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Liontrust Asset Management PLC
Interim / Quarterly Report • Dec 1, 2021
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Interim / Quarterly Report
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RNS Number : 0900U
Liontrust Asset Management PLC
01 December 2021
Embargoed until 0700 hours, Wednesday 1 December 2021
LIONTRUST ASSET MANAGEMENT PLC
HALF YEAR REPORT FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2021
Liontrust Asset Management Plc ("Liontrust", the "Company", or the "Group"), the independent fund management group, today announces its Half Year Report for the six months ended 30 September 2021.
Results:
· Adjusted profit before tax1 of £43.1 million (2020: £22.3 million), an increase of 93% compared to the equivalent period last year.
· Profit before tax of £31.1 million (2020: £6.9 million), an increase of 352% compared to the equivalent period last year. This includes costs of £12.1 million (2020: £15.4 million) relating to acquisitions and associated restructuring costs; the amortisation of the related intangible assets; and other non-cash and non-recurring costs (see note 6 below).
· Gross profit of £108.5 million (2020: £63.0 million), an increase of 72% compared to the equivalent period last year.
· Adjusted diluted EPS1 of 56.94 pence (2020: 30.74 pence), an increase of 85% compared to the equivalent period last year.
Dividend:
· First Interim dividend per share of 22.0 pence (2020: 11.0 pence), an increase of 100% compared to the equivalent payment last year.
Assets under management and advice:
· On 30 September 2021, assets under management and advice ("AuMA") were £35.7 billion, an increase of 15% since the start of the financial year and 73% compared to AuMA on 30 September 2020.
· AuMA as at close of business on 26 November 2021 were £36.5 billion.
Inflows:
· Net inflows for the six months ended 30 September 2021 of £2.1 billion (2020: £1.7 billion), an increase of 19% compared to the equivalent period last year.
Awards:
· During the period from the start of our financial year, Liontrust won the following awards:
a. "Asset Manager of the Year" awarded by Financial News Asset Management Awards 2021;
b. "Best Fund Group" awarded by Shares Awards 2021; and
c. "Global Group of the Year" awarded by Investment Week Fund Manager of the Year Awards 2021.
1 This is an Alternative Performance Measure, see note 2 below.
Commenting on the results, John Ions, Chief Executive, said:
"Liontrust has delivered another strong six months of sales and financial performance. Our net inflows of £1 billion and above for each of the last three quarters demonstrate the excellence of our investment teams, long-term performance, distribution, communications and power of the brand.
We have maintained this momentum into the new quarter of our financial year, with Liontrust's AuMA reaching £36.5 billion on 26 November.
The latest industry sales statistics reiterate Liontrust's continued success. In the third quarter of 2021, Liontrust had the second highest net retail sales in the UK (source: Pridham Report). The same report showed that Liontrust had the fifth highest gross retail sales in the UK over the same three-month period.
Liontrust has gained further independent recognition through another two prestigious awards that cover different distribution channels. First, Liontrust was named Asset Manager of the Year at the Financial News Awards, a publication for institutional investors. We have continued to make progress in the institutional market and are seeking to build our business further among these investors. We also won the Best Fund Group of the Year Award at the Shares Awards, which are voted for by private investors who read Shares magazine.
These follow Liontrust winning the Global Group of the Year Award at Investment Week's Fund Manager of the Year Awards in the summer. This magazine is read by wealth managers and financial advisers and reiterates the growing strength and breadth of our distribution and brand across all these channels.
Over the past six months, we have moved from virtual communications to being able to have face-to-face meetings with clients again. This has enabled us to present our Multi-Asset proposition at physical events for the first time since we acquired the Architas UK Investment Business last year.
We have been holding a Liontrust roadshow, the World Market Review ("WMR"), around the UK and taken part with three other asset managers in the Multi-Manager Forum this autumn. So far, with the WMR continuing, we have presented to around 450 advisers.
Last week, the Liontrust Sustainable Investment team, whose AuMA now exceeds £13 billion, held a client event reviewing COP26 and what the outcomes mean for investors. One thing COP26 has reiterated is the vital role asset management has to play in allocating capital to great businesses with the innovation and technology to help us tackle massive challenges like climate change.
Asset management can also benefit the wider society through democratising savings and community engagement. We have a responsibility to enable as many people as possible to boost their savings and future prospects by making investments as simple to understand and as easy to access as possible.
Even with the return of physical events, Liontrust continues to develop and expand our communications with investors and our capability of delivering these digitally to different audiences. We have generated 66,000 views for our recent investment videos, for example, and have seen a 77% increase in website traffic from the third quarter in 2020 to the third quarter in 2021.
Our continued successful progress over the past six months is thanks to the hard work of everyone at Liontrust and the loyalty of our clients and investors. Liontrust is well positioned to maintain the momentum into the future as we seek to broaden sales across distribution channels."
For further information please contact:
Liontrust Asset Management Plc (Tel: 020 7412 1700, Website: liontrust.co.uk)
John Ions: Chief Executive
Vinay Abrol: Chief Financial Officer & Chief Operating Officer
Simon Hildrey: Chief Marketing Officer
David Boyle: Head of Corporate Development
Singer Capital Markets (Tel: 020 7496 3000)
Corporate Broking: Tom Salvesen
Corporate Finance: Justin McKeegan
Panmure Gordon (Tel: 020 7886 2500)
Corporate Broking: Charles Leigh-Pemberton
Corporate Advisory: Antoine Dupont-Madinier
Chairman's Statement
I am delighted to report on the success of your Company over the past six months. This is thanks to the excellence and dedication of the management of the business and all employees and members at Liontrust.
The management expertly guided the business through the pandemic in 2020 and into 2021 and has now overseen the transition back to an increasing proportion of face-to-face meetings. All the while sales have continued to be strong with net inflows of £2.1 billion over the last six months, a 19% increase over the same period in 2020.
The success has led to strong financial performance for your Company. Adjusted profit before tax has increased by 93% to £43.1 million and there has been a rise of 85% in the adjusted diluted EPS of 56.94 pence.
As a result, your Company is to pay a first interim dividend per share of 22.0 pence. This represents a 100% increase on the dividend payment compared to the same six-month period last year and reflects the excellent management of the business, the success of the acquisitions of the past few years, the strong net inflows Liontrust has continued to deliver, and to create more balance between the first and second Interim dividends.
As well as the management of Liontrust, the Board are pleased with the stewardship of the business. One of our key strategies is to be a responsible company and investor and the Sustainability Report for 2021 is available on the Company's website outlining the developments in and performance of Liontrust in four areas of ESG (environmental, social and governance) over the past year. These are being a responsible investor, doing our part on climate change, developing a diverse and talented staff, and being a good corporate citizen.
Liontrust recognises that good governance and stewardship, sustainability and social impact are important considerations in choosing and monitoring investments and longer-term performance.
We have committed to integrating sustainability appropriately throughout the business. This includes publishing our Responsible Investment policy, which provides details of our engagement-led approach and how we manage our stewardship at both the company level and for individual investment teams.
Liontrust's second full Assessment of Value Report will be published in December and will include all the Company's UK-domiciled funds including the Multi-Asset ranges that joined last year as part of the acquisition of the Architas UK Investment Business. This report evaluates whether our funds are delivering value to investors. We recommend investors read this report, which will be available on the Liontrust website and highlights all the areas in which the Company is seeking to add value.
Key to this of course is investment performance and meeting investor expectations. We believe the excellence of our fund management teams, their investment processes and long-term performance demonstrates our ability to deliver this.
The success of our investment management, along with distribution, communications and the brand, is reflected in the three asset management group of the year awards Liontrust has won over the past six months, along with fund awards for the Sustainable, Multi-Asset and Global Equity investment teams.
I am delighted to welcome Rebecca Shelley who joined the Liontrust Board as a Non-executive Director on 1 November. Rebecca has a wealth of experience, knowledge and insights in financial services that will be an invaluable addition for us as Liontrust continues to expand its investment capabilities and proposition.
Results
Liontrust has delivered profit before tax of £31.063 million (2020: £6.874 million), an increase of 352% compared to the equivalent period last year.
The adjusted profit before tax was £43.128 million (2020: £22.296 million), an increase of 93%. Adjusted profit before tax is disclosed in order to give shareholders an indication of the profitability of the Group excluding non-cash expenses (share incentivisation, depreciation and intangible asset amortisation), and non-recurring expenses (acquisition related and associated restructuring and severance compensation related).
See note 6 below for a reconciliation of adjusted profit (or loss) before tax.
Dividend
In accordance with the Company's dividend policy, and to create more balance between the first and second Interim dividends, the Board is declaring a first Interim dividend of 22.0 pence per share (2020: 11.0 pence), an increase of 100%, which will be payable on 14 January 2022 to shareholders who are on the register as at 10 December 2021, the shares going ex-dividend on 9 December 2021. Last day for Dividend Reinvestment Plan elections is 22 December 2021.
Shareholder services
Link Group (a trading name of Link Market Services Limited and Link Market Services Trustees Limited) may be able to provide you with a range of services relating to your shareholding. To learn more about the services available to you please visit the shareholder portal at www.signalshares.com or call 0371 664 0300. Calls outside the UK will be charged at the applicable international rate. Lines are open Monday to Friday, 9.00 am to 5.30 pm, UK time, excluding public holidays in England and Wales.
Assets under management and advice
On 30 September 2021, our AuMA stood at £35,659 million and were broken down by type and investment process as follows:
| Process | Total | Institutional | UK Retail | Multi-Asset | Offshore |
| (£m) | (£m) | (£m) | (£m) | (£m) | |
| Sustainable Investment | 13,243 | 151 | 12,203 | 0 | 889 |
| Economic Advantage | 10,116 | 469 | 9,168 | 0 | 479 |
| Multi-Asset | 7,357 | 0 | 0 | 7,357 | 0 |
| Global Equity | 3,060 | 195 | 2,865 | 0 | 0 |
| Cashflow Solution | 1,032 | 689 | 289 | 0 | 54 |
| Global Fixed Income | 851 | 0 | 367 | 0 | 484 |
| Total | 35,659 | 1,504 | 24,892 | 7,357 | 1,906 |
On 26 November 2021, our AuMA was £36,492 million.
Inflows
The net inflows over the six months to 30 September 2021 are £2,088 million (2020: £1,748 million). A reconciliation of fund flows and AuMA over the six months to 30 September 2021 is as follows:
| Total | Institutional | UK Retail | Multi-Asset | Offshore | |
| (£m) | (£m) | (£m) | (£m) | (£m) | |
| Opening AuMA - 1 April 2021 | 30,929 | 1,488 | 20,627 | 7,139 | 1,675 |
| Net flows | 2,088 | (63) | 2,038 | (26) | 139 |
| Market and Investment performance | 2,642 | 79 | 2,227 | 244 | 92 |
| Closing AuMA - 30 September 2021 | 35,659 | 1,504 | 24,892 | 7,357 | 1,906 |
Awards
During the period from the start of our financial year, Liontrust won the following awards:
Group or team awards
· "Asset Manager of the Year" awarded by Financial News Asset Management Awards 2021;
· "Best Fund Group" awarded by Shares Awards 2021;
· "Best Multi-Manager Provider" awarded by Investment Life & Pensions Moneyfacts Awards 2021; and
· "Global Group of the Year" awarded by Investment Week Fund Manager of the Year Awards 2021.
Fund related awards
· "Best Sustainable & ESG Equity Fund" for Liontrust SF Global Growth Fund awarded by Investment Week Sustainable & ESG Awards 2021;
· "Best Sustainable & ESG Multi-Asset Fund" for Liontrust SF Managed Fund Awarded by Investment Week Sustainable & ESG Awards 2021;
· "Global Growth Fund of the Year" for Liontrust SF Global Growth awarded by Investment Week Fund Manager of the Year Awards 2021;
· "Global Income Fund of the Year" for Liontrust Global Dividend Fund awarded by Investment Week Fund Manager of the Year Awards 2021;
· "Managed - Flexible Investment" for Liontrust SF Managed Growth Fund awarded by Investment Week Fund Manager of the Year Awards 2021; and
· "Managed 40-85% Shares" for Liontrust SF Managed Fund awarded by Investment Week Fund Manager of the Year Awards 2021.
UK Retail Fund Performance (Quartile ranking)
| Quartile ranking - Since Launch/Manager Appointed | Quartile ranking - 5 year | Quartile ranking - 3 year | Quartile ranking - 1 year | Launch Date/ Manager Appointed | |
| Economic Advantage funds | |||||
| Liontrust UK Growth Fund | 1 | 2 | 2 | 3 | 25/03/2009 |
| Liontrust Special Situations Fund | 1 | 1 | 1 | 3 | 10/11/2005 |
| Liontrust UK Smaller Companies Fund | 1 | 1 | 1 | 3 | 08/01/1998 |
| Liontrust UK Micro Cap Fund | 1 | 1 | 1 | 1 | 09/03/2016 |
| Sustainable Future funds | |||||
| Liontrust Monthly Income Bond Fund | 2 | 1 | 3 | 1 | 12/07/2010 |
| Liontrust SF Managed Growth Fund | 1 | 1 | 1 | 2 | 19/02/2001 |
| Liontrust SF Corporate Bond Fund | 1 | 1 | 2 | 1 | 20/08/2012 |
| Liontrust SF Cautious Managed Fund | 1 | 1 | 1 | 3 | 23/07/2014 |
| Liontrust SF Defensive Managed Fund | 1 | 1 | 1 | 3 | 23/07/2014 |
| Liontrust SF European Growth Fund | 1 | 1 | 1 | 2 | 19/02/2001 |
| Liontrust SF Global Growth Fund | 2 | 1 | 1 | 3 | 19/02/2001 |
| Liontrust SF Managed Fund | 1 | 1 | 1 | 1 | 19/02/2001 |
| Liontrust UK Ethical Fund | 2 | 1 | 1 | 2 | 01/12/2000 |
| Liontrust SF UK Growth Fund | 2 | 1 | 1 | 2 | 19/02/2001 |
| Global Equity funds1 | |||||
| Liontrust Balanced Fund | 1 | 1 | 1 | 4 | 31/12/1998 |
| Liontrust China Fund | 3 | 3 | 3 | 3 | 31/12/2004 |
| Liontrust Emerging Market Fund | 3 | 3 | 3 | 3 | 30/09/2008 |
| Liontrust Global Smaller Companies Fund | 1 | 1 | 1 | 2 | 01/07/2016 |
| Liontrust Global Alpha Fund | 1 | 1 | 1 | 1 | 31/12/2001 |
| Liontrust Global Dividend Fund | 2 | 1 | 1 | 2 | 20/12/2012 |
| Liontrust Global Innovation Fund | 1 | 1 | 1 | 4 | 31/12/2001 |
| Liontrust Global Technology Fund | 3 | 2 | 3 | 3 | 15/12/2015 |
| Liontrust Income Fund | 1 | 1 | 2 | 4 | 31/12/2002 |
| Liontrust Japan Equity Fund | 2 | 3 | 2 | 3 | 22/06/2015 |
| Liontrust US Opportunities Fund | 1 | 1 | 2 | 1 | 31/12/2002 |
| Cashflow Solution funds | |||||
| Liontrust European Growth Fund | 1 | 1 | 1 | 1 | 15/11/2006 |
| Global Fixed Income funds | |||||
| Liontrust Strategic Bond Fund | 3 | - | 3 | 3 | 08/05/2018 |
Source: Financial Express to 30 September 2021 as at 5 October 2021, bid-bid, total return, net of fees, based on primary share classes. The Liontrust Asia Income Fund and funds previously managed by the European Income investment team are excluded. 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 or UK authorised ICVCs (primary share class).
1 Liontrust Latin America Fund, Liontrust Russia Fund and Liontrust India Fund are not included as they are in IA sectors that are not rankable (e.g. Specialist and Unclassified) as it would not be a fair comparison to make. Liontrust US Income Fund is not included as it merged into Liontrust Global Dividend Fund on 8 October 2021, and Liontrust Japan Opportunities Fund is not included as it merged into Liontrust Japan Equity Fund ion 8 November 2021.
Outlook
The last six months has demonstrated the strength of Liontrust across the business. This includes the quality of our investment capability, breadth of our client base, strong sales and client service, great communications, distinct brand and robust infrastructure. As a result, the Board are confident about the continued growth of your Company over the coming months and that we continue to trade in line with market expectations.
Alastair Barbour
Non-executive Chairman
| Consolidated Statement of Comprehensive Income | |||||
| Six months ended 30 September 2021 | |||||
| Six | Six | Year | |||
| months to | months to | ended | |||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||
| (unaudited) | (restated and unaudited) | (audited) | |||
| Notes | £'000 | £'000 | £'000 | ||
| Revenue* | 4 | 114,893 | 69,082 | 175,080 | |
| Cost of sales* | 4 | (6,348) | (6,026) | (11,321) | |
| Gross profit | 108,545 | 63,056 | 163,759 | ||
| Realised profit on sale of financial assets | 50 | - | 250 | ||
| Unrealised gain on financial assets | - | 316 | 672 | ||
| Administration expenses | 5 | (77,486) | (56,436) | (129,646) | |
| Operating profit | 31,109 | 6,936 | 35,035 | ||
| Interest receivable | 3 | 4 | 7 | ||
| Interest payable | (49) | (66) | (113) | ||
| Profit before tax | 31,063 | 6,874 | 34,929 | ||
| Taxation ** | 7 | (4,852) | (1,588) | (7,257) | |
| Profit for the period | 26,211 | 5,286 | 27,672 | ||
| Other comprehensive income | - | - | - | ||
| Total comprehensive income | 26,211 | 5,286 | 27,672 | ||
| Pence | Pence | Pence | |||
| Basic earnings per share | 8 | 43.27 | 9.21 | 47.02 | |
| Diluted earnings per share | 8 | 42.72 | 9.00 | 46.25 | |
| All of the results are derived from continuing operations. | |||||
| The accompanying notes form an integral part of these unaudited condensed interim financial statements. | |||||
| * The revenue of the six months to 30 September 2020 has been restated to reflect rebates being reclassified as a reduction in revenue rather than a cost of sales (see note 1d). This restatement has no impact on Gross profit, nor on net asset balances. | |||||
| ** The tax charge for the six months to 30 September 2020 has been restated to reflect deferred taxation on the share option charge that was not previously recognised (see note 1d). |
| Consolidated Balance Sheet | |||||
| As at 30 September 2021 | |||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||
| (unaudited) | (restated and unaudited) | (audited) | |||
| Notes | £'000 | £'000 | £'000 | ||
| Assets | |||||
| Non current assets | |||||
| Intangible assets | 9 | 79,992 | 36,565 | 84,812 | |
| Goodwill | 10 | 27,577 | 19,626 | 27,577 | |
| Property, plant and equipment | 5,346 | 6,875 | 5,257 | ||
| 112,915 | 63,066 | 117,646 | |||
| Current assets | |||||
| Trade and other receivables | 11 | 240,935 | 186,119 | 289,805 | |
| Financial assets | 12 | 4,107 | 1,859 | 2,188 | |
| Cash and cash equivalents | 82,837 | 98,602 | 71,898 | ||
| Total current assets | 327,879 | 286,580 | 363,891 | ||
| Liabilities | |||||
| Non current liabilities | |||||
| Deferred tax liability * | (12,467) | (4,599) | (13,436) | ||
| Lease liability | (5,024) | (6,668) | (3,418) | ||
| Total non current liabilities | (17,491) | (11,267) | (16,854) | ||
| Current liabilities | |||||
| Trade and other payables | (252,314) | (190,679) | (298,007) | ||
| Corporation tax payable | (1,853) | (1,314) | (3,288) | ||
| Total current liabilities | (254,167) | (191,993) | (301,295) | ||
| Net current assets | 73,712 | 94,587 | 62,596 | ||
| Net assets | 169,136 | 146,386 | 163,388 | ||
| Shareholders' equity | |||||
| Ordinary shares | 611 | 606 | 610 | ||
| Share premium | 64,370 | 121,809 | 64,370 | ||
| Capital redemption reserve | 19 | 19 | 19 | ||
| Retained earnings * | 109,626 | 29,142 | 104,207 | ||
| Own shares held | (5,490) | (5,190) | (5,818) | ||
| Total equity | 169,136 | 146,386 | 163,388 | ||
| The accompanying notes form an integral part of these unaudited condensed interim financial statements. | |||||
| The unaudited condensed interim financial statements were approved by the Board of Directors on 30 November 2021 and signed on their behalf by: Vinay Abrol | |||||
| * The 30 September 2020 deferred taxation and retained earnings have been restated to reflect deferred taxation on the share option charge that was not previously recognised (see note 1d). |
| Consolidated Cash Flow Statement | ||||||
| Six months ended 30 September 2021 | ||||||
| Six | Six | Year | ||||
| months to | months to | ended | ||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | ||||
| (unaudited) | (unaudited) | (audited) | ||||
| £'000 | £'000 | £'000 | ||||
| Cash flows from operating activities | ||||||
| Cash inflow from operations | 114,775 | 74,765 | 141,409 | |||
| Cash outflow from operations* | (71,972) | (70,046) | (95,913) | |||
| Cash inflow from changes in unit trust receivables and payables | 1,453 | 2,357 | 4,554 | |||
| Net cash generated from operations* | 44,256 | 7,076 | 50,050 | |||
| Interest received | 3 | 4 | 7 | |||
| Tax paid | (7,500) | (1,316) | (6,416) | |||
| Net cash from operating activities | 36,759 | 5,764 | 43,641 | |||
| Cash flows from investing activities | ||||||
| Purchase of property, plant and equipment | (310) | (99) | (254) | |||
| Acquisition of Architas net of cash required | - | - | (54,124) | |||
| Purchase of financial assets | (3,124) | - | - | |||
| Sale of financial assets | - | 1,334 | 1,334 | |||
| Purchase of seeding investments | (34) | (47) | (117) | |||
| Net cash (used in) / from investing activities | (3,468) | 1,188 | (53,161) | |||
| Cash flows from financing activities | ||||||
| Payment of lease liabilities* | (839) | (1,044) | (2,263) | |||
| Purchase of own shares | - | - | (812) | |||
| Sale of own shares | 328 | 672 | 852 | |||
| Issue of shares | - | 66,170 | 64,421 | |||
| Dividends paid | (21,841) | (14,442) | (21,074) | |||
| Net cash (used in) / from financing activities* | (22,352) | 51,356 | 41,124 | |||
| Net increase in cash and cash equivalents | 10,939 | 58,308 | 31,604 | |||
| Opening cash and cash equivalents | 71,898 | 40,294 | 40,294 | |||
| Closing cash and cash equivalents | 82,837 | 98,602 | 71,898 | |||
| Cash and cash equivalents consist only of cash balances. | ||||||
| The accompanying notes form an integral part of these unaudited condensed interim financial statements. | ||||||
| * The cash flow statement to 30 September 2020 has been represented to show the payment of lease liabilities as an item in financing activities rather than in operating activities in accordance with IAS7. |
| Consolidated Statement of Change in Equity (unaudited) | |||||||
| Six months ended 30 September 2021 | |||||||
| Share | Share | Capital | Retained | Own shares | Total | ||
| capital | premium | redemption | earnings | held | Equity | ||
| £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | ||
| Balance at 1 April 2021 brought forward | 610 | 64,370 | 19 | 104,207 | (5,818) | 163,388 | |
| Profit for the period | - | - | - | 26,211 | - | 26,211 | |
| Total comprehensive income for the period | - | - | - | 26,211 | - | 26,211 | |
| Dividends paid | - | - | - | (21,841) | - | (21,841) | |
| Shares issued | 1 | - | - | (1) | - | - | |
| Sale of own shares | - | - | - | - | 328 | 328 | |
| Equity share options issued | - | - | - | 1,541 | - | 1,541 | |
| Equity share options settled | - | - | - | (244) | - | (244) | |
| Deferred tax on option charge taken to equity | - | - | - | (247) | - | (247) | |
| Balance at 30 September 2021 | 611 | 64,370 | 19 | 109,626 | (5,490) | 169,136 | |
| Consolidated Statement of Change in Equity (unaudited and restated) | |||||||
| Six months ended 30 September 2020 | |||||||
| Share | Share | Capital | Retained | Own shares | Total | ||
| capital | premium* | redemption | earnings* | held | Equity | ||
| £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | ||
| Balance at 1 April 2020 brought forward* | 555 | 57,439 | 19 | 37,888 | (5,862) | 90,039 | |
| Profit for the period | - | - | - | 5,286 | - | 5,286 | |
| Total comprehensive income for the period | - | - | - | 5,286 | - | 5,286 | |
| Dividends paid | - | - | - | (14,442) | - | (14,442) | |
| Shares issued | 51 | 64,370 | - | - | - | 64,421 | |
| Sale of own shares | - | - | - | - | 672 | 672 | |
| Equity share options issued | - | - | - | 823 | - | 823 | |
| Equity share options issued settled | - | - | - | (532) | - | (532) | |
| Deferred tax on option charge taken to equity* | - | - | - | 119 | - | 119 | |
| Balance at 30 September 2020 | 606 | 121,809 | 19 | 29,142 | (5,190) | 146,386 | |
| Consolidated Statement of Change in Equity (audited) | |||||||
| Year ended 31 March 2021 | |||||||
| Ordinary | Share | Capital | Retained | Own shares | Total | ||
| shares | premium | redemption | earnings | held | Equity | ||
| £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | £ '000 | ||
| Balance at 1 April 2020 brought forward * | 555 | 57,439 | 19 | 37,888 | (5,862) | 90,039 | |
| Profit for the year | - | - | - | 27,672 | - | 27,672 | |
| Total comprehensive income for the year | - | - | - | 27,672 | - | 27,672 | |
| Dividends paid | - | - | - | (21,074) | - | (21,074) | |
| Capital reorganisation | - | (57,439) | - | 57,439 | - | - | |
| Shares issued | 55 | 64,370 | - | - | - | 64,425 | |
| Sale/(purchase) of own shares | - | - | - | - | 44 | 44 | |
| Equity Share options issued | - | - | - | 2,636 | - | 2,636 | |
| Equity share options settled | - | - | - | (518) | - | (518) | |
| Deferred tax on option charge taken to equity | - | - | - | 164 | - | 164 | |
| Balance at 31 March 2021 | 610 | 64,370 | 19 | 104,207 | (5,818) | 163,388 | |
| The accompanying notes form an integral part of these unaudited condensed interim financial statements. | |||||||
| * The 1 April 2020 opening balance has been restated to reflect the historic deferred taxation on share options charge that was not previously recognised (see note 1d) |
Notes to the Financial Statements
| 1 | Principal Accounting policies | |||
| a) | Basis of preparation | |||
| The Group financial information for the six months ended 30 September 2021 has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and with IAS 34 Interim Financial Reporting. This condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 March 2021. These are consistent with IFRSs issued by the International Accounting Standards Board as adopted by the UK Endorsement Board for use in the United Kingdom. | ||||
| This Half Yearly Report is unaudited and does not constitute statutory accounts within the meaning of s434 of the Companies Act 2006. The financial information for the half years ended 30 September 2021 and 2020 has not been audited by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. Therefore, these half year accounts should be read in conjunction with the statutory accounts for the year ended 31 March 2021, which were prepared in accordance with International Financial Reporting Standards, which comprise standards and interpretations issued by either the International Accounting Standards Board or the IFRS Interpretations Committee or their predecessors as adopted by the European Union ('IFRS') adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, those parts of the Companies Act 2006 applicable to companies reporting under IFRS; and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 ("Adopted IFRS"). KPMG reported on the 31 March 2021 financial statements, and their report was unmodified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006 in the UK. The preparation of financial statements in conformity with IFRS requires the directors of the Company to make significant estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial information and the reported income and expense during the reporting periods. Although these judgements and assumptions are based on the directors' best knowledge of the amount, events or actions, actual results may differ from these estimates. The accounting policies set out below have been used to prepare the financial information. All accounting policies have been consistently applied. |
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| b) | Going concern | |||
| The financial information presented within these financial statements has been prepared on a going concern basis under the historical cost convention (except for the measurement of financial assets at fair value through profit and loss and DBVAP liability which are held at their fair value). The Group is reliant on cash generated by the business to fund its working capital. The Directors have assessed the prospects of the Group and parent company over the forthcoming 12 months, including an assessment of current trading; budgets, plans and forecasts; the adequacy of current financing arrangements; liquidity, cash reserves and regulatory capital; and potential material risks to these forecasts and the Group strategy. This assessment includes a review of the ongoing impact of the Covid-19 pandemic on the business; and consideration of a severe but plausible downside scenario in which AuMA falls due to a market event by 20%. The Directors confirm that as a result of this assessment they have a reasonable expectation that the Group and parent company will continue to operate and meet its liabilities as they fall due for at least 12 months from the date of signing these accounts. | ||||
| c) | Accounting estimates and judgements | |||
| The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. Estimates and judgements used in preparing the financial statements are periodically evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting accounting estimates may not equal the related actual results. There are no significant judgements. The estimates and assumptions that have a significant effect on the carrying amounts of assets and liabilities are set out as follows: (i) Impairment of Goodwill Goodwill arising on acquisitions is capitalised in the consolidated balance sheet. Goodwill is carried at cost less provision for impairment. The carrying value of goodwill is not amortised but is tested annually for impairment or more frequently if any indicators of impairment arise. Goodwill is allocated to a cash generating unit (CGU) for the purpose of impairment testing, with the allocation to those CGUs that are expected to benefit from the business combination in which the goodwill arose (see note 14 of the Financial Statements to 31 March 2021). Impairment losses on goodwill, where these are identified, are not reversed. Impairment is tested through measuring the recoverable amount against the carrying value of the related goodwill. The recoverable amount is the higher of the fair value less costs to sell the CGU and its value in use. Value in use is assessed using a multi-period excess earnings model which requires a number of inputs requiring management estimates and judgements, the most significant of which are: future business performance and growth (including fund sales, redemptions and market growth), operating costs, synergies, and the cost of capital/discount rate. Due to the strong performance and growth of the Sustainable Investment team (acquired as part of the ATI acquisition) and the Global Equity team (acquired as part of the Neptune acquisition) there is no significant estimation in relation to the impairment of the related goodwill allocated to the Sustainable and Global Equity Investment teams' CGU. Due to the relatively recent acquisition of the Archtias UK Investment Business (Multi-Asset team CGU) and development of the Multi-Asset team products, goodwill and its impairment is a significant estimate therefore in relation to the Architas intangible (Multi-Asset team CGU). (ii) Impairment of intangible assets Details of the impairment policy for intangible assets and their estimated useful lives can be found in note 1h) of the Financial Statements to 31 March 2021. Due to the relatively recent acquisition of Architas (Multi-Asset team CGU) and development of the Multi-Asset team products, intangible impairment is a significant estimate in relation to the Architas intangible Asset (Multi-Asset team CGU). |
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| d | Restatement | |||
| The 30 September 2020 financial statements have been restated to reflect: (1) the corrected treatment of the deferred tax asset arising from the issue of employee share options due to the timing difference between the service period and the future tax deduction when the options are exercised. The restatement increased opening deferred tax assets and retained earnings at 1 April 2019 by£990,000. In the year ended 31 March 2020 the restatement increased deferred tax assets by a further £489,000 to £1,479,000, with £237,000 crediting retained earnings and £252,000 crediting taxation in the Statement of Comprehensive Income. The restatement increased profit and total comprehensive income for the year ended 31 March 2020 by £252,000 to £13,216,000 and increased net assets at 31 March 2020 by £1,479,000 to £90,039,000. The Statement of Comprehensive Income, Balance sheet, Statement of Changes in Equity and related notes were updated to reflect this restatement; and (2) contractual rebates due to customers being reclassified as a reduction in revenue rather than a cost of sales (see note 4) as they do not represent a payment for distinct goods or services. This restatement reduced revenue and cost of sales by £15,209,000 and has no impact on Gross profit, total profit, total comprehensive income for the year ended 31 March 2020 or net assets at 31 March 2020 and does not impact brought forward reserves at 1 April 2020. These restatements do not have an impact on basic and diluted earnings per share. The accounting policies applied in this Half Yearly Report are consistent with those applied in the Group's most recent annual accounts. |
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| 2 | Alternative Performance measures | |||
| The Group assess its performance using a variety of measures that are not defined under IFRS and are therefore termed alternative performance measures ('APMs'). The APMs that we use may not be directly comparable with similarly named measures used by other companies. | ||||
| The Group uses the APM's to present its financial performance, in a manner which is aligned with the requirements of our stakeholders. By presenting these APM's it enables comparison with our peers who may use different accounting policies. | ||||
| The Group uses the following APMs: | ||||
| Alternative Performance Measure | Definition | Reconciliation | ||
| Adjusted profit before tax | Profit before taxation, depreciation, amortisation, net IFRS16 finance costs, share incentivisation expenses and non-recurring items* | Note 6 | ||
| This is used to present a measure of profitability of the Group which is aligned to the requirements of shareholders, potential shareholders and financial analysts, and which removes the effects of financing and capital investment, which eases the comparison with the Group's competitors who may use different accounting policies and financing methods. Specifically, calculation of Adjusted profit before tax excludes share incentivisation expenses for similar reasons to above, and in particular provides shareholders, potential shareholders and financial analysts a consistent year on year basis of comparison of a "profit before tax number", when comparing the current year to the previous year and also when comparing multiple historical years to the current year, of how the underlying business is performing without the effects of share incentivisation expenses which can be influenced by other factors such as timing of grants due to prohibited periods, shareholder approval of share incentivisation plans, and other factors. |
||||
| Adjusted operating profit | Profit before interest, depreciation and amortisation, share incentivisation expenses and non-recurring items* | Note 6 | ||
| This is used to present a measure of profitability of the Group which is aligned to the requirements of shareholders, potential shareholders and financial analysts, and which removes the effects of financing and capital investment, which eases the comparison with the Group's competitors who may use different accounting policies and financing methods. Specifically, calculation of Adjusted operating profit before tax excludes share incentivisation expenses for similar reasons to above, and in particular provides shareholders, potential shareholders and financial analysts a consistent year on year basis of comparison of a "profit before tax number", when comparing the current year to the previous year and also when comparing multiple historical years to the current year, of how the underlying business is performing without the effects of share incentivisation expenses which can be influenced by other factors such as timing of grants due to prohibited periods, shareholder approval of share incentivisation plans, and other factors. | ||||
| Gross profit excluding performance fees | Gross profit less any revenue attributable to performance related fees. |
Note 4 | ||
| This is used to present a consistent year on year measure of revenues within the business, removing the element of revenue that may fluctuate year on year. | ||||
| Adjusted earnings per share | Adjusted profit before tax divided by the weighted average number of shares in issue for the period | n/a | ||
| This is used to present a measure of profitability per share in line with the adjusted operating profit as detailed above. | ||||
| Adjusted diluted earnings per share | Adjusted profit before tax divided by the diluted weighted average number of shares in issue for the period | n/a | ||
| This is used to present a measure of profitability per share in line with the adjusted operating profit as detailed above. | ||||
| *Non-recurring items include acquisition related and associated restructuring costs, and severance compensation related expenses. | ||||
| 3 | Segmental reporting | |||
| The Group operates only in one business segment - Investment management. | ||||
| The Group offers different fund products through different distribution channels. All financial, business and strategic decisions are made centrally by the Board, which determines the key performance indicators of the Group. The Group reviews financial information presented at a Group level. The Board, is therefore, the chief operating decision-maker for the Group. The information used to allocate resources and assess performance is reviewed for the Group as a whole. On this basis, the Group considers itself to be a single-segment investment management business. |
| 4 | Revenue | ||||||||||||||||||||||
| Six | Six | Year | |||||||||||||||||||||
| months to | months to | ended | |||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| (unaudited) | (unaudited) | (audited) | |||||||||||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| - Revenue * | 114,893 | 69,082 | 161,388 | ||||||||||||||||||||
| - Performance fee revenue | - | - | 13,692 | ||||||||||||||||||||
| Total Revenue | 114,893 | 69,082 | 175,080 | ||||||||||||||||||||
| Cost of sales * | (6,348) | (6,026) | (11,321) | ||||||||||||||||||||
| Gross Profit | 108,545 | 63,056 | 163,759 | ||||||||||||||||||||
| * Following a review, Management Fees are shown net of contractual rebates with customers, see note 1d. | |||||||||||||||||||||||
| Revenue from earnings includes: | |||||||||||||||||||||||
| - Investment management on unit trusts, open-ended investment companies sub-funds, portfolios and segregated account. | |||||||||||||||||||||||
| - Performance fees on unit trusts, open-ended investment companies sub-funds, portfolios and segregated accounts. | |||||||||||||||||||||||
| - Fixed administration fees on unit trusts and open-ended investment companies sub-funds. | |||||||||||||||||||||||
| - Net value of sales and repurchases of units in unit trusts and shares in open-ended investment companies (net of discounts). | |||||||||||||||||||||||
| - Net value of liquidations and creations of units in unit trusts and shares in open-ended investment companies sub-fund. | |||||||||||||||||||||||
| - Box profits on unit trusts - the "at risk" trading profit or loss arising from changes in the valuation of holdings of units in Group Unit Trusts to help manage client sales into, and redemptions from the trust. | |||||||||||||||||||||||
| - Foreign currency gains and losses. | |||||||||||||||||||||||
| - Less contractual rebates paid to customers. | |||||||||||||||||||||||
| The cost of sales includes: | |||||||||||||||||||||||
| - Operating expenses including (but not limited to) keeping a record of investor holdings, paying income, sending annual and interim reports, valuing fund assets and calculating prices, maintaining fund accounting records, depositary and trustee oversight and auditors. | |||||||||||||||||||||||
| - Sales commission paid or payable to third parties. | |||||||||||||||||||||||
| - External investment advisory fees paid or payable. | |||||||||||||||||||||||
| 5 | Administration expenses | ||||||||||||||||||||||
| Six | Six | Year | |||||||||||||||||||||
| months to | months to | ended | |||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| (unaudited) | (unaudited) | (audited) | |||||||||||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||||||||||
| Employee related expenses | |||||||||||||||||||||||
| Wages and salaries | 20,060 | 11,710 | 25,817 | ||||||||||||||||||||
| Social security costs | 2,864 | 3,508 | |||||||||||||||||||||
| Pension costs | 866 | 656 | 1,480 | ||||||||||||||||||||
| Share incentivisation expense | 2,974 | 2,049 | 4,693 | ||||||||||||||||||||
| DBVAP expense (1) | 1,344 | 856 | 1,656 | ||||||||||||||||||||
| Severance compensation | 4 | 214 | 1,793 | ||||||||||||||||||||
| 28,112 | 15,485 | 38,947 | |||||||||||||||||||||
| Non-employee related expenses | |||||||||||||||||||||||
| Members' drawings charged as an expense | 24,314 | 16,387 | 41,986 | ||||||||||||||||||||
| Members' share incentivisation expense | 971 | 1,045 | 1,471 | ||||||||||||||||||||
| Members' severance | 114 | ||||||||||||||||||||||
| Professional services(2) | 3,255 | 10,047 | 15,025 | ||||||||||||||||||||
| Depreciation and Intangible asset amortisation | 5,779 | 2,429 | 7,448 | ||||||||||||||||||||
| Other administration expenses | 14,941 | 11,043 | 24,769 | ||||||||||||||||||||
| Total administration expenses | 77,486 | 56,436 | 129,646 | ||||||||||||||||||||
| (1) For the financial year ended 31 March 2021 (going forward) management have reviewed their assessment of adjustments and have removed the DBVAP expense and the share incentive plan expense from its adjusted profit measure. (2) Includes acquisition related and restructuring costs for the Architas and Neptune. |
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| 6 | Adjusted profit before tax | ||||||||||||||||||||||
| Adjusted profit before tax is reconciled in the table below: | |||||||||||||||||||||||
| Six | Six | Year | |||||||||||||||||||||
| months to | months to | ended | |||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| (unaudited) | (unaudited) | (audited) | |||||||||||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||||||||||
| Profit before tax for the period | 31,063 | 6,874 | 34,929 | ||||||||||||||||||||
| Share incentivisation expense | 3,734 | 3,094 | 5,776 | ||||||||||||||||||||
| Unrealised (Gain) on DBVAP asset | - | - | (525) | ||||||||||||||||||||
| DBVAP expense net of gain(1) | - | 540 | - | ||||||||||||||||||||
| Severance compensation | 118 | 214 | 1,793 | ||||||||||||||||||||
| Net IFRS 16 finance costs | (821) | (902) | 112 | ||||||||||||||||||||
| Gain on sale of Asia Income Fund | - | - | (250) | ||||||||||||||||||||
| Professional services(2) | 3,255 | 10,047 | 15,025 | ||||||||||||||||||||
| Depreciation, Intangible asset amortisation and impairment | 5,779 | 2,429 | 7,448 | ||||||||||||||||||||
| Adjustments | 12,065 | 15,422 | 29,379 | ||||||||||||||||||||
| Adjusted profit before tax | 43,128 | 22,296 | 64,308 | ||||||||||||||||||||
| Interest receivable | (3) | (4) | (7) | ||||||||||||||||||||
| Interest payable | - | - | - | ||||||||||||||||||||
| Adjusted operating profit | 43,125 | 22,292 | 64,301 | ||||||||||||||||||||
| Adjusted basic earnings per share | 57.67 | 31.46 | 88.52 | ||||||||||||||||||||
| Adjusted diluted earnings per share | 56.94 | 30.74 | 87.06 | ||||||||||||||||||||
| (1) For the financial year ended 31 March 2021 ( and going forward) management have reviewed their assessment of adjustments and have removed the DBVAP expense and the share incentive plan expense from its adjusted profit measure. (2) Includes acquisition related and restructuring costs for Architas/Neptune. |
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| 7 | Taxation | ||||||||||||||||||||||
| The half year tax charge has been calculated at the estimated full year effective UK corporation tax rate of 19% (30 September 2020: 19%). | |||||||||||||||||||||||
| 8 | Earnings per share | ||||||||||||||||||||||
| The calculation of basic earnings per share is based on profit after taxation and the weighted average number of Ordinary Shares in issue for each period. The weighted average number of Ordinary Shares for the six months ended 30 September 2021 was 60,570,438 (30 September 2020 57,406,615; 31 March 2021: 58,846,929). Shares held by the Liontrust Asset Management Employee Trust are not eligible for dividends and are treated as cancelled for the purposes of calculating earnings per share. | |||||||||||||||||||||||
| Diluted earnings per share is calculated on the same bases as set out above, after adjusting the weighted average number of Ordinary Shares for the effect of options to subscribe for new Ordinary Shares that were in existence during the six months ended 30 September 2021. The adjusted weighted average number of Ordinary Shares so calculated for the period was 61,356,243 (30 September 2020: 58,757,394; 31 March 2021: 59,831,128). This is reconciled to the actual weighted number of Ordinary Shares as follows: | |||||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| Weighted average number of Ordinary Shares | 60,570,438 | 57,406,615 | 58,846,929 | ||||||||||||||||||||
| Weighted average number of dilutive Ordinary shares under option: | |||||||||||||||||||||||
| - to Liontrust Long Term Incentive Plan | 757,386 | 1,323,491 | 959,895 | ||||||||||||||||||||
| - to the Liontrust CSOP | 28,419 | 27,288 | 24,304 | ||||||||||||||||||||
| Adjusted weighted average number of Ordinary Shares | 61,356,243 | 58,757,394 | 59,831,128 | ||||||||||||||||||||
| 9 | Intangible assets | ||||||||||||||||||||||
| Intangible assets represent investment management contracts that have been capitalised upon acquisition and are amortised on a straight-line basis over a period of 10 years. The intangible asset on the balance sheet represents investment management contracts as follows: | |||||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||||||||||
| Investment management contracts acquired from ATI | 6,600 | 7,800 | 7,200 | ||||||||||||||||||||
| Investment management contracts acquired from Neptune | 24,223 | 28,765 | 25,737 | ||||||||||||||||||||
| Investment management contracts acquired from Architas | 49,168 | - | 51,874 | ||||||||||||||||||||
| 79,991 | 36,565 | 84,811 | |||||||||||||||||||||
| 10 | Goodwill | ||||||||||||||||||||||
| Goodwill is allocated to the CGU to which it relates as the underlying funds acquired in each business acquisition are clearly identifiable to the ongoing investment team that is managing them. The ATI Goodwill on acquisition is allocated to the Sustainable Funds team CGU and at 30 September 2021 was £11,873,000 (2020: £11,873,000). At 31 March 2021 an assessment was made in relation to impairment of the goodwill where the recoverable amount, based on a value in use, was calculated using an earnings model which used key assumptions such as the discount rate (12.8%, 2020: 13.0%), terminal growth rate (2%, 2020: 2%) and net AuMA growth (5%, 2020: 5%). Sensitivity analysis was carried out on this model which significantly reduced the forecast net AuMA growth. These changes in estimates would not lead to any impairment in the carrying value of this goodwill. The Neptune Goodwill on acquisition is allocated to the Global Equities team CGU and at 30 September 2021 was £7,753,000 (2020: £7,753,000). At 31 March 2021 an assessment was made in relation to impairment of the goodwill where the recoverable amount, based on a value in use, was calculated using an earnings model with reference to the projected cashflows relating to the CGU over a period of 5 years, which used key assumptions such as net AuMA growth, comprising net sales of £150 million and market growth rate (5%, 2020: 2.5% per annum), terminal growth rate (2%, 2020: 2%) and a discount rate (12.8%, 2020: 13.0%). Based on these reasonable estimates there was no indication of impairment and headroom over the carrying value of goodwill of £5.9 million. Sensitivity analysis was carried out on this model which included changing the discount rate and reducing the net AuMA growth. The discount rate could be increased by 1% without impacting goodwill and resulted in a £5.1 million reduction in headroom. If the terminal growth rate reduced by 0.6% the headroom would be reduced by £2.2 million but would not lead to an impairment. However, reducing the fund inflows to nil would result in the carrying value of goodwill being fully impaired. Management consider this to be a reasonably possible scenario, however the five year modelling timeframe would give ample time for management action. The "breakeven" point for impairment is net flows of £104 million. Given the strong current investment performance, and net inflows for the Global Equity funds in the period ended 30 September 2021 management have concluded that no impairment of the goodwill is required. An assessment of the goodwill will be reperformed at the financial year end. The Architas Goodwill on acquisition is allocated to the Multi Asset team CGU. At 31 March 2021 an assessment was made in relation to impairment of the goodwill where the recoverable amount, based on a value in use, was calculated using an earnings model with reference to the projected cashflows relating to the CGU over a period of 5 years, which used key assumptions such as net sales, net AuMA growth rates (4% per annum), terminal growth rate (2%) and a discount rate of 12.8%. Based on this assessment there was no indication of impairment. Sensitivity analysis was carried out on this model which included changing the discount rate and reducing the market growth. A reasonably possible change in the key assumptions would not lead to an impairment. In a severe scenario of nil market growth and nil net sales over the five year model the goodwill would be impaired. Management consider this to be a highly unlikely scenario and management would take action in such a scenario. Further, given this relatively recent acquisition and satisfactory performance in the period since acquisition management have concluded that no impairment of the goodwill is required. An assessment of the goodwill will be reperformed at the financial year end. |
|||||||||||||||||||||||
| £'000 | |||||||||||||||||||||||
| ATI - Sustainable investment team | 11,873 | ||||||||||||||||||||||
| Neptune - Global Equity investment team | 7,753 | ||||||||||||||||||||||
| Architas - Multi-Asset team | 7,951 | ||||||||||||||||||||||
| 27,577 | |||||||||||||||||||||||
| 11 | Trade and other receivables | ||||||||||||||||||||||
| 30-Sep-21 | 30-Sep-20 | 31-Mar-21 | |||||||||||||||||||||
| £'000 | £'000 | £'000 | |||||||||||||||||||||
| Trade receivables: - Fees receivable - Unit Trust sales and cancellations Prepayments and accrued income |
22,703 211,316 6,916 |
13,749 164,871 7,499 |
33,118 254,006 2,681 |
||||||||||||||||||||
| 240,935 | 186,119 | 289,805 | |||||||||||||||||||||
| All financial assets listed above are non-interest bearing. The carrying amount of these non-interest bearing trade and other receivables approximates their fair value. As at 30 September 2021, trade receivables of £nil (2020 : £nil) were past due but not impaired. Expected credit losses are immaterial. |
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| 12 | Financial assets | ||||||||||||||||||||||
| The Group holds financial assets that have been categorised within one of three levels using a fair value hierarchy that reflects the significance of the inputs into measuring the fair value. These levels are based on the degree to which the fair value is observable and are defined as follows: Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data. As at the balance sheet date all financial assets are categorised as Level 1. Under IFRS9 all financial assets are categorised as Assets held at fair value through profit and loss. The financial assets consist of units held in the Group's collective investment schemes as part of a 'manager's box, assets held by the EBT in respect of the Liontrust DBVAP and assets held in Liontrust Global Funds plc to assist administration. The holdings are valued on a mid or bid basis. |
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| 13 | Related party transactions | ||||||||||||||||||||||
| During the six months to 30 September 2021 the Group received fees from unit trusts and ICVCs under management of £116,146,000 (2020: £59,466,000). Transactions with these funds comprised creations of £3,980,800,000 (2020: £3,021,616,000) and liquidations of £2,195,098,000 (2020: £1,405,734,000). As at 30 September 2021 the Group owed the unit trusts £211,545,000 (2020: £175,286,000) in respect of unit trust creations and was owed £231,108,000 (2020: £165,831,000) in respect of unit trust cancellations and fees. | |||||||||||||||||||||||
| During the six months to 30 September 2021 the Group received fees from offshore funds under management of £5,655,000 (2020: £3,044,000). Transactions with these funds comprised purchases of £0 (2020: £40,000) and sales of £nil (2020: £nil). As at 30 September 2021 the Group was owed £753,000 (2020: £546,000) in respect of management fees. | |||||||||||||||||||||||
| Directors and management can invest in funds managed by the Group on commercial terms that are no more favourable than those available to staff in general. | |||||||||||||||||||||||
| 14 | Post balance sheet date event | ||||||||||||||||||||||
| There were no post balance sheet events. | |||||||||||||||||||||||
| 15 | Key risks | ||||||||||||||||||||||
| The Directors have identified the risks and uncertainties that affect the Group's business and believe that they will be substantially the same for the second half of the year as the current risks as identified in the 2021 Annual Report. These can be broken down into risks that are within the management's influence and risks that are outside it. | |||||||||||||||||||||||
| Risks that are within management's influence include areas such as the expansion of the business, prolonged periods of under-performance, loss of key personnel, human error, poor communication and service leading to reputational damage and fraud. | |||||||||||||||||||||||
| Risks outside the management's influence include falling markets, terrorism, a deteriorating UK economy, investment industry price competition and hostile takeovers. | |||||||||||||||||||||||
| Management monitor all risks to the business, they record how each risk is mitigated and have warning flags to identify increased risk levels. Management recognise the importance of risk management and view it as an integral part of the management process which is tied into the business model and is described further in the Risk management and internal control section on page 50 of the 2021 Annual Report and Note 2 "Financial risk management" on page 111 of the 2021 Annual Report. | |||||||||||||||||||||||
| 16 | Contingent assets and liabilities | ||||||||||||||||||||||
| The Group can earn performance fees on some of the segregated and fund accounts that it manages. In some cases a proportion of the fee earned is deferred until the next performance fee is payable or offset against future underperformance on that account. As there is no certainty that such deferred fees will be collectable in future years, the Group's accounting policy is to include performance fees in income only when they become due and collectable and therefore the element (if any) deferred beyond 30 September 2021 has not been recognised in the results for the period. | |||||||||||||||||||||||
| 17 | Directors' responsibilities | ||||||||||||||||||||||
| The Directors confirm that: i. This condensed set of interim financial statements has been prepared in accordance with UK-adopted IAS 34; ii. The Half Year Report herein includes a fair review of the information required by DTR 4.2.7, being an indication of important events that have occurred during the first six months of the current financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties faced by the company and the undertakings included in the consolidation taken as a whole for the remaining six months of the year; and iii. The Half Year Report includes, as required by DTR 4.2.8 a fair view of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last Annual Report and Accounts that could have a material effect on the financial position or performance of the Group in the past six months of the current financial year. There has been a change to the board of directors during the six month period ended 30 September 2021. A list of current directors is maintained on the Liontrust Asset Management Plc website. By Order of the Board John S. Ions Vinay K. Abrol Chief Executive Chief Operating Officer and Chief Financial Officer 30 November 2021 |
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| Forward Looking Statements | |||||||||||||||||||||||
| This report contains certain forward-looking statements with respect to the financial condition, results of operations and businesses and plans of the Group. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that have not yet occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this report should be construed as a profit forecast. These forward-looking statements are made only as at the date on which such statements are made and the Group does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make. ENDS |
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