Profits at City of London Investment Group fell almost a fifth over the 13 months to the end of June, a period which left it exposed to the biggest period of volatility in several years and big currency moves.
Factoring in a £2.9 million unanticipated tax charge profits after tax fell 17% from £6.3 million to £5.2 million. By 8.40 shares in the group had dropped 2.84% to 290p.
‘With revenues mainly in US$ whilst a substantial proportion of our costs are in GBP, the strengthening of the currency over the period resulted in a headwind of some £500,000,’ it said in a statement.
Funds under management rose 5.4% in dollar terms over the period while falling 4.2% in sterling as the currency cross moved from $1.52 to $1.71.
The company said it will nonetheless maintain its full-year dividend at 24p, with cover falling from 1.04 times to 0.83 times. It noted that it was reviewing its historic target of 1.5 times dividend cover, ‘and has in recent years applied it flexibly’.