Liontrust Asset Management Plc · LSE:LIO
Liontrust Asset Management — Investor Presentation (October 2024)
45 slides from Liontrust Asset Management's investor presentation, October 2024
Slide 1: Liontrust Asset Management PLC Trading Update
Liontrust Asset Management PLC Trading Update October 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
Past performance does not predict future returns Highlights Net flows AuMA Adjusted Strong Full Year profit capital Dividend before tax position maintained £(2.1)bn £26.0bn £67.4m £79.1m 72.0p 6 months to 30 As at 30 September 12 months to Surplus capital as at Second Interim September 2024 2024 31
Slide 5: Market backdrop
Market backdrop Challenging period for active asset management Liontrust’s investment bias has been impacted by negative sentiment towards: • Quality growth • UK equities • Mid and small caps Shows the importance of diversity of investment styles and asset classes We see attractive valuations now, s
Slide 6: Strategic objectives
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 broaden client
Slide 7: UK equity flows (industry)
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 ⚫ 37 months of consecutive outflows -1,000 ⚫ 87 months of outflows -1,500 out of the last 102 (since March 2016) -2,000 ⚫ Average £1.2bn of outflows each month in -2,5
Slide 8: Financial performance
» LIONTRUST COURAGE - POWER: PRIDE Financial performance
Slide 9: Full Year Results | Year ended 31 March 2024
Past performance does not predict future returns Full Year Results | Year ended 31 March 2024 Strong capital position with surplus capital of £79.1 million as at 31 March 2024 (£86.5 million as at 31 March 2023) Gross Profit £186.1 million (31 March 2023: £229.8 million) down 19%. Excluding performa
Slide 10: Reconciliation of adjusted profit to profit before tax
Reconciliation of adjusted profit to profit before tax | Year ended 31 March 2024 31 Mar 2024 31 Mar 2023 £’000 £’000 Change (Loss) / Profit before tax (579) 49,301 Write back of Majedie acquisition provision - (1,848) Severance compensation and staff reorganisation costs 3,198 3,995 (20%) Professio
Slide 11: Income statement (adjusted)
Income statement (adjusted) 31 Mar 2024 31 Mar 2023 £’000 £’000 Change Revenue excluding performance fees 187,480 224,855 (17%) Cost of sales (11,828) (13,569) (13%) Gross profit excluding performance fees 175,652 211,286 (17%) Performance fees 10,409 18,484 (44%) Gross profit 186,061 229,770 (19%)
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: The ICARA process included a review of the capital calculation shown left. The £m Mar-24 Mar-23 Group had previously not adjusted t
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 Inorganic o
Slide 14: Liontrust | Core strengths
Liontrust | Core strengths Brand People, Planet & Society Investor experience Investment proposition Distribution Operating platform 13
Slide 15: Brand | Distinctive and high profile
Brand | Distinctive and high profile Liontrust ranks 2nd among financial advisers for brand familiarity and 4th among DFMs1 Brand Liontrust Global Technology has the 3rd highest recall and attribution among DFMs and financial advisers1 Distribution Liontrust is perceived as the leading asset manager
Slide 16: Distribution | High levels of engagement, broadening the client base
Distribution | High levels of engagement, broadening the client base Market-leading UK Wholesale distribution Expanding European and International distribution Brand 3 London Sales Managers New hire Jeremy Roberts appointed Global Head of Distribution (ex-UK) 6 Regional Sales Managers Distribution N
Slide 17: Operating platform | Efficient and scalable
Operating platform | Efficient and scalable Efficient & scalable platform to support Operating margin and AuMA Brand strategic growth objectives £40bn 45% 42% 39% ● Centralised operations supporting fund teams 38% 40% £35bn Distribution ● Remuneration approach linked to fund performance 36% 36% 36%
Slide 18: Investment proposition | AuMA by process and product
Investment proposition | AuMA by process and product (£m) SUSTAINABLE ECONOMIC MULTI GLOBAL INVESTMENT ADVANTAGE ASSET INNOVATION Brand £9,477 £5,918 £4,111 £834 Distribution ◼ UK Retail 8,768 ◼ UK Retail 5,408 ◼ UK Retail 4,012 ◼ UK Retail 834 Core strength Operating ◼ Institutional 312 ◼ Instituti
Slide 19: Investor experience
Investor experience We aim to provide our investors with exceptional service, support and communications, striving to be as transparent as possible Brand Clear communication Thought leadership Distribution ⚫ Dedicated regional salespeople ⚫ Clear investment processes ⚫ Digital and in-person events C
Slide 20: People, Planet and Society
People, Planet and Society Our role in society Our people – diversity, equity and inclusion Brand ⚫ Asset managers provide capital to enable businesses to grow ⚫ Attract and develop talent ⚫ Help investors to achieve their financial objectives ⚫ Heads of Department have been at Liontrust an average
Slide 21: Performance | Liontrust funds to 30 September 2024
Past performance does not predict future returns Performance | Liontrust funds to 30 September 2024 1 year 60% 3 years 41% 5 years 57% Since inception 63% 1st and 2nd quartile 3rd and 4th quartile Source: Liontrust, FE Analytics, 30.09.24. Share classes are total return, net of fees, income rein
Slide 22: 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 23: Delivering our Strategic Objectives
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 ⚫ Discretionary investor lunches, Virtual Conferences, one to one meetings the client experience ⚫ Mor
Slide 24: 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 23
Slide 25: Appendices
Appendices 1. Board biographies 2. Company information 3. Key metrics 4. Business Developments 5. Alternative Performance Measures (“APMs”)
Slide 26: 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 27: 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 28: 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 29: Appendix 2 | Company information and shareholders
Appendix 2 | Company information and shareholders £27.0bn Established 28 years. Headquartered in London Established and Eight distinct active £27.0 billion AuMA as at £422 million market Listed on the London with offices in experienced management investment teams 30 June 2024 capitalisation Stock Ex
Slide 30: Appendix 3 | Key statistics
Appendix 3 | 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 FY24 Adj. op margin 19.1% 29.6% 32.9% 32.5% 33.5%
Slide 31: Appendix 3 | Key statistics – FY14 to FY24
Past performance does not predict future returns Appendix 3 | Key statistics – FY14 to FY24 Growth in AuMA by organic growth and acquisition 40 Architas Majedie 35 0.1 2.5 (4.8) 30 5.1 5.5 (6.0) (2.4) 2.4 25 Neptune 5.8 £bn 20 ATI 3.5 33.5 15 2.7 30.9 31.4 2.7 (2.0) 27.8 0.4 1.8 10 0.4 2.5 16.1 1.0
Slide 32: Appendix 3 | Key statistics
Appendix 3 | Key statistics Acquisition timeline ATI Neptune Architas Majedie FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 AUMA (£bn) 3.6 4.5 4.8 6.5 10.5 12.7 16.1 30.9 33.5 31.4 27.8 % change 20% 25% 7% 35% 62% 21% 27% 92% 8% (6)% (12)% Revenue (£m) 28.4 36.8 44.9 51.6 76.8 84.6 106.6 16
Slide 33: Appendix | Key metrics
Appendix 3 | 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 32
Slide 34: Appendix 3 | Key metrics
Appendix 3 | 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 team3 Economic Advantage £5.9bn Global Sustainable £0.8bn Innovation Investment £9.5bn £2.4bn Cashflow Solution Multi-Asset £4.1bn £1.
Slide 35: Appendix 3 | The Economic Advantage Team – Fund range
Past performance does not predict future returns Appendix 3 | The Economic Advantage Team – Fund range Liontrust UK Liontrust Liontrust UK Liontrust UK Smaller Special Micro Cap Growth Companies Situations £126m £1.0bn £3.5bn £1.0bn Inception: 09.03.16 Inception: 08.01.98* Inception: 10.11.05 Incept
Slide 36: Appendix 3 | Liontrust Sustainable Future – Quartile Performance for SF Managed fund range
Past performance does not predict future returns Appendix 3 | Liontrust Sustainable Future – Quartile Performance for SF Managed fund range 6M 1Y 3Y 5Y 7Y 10Y Launch Liontrust SF Defensive Managed 2 Inc IA Mixed Investment 20-60% Shares 4th 1st 4th 3rd 1st 1st 1st Liontrust SF Cautious Managed 2 Inc
Slide 37: Appendix 3 | Balance sheet 31 March 2024
Appendix 3 | Balance sheet 31 March 2024 31 Mar 2024 31 Mar 2023 £’000 £’000 Assets Non-current assets 84,301 132,593 Current assets Trade and other receivables 229,586 241,682 Financial assets 8,157 9,921 Cash and cash equivalents 104,318 121,037 Total current assets 342,061 372,640 Liabilities Non
Slide 38: Appendix 3 | Non-current assets – impairment breakdown
Appendix 3 | Non-current assets – impairment breakdown 31 Mar 2023 31 Mar 2024 Non-current assets £’000 Amortisation Impairment £’000 Intangible assets* 90,629 (12,094) (30,674) 48,472 Goodwill** 38,586 (6,391) 32,110 Property, plant & equipment 3,378 3,719 132,593 (12,094) (37,065) 84,301 Intangibl
Slide 39: Appendix 4 | Business developments
Appendix 4 | 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 35.5% launches performance expanding technology and client international engagement distribution Source: Li
Slide 40: Appendix 5 | Alternative Performance Measures (APMs)
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 compensa
Slide 41: Appendix 5 | APMs (continued)
Appendix 5 | 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 42: Appendix 5 | APMs (continued)
Appendix 5 | 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 43: 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 44: 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 45: 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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