Liontrust Asset Management Plc · LSE:LIO
Liontrust Asset Management — H1 FY2024 Earnings Presentation
43 slides from Liontrust Asset Management's earnings presentation, November 2023
Slide 1: Liontrust Asset Management PLC Half Year Results
Liontrust Asset Management PLC Half Year Results November 2023 | John Ions & Vinay Abrol
Slide 2: Highlights of the Half Year Results
Highlights of the Half Year Results Net Flows AuMA Adjusted PBT Dividend per share £(1.6)bn in Q2 FY24 £27.7bn £36.0m 22.0p £(3.2)bn As at 30 September 2023 First Interim Dividend 6 months to 30 payable on 5 January September 2023 2024 Our unchanged strategic objectives Product development Client en
Slide 3: Market backdrop
Market backdrop Challenging 3rd quarter for the asset management industry Liontrust’s investment bias has been impacted by negative sentiment: • Quality growth • UK equities • Mid and small caps Shows the importance of diversity of investment styles and asset classes We see attractive valuations now
Slide 4: UK equity flows (industry)
UK equity flows (industry) 1,500 1,000 ⚫ Includes UK All 500 Companies, UK Equity and UK Smaller Companies 0 £m ⚫ 26 months of consecutive -500 outflows ⚫ 76 months of outflows -1,000 out of the last 91 (since March 2016) -1,500 ⚫ Average £1.2bn of -2,000 outflows each month YTD Mar-18 Mar-16 Sep-16
Slide 5: Financial Performance
Financial Performance
Slide 6: Results for the 6 months ended 30 September 2023
Results for the 6 months ended 30 September 2023 Half Year results: • Strong capital position with surplus capital of £86.5 million as at 31 March 2023 (£77.5 million as at 30 September 2023 (unaudited)) • Gross Profit £98.6 million (30 Sep 2022: £108.8 million) down 9%. Excluding performance fees,
Slide 7: Reconciliation of adjusted profit to profit before tax
Reconciliation of adjusted profit to profit before tax for the 6 months ended 30 September 2023 30 Sep 2023 30 Sep 2022 £’000 £’000 Change (Loss) / Profit before tax (10,126) 14,066 Severance compensation and staff reorganisation costs 1,092 3,557 (69%) Professional services1 8,139 4,654 75% Intangi
Slide 8: Income statement (adjusted)
Income statement (adjusted) 30 Sep 2023 30 Sep 2022 £’000 £’000 Change Gross profit excluding performance fees 92,526 108,801 -15.0% Performance fees 6,042 - - Gross profit 98,568 108,801 -9.4% Net gains/(loss) on financial assets (120) 465 Staff costs (member & employee) (39,839) (43,973) -9.4% Dep
Slide 9: Maintaining a strong capital position
Maintaining a strong capital position | Increasing surplus supporting growth and dividends Regulatory Capital The Group approved the Internal Capital and Risk Assessment ("ICARA") process in September 2023, the ICARA is based upon the financial data of the Group as at 31 March 2023. The updated capi
Slide 10: Disciplined capital allocation policy
Capital allocation framework Disciplined capital allocation policy Organic Investment in selected growth areas, alongside 1 investment cost discipline and driving efficiencies Maintain appropriate Progressive dividend policy, aligned to growth in 2 Dividend earnings net cash balance Inorganic Value
Slide 11: Strategy
Strategy
Slide 12: Our unchanged strategy
» Our unchanged strategy LIONTRUST COURAGE - POWER - PRIDE | Be a responsible 2 Deliver market leading 3 Diversify the company and investor investment performance fund range over the longer term ASP 76 d% 4 Expand distribution 5 Enhance the 6 Attract and 7 Develop the business and the client base in
Slide 13: A compelling investment case
A compelling investment case Established Strong and Efficient and and Evolving Recognized Scalable Operating Product Set Brand Platform 01 03 05 Successful at Leading UK Platform for Recruiting & Wholesale Further Retaining Talent Distribution Consolidation 02 04 06 12
Slide 14: 1. Established and evolving product set
1. Established and evolving product set Past performance does not predict future returns Sustainable Investment Economic Advantage’s European Dynamic is The European Strategic team has over 22 years’ four UK domiciled funds the top performing fund Equity Fund, also experience. Rated the are all in t
Slide 15: 2. Successful recruiting and retaining talent
2. Successful recruiting and retaining talent Anthony Peter James Samantha Cross Michaelis Inglis-Jones Gleave launched the first has been Head of the launched the joined Liontrust to Economic Advantage Sustainable Investment European Dynamic manage the Cashflow fund – UK Smaller team since 2001; 11
Slide 16: 3. Strong and recognised brand
3. Strong and recognised brand ● Liontrust has been named the 6th strongest asset management brand in the UK by Broadridge1 ● Liontrust is 1st for unprompted advertising recall among retail investors2 Leading brand ● LinkedIn followers have grown by 18.7% from 1 April to 15 November ● From 1 June 20
Slide 17: 4. Leading wholesale distribution
4. Leading wholesale distribution ● Increased client engagement, including Liontrust roadshow, events, virtual conference and 3rd party events ● Around 800 intermediaries are seeing the Sustainable Investment team Wholesale this autumn distribution ● Sustainable Investment and Economic Advantage are
Slide 18: 5. Efficient and scalable operating platform
5. Efficient and scalable operating platform Efficient & scalable platform to support Improving profitability as AuMA has increased1 strategic growth objectives 42% ● Remuneration approach linked to fund performance ● Lean internal operations team 39% 38% ● Single outsourced fund administrator (BNYM
Slide 19: 6. Platform for further consolidation
6. Platform for further consolidation Criteria Historic Strategy Future Strategy Geography • UK focused • UK & International Scale • Bolt-on • Bolt-on & Larger Scale • Value-add specialist capabilities • Organic growth potential Target Attributes • Established teams with strong track-record • Cultur
Slide 20: A compelling investment case
A compelling investment case Established Strong and Efficient and and Evolving Recognized Scalable Operating Product Set Brand Platform 01 03 05 Successful at Leading UK Platform for Recruiting & Wholesale Further Retaining Talent Distribution Consolidation 02 04 06 19
Slide 21: Appendices
Appendices 1. Board biographies 2. Company information 3. Key metrics 4. Additional financial information 5. Alternative Performance Measures
Slide 22: Appendix 1 – Board biographies
Appendix 1 – Board biographies Alastair Barbour – Non-Executive Chair Joined the Board in April 2011. Alastair is a chartered accountant with 25 years’ experience spent auditing and advising boards and management of public companies in the UK and internationally, principally in the financial service
Slide 23: Appendix 1 – Board biographies
Appendix 1 – Board biographies Vinay Abrol – Chief Operating Officer and 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 computin
Slide 24: Appendix 1 – Board biographies
Appendix 1 – Board biographies Miriam Greenwood OBE – Non Executive Director, member of the Nomination Committee, Audit and Risk Committee and Remuneration Committee Joined the Board in November 2023. Miriam has spent more than 30 years working for a number of leading investment banks and other fina
Slide 25: Appendix 1 – Company Secretary team
Appendix 1 – Company Secretary team Sally Buckmaster – Group Company Secretary 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 as legal advisor at
Slide 26: Appendix 2 – Company information and shareholders
Appendix 2 – Company information and shareholders Market capitalisation: £359.2 million Top 15 external shareholders ($439.3 million) as at 10 November 2023* Shares No. Fund Manager 31 Oct 23 % Premium listing on the London Stock 1 Hargreaves Lansdown, stockbrokers 4,256,163 6.55 2 Vanguard Group 3,
Slide 27: Appendix 3 – Key metrics: AuMA £27.7bn
Appendix 3 – Key metrics – 30 September 2023 AuMA by product AuMA by client type AuMA by process ◼ UK Retail Funds & MPS £23,393m 85% ◼ Financial Adviser 38% ◼ Sustainable Investment £9,985m 36% ◼ Institutional Accounts & Funds £1,932m 7% ◼ Wealth Manager 18% ◼ Economic Advantage £7,181m 26% ◼ Inter
Slide 28: Appendix 3 – Key statistics
Appendix 3 – Key statistics Acquisition timeline ATI Neptune Architas Majedie FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 AUMA (£bn) 3.0 3.6 4.5 4.8 6.5 10.5 12.7 16.1 30.9 33.5 31.4 % change 20% 25% 7% 35% 62% 21% 27% 92% 8% (6)% Revenue (£m) 20.3 28.4 36.8 44.9 51.6 76.8 84.6 106.6 163.
Slide 29: Appendix 3 – Key metrics
Appendix 3 – Key metrics Percentage of NAV by region Percentage of NAV by asset class ◼ Americas 17% ◼ Bonds 12% ◼ Asia 2% ◼ Equities 70% ◼ Europe ex UK 23% ◼ Funds 16% ◼ UK 58% ◼ Derivatives 2% Bond NAV by region Equity NAV by region Funds of Funds NAV by region 8% 1% 23% 21% 38% 2% 55% 62% 70% 20%
Slide 30: Appendix 3 – AuMA and flows
Appendix 3 – AuMA and flows On 30 September 2023, our AuMA stood at £27,650 million and were broken down by type and investment process as follows: Institutional Investment UK Retail Funds & Alternative International Funds Total Accounts & Funds Trusts MPS Funds & Accounts Process (£m) (£m) (£m) (£m
Slide 31: Appendix 3 – AuMA by process and product
Appendix 3 – AuMA by process and product as at 30 September 2023 (£m) By process and product Sustainable Economic Global Fixed £m Investment Advantage Multi-Asset Global Innovation Cashflow Solution Global Fundamental Income Total Total AuMA 9,985 7,181 4,466 642 1,620 3,518 238 27,650 ◼ UK Retail 9
Slide 32: Appendix 3 – Liontrust UK fund performance to 31 October 2023
Appendix 3 – Liontrust UK fund performance to 31 October 2023 Past performance does not predict future returns Since Inception/Manager/ 1 Year 3 Years 5 Years Objective change % change Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Date Economic Advan
Slide 33: Appendix 3 – Sustainable Investment team fund performance
Appendix 3 – Sustainable Investment team fund performance to 31 October 2023 Past performance does not predict future returns 1 Year 3 Years 5 Years Since Inception % change Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Date Liontrust Sustainable Future 4.0% 4.0% 3.8% 2 -11
Slide 34: Appendix 3 – Multi-Asset fund performance
Appendix 3 – Multi-Asset fund performance to 31 October 2023 Past performance does not predict future returns 1 Year 3 Years 5 Years Since Inception % change Fund CBM Q Fund CBM Q Fund CBM Q Fund CBM Q Date Liontrust MA Explorer 100 S Acc 8.6% 1.5% 1 16.7% 10.6% 2 34.3% 19.8% 1 268.0% 191.9% 2 01/03
Slide 35: Appendix 3 – Global Fundamental fund performance
Appendix 3 – Global Fundamental fund performance to 31 October 2023 Past performance does not predict future returns 1 Year 3 Years 5 Years Since Inception Fund Fund BM Sector Q Fund BM Sector Q Fund BM Sector Q Fund BM Sector Q Date Liontrust Balanced C Acc 4.1% 1.8% 1.8% 1 3.6% 9.2% 9.2% 4 34.2% 1
Slide 36: Appendix 3 – Non-UK UCITS performance
Appendix 3 – Non-UK UCITS performance to 31 October 2023 Past performance does not predict future returns 1 Year 3 Years 5 Years Since Inception Fund Fund CBM1 CBM2 Fund CBM1 CBM2 Fund CBM1 CBM2 Fund CBM1 CBM2 Date Economic Advantage Liontrust GF Special Situations C3 Inst Acc GBP -0.7% 5.9% - 10.7%
Slide 37: Appendix 4 – Balance sheet 30 September 2023
Appendix 4 – Balance sheet 30 September 2023 30 Sep 2023 31 Mar 2023 £’000 £’000 Assets Non current assets 94,885 132,593 Current assets Trade and other receivables 194,665 241,682 Financial assets 9,710 9,921 Cash and cash equivalents 96,932 121,037 Total current assets 301,307 372,640 Liabilities
Slide 38: Appendix 4 – Non current assets – impairment breakdown
Appendix 4 – Non current assets – impairment breakdown 31 Mar 23 30 Sep 23 Non current assets £’000 Amortisation Impairment £’000 Intangible assets 90,629 (7,018) (25,379) 58,232 Goodwill 38,586 (4,534) 34,052 Property, plant & equipment 3,378 2,601 132,593 94,885 Intangible assets ATI 4,800 (600) -
Slide 39: Appendix 5 – Alternative Performance Measures
Appendix 5 – 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 compens
Slide 40: Appendix 5 – APMs (continued)
Appendix 5 – APMs (continued) Gross profit excluding performance fees Definition: Gross profit less any revenue attributable to performance related fees. Reconciliation: Note 4. Reason for use: This is used to present a consistent year on year measure of gross profits within the business, removing t
Slide 41: Appendix 5 – APMs (continued)
Appendix 5 – APMs (continued) Average Assets under Management and Advice Definition: The average of aggregate assets managed or advised by the Group during the financial year Reconciliation: Average AuMA for the year is the average of each month end aggregate AuMA during the period. Reason for use:
Slide 42: 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. All Liontrust Funds carry some degr
Slide 43: 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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