Liontrust swings to statutory loss as assets under management slide

Liontrust Asset Management reported a 9% fall in first-half gross profit on Thursday, at £98.6m.

The FTSE 250 company said that excluding performance fees, gross profit stood at £92.5m, marking a 15% decline from the previous year.

Additionally, the firm generated £6m in performance fee revenues, in contrast to nil in 2022.

Adjusted profit before tax for the half-year slid 16% to £36m, and adjusted diluted earnings per share declined 21% to 42.32p,

Liontrust recorded a statutory loss before tax of £10.1m for the six months ended 30 September, swinging from a profit of £14.1m in 2022.

That loss included charges totalling £46.2m, consisting of expenses related to acquisitions and associated restructuring costs of £8.1m, non-cash amortisation and impairment of related intangible assets and goodwill of £7m amortisation and £29.9m impairment, and other non-cash and non-recurring costs of £1.1m.

The board declared a first interim dividend per share of 22p, consistent with the prior year.

Regarding assets under management and advice (AuMA), as of 30 September, Liontrust reported a total of £27.7bn, marking a 12% decrease over the six months.

By 9 November, AuMA had fallen further to £26.6bn.

Finally, the company reported net outflows of £3.2bn for the six months ended 30 September, compared to net outflows of £2.2bn during the same period last year.

“This has been a challenging period for the asset management sector, including Liontrust,” said chief executive officer John Ions.

“This is shown by the fact that the industry experienced net retail outflows in the UK in September of £1.4bn, according to the Investment Association, and asset managers only required net retail sales of £7.4m in the UK in the third quarter of 2023 to make it into the top ten list of sellers.

“It is in this context that we need to view Liontrust’s net outflows and the impairment of recent acquisitions.”

Ions said most of Liontrust’s assets were invested in UK equities - an asset class still out of favour with investors.

“UK All Companies was the worst-selling sector for net retail sales yet again in September, with net retail outflows of £884m, which has been the case for ten out of the past 11 months.

“In the current environment, it is more important than ever that our investment teams explain the drivers of performance and how their portfolios are positioned for the future.

“We have interacted extensively with our client base over the autumn, including through a series of Liontrust and partner events.”

That was in conjunction with the engagement Liontrust’s communications were generating, including more than 1.7 million views of its fund manager videos from the start of 2023 to November, John Ions explained.

“To support the investment and distribution teams, we have been reviewing our operating model and are investing in the operational infrastructure of the business.

“We want to ensure Liontrust has an efficient and scalable platform to support the growth of the group going forward.

“While we continue to invest in selected areas of the group for future growth, we are also concentrating on managing costs and driving efficiencies across the business.”

Ions said that was to ensure the firm had a lean, efficient and focussed operation underpinned by a resilient balance sheet.

“All of these developments and initiatives are building on the strong foundations that we already have through the investment teams, brand, distribution and business processes.

“They give me great confidence we will emerge stronger from the current environment.”

At 1111 GMT, shares in Liontrust Asset Management were down 1.31% at 594.63p.

Reporting by Josh White for Sharecast.com.