C O U R A G E · P O W E R · P R I D E
H A L F - Y E A R R E P O R T A N D C O N D E N S E D | I N T E R I M |
F I N A N C I A L S TAT E M E N T S ( U N A U D I T E D ) T O 3 0 | S E P T E M B E R 2 0 2 4 |
L I O N T R U S T A S S E T M A N A G E M E N T | P L C |
DIRECTORS AND ADVISERS
DIRECTORS, REGISTERED OFFICE | Legal Advisers: |
AND COMPANY NUMBER: | Macfarlanes LLP |
Luke Savage (Non-executive Chair) | 20 Cursitor Street |
London EC4A 1LT | |
John Ions (Chief Executive Officer) | Bankers: |
Vinay Abrol (Chief Financial Officer) | Royal Bank of Scotland Plc |
280 Bishopsgate | |
Rebecca Shelley (Senior Independent Director) | London EC2M 4RB |
Mandy Donald (Non-executive Director) | Financial Adviser and Corporate Broker: |
Singer Capital Markets | |
Miriam Greenwood OBE DL (Non-executive Director) | 1 Bartholomew Lane |
London EC2N 2AX | |
2 Savoy Court | |
London WC2R 0EZ | Panmure Liberum |
Registered in England with Company Number 02954692. | Ropemaker Place, Level 12 |
Company Secretary: | 25 Ropemaker Street |
London EC2Y 9LY | |
Sally Buckmaster | |
Independent Auditors: | HSBC Bank plc |
8 Canada Square | |
KPMG LLP | Canary Wharf |
15 Canada Square | London E14 5HQ |
London E14 5GL | Registrars: |
Equiniti Limited | |
Aspect House | |
Spencer Road | |
Lancing | |
West Sussex BN99 6DA |
2 LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024
CHAIR'S STATEMENT
I am delighted to have joined as the new Non-executive Chair of your Company and I am excited by the challenge and the opportunities in front of Liontrust, a company that I believe has an exciting future.
Having met many people across the Group, I have been impressed by their quality and passion for the business,
attributes that underpin the highly respected business and strong brand. The Group's agility and entrepreneurial culture means that it is possible for the business to make significant progress over a relatively short period of time.
There are clearly challenges for active managers at the moment, particularly from the growing demand for passive vehicles. This has not shaken the commitment at Liontrust to active management and the value this can add to client portfolios.
All active managers experience periods of volatile performance, and it is important always to understand what is driving this and the reasons for any underperformance. There is a real belief and trust in the investment processes at Liontrust and a recognition that the fund management teams stay true to them even during difficult times, especially when their investment approach is out of favour.
The Board believes in the four strategic objectives that Liontrust has set for itself - Continue to enhance the client experience and outcomes; Diversify the product range and investment offering; Further broaden distribution and the client base; and strengthen our technological, data and digital capability - and is ensuring the business has the support and the means to execute these in the best way possible. There are a number of options, for example, for broadening the Group's distribution and fund range, and we will support what we see as the most effective means to expedite this.
The Board has supported the investment in the business, the action to manage costs and other changes over the past year in the belief that these will help drive Liontrust forward. The confidence of the Board in the long-term outlook for the business and its
financial strength is demonstrated by our intention to targeting the same dividends for the financial year ending 31 March 2025 as last year and the announcement of a share buyback programme.
Results
Gross Profit of £81.1 million (2023: £98.6 million and £92.5 million excluding performance fees), with a Revenue Margin1 of 0.603% (2023: 0.627%) on Average AuMA of £26,860 million (2023: £29,495 million).
Adjusted profit before tax1 is £25.8 million (2023: £36.0 million), with an Adjusted Operating Margin1 of 30.5% (2023: 35.9%).
Statutory Profit before tax of £12.5 million (2023: Statutory Loss before tax of £10.1 million). This includes charges of £13.3 million (2023: £46.2 million) relating to acquisitions and non- recurring costs; the non-cash amortisation and impairment of the acquisition-related intangible assets and goodwill.
Adjusted profit before tax1 is disclosed in order to give shareholders an indication of the profitability of the Group excluding non- cash (intangible asset amortisation) expenses and non-recurring (professional fees relating to acquisition, cost reduction, restructuring and severance compensation related) expenses. See note 6 below for a reconciliation of Adjusted profit before tax1.
First Interim Dividend
In accordance with the Company's longstanding progressive dividend policy, which remains unchanged, the Board is declaring a first Interim dividend of 22.0 pence per share (2023: 22.0 pence) which will be payable on 8 January 2025 to shareholders who are on the register as at 29 November 2024, with the shares going ex-dividend on 28 November 2024. The last day for Dividend Reinvestment Plan elections is 13 December 2024.
Business transformation programme
In late 2023, Liontrust started a transformation of our business, with the initial focus on strengthening data management, delivery and analysis across the business through the implementation of an enterprise portfolio management system. The enhancements have been achieved by implementing BlackRock's Aladdin platform; a Middle-Office operating model with BNY; BNY Front Office Services; and a new enterprise data platform-BNY Data Vault.
1This is an Alternative Performance Measure, see note 2 on page 17.
LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024 3
Liontrust is reorganising the fund ranges: the closure of four smaller funds in our Irish domiciled fund range, which was completed in October 2024; the merger (subject to investor approval) of the GAM Star Alpha Technology Fund into our newly launching Liontrust GF Global Alpha Long/Short Fund to be managed by Mark Hawtin and the Global Equities team; and further fund rationalisation. We expect all this reorganisation to be completed by the end of March 2025.
We will integrate the Global Fixed Income investment team into the Multi-Asset investment team under John Husselbee and then insource the fixed income exposure that is currently with external fund managers for our Multi-Asset funds and portfolios by the end of 2025. This comes at a time when both teams believe there will be greater diversity in interest rate policies around the world and there is scope for greater impact from the fixed income exposure in the Multi-Asset investment team's asset allocation. The integration will provide the Multi-Asset investment team with greater control over managing duration and will enhance its expertise across rates and credit. The insourcing of the fixed income allocation should reduce costs for clients of the Multi-Asset funds and portfolios while the funds managed by the
Global Fixed Income team will benefit from being provided with permanent capital by the Multi-Asset investment team.
We are cutting our cost base, including through the proposed reduction of approximately 25 roles (12% of staff headcount) across our business for an annualised saving, if implemented in full, of employee-related, member-related and non-staff- related expenses of around £4.5 million. This is expected to be completed by the end of March 2025, and implementation costs for the role reductions are anticipated to be around £4.0 million, which will be incurred in the second half of the current financial year and the first half of the next.
Capital Management
As at 30 September 2024 the Company had surplus capital after foreseeable dividends of over £45 million (as set out in note 1d below). In light of this, the Directors intend to target a dividend of at least 72 pence per share for the year ending 31 March 2025. In addition, the Company is initiating a share buyback programme with an aggregate value of up to £5 million, to be phased over the period to 31 March 2025. The shares purchased by the Company will be cancelled.
4 LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024
ASSETS UNDER MANAGEMENT AND ADVICE
On 30 September 2024, our AuMA stood at £25,956 million and were broken down by type and investment process as follows:
Institutional | International | |||||
Accounts | Investment | UK Retail | Alternative | Funds & | ||
Total | & Funds | Trusts | Funds & MPS | Funds | Accounts | |
Process | (£m) | (£m) | (£m) | (£m) | (£m) | (£m) |
Sustainable Investment | 9,477 | 312 | - | 8,768 | - | 397 |
Economic Advantage | 5,918 | 413 | - | 5,408 | - | 97 |
Multi-Asset2 | 4,233 | - | - | 4,034 | 99 | 100 |
Global Equities | 1,149 | - | - | 1,118 | 23 | 8 |
Global Innovation | 834 | - | - | 834 | - | - |
Cashflow Solution | 2,411 | 516 | - | 1,562 | 136 | 197 |
Global Fundamental | 1,934 | 228 | 1,186 | 515 | - | 5 |
Total | 25,956 | 1,469 | 1,186 | 22,239 | 258 | 804 |
AuMA as at 14 November 2024 were £25,219 million.
2Includes AuMA of the Global Fixed Income investment team which is being integrated into the Multi-Asset investment team.
FLOWS
The net outflows over the Period were £2,067 million (2023: £3,213 million). A reconciliation of fund flows and AuMA over the six-month period to 30 September 2024 is as follows:
Institutional | International | |||||
Accounts | Investment | UK Retail | Alternative | Funds & | ||
Total | & Funds | Trusts | Funds & MPS | Funds | Accounts | |
(£m) | (£m) | (£m) | (£m) | (£m) | (£m) | |
Opening AuMA - 1 April 2024 | 27,822 | 1,741 | 1,135 | 23,815 | 236 | 895 |
Net flows | (2,067) | (268) | (20) | (1,676) | (11) | (92) |
Market and Investment performance | 201 | (4) | 71 | 100 | 33 | 1 |
Closing AuMA - 30 September 2024 | 25,956 | 1,469 | 1,186 | 22,239 | 258 | 804 |
LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024 5
Key Fund Performance (Quartile ranking)
UK domiciled funds
Quartile ranking | |||||||||||||||||||||||||||||||||||||
- Since Launch/ | Quartile | Quartile | Quartile | Launch Date/ | |||||||||||||||||||||||||||||||||
Manager | ranking | ranking | ranking | Manager | |||||||||||||||||||||||||||||||||
Appointed | - 5 year | - 3 year | - 1 year | Appointed | |||||||||||||||||||||||||||||||||
ECONOMIC ADVANTAGE FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust UK Growth Fund | 1 | 3 | 3 | 4 | 01/04/1996 | ||||||||||||||||||||||||||||||||
Liontrust Special Situations Fund | 1 | 3 | 3 | 4 | 10/11/2005 | ||||||||||||||||||||||||||||||||
Liontrust UK Smaller Companies Fund | 1 | 2 | 3 | 4 | 08/01/1998 | ||||||||||||||||||||||||||||||||
Liontrust UK Micro Cap Fund | 1 | 1 | 2 | 4 | 09/03/2016 | ||||||||||||||||||||||||||||||||
SUSTAINABLE FUTURE FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust SF Monthly Income Bond Fund | 1 | 1 | 2 | 1 | 12/07/2010 | ||||||||||||||||||||||||||||||||
Liontrust SF Managed Growth Fund | 2 | 1 | 4 | 1 | 19/02/2001 | ||||||||||||||||||||||||||||||||
Liontrust SF Corporate Bond Fund | 3 | 2 | 3 | 1 | 19/02/2001 | ||||||||||||||||||||||||||||||||
Liontrust SF Cautious Managed Fund | 2 | 4 | 4 | 3 | 23/07/2014 | ||||||||||||||||||||||||||||||||
Liontrust SF Defensive Managed Fund | 1 | 4 | 4 | 2 | 23/07/2014 | ||||||||||||||||||||||||||||||||
Liontrust SF European Growth Fund | 3 | 4 | 4 | 2 | 19/02/2001 | ||||||||||||||||||||||||||||||||
Liontrust SF Global Growth Fund | 3 | 3 | 4 | 2 | 19/02/2001 | ||||||||||||||||||||||||||||||||
Liontrust SF Managed Fund | 2 | 2 | 4 | 1 | 19/02/2001 | ||||||||||||||||||||||||||||||||
Liontrust UK Ethical Fund | 3 | 4 | 4 | 1 | 01/12/2000 | ||||||||||||||||||||||||||||||||
Liontrust SF UK Growth Fund | 3 | 4 | 4 | 2 | 19/02/2001 | ||||||||||||||||||||||||||||||||
GLOBAL INNOVATION FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust Global Dividend Fund | 2 | 1 | 1 | 1 | 20/12/2012 | ||||||||||||||||||||||||||||||||
Liontrust Global Innovation Fund | 1 | 2 | 4 | 1 | 31/12/2001 | ||||||||||||||||||||||||||||||||
Liontrust Global Technology Fund | 2 | 2 | 1 | 1 | 15/12/2015 | ||||||||||||||||||||||||||||||||
GLOBAL EQUITIES FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust Balanced Fund | 1 | 1 | 3 | 1 | 31/12/1998 | ||||||||||||||||||||||||||||||||
Liontrust China Fund | 4 | 3 | 3 | 2 | 31/12/2004 | ||||||||||||||||||||||||||||||||
Liontrust Emerging Market Fund | 3 | 4 | 3 | 2 | 30/09/2008 | ||||||||||||||||||||||||||||||||
Liontrust Global Alpha Fund | 1 | 2 | 4 | 3 | 31/12/2001 | ||||||||||||||||||||||||||||||||
Liontrust Global Smaller Companies Fund | 4 | 3 | 4 | 3 | 31/12/2007 | ||||||||||||||||||||||||||||||||
Liontrust India Fund | 4 | 1 | 2 | 3 | 29/12/2006 | ||||||||||||||||||||||||||||||||
Liontrust Japan Equity Fund | 2 | 1 | 1 | 1 | 22/06/2015 | ||||||||||||||||||||||||||||||||
Liontrust Latin America Fund | 3 | 3 | 3 | 1 | 03/12/2007 | ||||||||||||||||||||||||||||||||
Liontrust US Opportunities Fund | 2 | 3 | 4 | 3 | 31/12/2002 | ||||||||||||||||||||||||||||||||
6 LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024
Quartile ranking | |||||||||||||||||||||||||||||||||||||||
- Since Launch/ | Quartile | Quartile | Quartile | Launch Date/ | |||||||||||||||||||||||||||||||||||
Manager | ranking | ranking | ranking | Manager | |||||||||||||||||||||||||||||||||||
Appointed | - 5 year | - 3 year | - 1 year | Appointed | |||||||||||||||||||||||||||||||||||
CASHFLOW SOLUTION FUNDS | |||||||||||||||||||||||||||||||||||||||
Liontrust European Dynamic Fund | 1 | 1 | 1 | 4 | 15/11/2006 | ||||||||||||||||||||||||||||||||||
GLOBAL FIXED INCOME FUNDS | |||||||||||||||||||||||||||||||||||||||
Liontrust Strategic Bond Fund | 3 | 3 | 3 | 3 | 08/05/2018 | ||||||||||||||||||||||||||||||||||
GLOBAL FUNDAMENTAL FUNDS | |||||||||||||||||||||||||||||||||||||||
Liontrust Income Fund | 1 | 2 | 2 | 3 | 31/12/2002 | ||||||||||||||||||||||||||||||||||
Edinburgh Investment Trust Plc | 1 | - | 1 | 1 | 27/03/2020 | ||||||||||||||||||||||||||||||||||
Liontrust UK Equity Fund | 1 | 2 | 2 | 2 | 27/03/2003 | ||||||||||||||||||||||||||||||||||
Liontrust UK Focus Fund | 1 | 3 | 3 | 1 | 29/09/2003 | ||||||||||||||||||||||||||||||||||
MULTI-ASSET FUNDS | |||||||||||||||||||||||||||||||||||||||
Liontrust MA Explorer 35 Fund | 1 | - | - | 1 | 31/12/2002 | ||||||||||||||||||||||||||||||||||
Liontrust MA Explorer Income 45 Fund | 2 | - | - | 1 | 31/03/2020 | ||||||||||||||||||||||||||||||||||
Liontrust MA Explorer Income 60 Fund | 1 | - | - | 1 | 27/03/2003 | ||||||||||||||||||||||||||||||||||
Liontrust MA Explorer 70 Fund | 2 | - | - | 2 | 29/09/2003 | ||||||||||||||||||||||||||||||||||
Liontrust MA Explorer 85 Fund | 1 | - | - | 2 | 29/09/2003 | ||||||||||||||||||||||||||||||||||
Liontrust MA Explorer 100 Fund | 1 | - | - | 2 | 29/09/2003 | ||||||||||||||||||||||||||||||||||
Liontrust MA Monthly High Income Fund | 3 | 4 | 2 | 1 | 01/05/2012 | ||||||||||||||||||||||||||||||||||
Liontrust MA UK Equity Fund | 4 | 3 | 2 | 2 | 12/11/2001 | ||||||||||||||||||||||||||||||||||
Liontrust Strategic Bond Fund | 2 | 3 | 3 | 1 | 08/05/2018 | ||||||||||||||||||||||||||||||||||
LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024 7
Key Fund Performance (Quartile ranking)
Irish domiciled funds
Quartile ranking | |||||||||||||||||||||||||||||||||||||
- Since Launch/ | Quartile | Quartile | Quartile | Launch Date/ | |||||||||||||||||||||||||||||||||
Manager | ranking | ranking | ranking | Manager | |||||||||||||||||||||||||||||||||
Appointed | - 5 year | - 3 year | - 1 year | Appointed | |||||||||||||||||||||||||||||||||
ECONOMIC ADVANTAGE FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust GF Special Situations Fund | 1 | 3 | 3 | 3 | 08/11/2012 | ||||||||||||||||||||||||||||||||
Liontrust GF UK Growth Fund | 1 | 2 | 2 | 4 | 03/09/2014 | ||||||||||||||||||||||||||||||||
SUSTAINABLE FUTURE FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust GF SF European | 2 | 2 | 2 | 1 | 29/05/2018 | ||||||||||||||||||||||||||||||||
Corporate Bond Fund | |||||||||||||||||||||||||||||||||||||
Liontrust GF SF Global Growth Fund | 2 | - | 4 | 2 | 12/11/2019 | ||||||||||||||||||||||||||||||||
Liontrust GF SF Multi Asset Global Fund | 4 | - | - | 2 | 13/10/2021 | ||||||||||||||||||||||||||||||||
Liontrust GF SF Pan-European Growth Fund | 3 | 4 | 4 | 2 | 14/03/2001 | ||||||||||||||||||||||||||||||||
Liontrust GF SF US Growth Fund | 3 | - | - - | 3 | 07/07/2023 | ||||||||||||||||||||||||||||||||
CASHFLOW SOLUTION FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust GF European Smaller | 1 | 1 | 1 | 1 | 01/02/2017 | ||||||||||||||||||||||||||||||||
Companies Fund | |||||||||||||||||||||||||||||||||||||
Liontrust GF European Strategic Equity Fund | 1 | 1 | 1 | 1 | 25/04/2014 | ||||||||||||||||||||||||||||||||
MULTI-ASSET FUNDS | |||||||||||||||||||||||||||||||||||||
Liontrust GF Absolute Return Fund | 3 | 3 | 2 | 3 | 26/06/2018 | ||||||||||||||||||||||||||||||||
Liontrust GF High Yield Fund | 1 | 2 | 2 | 1 | 08/06/2018 | ||||||||||||||||||||||||||||||||
Liontrust GF Strategic Bond Fund | 1 | 2 | 2 | 1 | 13/04/2018 | ||||||||||||||||||||||||||||||||
Source: Financial Express to 30 September 2024 as at 7 October 2024, bid-bid, total return, net of fees, based on primary share class.
Past performance is not a guide to future performance, investments can result in total loss of capital. The above funds are all UK authorised unit trusts, OEICs, Irish authorised OEICs (primary share class) or UK listed investment trusts. Onshore funds use the Financial Express Investment Association sectors. Offshore funds use the FCA Recognised offshore sectors. Edinburgh Investment Trust Plc uses the AIC Investment Trust UK Equity Income sector.
MA Explorer funds had an objective change on 05/04/2023 and rankings are shown from then.
MA Dynamic Passive fund range, MA Blended fund range, Diversified Real Assets Fund and Russia Funds (suspended) are not included as are in an IA sector that is not rankable, GF Pan European Dynamic Fund is excluded because was recently launched. GF UK Equity, International Equity, US Equity and GF Tortoise are excluded as these funds are closing.
Looking forward
Everyone at Liontrust is focused on returning the business to positive net flows and are confident that Liontrust has the right strategy, investment teams, brand, client relationships and strength of marketing to achieve this. Over the long term, the investment teams and processes have proved they add value to our clients and the fact that Liontrust is so highly regarded for communications and client service and engagement shows how well positioned we are to take advantage of improving fund performance.
As the new Non-executive Chair, I am looking forward to being part of the development of Liontrust over the coming years.
Luke Savage
Non-executive Chair
20 November 2024
8 LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 September 2024
Six months to | Six months to | Year ended | ||
30-Sep-24 | 30-Sep-23 | 31-Mar-24 | ||
(unaudited) | (unaudited) | (audited) | ||
Note | £'000 | £'000 | £'000 | |
Revenue | 4 | 87,039 | 104,547 | 197,889 |
Cost of sales | 4 | (5,973) | (5,979) | (11,828) |
Gross profit | 81,066 | 98,568 | 186,061 | |
Realised (loss)/gain on sale of financial assets | (6) | 12 | 184 | |
Unrealised gain/(loss) on financial assets | 174 | (132) | 838 | |
Administration expenses | 5 | (69,809) | (109,164) | (188,932) |
Operating profit/(loss) | 11,425 | (10,716) | (1,849) | |
Interest receivable | 1,121 | 642 | 1,337 | |
Interest payable | (42) | (52) | (67) | |
Profit/(Loss) before tax | 12,504 | (10,126) | (579) | |
Taxation (charge)/credit | 7 | (3,766) | 796 | (2,911) |
Profit/(Loss) for the period | 8,738 | (9,330) | (3,490) | |
Other comprehensive income: | - | - | - | |
Total comprehensive income | 8,738 | (9,330) | (3,490) | |
Pence | Pence | Pence | ||
Basic earnings per share | 8 | 13.67 | (14.61) | (5.46) |
Diluted earnings per share | 8 | 13.67 | (14.61) | (5.46) |
All of the results are derived from continuing operations.
The accompanying notes form an integral part of these unaudited condensed interim financial statements.
LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024 9
CONSOLIDATED BALANCE SHEET
As at 30 September 2024
30-Sep-24 | 30-Sep-23 | 31-Mar-24 | ||
(unaudited) | (unaudited) | (audited) | ||
Note | £'000 | £'000 | £'000 | |
Assets | ||||
Non current assets | ||||
Intangible assets | 9 | 43,919 | 58,233 | 48,472 |
Goodwill | 10 | 32,110 | 34,052 | 32,110 |
Property, plant and equipment | 2,809 | 2,600 | 3,719 | |
78,838 | 94,885 | 84,301 | ||
Current assets | ||||
Trade and other receivables | 11 | 172,716 | 194,665 | 229,586 |
Financial assets | 12 | 5,752 | 9,710 | 8,157 |
Cash and cash equivalents | 88,508 | 96,932 | 104,318 | |
Total current assets | 266,976 | 301,307 | 342,061 | |
Liabilities | ||||
Non current liabilities | ||||
Deferred tax liability | (10,089) | (13,393) | (11,227) | |
Lease liability | (1,517) | (1,684) | (2,538) | |
Total non current liabilities | (11,606) | (15,077) | (13,765) | |
Current liabilities | ||||
Trade and other payables | (181,282) | (199,884) | (241,363) | |
Corporation tax payable | (4,468) | (1,208) | - | |
Total current liabilities | (185,750) | (201,092) | (241,363) | |
Net current assets | 81,226 | 100,215 | 100,698 | |
Net assets | 148,458 | 180,023 | 171,234 | |
Shareholders' equity | ||||
Ordinary shares | 648 | 648 | 648 | |
Capital redemption reserve | 19 | 19 | 19 | |
Retained Earnings | 160,763 | 190,685 | 183,461 | |
Own shares held | (12,972) | (11,329) | (12,894) | |
Total equity | 148,458 | 180,023 | 171,234 | |
10 LIONTRUST ASSET MANAGEMENT PLC HALF YEAR REPORT 2024