The City of London Investment Group has reported a drop in pre-tax profit, as the group’s efforts to diversify its business against a “volatile market backdrop” hit earnings.
The Group reported a profit before tax of £11.4m for the year ending 30 June, a drop of almost 11 per cent compared to the previous year’s figure.
Revenues also slipped, falling almost six per cent to £31.9m. Basic earnings per share fell over 11 per cent to 34.9p, compared to 39.5p the year before.
Despite these drops, the Group’s funds under management at the end of the year were $5.4bn ($4.8bn) – a six per cent increase on 2018.
Chairman Barry Aling said the year “was very much a ‘game of two halves’”, with escalations in trade friction between the US and China hitting equity markets hard towards the end of 2918, before they “regained their composure” in early 2019.
Aling said that “while volatility appears likely to remain the order of play in the coming months”, the Group’s Board “remains firmly of the view” that its business model will continue to deliver.
City of London Investment Group has been working to diversify its asset base by moving into areas including real estate investment funds.
Despite producing lower revenue margins than other assets, Aling said the “potential to grow these diversification products without capacity constraints” represents a good opportunity for growth within the Group.
The Group recommended a final dividend of 18p per share, taking the total dividing for the year to 40.5p – up from 27p in 2018.
Shares in the Group were down 0.95 per cent in late morning trading to 416p.