Liontrust
(LIO.L): On the face of it, this trading update, for the first quarter to 30th
June 2015, is a bit underwhelming. Assets under management fell slightly by
£36m from £4,494m to £4,458m, with net outflows calculated as £7m. The net
outflow broke down into -£29m from Institutional, but +£22m elsewhere, implying
a slight margin mix benefit. The balance of the AuM drop was market moves and
investment performance with Institutional down £16m and -£13m elsewhere. The
group points out that retail fund performance continues to be very good over
the long term, with six out of eight funds in the first quartile since their
current manager was appointed. However, over one year three funds are fourth
quartile and only one is in the top quartile (Macro UK Growth Fund). The new
Global Strategic Equity Fund has just launched, but there is no news on its
progress.
Looking ahead,
Liontrust seems well placed to exploit the growing UK market in savings
products, as government policy and demographics both push savers towards more
involvement in long term financial planning. Including performance fees (of
maybe 2p per share?), eps consensus for FY2016 is at 24.5p, which at today’s
slightly grumpy 330p, is a PE of 13.5x. The dividend expectation of 9.4p
equates to a prospective yield of 2.8%. Double digit plus eps growth can be
achieved over the next few years and with a growing cash pile and healthy dividend
cover, of well over 2x, further dividend growth should be impressive. Last
November I was keen on the shares, when they were a snip at 215p. After such a
good run, it feels to me that they might pause for breath, but I would stay
invested. (Neil Cumming, 22nd
July 2015)
These comments are not a personal recommendation to deal. Any
investments can fall as well as rise in value, so you could get back less than
you invest. I may have a financial interest in some of the stocks written
about. www.dividendpower.co.uk
or e-mail at info@dividendpower.co.uk Twitter:
@DividendPower
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