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The dividend cover template shows the quarterly estimated cost of dividend against actual post-tax profits for last year, the current six months and the assumed post-tax profit for the remainder of the current year and the next financial year based upon specified assumptions.

CHAIR'S STATEMENT

Introduction
CLIG is an investment-led organisation, focused on providing our teams with the resources they need to continue to provide strong long-term performance for our clients. Our investment teams produced good absolute and relative performance across most strategies in the period from 1st July 2024 to 31st December 2024 and for the full calendar year 2024, augmenting our long-term track records. Our business development team was active in increasing outreach to clients and prospects and launched an effort to enhance communications. Group management continue to look for ways to run the business more efficiently and are on track for reducing annualised costs.

Assets
Funds under management (FuM) averaged $10.3 billion in the period from 1st July 2024 to 31st December 2024, approximately 12% higher than the same period in 2023. This higher FuM level during the period improved cashflows and allowed CLIG to accumulate reserves and increase our dividend cover. Investment performance was good across almost all strategies, but net flows from 1st July 2024 through 31st December 2024 were negative. FuM were $9.9 billion at 31st December 2024, a decrease of c.3% as compared to $10.2 billion at 30th June 2024.

We were happy with asset growth progression over the past year, but witnessed several outflows as we approached year end. These coincided with talk of tariffs and trade wars as the prospect of a second Trump presidency was absorbed by markets. In the short term, this underpinned the US and sparked a sell-off in international and emerging markets. Contrast these fourth quarter performances: S&P 500 +2.4%, NASDAQ Composite +6.4%, MSCI World -0.27%, MSCI Emerging Markets -8.0% (source: Bloomberg).

For added perspective, consider the Group's FuM growth over the past five and ten years from $3.9 billion as at 30th June 2014 to $5.4 billion at 30th June 2019 and $10.2 billion as at 30th June 2024. We are pleased with this healthy growth in assets. While this upward stair step pattern appears very orderly in hindsight, FuM volatility was a constant feature throughout the period – such is the nature of markets.

It is important to note that not only have FuM grown at CLIG, but the composition of funds managed has also changed meaningfully. Four factors have largely driven this change. First, the merger with Karpus Investment Management (KIM) in 2020 means that about 40% of Group assets are now being managed by KIM (out of that 65.5% in fixed income products and 34.5% in equities). Second, assets managed by our excellent International team have grown to 21% of Group FuM. Third, Emerging Markets, which have been out of favour for a protracted period, decreased to 35% from c.90% back in 2014. Lastly, our diversification assets, made up of a variety of strategies including Opportunistic Value (OV), Listed Private Equity (LPE), High Yield and Global are taking root and have grown to nearly 5% of Group FuM. For many years, your team at CLIG has worked diligently to manage the migration from a sole focus in EM to now having about two thirds of FuM outside EM. This dynamic transformation, organic and inorganic, improves the risk profile of the Group and opens up new avenues for growth and further diversification.

Performance
Several of our shareholders have asked for more information on performance, so I am taking this opportunity to go into some detail. Our OV team at CLIM delivered strong absolute returns and outperformed their indices by between 6% and 16%. Exceptional KIM performance deserves to be highlighted as well, particularly the team's Taxable Fixed Income and Tax-Sensitive strategies, comprising c.26% of Group FuM. These products outperformed their indices by 6.2% and 7.7% in 2024, a staggering feat in fixed income. The vast majority of our CLIM and KIM-managed International mandates nicely outperformed their various indices by between 1% and 3%. Similarly, most of our EM mandates outperformed their indices in a range of 0.2% and 1.7%. And our LPE strategies performed strongly, with the composite delivering 20.9% on an absolute basis net of fees, outperforming their hurdle rate by 12.9% points.

ESG
Historically, we have secured renewable energy for our London and Rochester NY offices. It is heartening to know that this past year, the energy consumed by CLIM's West Chester, Pennsylvania office came from renewable sources. This improvement began in February 2024 and is ongoing. You will find more detail in the CEO Review.

Business travel increased during the period with growth in our marketing efforts as the team met clients and prospects. To offset the impact of increased business travel, the Group will continue with its carbon offset programme.

All employees regularly receive a training programme directed towards diversity, equity and inclusion. To reinforce awareness of their role in protecting our network infrastructure, all employees receive monthly training on the critical issue of cybersecurity.

Alongside adherence to CLIG's governance obligations at Board level, the Group is strongly committed to regular workforce engagement sessions to develop a closer relationship between employees and the Non-Executive Directors (NEDs). We encourage good relations between the NEDs and employees.

Your Board
Tom Griffith (CEO), Peter Roth (Senior Independent Director and Chairman of Audit and Risk Committee), Sarah Ing (Chair of Remuneration Committee) and I are the members of your Board of Directors. Our working relationship remains constructive and our focus continues to be on ensuring a stable and supportive environment for our teams and efficient management of the business for all stakeholders. We are in the late stages of recruiting another NED and look forward to providing you a timely update as we have it.

Dividends
Your Board is declaring an unchanged interim dividend of 11p per share. We continue to believe that the 1.2 times dividend cover policy based on a rolling five-year period provides a prudent template that serves to protect shareholders from volatility that can affect profits of asset management companies. The Board applies this policy using Underlying Profits†. The interim dividend will be paid on 3rd April 2025 to those shareholders registered at the close of business on 7th March 2025.

Shareholder engagement
During 2024, our executive team took a number of constructive steps to facilitate engagement with our existing and potential shareholders. Most recently in November 2024, our CEO, CFO and Head of Business Development hosted an effective meeting for hundreds of existing and prospective shareholders in CLIG. The session was on the Investor Meet Company platform and can be viewed by going to the Resources/Video Content section on our website www.clig.co.uk. Please take the time to watch as the team successfully conveys a number of important elements about CLIG.

Outlook
2024 was CLIG's 33rd year in operation and its 18th year as a public company. We merged with KIM in October 2020, it having started in 1986. 2024 therefore marked its 38th year. Over this long span, the Group encountered all manner of markets, learning and adapting along the way. Predicting markets is like predicting the weather, but what we can look at and extrapolate from with some confidence is closed-end fund (CEF) discounts and these continue to be quite wide, providing attractive entry points. Please refer to Figure 4 on page 9 of the interim report within the CEO Review for a graph detailing investment trust discount levels since 1990.

Many markets outside the US have been under a cloud while the US has attracted huge interest and capital flows. It is not surprising, therefore, that we are hearing about attractive valuations and opportunities from our international and EM teams. In addition, our investment teams at CLIM and KIM continue to successfully engage in corporate governance initiatives, working with CEF Boards to narrow discounts. Our teams are active, highly focused and we remain constructive on the outlook for performance at CLIG.

Conclusion
CLIG continues to strive for excellence for all its stakeholders while exercising care and patience in managing the business. Management and your Board continue to look for ways to improve processes and efficiency at your Company. Investment performance for the rolling six months and the calendar year was strong in the large majority of the Group's investment strategies. It is our performance record that will assist with client retention and in converting prospects into long-term supporters.

I would like to thank our teams for their continued fine work and all our stakeholders for their support. Thank you for your interest in City of London Investment Group.

Sincerely yours,
Rian Dartnell 
Chair 
24th February 2025
†This is an Alternative Performance Measure (APM). Please refer to CEO review for more details on APMs.

CHIEF EXECUTIVE OFFICER'S REVIEW

Monetary easing
In September 2024, the US Federal Reserve began to lower US interest rates by a larger than expected 50 basis points, followed in both November and December by 25 basis point cuts, reducing the Federal Funds rate to 4.25%-4.50% by year end. The theme of monetary easing is one that global capital markets have embraced, after eleven US rate hikes since March 2022, while the US dollar continues to trade strongly against most global currencies.

The Trump administration has threatened tariffs and other protectionist trade measures. Trading partners are eyeing the trade measures nervously, while international and emerging markets are hoping for a weaker US dollar which should increase demand for commodities, including oil, and boost foreign financial asset returns when converted to US dollars. After more than a decade of US exceptionalism in bond and equity markets, there might be a valuation opportunity for international and emerging markets to attract capital from US investors.

While threats of a full-blown trade war are being raised, the most likely scenario is for significant negotiation to take place among global trading partners and for "managed trade" to become the norm. If progress can also be made on ending the wars in Ukraine and the Middle East, expect financial markets to trade higher in 2025. The mid-January ceasefire in the Middle East can be viewed as a tentative start in terms of reducing tensions in the region.

FuM & flows
As shareholders will have seen from our interim trading update (announced on 20th January 2025) and the monthly release of data on our website www.clig.co.uk, Funds under Management (FuM) have decreased over the six months to the end of the calendar year (see Figure 1 below) due to net outflows, as shown in Figure 2 below.

The marketing team is focused on raising assets based on the good long-term performance of the Group's investment management subsidiaries. Ten-year quartile charts of strategies managed by both operating subsidiaries are reflected in Figure 3 on page 8 of the interim report.

Client interest for our Listed Private Equity (LPE) strategy, managed by City of London Investment Management (CLIM) where an investment trust structure provides liquid access to private equity exposure with the transparency of regularly published net asset values, remains strong. We will split out the LPE strategy in our Q3 Trading Update and the FY 2025 Annual Report & Accounts, as LPE is a further avenue for diversification for the Group. Additionally, within CLIM, we had positive inflows in our Opportunistic Value strategy, as institutional clients are looking for specific tradeable opportunities that the team provides. Net outflows were seen in our two flagship strategies, Emerging Markets (EM) and International Equity (INTL), which is not surprising considering the increasing demand for US assets based on the outperformance of the US equity market and the strong dollar. At CLIM, the focus continues to be on ensuring that current clients are looked after from a performance perspective, so that when the overall environment turns towards non-US equity assets, our strategies retain their compelling long-term performance metrics.

As shown in Figure 3 on page 8 of the interim report, the Karpus Investment Management (KIM) team continues to outperform their peers over the ten-year period. KIM's overall FuM increased over the six months due to outperformance of the underlying asset classes although net flows were negative as shown in Figure 2 below. Over the six months, we have continued to bolster the marketing and relationship management teams at KIM, in order to find new avenues for growth and clients.

Currently, for US retail investors, interest rates in fixed rate bank deposits or money market vehicles offered by financial institutions remain higher than in recent memory and are in competition to an active fixed income manager. KIM's outflows during the six months fall into one of three primary categories: 1) the retail client base who are required to withdraw retirement assets by calendar year end due to US regulations, 2) high-net-worth clients with considerable wealth who withdrew assets to deploy capital for life events and/or business opportunities, and 3) institutional pension plan clients that were impacted by regulation changes which drove the outflows.

 

Value in closed-end funds
Our two operating subsidiaries continue to see value and opportunities in their various closed-end funds (CEFs) investment universes. Discounts in US-listed CEFs that invest in non-US equities remain wide due to the ongoing outperformance of assets offering US exposure, despite a strong year of relative and absolute performance. Discounts in UK-listed investment trusts also remain wide as the expansion of passive options in the UK marketplace provide competition to the c.150-year-old investment trust industry. Figure 4 on page 9 of the interim report provides a long-term view of the investment trust discount with the universe of investment trusts excluding 3i (blue line) remaining historically wide.

There are two positive outcomes we have seen over the past year: 1) an increase in corporate governance activity driven by CLIM and KIM as well as other investors, and 2) an increase in non-traditional offerings via investment trusts. The Association of Investment Companies (AIC) released findings that 25 years ago (1999), 88% of investment trusts were invested in equities. In 2024, that figure has fallen to 55%, as investment trusts are now deploying their capital in under-invested avenues, such as private credit, infrastructure, and property. These asset classes that need a longer-term time horizon are tailor-made for the investment trust structure, where the manager does not have to be concerned with managing daily cash flows or raising money for redemptions.

Financial results
Net fee income rose by 10% in the first six months of FY2025 to $35.3 million compared to the same period in FY2024 ($32.2 million) due to higher average FuM of $10.3 billion over the current period compared to $9.2 billion in the first six months of FY2024.

The Group's profit before tax increased c.14% for the six months ended 31st December 2024 to $12.6 million as compared to $11.1 million for the six months ended 31st December 2023. Underlying profit before tax† for the six months ended 31st December 2024 was also higher by c.14% at $15.2 million as compared to $13.3 million for the six months ended 31st December 2023.

EPS for the six months ended 31st December 2024 increased by c.12% to 19.0¢ (14.7p†) per share from 16.9¢ (13.4p†) per share for the six months ended 31st December 2023. Underlying EPS† for the six months ended 31st December 2024 increased by c.12% to 22.9¢ (17.8p) per share from 20.4¢ (16.2p) per share for the six months ended 31st December 2023.

The Group's fee income and the bulk of expenses are incurred in US dollars; however, c.32% of Group overheads are incurred in sterling that are subject to USD/GBP currency rate fluctuations. On average, US dollars weakened by c.2% against sterling to 1.287 for the six months ended 31st December 2024 from 1.256 for the six months ended 31st December 2023. The weaker US dollar meant that our sterling-denominated expenses cost more in dollar terms.

We continue to review expenses across the Group. Total administrative expenses for the six months ended 31st December 2024 were c.6% higher at $23.6 million as compared to $22.2 million for the six months ended 31st December 2023. The increase primarily relates to higher legal & professional fees, additional marketing resources, an increase in travel costs to meet clients and prospects, and the impact of US dollar weakening over costs denominated in sterling. From a cost reduction perspective, we are on track to reduce our costs by c.$3 million on an annualised basis.

Dividend cover chart
We have provided an illustrative framework on our website at https://clig.com/dividend-cover/ to enable interested parties to calculate our post-tax profits based upon some key assumptions. The dividend cover chart shows the quarterly estimated cost of a maintained dividend against actual post-tax profits for last year, the current year and the assumed post-tax profit for next financial year based upon assumptions included in the chart.

Alternative Performance Measures
The Directors use the following Alternative Performance Measures (APMs) to evaluate the performance of the Group as a whole:

Earnings per share in pence – Earnings per share in US dollars as per the income statement is converted to sterling using the average exchange rate for the period. Refer to note 6 in the interim financial statements.

Underlying profit before tax – Profit before tax, adjusted for gain/loss on investments and amortisation of intangibles. This provides a measure of the profitability of the Group for management's decision-making.

Underlying earnings per share in pence – CLIG's shares are quoted on the London Stock Exchange therefore the dividend is declared in sterling. Underlying profit before tax, adjusted for tax as per the income statement and the tax effect of adjustments, are divided by the weighted average number of shares in issue as at the period end. Underlying earnings per share is converted to sterling using the average exchange rate for the period. Refer to the reconciliation on note 6 in the financial statements.

CLIG KPI
We retain the share price KPI to show the total return of CLIG over a market cycle. The goal of this KPI is for the total return (share price plus dividends) to compound annually in a range of 7.5% to 12.5% over a five-year period.

As seen in Figure 5 on page 11 of the interim report, for the five years ended 31st December 2024, CLIG's cumulative total return was 35.1%, or 6.2% annualised.

For the full 2024 calendar year, CLIG's cumulative total return, inclusive of dividends, was 36.6% in the currency of listing (sterling). The share price, excluding dividends, ended the calendar year at 395 pence, which was an increase of 24.6% from the starting price of 317 pence.

Since listing in April 2006 through 31st December 2024, CLIG's cumulative total return was 765%, or 12.2% annualised. Please note that all figures are sourced from Bloomberg.

Corporate Governance and stakeholders
In last year's interim statement, we reiterated comments from our previous Chair, Barry Aling, that "CLIG is committed to meeting the standards of our UK listing although it has created a meaningful burden in terms of human and financial resources." CLIG remains committed to the UK market and our UK listing, but we would be remiss if we did not again reiterate the reality of the situation around UK public markets. Bluntly stated, the regulatory burden of remaining listed in London is real. We are monitoring the other UK companies that are announcing plans to move their primary listing to non-UK exchanges, and we continue to monitor the lack of growth in new listings in London.

We have made changes from a corporate perspective over the past two years to be more transparent of our unique situation. Last year, we converted our reporting currency to US dollars, reflecting that c.99% of our revenues were in dollars, and on 2nd December 2024, we announced that CLIG is qualified to trade on the OTCQX ® Best Market under the symbol "CLIUF". Our goal is to enhance our visibility and improve access for our US investors, which include four of our nine largest shareholders (excluding current employees). Additionally, we have increased our efforts to communicate directly with our UK-based individual shareholders via Investor Meet, to ensure that they have opportunities to receive updates on the CLIG story directly from management.

Regarding Board composition, we announced alongside our FY2024 annual results that Tazim Essani would not seek re-election at the October AGM. We appreciated Tazim's advice, counsel, and oversight during her tenure as a CLIG Director.

The Nomination Committee will provide an update to all shareholders on the future composition of the Board when appropriate.

Environmental reporting update
Employees and management of the Group are committed to protecting the environment in which we operate. We provide investment management services to our clients which have a relatively modest direct environmental impact. As noted within our FY2024 Annual Report and Accounts, we plan to reduce emissions where we can, and we implemented a program to offset emissions where we cannot reduce. Below are descriptions of actions taken at the Group level to 1) reduce carbon emissions and 2) offset carbon emissions.

In terms of reducing carbon emissions, the electricity supplied to our three largest offices in London (UK), Rochester (US) and West Chester (US) is either powered primarily by renewable sources or is supplied via contracts backed by renewable energy sources.

In terms of offsetting carbon emissions, we provided a review of our carbon offset programme within our Task Force on Climate-Related Financial Disclosures (TCFD) section (pages 37-45) in the FY2024 Annual Report & Accounts. We will continue to use the TCFD section in our Annual Reports & Accounts to provide detail on our environmental initiatives. Unlike FY2024, where we completed two rounds of carbon offsets, in FY2025, we are going to complete one purchase at the end of the financial year, to simplify reporting.

Cybersecurity update
Employee education on cybersecurity risks, combined with a project to reduce the complexity of our IT infrastructure, remained our priorities during the prior six months. From an employee education perspective, our colleagues continue to receive monthly training on a rotating list of cybersecurity topics and risks. Additionally, we have worked with our external education vendor to fine-tune and improve the impact of our internal email phishing tests that are sent to employees monthly. From an IT infrastructure perspective, our IT department continued making progress on their goal to reduce network complexity by removing unnecessary servers and streamlining internal processes.

CLIG outlook
As an active investment manager, our priority of delivering investment outperformance against a relevant benchmark for our clients is paramount. Throughout the calendar year 2024, our investment teams delivered outperformance for our clients, which sets the stage for our marketing and client servicing efforts in calendar year 2025. CEF discounts remain wide, which allow for existing and potential clients to understand and evaluate the value in the investment universe. Additionally, the potential for corporate governance activity provides a compelling opportunity.

CLIG continues to position our investment teams in a manner to take advantage of client demand in various asset classes, including listed private equity investment trusts in the UK, listed international CEFs, and municipal CEFs in the US. We have been patiently waiting for the US-centric investment focus to wane, which may be driven by further monetary easing and/or the shift that may come from the second Trump administration.

Success rarely happens/occurs in a straight line, particularly in the volatile asset management business. While client flows during the previous quarter did not meet our expectations, management and our colleagues are committed to growth in FuM through the continued performance of our underlying strategies.

As a Group, we will continue to go further together, working on behalf our clients, colleagues, and shareholders.

Tom Griffith 
Chief Executive Officer
24th February 2025

 

 

 

 

 

NOTES

1     BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

The financial information contained herein is unaudited and does not comprise statutory financial information within the meaning of section 434 of the Companies Act 2006. The information for the year ended 30th June 2024 has been extracted from the latest published audited accounts which have been delivered to the Registrar of Companies. The report of the independent auditor on those financial statements contained no qualification or statement under s498(2) or (3) of the Companies Act 2006.

These interim financial statements have been prepared in accordance with the International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. The accounting policies adopted and the estimates and judgements used in the preparation of the unaudited consolidated financial statements are consistent with those set out and applied in the statutory accounts of the Group for the year ended 30th June 2024, which were prepared in accordance with UK-adopted International Accounting Standards.

The consolidated financial information contained within this report incorporates the results, cash flows and financial position of the Company and its subsidiaries for the period to 31st December 2024.

Group companies are regulated and perform annual capital adequacy and liquidity assessments, which incorporates stress testing based on loss of revenue on the Group's financial position over a three-year period. The Group has performed additional stress tests using several different scenario levels, over a three-year period on the Group's financial position from 31st December 2024.

The Group's financial projections, capital adequacy and liquidity assessments provide comfort that the Group has adequate financial and regulatory resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the interim financial statements.

New or amended accounting standards and interpretations adopted
The Group has adopted all the new or amended accounting standards and interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for the current reporting period. Any new or amended accounting standards that are not mandatory have not been early adopted. None of the standards not yet effective are expected to have a material impact on the Group's financial statements.

2     SEGMENTAL ANALYSIS          

The Directors consider that the Group has only one reportable segment, namely asset management, and hence only analysis by geographical location is given.

3     FINANCE INCOME  

4     FINANCE EXPENSE  

5     GAIN ON INVESTMENTS      

6     EARNINGS PER SHARE

The calculation of earnings per share is based on the profit for the period attributable to the equity shareholders of the parent divided by the weighted average number of ordinary shares in issue for the six months ended 31st December 2024.

As set out in note 8 the Employee Benefit Trust held 1,396,147 ordinary shares in the Company as at 31st December 2024. The Trustees of the Trust have waived all rights to dividends associated with these shares. In accordance with IAS 33 "Earnings per share", the ordinary shares held by the Employee Benefit Trust have been excluded from the calculation of the weighted average number of ordinary shares in issue.

The calculation of diluted earnings per share is based on the profit for the period attributable to the equity shareholders of the parent divided by the diluted weighted average number of ordinary shares in issue for the six months ended 31st December 2024.

Reported earnings per share

Underlying earnings per share*

Underlying earnings per share is based on the underlying profit after tax*, where profit after tax is adjusted for gain/loss on investments, amortisation of acquired intangibles and their related tax impact.

Underlying profit for calculating underlying earnings per share

 7     INTANGIBLE ASSETS              

Goodwill, direct customer relationships, distribution channels and trade name acquired through a business combination relate to the merger with KIM on 1st October 2020.

The fair values of KIM's direct customer relationships and the distribution channels have been measured using a multi-period excess earnings method. The model uses estimates of annual attrition driving revenue from existing customers to derive a forecast series of cash flows, which are discounted to a present value to determine the fair values of KIM's direct customer relationships and the distribution channels.

The fair value of KIM's trade name has been measured using a relief from royalty method. The model uses estimates of royalty rate and percentage of revenue attributable to the trade name to derive a forecast series of cash flows, which are discounted to a present value to determine the fair value of KIM's trade name.

The total amortisation charged to the income statement for the six months ended 31st December 2024 in relation to direct customer relationships, distribution channels and trade name, was $2,799k (year ended 30th June 2024: $5,599k; six months ended 31st December 2023: $2,799k).

Impairment
Goodwill acquired through business combination is in relation to the merger with KIM and relates to the acquired workforce and future expected growth of the Cash Generating Unit (CGU).

The Group's policy is to test goodwill arising on acquisition for impairment annually, or more frequently if changes in circumstances indicate a possible impairment. The Group has considered whether there have been any indicators of impairment during the six months ended 31st December 2024 which would require an impairment review to be performed. The Group has considered indicators of impairment with regard to a number of factors, including those outlined in IAS 36 'Impairment of assets'. No indications of impairment of individual intangible assets have been identified.

8     INVESTMENT IN OWN SHARES

Investment in own shares relates to City of London Investment Group PLC shares held by an Employee Benefit Trust on behalf of City of London Investment Group PLC.

At 31st December 2024 the Trust held 517,035 ordinary 1p shares (30th June 2024: 695,988; 31st December 2023: 593,236), of which 221,000 ordinary 1p shares (30th June 2024 – 238,500; 31st December 2023: 241,000) were subject to options in issue.

The Trust also held in custody 879,112 ordinary 1p shares (30th June 2024: 1,133,649; 31st December 2023: 1,196,133) for employees in relation to restricted share awards granted under the Group's Employee Incentive Plan (EIP).

The Trust has waived its entitlement to receive dividends in respect of the total shares held (31st December 2024: 1,396,147; 30th June 2024: 1,829,637; 31st December 2023: 1,789,369).

9    DIVIDENDS  

A final dividend of 22p per share (2023: 22p) (gross amount payable £11,149k; net amount paid £10,757k ($13,866k)*) in respect of the year ended 30th June 2024 was paid on 7th November 2024.

An interim dividend of 11p per share (2024: 11p) (gross amount payable £5,575k; net amount payable £5,421k*) in respect of the year ending 30th June 2025 will be paid on 3rd April 2025 to members registered at the close of business on 7th March 2025.

* Difference between gross and net amounts is due to shares held at EBT that do not receive dividend.

 10     PRINCIPAL RISKS AND UNCERTAINTIES

In the course of conducting its business operations, the Group is exposed to a variety of risks including market, liquidity, operational and other risks that may be material and require appropriate controls and on-going oversight.

The principal risks to which the Group will be exposed in the second half of the financial year are substantially the same as those described in the last annual report (see page 28 and 29 of the Annual Report and Accounts for the year ended 30th June 2024), being the potential for loss of FuM as a result of poor investment performance, client redemptions, breach of mandate guidelines or material error, loss of key personnel, technology/IT, cybersecurity and business continuity and legal and regulatory risks.

Changes in market prices, such as foreign exchange rates and equity prices will affect the Group's income and the value of its investments.

Most of the Group's revenues, and a significant part of its expenses, are denominated in US dollars. However, exchange rate movements will impact the portion of Group expenses that are incurred in non-US dollars.

11     RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company and its subsidiary undertakings carry out transactions with related parties as defined under IAS 24 Related Party Disclosures. Material transactions are set out below:

(i) Transactions with key management personnel
Key management personnel are defined as Directors (both Executive and Non-Executive) of City of London Investment Group PLC.

(a) The compensation paid to the Directors as well as their shareholdings in the Group and dividends paid, did not affect the financial position or the performance of the Group for the current reporting period. There were no changes to the type and nature of the related party transactions from those that were reported in the FY2024 Annual Report and Accounts.

(b) One of the Group's subsidiaries manages funds for one of its key management personnel, for which it receives a fee. All transactions between key management and their close family members and the Group's subsidiary are on terms that are available to all employees of that Company. The amount received in fees during the period was $7k (2023: $3k). There were no fees outstanding as at the period end.

(c) A close member of a key management's personnel provides professional services to the Group. The amount paid during the period for these services was $11k. The amount outstanding at the period end was $0.4k.
(ii) Person with significant influence
One of the Group's subsidiaries manages funds for a person with significant influence based on his shareholding in the Group. The amount received in fees during the period was $49k (2023: $39k).

 12   FINANCIAL INSTRUMENTS

The Group's financial assets include cash and cash equivalents, investments and other receivables.

Its financial liabilities include accruals and other payables. The fair value of the Group's financial assets and liabilities is materially the same as the book value.

Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1: fair value derived from quoted prices (unadjusted) in active markets for identical assets and liabilities.

• Level 2: fair value derived from inputs other than quoted prices included within level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: fair value derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

The fair values of the financial instruments are determined as follows:

• Investments for hedging purposes are valued using the quoted bid price and shown under level 1.

• Investments in own funds are determined with reference to the net asset value (NAV) of the fund. Where the NAV is a quoted price the fair value is shown under level 1, where the NAV is not a quoted price the fair value is shown under level 2.

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.

There were no financial liabilities at fair value at any of the reporting periods.

Where there is an impairment in the investment in own funds, the loss is reported in the income statement. No impairment was recognised during the period or the preceding year.

13   GENERAL

The interim financial statements for the six months ended 31st December 2024 were approved by the Board on 24th February 2025. These financial statements are unaudited, but they have been reviewed by the auditors, having regard to International Standard on Review Engagements (UK) 2410 (ISRE (UK) 2410) "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.

Copies of this statement are available on our website www.clig.co.uk.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The Directors confirm that to the best of our knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS34 Interim Financial Reporting as adopted by the UK; and

• The Half Year Report includes a fair review of the information required by:

DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so.

The Directors of City of London Investment Group PLC are as listed in the Annual Report and Accounts 2023/2024. A list of current Directors is maintained at www.clig.co.uk.

By order of the Board

Tom Griffith 
Chief Executive Officer
24th February 2025

INDEPENDENT REVIEW REPORT TO CITY OF LONDON INVESTMENT GROUP PLC

Conclusion
We have been engaged by City of London Investment Group plc (the 'company') to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2024 which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive income, the Consolidated Balance sheet, Consolidated Cash Flow Statement and the Consolidated Statement of Changes in Equity. We have read the other information contained in the half-yearly financial report which compromises of the Half Year Summary, Chair's statement, Chief Executive Officer's review and notes to the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2024 is not prepared, in all material respects, in accordance with UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.

Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with UK-adopted international accounting standards. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting'.

Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE (UK), however future events or conditions may cause the entity to cease to continue as a going concern.

In our evaluation of the Directors' conclusions, we considered the inherent risks associated with the group's business model including effects arising from macro-economic uncertainties such as such as the impact of the Russian invasion of Ukraine, rising inflation and geopolitical instability in the Middle East, we assessed and challenged the reasonableness of estimates made by the Directors and the related disclosures and analysed how those risks might affect the group's financial resources or ability to continue operations over the going concern period.

Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with UK-adopted International Accounting Standard (IAS) 34, 'Interim Financial Reporting'.

In preparing the half-yearly financial report, the Directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report.

Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.

Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants London
24th February 2025

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SOURCE City of London Investment Group PLC