City of London Investment Company plc (LON:CLIG) has announced its FUM for 4Q’24 and the full year. It was another positive quarter for the group, with FUM rising 1% from $10.10bn to $10.24bn. Over the financial year, FUM have increased 8.7% and are at their highest level since before the market weakness, in early 2022. Much of the positive effects this quarter were driven by markets: the MSCI Emerging Markets Index rose 4%, although the MSCI All-World ex-US index was flat. Inflows were mixed, with a positive quarter for the International strategy and outflows from Emerging Markets, KIM and Opportunistic Value. Nevertheless, 2H’24 was a great improvement over 1H’24.
- Funds and dividend: Over the year, performance was generally very good. Most strategies outperformed, with only two main strategies not doing so. The full-year dividend is expected to be the same as for the previous year. This was a final dividend of 22p, making 33p for the year.
- Estimates: With FUM almost in line with our forecasts, the main change was an adverse exchange rate movement. Our 2024E underlying EPS has decreased from 43.5¢ to 43.4¢, our 2025E EPS has decreased by 1% from 51.0¢ to 50.6¢. and our 2026E EPS has decreased by 1% from 55.9¢ to 55.5¢.
- Valuation: After the recent performance, the 2025E P/E of 11.2x is a noticeable discount to the peer group. A 2025E dividend yield of 9.1% is well above the market average and should, at the very least, provide support for the shares in the current markets.
