Liontrust Asset Management PLC
Trading Update
October 2024
OUR PURPOSE
To help clients enjoy a better financial future through the power of active management and distinct investment processes
Liontrust's values
COURAGE
Liontrust does not follow the herd and has the courage to have independence of thought
The business has the courage to do the right thing, make decisions and be nimble
Liontrust has the courage to take an active and engaged approach to investing, clients, staff and society
POWER
Liontrust believes in the power of promoting diversity and inclusion across the business, bringing diverse and inclusive thinking and approaches to our purpose
We seek to empower our staff to fulfil their potential and foster an environment in which everyone is engaged and encouraged to actively participate in the business
Liontrust benefits from the power of being dynamic and ambitious, promoting positivity and adaptability to change
PRIDE
We take pride in seeking to act in the best interests of clients and delivering good customer outcomes at all times
Our staff are responsible for upholding the highest standards of integrity, taking pride in being trustworthy and transparent while making decisions with a clear sense of fairness
Everyone takes pride in being responsible for supporting each other, collaborating, treating each other with dignity and respect, and being open-minded to new ideas, challenge and debate
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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 |
2024 | 31 March 2024 | 31 March 2024 | Dividend of 50p | |
September 2024 | ||||
payable on 9 | ||||
August 2024 |
Source: Liontrust Asset Management, September 2024. This slide includes Alternative Performance Measures (APMs) - see Appendix 5 for the definition of these APMs.
You may get back less than you originally invested. Please refer to the Key Risks slide for more information | 3 |
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, such as for stocks in aggregate held by the Economic Advantage and Sustainable Investment teams
Focus on distribution, product development and operational infrastructure to ensure Liontrust is positioned to take advantage of change in sentiment
We have seen substantial flows into the European Dynamic Fund - AuMA increased from £747 million as at 31 March 2023 to more than £1.6 billion as at 30 September 2024
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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 experience and | distribution and the client |
outcomes | base |
Diversify the product range | Strengthen our |
technological, data and | |
and investment offering | |
digital capability | |
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UK equity flows (industry)
1,500 | ||||||||||||||||||
1,000 | ||||||||||||||||||
500 | ||||||||||||||||||
0 | ||||||||||||||||||
£m | -500 | |||||||||||||||||
-1,000 | ||||||||||||||||||
-1,500 | ||||||||||||||||||
-2,000 | ||||||||||||||||||
-2,500 | Sep-16 | Sep-17 | Dec-17Mar-18Jun-18Sep-18Dec-18Mar-19Jun-19Sep-19Dec-19Mar-20Jun-20Sep-20 | Jun-21Sep-21Dec-21Mar-22Jun-22Sep-22 | Sep-23 | |||||||||||||
Mar-16 | Jun-16 | Dec-16 | Mar-17 | Jun-17 | Dec-20 | Mar-21 | Dec-22 | Mar-23 | Jun-23 | Dec-23 | Mar-24 | Jun-24 | ||||||
UK equity strategy monthly net flows | Annual average |
Source: Investment Association, IA sector UK monthly net sales, 31.08.24
- Includes UK All Companies, UK Equity and UK Smaller Companies IA sector funds
- 37 months of consecutive outflows
- 87 months of outflows out of the last 102 (since March 2016)
- Average £1.2bn of outflows each month in 2024 to 31 August 2024
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Financial performance
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 performance fees, gross profit was
£175.7 million (31 March 2023: £211.3 million) down 17%
Adjusted PBT of £67.4 million (31 March 2023: £87.1 million) down 23%1
Adjusted diluted EPS of 79.2p (31 March 2023: 109.8p) down 28%2
Adjusted operating margin of 35.5% (31 March 2023: 37.7%)
Revenue margin of 0.67% on Average AuMA of £28.3 billion (31 March 2023: 0.68% on Average AuMA of £33.8
billion). Excluding performance fees revenue margin of 0.62% (31 March 2023: 0.62%)
Non-cashImpairment charge of £37.1 million to intangible assets and goodwill: Architas intangible (£7.3 million); Majedie intangible (£23.4million) and goodwill (£6.4 million)
Second interim dividend of 50.0 pence per share (2023: 50.0 pence) payable on 9 August 2024
- Statutory loss before tax of £0.6m (31 March 2023 PBT: £49.3m).
- Diluted EPS (5.46)p (31 March 2023: 61.21p).
This slide includes Alternative Performance Measures (APMs) - see Appendix 5 for the definition of these APMs.
You may get back less than you originally invested. Please refer to the Key Risks slide for more information | 8 |
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%) |
Professional services1 | 15,652 | 8,026 | 95% |
Intangible asset amortisation | 12,094 | 14,793 | (18%) |
Intangible asset and goodwill impairment2 | 37,065 | 12,816 | 189% |
Adjustments | 68,009 | 37,782 | |
Adjusted profit before tax | 67,430 | 87,083 | (23%) |
- Includes acquisition related and restructuring costs for Neptune, Architas, Majedie (£0.6m (2023: £5.9m)), GAM (£9.5m (2023: £1.5m)) and Other costs relating to target operating model restructure (£5.6m (2023: £0.6m)).
- Intangible asset and goodwill impairment attributable to Majedie is £29.8 million, and attributable to Architas is £7.3 million.
This slide includes Alternative Performance Measures (APMs) - see Appendix 5 for the definition of these APMs.
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