Company Announcements

City of London Investment Group PLC

16 July 2019

The information contained within this announcement is deemed by the Group to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.



CITY OF LONDON INVESTMENT GROUP PLC

("City of London" or "the Group" or "the Company")

PRE-CLOSE TRADING UPDATE for the year to 30 June 2019

City of London (LSE: CLIG), a leading specialist asset management group focused on emerging markets and closed-end funds, provides a pre-close trading update for its financial year ended 30 June 2019. The numbers that follow are unaudited.

Funds under management were US$5.4 billion (£4.2 billion) at 30 June 2019 (2018: US$5.1 billion or £3.9 billion), representing a 6% increase in US$ terms for the year.  A breakdown by strategy follows:

*Opportunistic Value formerly Global Tactical Asset Allocation, GTAA

Funds under Management excludes seed investments

The core EM strategy outperformed (by approximately 300 bps, net of fees) for the full year as discounts narrowed and country allocation was positive.  The Developed, Opportunistic Value (formerly GTAA) and Frontier strategies all recorded negative relative performance due to a combination of negative NAV and country allocation effects.

The Group's overhead for the year to 30 June 2019 is expected to be £12.9 million (2018: £12.5 million) and the current monthly run-rate is c £1.1m.

For the year to 30 June 2019, the Group expects that pre-tax profits will be approximately £11.4 million, including NCI profit of £0.2million, (2018: £12.8 million, NCI nil). Profits after an anticipated tax charge of £2.4 million (21% of pre-tax profits) will be approximately £9.0 million (2018: profits of £10.1 million after a tax charge of £2.7 million, representing 21% of pre-tax profit) of which £8.8m will be attributable to shareholders of the Company.  Basic and fully diluted earnings per share are expected to be 34.9p and 34.1p respectively (2018: 39.5p and 39.3p).

The Board is recommending a final dividend of 18p per share (2018: 18p). This would bring the total dividend payment for the year to 40.5p, including the special dividend of 13.5p paid in March (2018: 27p, special nil). Dividend cover, excluding the special dividend, equates to 1.3 times (2018: 1.47 times).

The Board confirms the final dividend timetable for the year to 30 June 2019:

·     ex-dividend date:                      10 October 2019

·     dividend record date:              11 October 2019

·     payable:                                     29 October 2019

City of London expects to announce final results alongside publication of its Accounts for the year to 30 June 2019 on 16 September 2019. The Group's Annual General Meeting will be held on 21 October 2019.   

Template

Please see the attached graph which is based on the following assumptions and includes the estimated cost of a maintained dividend:

http://www.rns-pdf.londonstockexchange.com/rns/6075F_1-2019-7-15.pdf

Assumptions:

·    Starting point Current FuM (end June 2019)

·    Net increase in FuM in 2019/2020 (straight-lined to June 2020):

§ emerging market strategies zero

§ diversification strategies $250m

·    Operating margin adjusted monthly for change in product mix and commission run-off

·    Market growth: 0%

·    Increase in overheads: 0%

·    Increased "financing" cost due to IFRS16, net of interest income, £0.1m

·    EIP charge: 5% of operating profit (final year)

·    Corporation tax based on an estimated average rate of 21%

·    Exchange rate assumed to be £1/$1.27 for entire period

·    Number of CLIG Shares in issue (26.6m) less those held by the Employee Benefit Trust (1.5m) as at 30 June 2019

This can also be found on our website at:

https://www.citlon.com/investor-relations/dividend-cover.php

For further information, please visit http://www.citlon.co.uk/ or contact:

Tom Griffith, CEO

City of London Investment Group PLC

Tel: 001 610 380 0435

Martin R Green

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20 3829 5000

This release includes forward-looking statements, which may differ from actual results.  Any forward-looking statements are based on certain factors and assumptions, which may prove incorrect, and are subject to risks, uncertainties and assumptions relating to future events, the Group's operations, results of operations, growth strategy and liquidity.