PRIDE IN OUR
PERFORMANCE
LIONTRUST ASSET MANAGEMENT PLC
ANNUAL REPORT & FINANCIAL STATEMENTS 2021
Introduction
Highlights
Chairman's Statement
Strategic Report
Chief Executive's report
Our purpose and strategy
Our strategy
Business model
Key performance measures Fund Management review Sales and marketing review Operations review Financial review
Principal risks and mitigations
Our People, Sustainability and Corporate Responsibilities
Governance
Board of Directors
Risk management and internal controls report
Directors' report
Directors' responsibility statement Corporate Governance report Directors Board Attendance Report Nomination Committee report Audit & Risk Committee report Remuneration report
Financial Statements - Group and Company
Consolidated Statement of
Comprehensive Income
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Independent auditor's report to the members of Liontrust Asset Management PLC
Shareholder Information
1
3
6 | A | specialist asset manager whose | ||
8 | ||||
purpose is to have a positive impact on | ||||
8 | ||||
our clients, stakeholders and society. Our | ||||
9 | ||||
values are: | ||||
10 | ||||
12 | ||||
24 | COURAGE | |||
25 |
26We do not follow the herd and have the courage to have
30independence of thought. Our fund managers have the
courage of their convictions and have differentiated
33and robust investment processes. The business has the courage to do the right thing, make decisions and to be
innovative and nimble.
49
50
55EXCELLENCE
- We strive for excellence in our products, service and people
- so we can have a positive impact on clients and stakeholders. We pride ourselves on the quality of our fund management
- teams and the knowledge and ability of our staff across the
- business. We provide first-class service and are transparent
69about the management of our funds, portfolios and the
72business, communicating clearly and frequently.
102GOOD CITIZENSHIP
- We seek to be a responsible company and investor. We
- uphold the highest standards of integrity in all of our actions, treating staff, clients and stakeholders fairly
- and with respect. We are committed to contributing
- to and benefiting the wider society, including through sustainability, financial education, diversity and equality.
141 Forward Looking statements
151 | This report contains certain forward-looking statements with |
respect to the financial condition, results of operations and | |
businesses and plans of the Group. These statements and | |
forecasts involve risk and uncertainty because they relate to | |
events and depend on circumstances that have not yet occurred. | |
There are a number of factors that could cause actual results | |
or developments to differ materially from those expressed or | |
implied by these forward-looking statements and forecasts. | |
Nothing in this report should be construed as a profit forecast. |
Highlights
Sustained growth of our AuM from £16,078 million to £30,929 million demonstrates the substantial progress made in this year. To have recorded 11 consecutive years of net inflows shows the progress the business has made.
31 March
2021
£30,929 million
31 March
2020
£16,078 million
2017
Assets under management and Advice *
2021 | 2020 | ||
£16.1 billion | 92% increase | ||
££3012,655.9billion | |||
Net flows* | ££3,4981,775milllion | £2,695 million | 30% increase | |
2016 | ||||
£106.6 million | 54% increase | |||
Gross profit | ££16384.6.8million | |||
£16.5 million | 111% increase | |||
Profit before tax | ££3419.9millillion | |||
Adjusted profit
2015 | before tax* |
££6430..31milllion | £38.1 million | 69% increase |
Adjusted diluted | 8746..49pence | 56.7 pence | 54% increase | |
earnings per share* | ||||
Total Dividend | ||||
4726.pence0 pence | 33 pence | 42% increase | ||
per share | ||||
2014
- These are alternative performance measures ('APM'). See p.29 for further details.
2013 | LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021 | 1 |
What differentiates Liontrust
EXPERTISE
We focus only on those areas of investment in which we have particular expertise.
PROCESS DRIVEN
Each fund management team applies rigorous and documented investment processes to managing funds and portfolios to ensure the way they manage money is predictable and repeatable and to prevent them from investing in stocks for the wrong reasons.
INVESTMENT FOCUSED
Our fund managers can concentrate on managing their funds and portfolios without being distracted by other day-to-day aspects of running an asset management business.
CULTURE
How a fund manager or team performs is not just down to the talent of the individuals but also due to the culture and environment in which they work. Our fund managers have the freedom to manage their portfolios according to their own investment processes and market views.
ACTIVE MANAGEMENT
Our fund managers have the courage of their convictions in making investment decisions, ensuring our funds and portfolios are truly actively managed for the long-term benefit of our clients and investors.
STRONG AND DISTINCTIVE BRAND
Our brand is accessible and engaging, and represents our strength, conviction, independence, innovation, excellence, transparency and ethics.
COMMUNITY ENGAGEMENT
We focus on financial education, providing opportunities for vulnerable children and young people, promoting gender equality and wildlife conservation.
2 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021
Chairman's Statement
Introduction
I am delighted at the accomplishments of your Company over the past year, with Liontrust reacting impressively to the onset of Covid-19 and the series of lockdowns. We have seen many positive characteristics of the business during this period and as a result the Company has been able to make significant progress and maintain its growth. I want to extend the Board's recognition and thanks for the commitment and professionalism of John Ions, Vinay Abrol and colleagues at Liontrust.
The most important consideration of all has been the safety and wellbeing of the Liontrust team and our clients and stakeholders throughout the year. Employees have been actively engaged through regular company updates and were encouraged to take time off work through a holiday allowance bonus scheme. Those with additional demands, such as dealing with the challenges of home-schooling, were given due consideration and flexibility.
The Company has a responsibility to society as well, which is why Liontrust extended its support to community engagement partners in 2020.
Liontrust has enjoyed a strong increase in revenues and adjusted profit before tax, which have been driven by strong net inflows, significant growth in AuMA and better than expected performance fee revenues.
This has contributed to a rise in the dividend payment by 42%, with the details outlined below. This increase continues the trend we have seen over the past few years; from 2017 to 2021, the dividend has grown by an average of 33% per annum.
Among the key accomplishments of the Company has been the acquisition of the Architas UK Investment Business, which Liontrust started and completed during lockdowns. This demonstrates
the effectiveness of the management of the business and its ability to adapt successfully to take advantage of opportunities whatever the circumstances. The acquisition contributes to one of the key strategies of the Company which is to expand Liontrust's distribution and products.
Liontrust's success is benefiting employees, shareholders and other stakeholders, which is important to the Board and helping to achieve our strategic objectives for the business, one of which is to retain talented employees. Liontrust is investing in training and development as we encourage our employees to fulfil their talent and potential.
The Board has a key commitment to diversity across Liontrust. As part of this, Liontrust has established a Diversity and Inclusion Committee chaired by Vinay Abrol that is looking at preventing and eliminating discrimination; raising awareness of the importance and benefits of diversity; ensuring policies and procedures promote diversity; increasing awareness through training, mentoring and coaching; and attracting people from diverse backgrounds.
Liontrust has also made progress elsewhere in the sustainability of the business, especially in being a responsible investor. The fund management teams have been incorporating ESG considerations into their distinct processes to complement and enhance their approach to investment including stewardship and the management of sustainability risk.
I would like to thank Mike Bishop for his significant contribution to Liontrust and welcome Quintin Price to the Board of the Company as a Non-Executive Director.
Mike will be retiring from the Company after the 2021 Annual General Meeting in September. The Board and your Company are very grateful to Mike for his work, wisdom and support over many years which has contributed to Liontrust enjoying such success. He has been a massive help to me personally as a Non-executive Director and now Chairman. Mike will be much missed by the Board and we wish him all the very best for the future.
Quintin joins on 1 July, becoming a member of the Audit & Risk, Remuneration and Nomination Committees. Quintin has a wealth of experience, knowledge and insights from a 30-year career working at a senior level for several investment companies including BlackRock. He will be an invaluable addition as Liontrust continues to expand our investment capability and proposition.
Results
Profit before tax is £34.929 million (2020: £16.508 million), an increase of 112%. The Profit before tax for the financial year ended 31 March 2021 includes £15.025 million of acquisition and re- organisation related costs incurred as a result of the acquisition of Architas Multi-Manager Limited ("AMML") and Architas Advisory Services Limited ("AASL", together, the "Architas UK Investment Business") which completed on 30 October 2020 and the re- organisation costs incurred as a result of the acquisition of Neptune Investment Management Limited ("Neptune"), see note 5 below for further information.
Adjusted profit before tax was £64.308 million (2020: £38.054 million). Adjusted profit before tax is disclosed in order to give shareholders an indication of the profitability of the Group excluding non-cash (depreciation, intangible asset amortisation and share incentivisation related) expenses and non-recurring (professional fees relating to acquisition, cost reduction, restructuring and severance compensation related) expenses ("Adjustments"), see note 5 below for a reconciliation of adjusted profit before tax.
Dividend
The success in fund performance and distribution has resulted in a 30% increase in net inflows, and along with the acquisition of the Architas UK Investment Business a 92% increase in assets under management and a 44% increase in revenues excluding performance fees when compared to last year. This has enabled the Board to declare a second interim dividend of 36.0 pence per share (2020: 24.0 pence). The total dividend for the financial year ending 31 March 2021 is 47.0 pence per share (2020: 33.0 pence per share), an increase of 42% compared with last year.
The second interim dividend will be payable on 6 August 2021 to shareholders who are on the register as at 2 July 2021, the shares going ex-dividend on 1 July 2021. Last day for Dividend Reinvestment Plan elections is 16 July 2021
Shareholder services
Link Group (a trading name of Link Market Services Limited and Link Market Services Trustees Limited) may be able to provide you with a range of services relating to your shareholding. To learn more about the services available to you please visit the shareholder portal at www.signalshares.com or call 0371 664 0300. Calls outside the UK will be charged at the applicable international rate. Lines are open Monday to Friday, 9.00 am to 5.30 pm, UK time, excluding public holidays in England and Wales.
Alastair Barbour
Chairman
22 June 2021
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021 | 3 |
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Liontrust Asset Management plc published this content on 07 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 July 2021 16:25:04 UTC.