Liontrust Asset Management : Annual Report & Financial Statements 2021

PRIDE IN OUR

PERFORMANCE

LIONTRUST ASSET MANAGEMENT PLC

ANNUAL REPORT & FINANCIAL STATEMENTS 2021

Introduction

Highlights

Chairman's Statement

Strategic Report

Chief Executive's report

Our purpose and strategy

Our strategy

Business model

Key performance measures Fund Management review Sales and marketing review Operations review Financial review

Principal risks and mitigations

Our People, Sustainability and Corporate Responsibilities

Governance

Board of Directors

Risk management and internal controls report

Directors' report

Directors' responsibility statement Corporate Governance report Directors Board Attendance Report Nomination Committee report Audit & Risk Committee report Remuneration report

Financial Statements - Group and Company

Consolidated Statement of

Comprehensive Income

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

Notes to the Financial Statements

Independent auditor's report to the members of Liontrust Asset Management PLC

Shareholder Information

1

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6	A	specialist asset manager whose
8
purpose is to have a positive impact on
8
our clients, stakeholders and society. Our
9
values are:
10
12
24		COURAGE
25

26We do not follow the herd and have the courage to have

30independence of thought. Our fund managers have the

courage of their convictions and have differentiated

33and robust investment processes. The business has the courage to do the right thing, make decisions and to be

innovative and nimble.

49

50

55EXCELLENCE

1. We strive for excellence in our products, service and people
2. so we can have a positive impact on clients and stakeholders. We pride ourselves on the quality of our fund management

1. teams and the knowledge and ability of our staff across the
2. business. We provide first-class service and are transparent

69about the management of our funds, portfolios and the

72business, communicating clearly and frequently.

102GOOD CITIZENSHIP

1. We seek to be a responsible company and investor. We
2. uphold the highest standards of integrity in all of our actions, treating staff, clients and stakeholders fairly
3. and with respect. We are committed to contributing
4. to and benefiting the wider society, including through sustainability, financial education, diversity and equality.

141 Forward Looking statements

151	This report contains certain forward-looking statements with
respect to the financial condition, results of operations and
	businesses and plans of the Group. These statements and
	forecasts involve risk and uncertainty because they relate to
	events and depend on circumstances that have not yet occurred.
	There are a number of factors that could cause actual results
	or developments to differ materially from those expressed or
	implied by these forward-looking statements and forecasts.
	Nothing in this report should be construed as a profit forecast.

Highlights

Sustained growth of our AuM from £16,078 million to £30,929 million demonstrates the substantial progress made in this year. To have recorded 11 consecutive years of net inflows shows the progress the business has made.

31 March

2021

£30,929 million

31 March

2020

£16,078 million

2017

Assets under management and Advice *

2021		2020
		£16.1 billion	92% increase
££3012,655.9billion

Net flows*	££3,4981,775milllion	£2,695 million	30% increase
2016
			£106.6 million	54% increase
Gross profit	££16384.6.8million
			£16.5 million	111% increase
Profit before tax	££3419.9millillion

Adjusted profit

2015	before tax*

££6430..31milllion	£38.1 million	69% increase

Adjusted diluted	8746..49pence	56.7 pence	54% increase
earnings per share*
Total Dividend
4726.pence0 pence	33 pence	42% increase
per share

2014

• These are alternative performance measures ('APM'). See p.29 for further details.

2013	LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021	1

What differentiates Liontrust

EXPERTISE

We focus only on those areas of investment in which we have particular expertise.

PROCESS DRIVEN

Each fund management team applies rigorous and documented investment processes to managing funds and portfolios to ensure the way they manage money is predictable and repeatable and to prevent them from investing in stocks for the wrong reasons.

INVESTMENT FOCUSED

Our fund managers can concentrate on managing their funds and portfolios without being distracted by other day-to-day aspects of running an asset management business.

CULTURE

How a fund manager or team performs is not just down to the talent of the individuals but also due to the culture and environment in which they work. Our fund managers have the freedom to manage their portfolios according to their own investment processes and market views.

ACTIVE MANAGEMENT

Our fund managers have the courage of their convictions in making investment decisions, ensuring our funds and portfolios are truly actively managed for the long-term benefit of our clients and investors.

STRONG AND DISTINCTIVE BRAND

Our brand is accessible and engaging, and represents our strength, conviction, independence, innovation, excellence, transparency and ethics.

COMMUNITY ENGAGEMENT

We focus on financial education, providing opportunities for vulnerable children and young people, promoting gender equality and wildlife conservation.

2 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021

Chairman's Statement

Introduction

I am delighted at the accomplishments of your Company over the past year, with Liontrust reacting impressively to the onset of Covid-19 and the series of lockdowns. We have seen many positive characteristics of the business during this period and as a result the Company has been able to make significant progress and maintain its growth. I want to extend the Board's recognition and thanks for the commitment and professionalism of John Ions, Vinay Abrol and colleagues at Liontrust.

The most important consideration of all has been the safety and wellbeing of the Liontrust team and our clients and stakeholders throughout the year. Employees have been actively engaged through regular company updates and were encouraged to take time off work through a holiday allowance bonus scheme. Those with additional demands, such as dealing with the challenges of home-schooling, were given due consideration and flexibility.

The Company has a responsibility to society as well, which is why Liontrust extended its support to community engagement partners in 2020.

Liontrust has enjoyed a strong increase in revenues and adjusted profit before tax, which have been driven by strong net inflows, significant growth in AuMA and better than expected performance fee revenues.

This has contributed to a rise in the dividend payment by 42%, with the details outlined below. This increase continues the trend we have seen over the past few years; from 2017 to 2021, the dividend has grown by an average of 33% per annum.

Among the key accomplishments of the Company has been the acquisition of the Architas UK Investment Business, which Liontrust started and completed during lockdowns. This demonstrates

the effectiveness of the management of the business and its ability to adapt successfully to take advantage of opportunities whatever the circumstances. The acquisition contributes to one of the key strategies of the Company which is to expand Liontrust's distribution and products.

Liontrust's success is benefiting employees, shareholders and other stakeholders, which is important to the Board and helping to achieve our strategic objectives for the business, one of which is to retain talented employees. Liontrust is investing in training and development as we encourage our employees to fulfil their talent and potential.

The Board has a key commitment to diversity across Liontrust. As part of this, Liontrust has established a Diversity and Inclusion Committee chaired by Vinay Abrol that is looking at preventing and eliminating discrimination; raising awareness of the importance and benefits of diversity; ensuring policies and procedures promote diversity; increasing awareness through training, mentoring and coaching; and attracting people from diverse backgrounds.

Liontrust has also made progress elsewhere in the sustainability of the business, especially in being a responsible investor. The fund management teams have been incorporating ESG considerations into their distinct processes to complement and enhance their approach to investment including stewardship and the management of sustainability risk.

I would like to thank Mike Bishop for his significant contribution to Liontrust and welcome Quintin Price to the Board of the Company as a Non-Executive Director.

Mike will be retiring from the Company after the 2021 Annual General Meeting in September. The Board and your Company are very grateful to Mike for his work, wisdom and support over many years which has contributed to Liontrust enjoying such success. He has been a massive help to me personally as a Non-executive Director and now Chairman. Mike will be much missed by the Board and we wish him all the very best for the future.

Quintin joins on 1 July, becoming a member of the Audit & Risk, Remuneration and Nomination Committees. Quintin has a wealth of experience, knowledge and insights from a 30-year career working at a senior level for several investment companies including BlackRock. He will be an invaluable addition as Liontrust continues to expand our investment capability and proposition.

Results

Profit before tax is £34.929 million (2020: £16.508 million), an increase of 112%. The Profit before tax for the financial year ended 31 March 2021 includes £15.025 million of acquisition and re- organisation related costs incurred as a result of the acquisition of Architas Multi-Manager Limited ("AMML") and Architas Advisory Services Limited ("AASL", together, the "Architas UK Investment Business") which completed on 30 October 2020 and the re- organisation costs incurred as a result of the acquisition of Neptune Investment Management Limited ("Neptune"), see note 5 below for further information.

Adjusted profit before tax was £64.308 million (2020: £38.054 million). Adjusted profit before tax is disclosed in order to give shareholders an indication of the profitability of the Group excluding non-cash (depreciation, intangible asset amortisation and share incentivisation related) expenses and non-recurring (professional fees relating to acquisition, cost reduction, restructuring and severance compensation related) expenses ("Adjustments"), see note 5 below for a reconciliation of adjusted profit before tax.

Dividend

The success in fund performance and distribution has resulted in a 30% increase in net inflows, and along with the acquisition of the Architas UK Investment Business a 92% increase in assets under management and a 44% increase in revenues excluding performance fees when compared to last year. This has enabled the Board to declare a second interim dividend of 36.0 pence per share (2020: 24.0 pence). The total dividend for the financial year ending 31 March 2021 is 47.0 pence per share (2020: 33.0 pence per share), an increase of 42% compared with last year.

The second interim dividend will be payable on 6 August 2021 to shareholders who are on the register as at 2 July 2021, the shares going ex-dividend on 1 July 2021. Last day for Dividend Reinvestment Plan elections is 16 July 2021

Shareholder services

Link Group (a trading name of Link Market Services Limited and Link Market Services Trustees Limited) may be able to provide you with a range of services relating to your shareholding. To learn more about the services available to you please visit the shareholder portal at www.signalshares.com or call 0371 664 0300. Calls outside the UK will be charged at the applicable international rate. Lines are open Monday to Friday, 9.00 am to 5.30 pm, UK time, excluding public holidays in England and Wales.

Alastair Barbour

Chairman

22 June 2021

LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2021

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