Insider: chiefs buy big exposure to 17% dividend yield

A 17% yielding £200,000 investment by the boss of Liontrust Asset Management (LSE:LIO) has backed his company’s shares to recover after they recently traded at their lowest level since 2017.

The move by John Ions, who has led Liontrust since 2010, follows his optimism that external headwinds facing active managers should lessen over the course of 2025.

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In the company’s most recent update, Ions reported outflows of £1.6 billion for the three months to 31 December but said these were significantly concentrated in October after Budget uncertainty led to the industry’s third worst month on record.

He highlighted reasons to expect a more positive period for active investors as equity returns broaden away from a handful of US tech giants.

Ions said: “There is currently an extreme concentration of the mega caps in the US market, which is at its highest level for a century.

“Any broadening of returns from equity markets, greater focus on valuations and lower index returns going forward will present opportunities for price discovery among active investors.”

Ions also noted the stronger performance of the company’s investment teams and progress on strategic objectives such as client experience and diversifying the fund range.

He bought his shares at 400p, which compared with 476p at the start of the year and record levels above 2,000p in autumn 2021. The company, which was founded in 1994 and joined the stock market in 1999, has seen its fortunes slump during a challenging period for UK assets.

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Broker Panmure Liberum, which has a price target of 1,050p, described Liontrust as a microcosm of the broader issues of the UK equity market.

It added this month: “Management is not inactive. In an undervalued market, the shares are undervalued but the broader issues of UK equities cannot be avoided.”

The slide in valuation to a low of 382p means Liontrust shares yield more than 17%, which is based on market assumptions for an unchanged total dividend of 72p a share.

Liontrust distributed an unchanged interim award of 22p a share on 8 January, having already pledged to hand out at least 72p for the current financial year.

Peel Hunt’s central case is for the dividend to continue at this level, but notes that the risk of a cut is increasing as the payment is uncovered based on its 2025-27 earnings forecasts.

The broker has a price target of 560p, having warned that current trends suggest flows may not turn positive until the financial year ending March 2027.

Deutsche Bank, which assumes the dividend will be cut materially in the 2026 financial year, believes the market valuation fairly reflects the challenging position and outlook.

The third-quarter update on 15 January showed a 5.3% fall in assets under management to £24.6 billion, an acceleration from the 4% decline in the previous three months after £1.4 billion of outflows from UK retail funds.

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Annual cost savings from the company’s transformation programme have increased from £4.5 million to £6 million but Peel Hunt said its expectations that outflows will stay higher for longer meant its profit forecasts for 2025-27 have been cut by between 3% and 10%.

The former FTSE 250 stock closed last week at 426.5p. As well as the purchase by Ions, chief financial officer Vinay Abrol spent £99,000 on Wednesday at a price of 396p.

Directors see improving landscape

The view in the Marshalls (LSE:MSLH) boardroom that the building products firm is well placed for when market conditions recover has been backed up through £26,000 of insider purchases.

Chief executive Matt Pullen and finance boss Justin Lockwood disclosed their investments after Tuesday’s year-end update led to more selling of the FTSE 250-listed stock.

They bought their shares at 239p and 232p respectively, which compared with 255p before the update and 355p in October.

Marshalls reported an 8% drop in annual revenues, driven by a 17% reverse in landscaping to £268 million following lower demand from housebuilders and subdued domestic activity.

The division’s decline for the final quarter improved to 9%, having been 23% lower in the first half of the year.

Building products revenues fell 3% to £165 million while roofing rose 4% to £186 million after a strong final quarter led by solar demand and a return to growth for 2022 acquisition Marley.

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Continued market uncertainty and a £3 million increase in costs from higher National Insurance contributions prompt a cautious outlook, although Marshalls believes profitability in 2025 will be ahead of 2024’s level.

It added: “The group's business units are well positioned to capitalise on the market recovery, which is expected to build progressively through the year.”

Peel Hunt retained its Buy recommendation but cut its price target from 380p to 340p following the update. It said: “Hopefully some stability can return and when it does Marshalls should benefit from its operational gearing.”

Deutsche Bank reduced its 2025 and 2026 profit forecasts by 13% and 11% respectively, which it said set a cautious base. It has a price target of 420p