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Highlights:
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Liontrust Asset Management reported continued elevated outflows, resulting in total assets under management declining by 4% to £26 billion.
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The company experienced net outflows of £1.1 billion in the last quarter, contributing to approximately £2 billion in net outflows for the first half of the financial year.
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Despite challenges in investor confidence and market sentiment, Liontrust's CEO emphasized the firm's commitment to enhancing data management and digital services for improved client support.
Liontrust Asset Management {LSE:LIO} has faced significant challenges, as shares fell to levels not seen in nearly seven years following the announcement of continued elevated outflows during the past quarter. The firm reported a 4% decline in total assets under management, which now stands at £26 billion. Although the investment performance was marginally positive, it was insufficient to counteract the net outflows of £1.1 billion, marking a slight deterioration compared to the previous quarter. Consequently, net outflows for the first six months of the financial year reached around £2 billion.
John Ions, Chief Executive of Liontrust, attributed the downturn in investor confidence and fund flows to "speculation and uncertainty around changes to taxation and reliefs" leading up to the Budget on 30 October. This climate of uncertainty has adversely affected the entire industry, leading to a cautious approach from investors.
To address these challenges, Liontrust has focused on strengthening its data management, delivery, and analysis capabilities. Ions stated that these enhancements will not only improve the reporting and digital services provided to clients but will also yield significant benefits for the investment management and risk teams, promoting productivity gains and operational efficiencies across the business.
In early trading, shares of Liontrust dropped by 4.7%, reflecting investor concerns as the stock fell to lows last seen in early 2018. Analysts at Peel Hunt noted that given the current lower level of assets under management and the lack of improvement in market sentiment, they plan to reduce profit and earnings per share expectations by approximately 10%. The consensus forecast currently anticipates pre-tax profits of £59 million and earnings per share of 69p.
Despite these challenges, there remains speculation regarding the stability of the dividend, which is currently assumed to remain unchanged at 72p. Given Liontrust's robust balance sheet, analysts suggest this assumption is reasonable, resulting in a substantial yield of approximately 14%.
