Liontrust profit slides after billions more outflows
Profit at Liontrust slid by more than a quarter after the fund manager suffered billions more in outflows.
The London-based business reported an adjusted pre-tax profit of £48.3m for the year to end March 2025, a drop of 28 per cent compared to last year.
Liontrust saw nearly £5bn in outflows over the period, though this was lower than the £6.1bn in outflows the firm experienced the previous year.
The lion’s share of the outflows came from retail funds, taking total assets under management and advice to £22.6bn.
CEO John Ions told Morning Wire he was hopeful of a revival of UK equities in the wake of market turmoil in the US following Donald Trump’s erratic tariff regime.
“The outlook going forward is better. You’re now beginning to see more inquiries inwards,” he said.
“This period of US exceptionalism…it’s been pretty much a one-way bet. But what we’ve seen since Trump and the tariffs is investors looking to move away from the US and to look at areas outside the megacap stocks into the smaller cap space.
“If the weight of money into large-caps does not drive returns and price discovery starts to get rewarded, for a group like ourselves…it’s very much more of an environment where people will look to access what we have for what it delivers.”
Liontrust shares sank 8.9 per cent to 375p. The stock has roughly halved in value over the past 12 months.
Business transformation
“We remain committed to and steadfast in our confidence in the investment teams and their processes, including those strategies that have found the last three years challenging, negatively impacting net flows and therefore having a leveraged impact on the fall in the share price,” Liontrust chair Luke Savage said.
“We have been communicating to and engaging with existing clients to an even greater extent than before while seeking to expand the client base across different channels, including among institutional investors, and internationally.
“All of this will play a key role in the group returning to positive flows and generating growth.”
Liontrust said it was engaged in a “business transformation programme” designed to overhaul the firm’s operating model.
That has included the outsourcing of trading for investment funds and institutional accounts, as well as a reduction in staff headcount, a move which is expected to shed around £6m in annual costs.
Liontrust maintained its full year dividend of 72p, in defiance of earlier warnings that the fund manager was “increasingly at risk” of running out of money to pay its dividend.
“Following our earnings downgrades, the dividend looks increasingly at risk, as we forecast surplus capital to fall from £46m at the first half of 2025 to just £5m by the end of 2025,” said RBC analysts said.