adjusted operating profit compared to gross profits, identifying the operating gearing within the busine
Slide 49: Appendix 6 | APMs (continued)
Appendix 6 | APMs (continued) Dividend margin Definition: This is the dividends declared for the year divided by the Adjusted diluted earnings per share excluding performance fees. Reason for use: This is used to identify the dividend cover versus adjusted diluted earnings per share excluding perfor
Slide 50: Key risks
Key risks Past performance does not predict future returns. You may get back less than you originally invested. We recommend any fund is held long term (minimum period of 5 years). We recommend that you hold funds as part of a diversified portfolio of investments. The Funds managed by the Economic A
Slide 51: Key risks (continued)
Key risks (continued) • May encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings. • Outside of normal conditions, may hold higher levels of cash which may be deposited with several credi
Slide 52: Key risks (continued)
Key risks (continued) The Funds managed by the Cashflow Solution Team: • May hold overseas investments that may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of a Fund. • May have a concentrated portfolio, i
Slide 53: Key risks (continued)
Key risks (continued) All Liontrust Funds carry some degree of risk which may have an adverse effect on the future value of your investment. Therefore, before making an investment decision, you should familiarise yourself with the different types of specific risks associated with the investment port
Slide 54: Disclaimer
Disclaimer Important notice This presentation is issued by Liontrust Asset Management PLC and Liontrust Fund Partners LLP (LFP) (both 2 Savoy Court, London WC2R 0EZ). LFP is authorised and regulated in the UK by the Financial Conduct Authority (FRN 518165) to undertake regulated investment business.
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