Shares in fund manager Liontrust Asset Management (LIO) traded flat at £13.70 despite the company raking in £1.75 billion of net inflows as more people invest their money with the firm.
In a trading update for the six months to 30 September, assets under management and advice rose to £20.6 billion, up 28% since the start of the current financial year, while net inflows (more investors putting money in than taking money out) increased to £1.74 billion from £1.36 billion a year earlier.
The FTSE 250 firm added that the proposed acquisition of Architas Multi-Manager and Architas Advisory Services, announced on 1 July, would add £5.8 billion of assets when the deal is completed, which is expected to be complete on 30 October.
Chief executive John Ions said, ‘The strong momentum of the business over the past few years has continued through the Covid-19 crisis.
‘This is testament to our fund management teams and their robust investment processes, strong relationships with clients, the power of the brand and how successfully everyone at Liontrust has adapted to the current environment.’
BROKER VIEW
Numis analyst David McCann said Liontrust in the past has typically been viewed as a value stock, trading on a price-to-earnings (P/E) ratio of 10-to-12 times with a 5% dividend yield.
He pointed out it is now trading on a 2022 PE of 16.5 times and 3.6% yield, and therefore no longer offers ‘value’ in a traditional sense.
McCann said, ‘We think given good fund performance in most of the key funds, a strong sales and marketing function and a relevant fund range to the modern fund buyer, there are no obvious reasons why this should change for the time being.
‘Finally, we can see one of the outcomes of the Covid-19 crisis potentially further bolstering the case for sustainable investments and in this regard Liontrust looks very well positioned longer term in our view.’
The firm’s best-selling fund remains the £6.6 billion Liontrust Special Situations (B0N6YF7), which pulled in more than £300 million of investors’ money between March and August according to Morningstar data.
