Liontrust Asset Management : Full Year Results for Year Ended 31 March 2024

LEI: 549300XVXU6S7PLCL855 For immediate release

26 June 2024

LIONTRUST ASSET MANAGEMENT PLC

FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2024

Liontrust Asset Management Plc ("Liontrust", the "Company", or the "Group"), the specialist fund management group, today announces its audited results for the financial year ended 31 March 2024.

• Gross Profit of £186.1 million (2023: £229.8 million), includes £10.4 million of performance fee revenues
  (2023: £18.5 million), with a Revenue margin1 of 0.62% (2023: 0.62%).
• Adjusted profit before tax1 of £67.4 million (2023: £87.1 million), a decrease of 23%.
• Adjusted operating margin1 of 35.5% (2023: 37.7%).
• Adjusted diluted earnings per share1 of 79.2 pence per share (2023: 109.8 pence per share), a decrease of 28%.
• Statutory Loss before tax of £0.6 million (2023: Statutory Profit before tax of £49.3 million). See note 6 below for further detail and a reconciliation to Adjusted profit before tax1.
• Full year dividend maintained at 72p.
• On 31 March 2024, assets under management and advice ("AuMA") were £27.8 billion (2023: £31.4 billion), a decrease of 11.5%.
• AuMA as at 20 June 2024 were £27.25 billion.

1 This is an Alternative Performance Measure. See note 2 below.

Commenting, John Ions, Chief Executive Officer, said:

"Liontrust has delivered an Adjusted profit before tax1 of £67.4 million and a strong Adjusted operating margin1 of 35.5% in spite of the challenging environment for active managers over the past year.

We have started to see signs of a change in investor sentiment and this is likely to move significantly when more central banks reduce interest rates and there is greater political and fiscal certainty in the UK. There is no doubt that the amount individuals are investing has been negatively impacted by the cost of living, the reductions in Covid savings and tax rises. With more stability will come greater recognition of valuation opportunities especially in the UK stock market.

The negative investor sentiment has combined with a market environment over the past 18 months that has proved a significant headwind for many of our strategies and led to net outflows of £6.1 billion across the whole financial year for Liontrust. This market environment has also prompted many commentators to again question the value of active asset management.

The events of the last year have not reduced our belief in active management but have reinforced the need for Liontrust to expand our investment capability across asset classes and investment styles, broaden distribution and enhance the Group's operations. As we could not accelerate these developments through an acquisition, we have been pursuing them organically, through recruitment and investment in the business. These actions are ensuring we can drive the business forward and deliver on our strategic objectives.

We are building the business from a position of strength despite the challenges of the past year. Liontrust has a high- profile and positive brand, excellent investment teams, deep client relationships as well as good operating margins.

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The ability of the investment teams to deliver for clients over the long term is shown by the fact that to 31 May 2024, 69% of Liontrust's funds were in the first or second quartile of their respective IA sectors since the funds were launched2.

The Liontrust European Dynamic Fund won the award for best Europe ex UK Fund for the third year running at the prestigious Fund Manager of the Year awards on 20 June. The Liontrust European Strategic Equity Fund and the Liontrust India Fund were both shortlisted for awards.

We are optimistic about the long-term outlook for the UK economy and stock market. The UK has not lost the ability to develop world class businesses and it is about providing the incentives and liquidity to encourage such companies to list on the London Stock Exchange. A key part of this is attracting international investors to reinvest back in the UK market.

We are well positioned for when the UK comes back into favour given that the four funds managed by the Economic Advantage team, including Special Situations, to 31 May 2024 are in the first quartile of their respective IA sectors since launch2.

One of our strategic objectives is to expand the Liontrust investment proposition, which we have done through fund launches and the formation of the Global Equities team headed by Mark Hawtin.

Another objective is to enhance distribution in the UK and internationally and we have continued to do so through strengthening the UK sales team under Kristian Cook with new senior hires, the recruitment of Jeremy Roberts as Head of Global Distribution (ex UK) and the recent appointment of Michael Buchholz as Head of Distribution for Germany and Austria. Michael will join in August 2024 and be based in the branch office in Frankfurt that we will open later this year.

We have been investing to achieve the fourth strategic objective of strengthening our technological, data and digital capability, which includes implementing new portfolio management and research management systems. These will give us a single front office operating platform providing Liontrust with scalability, flexibility and efficiency to support future growth of the business. This investment is a significant development in achieving the operating model that we had identified as part of the proposed acquisition of GAM Investments last year.

The Liontrust brand is strong. The most recent research shows that Liontrust is regarded as the third best asset manager among financial advisers in the UK and is eighth among wealth managers (source: Research in Finance).

Liontrust is also importantly achieving good rates of engagement with clients, both through face-to-face presentations and digital content. For example, there were more than two million views of Liontrust videos over the last financial year. This is all contributing to Liontrust delivering our strategic objective to enhance further the client experience.

Community engagement has been a long-term commitment for Liontrust, including financial education and conservation. We have further raised the profile of and engagement with our support of the conservation breeding programme for endangered Asiatic lions at London Zoo. Primary school children around the UK nominated more than 650 names for the three lion cubs recently born at London Zoo and then listeners to Times Radio and readers of The Times voted for their favourites from a short list of names for each cub.

Outlook

Liontrust has an expanding and compelling range of investment teams with robust processes; broadening distribution and excellent client service; great engagement with our campaigns and content; a strong brand; and an enhanced operating model. This gives me great confidence that we have the platform to succeed in delivering growth."

1. This is an Alternative Performance Measure. See note 2 below.
2. Source: Financial Express, bid-to-bid basis, net of fees. Statistics using monthly return period.

For further information please contact:

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Teneo (Tel: [phone], Email: [e-mail])

Tom Murray, Colette Cahill, Jessica Pine

Liontrust Asset Management Plc (Tel: [phone], Website: liontrust.co.uk)

Stephen Corbett: Head of Investor Relations

Simon Hildrey: Chief Marketing Officer

Singer Capital Markets (Tel: [phone])

Corporate Broking: Charles Leigh-Pemberton

Corporate Finance: James Moat

Panmure Gordon (Tel: [phone])

Corporate Broking: David Watkins

Corporate Advisory: Atholl Tweedie

HSBC Bank plc (Tel: [phone])

Corporate Broking: Sam McLennan, James Hopton

Corporate Advisory: Alexander Paul

Chair's Statement

The Board of Directors are committed to Liontrust's vision and the strategy of the Group. The underlying business is in better health than it has ever been with regards to investment proposition, quality of our people, reach of sales and marketing, and strengthening business infrastructure. We will not be diverted from our long-term plan by short-term challenges.

Active management

There is no doubt we have been confronted by one of the toughest periods for active asset managers. This is especially the case for those which offer investment styles that have been largely out of favour during this environment of interest rates remaining higher for longer than many expected. For Liontrust, this has impacted our quality growth, small and mid caps, sustainable investing, as well as UK equity, strategies; this is reflected in the net outflows of £6 billion over the financial year.

Liontrust has always believed the best way of allocating capital to companies and managing investments on behalf of clients is through active management with robust investment processes and high-conviction portfolios. Each team at Liontrust has the freedom to use their own distinct investment processes and we continue to believe these are key to long-term performance and effective risk control.

The need for individuals to take responsibility for their own savings and ensure their future financial security will only grow in importance and this can act as a tailwind for active managers. We believe those active managers who deliver value will continue to have a key role for investors in achieving their financial objectives. We recognise active managers and investment processes do not always deliver alpha in a consistent and predictable manner; in some years, as we have seen recently, processes will underperform, but we are confident they will deliver for clients over the long term.

John Ions, Vinay Abrol, and the rest of Liontrust are working hard to enable the Group to return to net inflows and are not simply waiting for market sentiment to change. In his statement below, John explains the strategy for delivering growth and the many actions that have already been taken to ensure Liontrust is well positioned for the future and can take advantage of opportunities.

Robust business

I am pleased to report that the Liontrust operating model is robust with the Group capital position remaining strong. Over the financial year, Liontrust delivered adjusted profit before tax of £67.4 million, gross profit of £186 million and the full year dividend is maintained at 72p per share. Our financial strength has been aided by our flexible

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remuneration model for investment managers through their revenue share model. This ensures the investment managers are fully aligned with the business and investors as AuMA rises and falls.

Liontrust remains in robust financial health with £104 million of cash and cash equivalents on the balance sheet and surplus capital of nearly £80 million as at 31 March 2024.

Strategy

A strategic objective that John talks about in detail in his statement is the further diversification of our fund range and investment teams. We have seen clearly why this is important given the market environment of the last few years. Diversification can be achieved through launching funds for existing investment teams and recruiting new teams as we have done with the Global Equities team. The Board also believes in selective acquisitions that accelerate the development of Liontrust and its ability to grow, typically through bringing in investment teams that complement our existing capability or expand distribution.

It is in this context that our endeavour to acquire GAM Holding AG in the first half of the financial year should be viewed. It presented the opportunity to expand rapidly our investment management and distribution capability, as well as enhance the operations and administration of the Group. Alongside acquisitions, Liontrust continues to pursue these objectives through recruitment and internal developments.

People and sustainability

There are many ways in which Liontrust has responsibilities to investors, employees, stakeholders, the planet and society. These responsibilities range from engagement with the companies we invest in, through commitments to net zero, DE&I (Diversity, Equity, Inclusion) and the well-being of employees, to contributing to the financial services industry and our community.

Liontrust has been investing in and developing our people, including through a leadership programme, coaching, training and a mentoring scheme.

In May 2022, Liontrust signed up to the Net Zero Asset Managers' initiative (NZAM). This commitment covers the Group's net zero targets for the investments it makes on behalf of clients. At the time it joined, Liontrust committed approximately 42% of its AuMA to NZAM. As at the end of December 2023, the percentage of the Group's AuMA committed had risen to 45%. In 2023, Liontrust set near-term science based emissions reduction targets (which were approved by the Science Based Targets initiative, or SBTi) to show the Group's commitment to reducing emissions in line with the Paris Agreement goals.

Board of Directors

I would like to welcome publicly Miriam Greenwood to the Board, who joined us in November and has become Chair of the Remuneration Committee. Miriam brings extensive experience and expertise to the Remuneration Committee and the Board as a whole.

In becoming Chair of the Remuneration Committee, Miriam has succeeded George Yeandle, who is retiring from the Board at the AGM in September 2024. George has shown outstanding leadership of the Remuneration Committee over the last nine years and I want to thank him for his great contribution to the Board.

We have announced previously that the process of seeking a new Chair had started. This process is progressing well and we will update shareholders when we have news on an appointment.

Results

Gross Profit of £186.1 million (2023: £229.8 million), includes £10.4 million of performance fee revenues (2023: £18.5

million), with a Revenue Margin1 of 0.620% (2023: 0.625%) on Average AuMA of £28,330 million (2023: £33,815 million).

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Adjusted profit before tax1 is £67.430 million (2023: £87.083 million), a decrease of 22.6% compared to last year, with

an Adjusted Operating Margin1 of 35.5% (2023: 37.7%).

Statutory Loss before tax of £0.6 million (2023: Statutory Profit before tax of £49.3 million), This includes charges of

£68.0 million (2023: £37.8 million) relating to acquisitions and non-recurring costs (£18.8 million); the non-cash

amortisation and impairment of the acquisition-related intangible assets and goodwill (amortisation: £12.1 million,

impairment: £37.1 million).

Adjusted profit before tax1 is disclosed in order to give shareholders an indication of the profitability of the Group excluding non-cash (intangible asset amortisation) expenses and non-recurring (professional fees relating to acquisition, cost reduction, restructuring and severance compensation related) expenses. See note 6 below for a reconciliation of Adjusted profit before tax1.

1 This is an Alternative Performance Measure. See note 2 below.

Dividend

The Board has declared a second interim dividend of 50.0 pence per share (2023: 50.0 pence) bringing the total

dividend for the financial year ending 31 March 2024 to 72.0 pence per share (2023: 72.0 pence per share).

The second interim dividend will be payable on 9 August 2024 to shareholders who are on the register as at 5 July 2024, the shares going ex-dividend on 4 July 2024. Last day for Dividend Reinvestment Plan elections is 19 July 2024.

Looking forward

Liontrust has built a great business of which I am proud to be Chair. This has been based on the hard work and dedication of the team at Liontrust, along with their expertise, and the Board thanks everyone for their contribution. We are confident the actions taken by management will reap rewards in the future.

Alastair Barbour

Non-executive Chair

25 June 2024

Chief Executive Officer's Report

This has been a challenging year for Liontrust. As the Chair has outlined in his statement, the market environment and investor sentiment has been negative for many of our strategies and this has driven the net outflows for Liontrust over the financial year.

We have full confidence in our proven investment teams and processes delivering over the long term for investors. Liontrust has also been developing the business to put it in a strong position to drive the next stage of our growth. We are pleased with the progress we have been making and how Liontrust is structured to capitalise on the opportunities ahead after the headwinds that the Group has faced over the last year.

Investment proposition

We have continued to expand Liontrust's investment proposition as part of the strategic objective to diversify the product range. Liontrust has added the Global Equities team headed by Mark Hawtin. Mark has 40 years of investment experience, having been Head of Global Equities at GAM Investments and a partner and portfolio manager at Marshall Wace Asset Management. We are very pleased with the feedback about the new team and they are already bringing us opportunities to broaden our client base globally.

The Economic Advantage team headed by Anthony Cross has expanded their capability through the recruitment of Alexander Game from Unicorn Asset Management, while Natalie Bell is now a named manager of the UK Smaller Companies and UK Micro Cap funds.

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The outflows of assets from UK equity funds and depressed valuations of UK listed companies is threatening the robustness of the stock market. Many fantastic UK companies are being taken private too cheaply, are subject to takeovers by overseas companies or are choosing to list outside the UK. For these reasons, we support initiatives that will attract greater capital and companies to the UK stock market.

We welcomed the Government's announcement of the intention to bring in a UK ISA. Liontrust, particularly the Economic Advantage team, has been actively engaged with the Government over the idea and the subsequent consultation. Liontrust believes in the long-term potential of the UK economy and its ability to produce world class companies. What we need are the incentives to encourage these companies to list on the UK market.

Liontrust expanded the fund offering during the last year with the launch of the GF Sustainable Future US Growth Fund in July 2023, which is managed by the Sustainable Investment team, and the GF Pan-European Dynamic Fund in February 2024, which is managed by the Cashflow Solution team and attracted more than €200 million within four months.

The Liontrust European Dynamic Fund won the award for best Europe ex UK Fund for the third year running at the prestigious Fund Manager of the Year awards on 20 June. The Liontrust European Strategic Equity Fund and the Liontrust India Fund were both shortlisted for awards.

Liontrust has continued to deliver strong long-term fund performance for our clients. Of Liontrust's funds, 75% are in the first or second quartile of their respective sectors since the funds were launched to 31 March 20241.

Liontrust has been merging funds where we can produce economies of scale for the benefit of investors, such as the Global Equity and Global Focus funds into the Global Alpha Fund. These mergers also enable the Group to focus on those funds where there is significant existing or potential client demand.

1 Source: Financial Express, bid-to-bid basis, net of fees, primary share classes. Statistics using monthly return period.

Expand distribution

Another of our four strategic objectives is to further broaden distribution and the client base and we have made significant progress in this area as well by strengthening the sales team in both the UK and internationally. We made two internal appointments with Kristian Cook becoming Head of UK Distribution and Mark Wright being named Head of UK Regional Distribution. We have also recruited a new head of strategic partners in the UK and business development managers for London and the South-East of England.

Jeremy Roberts joined from GAM Investments in March 2024 to be Head of Global Distribution (ex UK) with responsibility for developing sales internationally. We have strengthened our distribution capability in Germany with the appointment of Michael Buchholz. He joins Liontrust in August 2024 as Head of Distribution for Germany and Austria and will be based in the branch office in Frankfurt that will open later this year. Jeremy will be making further hires to build the international sales team and we will be expanding our physical presence in continental Europe.

Client experience

We have also focused on providing an excellent level of service and engagement with clients and ensuring there is a high level of awareness and understanding of Liontrust funds. Nearly 1,800 professional intermediaries attended Liontrust events in 2023 and around 400 have attended the adviser roadshow around the UK in the spring and early summer of 2024 at which the Sustainable Investment and Global Innovation teams have been presenting. Liontrust has a series of events for professional intermediaries planned through the autumn.

Liontrust is generating strong investor engagement through our marketing, with significant development of our digital presence. Liontrust fund manager videos had more than 2.3 million views from February 2023 to February 2024. A new weekly video that started in March 2024 to provide a bite-size review of the latest market and economic news had attracted 42,000 views in the first nine weeks.

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Also, from February 2023 to February 2024, Liontrust's LinkedIn channel had 8.71 million impressions and 68,578 clicks. LinkedIn followers have grown by nearly 50% in the 15 months to June 2024.

Strengthen technology and data

Another key way in which Liontrust has been ensuring we are in a strong position for the future is through developing our technological and data capability. This includes implementing new front office portfolio management and research management systems. These will give us a single front office operating platform that provides Liontrust with scalability, flexibility and efficiency to support future growth of the business. These systems will improve the quality and efficiency of delivering and analysing data and greater productivity across the business. In time, this will lead to enhancements for client service and reporting, enabling Liontrust to develop further our digital capability.

In September 2023, we started a programme to implement a strategic Enterprise Platform and associated Operating Model which includes new Front Office tooling - BlackRock Aladdin, with FlexTrade as the EMS, an extended Middle Office operating model with BNY and the implementation of BNY Front Office Service, and a new Enterprise Data platform - BNY Data Vault.

In December 2023, we implemented FactSet RMS, a flexible, scalable and consistent research management system which allows our investment teams to store, collaborate and analyse research, both internally generated and externally acquired. FactSet RMS allows us to leverage technology to generate insight and drive efficiencies, while also supporting growing regulatory reporting requirements and preparing for emerging technologies like AI (artificial intelligence).

Liontrust Foundation

Liontrust established its charitable foundation during the financial year. The Liontrust Foundation has been set up to promote social mobility and preserve and recover nature. The Foundation is committed to empowering young entrepreneurs and promoting DE&I in particular through these two objectives.

We have a very strong Board of Trustee Directors, who are chaired by Simon Hildrey, Chief Marketing Officer at Liontrust. The other trustees are Mandy Donald (Non-executive Director of Liontrust), Nathalie Richards (CEO of SEO London) and Dr Andrew Terry (Director of Conservation and Policy at Zoological Society of London).

Outlook

Liontrust has put in place the structure to deliver growth. We have an expanding and compelling range of investment teams with robust processes; broadening distribution and excellent client service; great engagement with our campaigns and content; a strong brand; and an enhanced operating model. This gives me confidence that we are able to take advantage of the opportunities and mitigate the challenges for active asset managers in the future.

John Ions

Chief Executive Officer

25 June 2024

Assets under management and advice

On 31 March 2024, our AuMA stood at £27,822 million and were broken down by type and investment process as follows:

		Institutional	Investment	UK Retail	Alternative	International
Process	Total	Accounts &	Funds &
Trusts	Funds & MPS	Funds
		Funds	Accounts
	(£m)	(£m)	(£m)	(£m)	(£m)	(£m)
Sustainable Investment	10,433	323	-	9,624	-	486
Economic Advantage	6,571	450	-	5,998	-	123
Multi-Asset	4,344	-	-	4,220	124	-
Global Innovation	827	-	-	827	-	-

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Cashflow Solution	2,184	556	-	1,404	112	112
Global Fundamental	3,267	412	1,135	1,706	-	14
Global Fixed Income	196	-	-	36	-	160
Total	27,822	1,741	1,135	23,815	236	895

AuMA as at 20 June 2024 were £27,250 million.

Net Flows

The Net outflows over the Financial Year were £6,083 million (2023: £4,842 million). A reconciliation of fund flows and AuMA over the financial year ended 31 March 2024 is as follows:

		Institutional	Investment	UK Retail	Alternative	International
		Accounts &	Funds &	Funds &
		Trusts	Funds
	Total	Funds	MPS	Accounts
	(£m)	(£m)	(£m)	(£m)	(£m)	(£m)
Opening AuMA - 1 April 2023	31,430	2,394	1,139	25,721	1,084	1,092
Net flows	(6,083)	(925)	(92)	(3,999)	(821)	(246)
Market and Investment	2,475	272	88	2,093	(27)	49
performance
Closing AuMA - 31 March 2024	27,822	1,741	1,135	23,815	236	895
Consolidated Statement of Comprehensive Income for the year ended 31 March 2024
					Year	Year
					ended	ended
				31-Mar-24	31-Mar-23
			Notes		£'000	£'000
Revenue			4	197,889	243,339
Cost of sales			4	(11,828)	(13,569)
Gross profit				186,061	229,770
Gain on write back of Majedie acquisition provision			-	1,848
Realised profit/ (loss) on sale of financial assets			184	-
Unrealised profit/ (loss) on financial assets				838	618
Administration expenses			5	(188,932)	(183,210)
Operating profit					(1,849)	49,026
Interest receivable					1,337	358
Interest payable					(67)	(83)
(Loss)/ Profit before tax					(579)	49,301
Taxation					(2,911)	(9,973)
(Loss)/ Profit for the year					(3,490)	39,328
Other comprehensive income					-	-

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Total comprehensive income		(3,490)	39,328
		Pence	Pence
Basic earnings per share	7	(5.46)	61.45
Diluted earnings per share	7	(5.46)	61.21
Consolidated Balance Sheet as at 31 March 2024
		As at	As at
		31-Mar-24	31-Mar-23
	Notes	£'000	£'000
Assets
Non current assets
Intangible assets		48,472	90,629
Goodwill		32,110	38,586
Property, plant and equipment		3,719	3,378
Total non current assets		84,301	132,593
Current assets
Trade and other receivables		229,586	241,682
Financial assets		8,157	9,921
Cash and cash equivalents		104,318	121,037
Total current assets		342,061	372,640
Liabilities
Non current liabilities
Deferred tax liability		(11,227)	(21,493)
Lease liability		(2,538)	(2,168)
Total non current liabilities		(13,765)	(23,661)
Current liabilities
Trade and other payables		(241,363)	(255,460)
Corporation tax payable		-	(5,131)
Total current liabilities		(241,363)	(260,591)
Net current assets		100,698	112,049
Net assets		171,234	220,981
Shareholders' equity
Ordinary shares		648	648
Share premium		-	112,510
Capital redemption reserve		19	19
Retained earnings		183,461	121,341
Own shares held		(12,894)	(13,537)
Total equity		171,234	220,981
Consolidated Cash Flow Statement
For the year ended 31 March 2024

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				Year ended		Year ended
				31-Mar-24		31-Mar-23
				£'000		£'000
	Cash flows from operating activities
	Cash received from operations			178,771		236,362
	Cash paid in respect of operations			(134,636)		(174,437)
	Net cash generated from changes in unit trust receivables and
	payables			1,197		(1,387)
	Net cash generated from operations			45,332		60,538
	Interest received			1,432		358
	Tax paid			(18,558)		(17,479)
	Net cash generated from operating activities			28,206		43,417
	Cash flows from investing activities
	Purchase of property and equipment			(142)		(253)
	Acquisition of Majedie net of cash acquired			-		13,596
	Gain on liquidation of Architas			-		827
	Loan to GAM			(8,900)		-
	Loan repaid by GAM			8,900		-
	Purchase of DBVAP Financial Asset			(1,493)		(2,701)
	Sale DBVAP Financial Asset			4,348		-
	Purchase of Seeding investments			(328)		(2,193)
	Sale of Seeding investments			371		1,990
	Net cash generated from investing activities			2,756		11,266
	Cash flows from financing activities
	Payment of lease liabilities			(1,525)		(1,328)
	Purchase of own shares			-		(7,100)
	Dividends paid			(46,156)		(46,070)
	Net cash used in from financing activities			(47,681)		(54,498)
	Net (decrease)/ increase in cash and cash equivalents*			(16,719)		185
	Opening cash and cash equivalents*			121,037		120,852
	Closing cash and cash equivalents*			104,318		121,037
	* Cash and cash equivalents consist only of cash balances.
Consolidated Statement of Change in Equity
For the year ended 31 March 2024
		Share	Share	Capital	Retained	Own shares		Total
		capital	premium	redemption	earnings	held		Equity
		£ '000	£ '000	£ '000	£ '000	£ '000	£ '000
Balance at 1 April 2023 brought forward	648	112,510	19	121,341	(13,537)	220,981
Profit for the year	-	-	-	(3,490)	-	(3,490)

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