Half-year Results

Ashmore Group plc (Ashmore, the Group), the specialist Emerging Markets asset manager, today announces its unaudited results for the six months ended 31 December 2024.

• Improved net flows deliver stable AuM
• Assets under management (AuM) of US$48.8 billion 1 were broadly unchanged over the six months.
• Positive performance of US$0.6 billion.
• Significant reduction in redemptions delivered improved net outflows of US$1.1 billion.
• Adjusted net revenue of £79.9 million, 14% lower YoY reflecting lower average AuM.
• Net management fees of £68.3 million, 17% lower YoY.
• Successfully generated performance fees of £7.9 million, in line with the prior year period.
• Adjusted operating costs reduced by 9% YoY, with variable remuneration accrued at 30% of EBVCT.
• Efficient operating model produced adjusted EBITDA margin of 42%, on adjusted EBITDA of £33.7 million.
• Active seed capital programme delivered gains of £5.0 million, notwithstanding volatile market conditions.
• Diluted EPS of 5.4 pence and on an adjusted basis diluted EPS of 4.8 pence (-17% YoY).
• The Board has declared an unchanged interim dividend of 4.8 pence per share.
• Balance sheet strength maintained, facilitating investment in future growth.
• Total seed capital investments of £347.9 million.
• Ashmore's active investment processes continue to generate outperformance
• Approximately 60% of AuM outperforming over three and five years.
• Strong Q1 market performance largely reversed in Q2.
• Over the six months, EM fixed income indices increased by +1% to +4%.
• EM equity indices returned -1% to +2%.
• Strategy building a more diversified business with growth in equities and local platforms
• Equities net inflows drive 4% increase in AuM to US$7.0 billion, representing 14% of Group AuM.
• Alternatives capital raising continues alongside successful realisations.
• First close of debt infrastructure fund, raising more than US$300 million.
• Private equity realisations in Latin America and Middle East contributed to performance fees.
• Local platforms now manage US$7.6 billion AuM, client flows driving notable AuM growth in India (+16%) & Colombia (+21%).
• EM-domiciled clients represent 38% of Group, an increase from 36% a year ago.
• Positive macro outlook centred on robust EM economies
• Robust fundamentals, resilience and reforms evident across emerging markets, delivering superior economic growth.
• Meaningful upside to asset prices in EM if US policy implementation is more measured than campaign rhetoric.
• Significant rebalancing required to address investors' cyclically low EM allocations and to capture the potential upside to asset prices.

Commenting on the Group's results, Mark Coombs, Chief Executive Officer, Ashmore Group said:

"Ashmore's net flows continue to improve and AuM was largely unchanged at the end of the period. Ongoing strong control of operating costs helped to mitigate the impact of lower average AuM on the financial results, and the Group continues to invest in strategic growth and diversification opportunities including through its seed capital investments.

"There are strong arguments for investors to rebalance allocations from heavily overweight US positions in favour of the attractive valuations and investment opportunities in emerging markets. These markets offer significant diversification and growth, which is increasingly recognised by clients and reflected in activity levels. Ashmore's active investment management processes are delivering for clients and the Group is well-positioned to navigate the asset price volatility resulting from the US election, and to capture the longer-term upside from current market levels."

• As reported on 15 January 2025.

Analysts briefing

There will be a presentation for sell-side analysts at 9.00am on 7 February 2025 at UBS, 5 Broadgate, London, EC2M 2QS. A copy of the presentation will be made available on the Group's website at ir.ashmoregroup.com.

Against a backdrop of volatile global capital markets over the six months to 31 December 2024, emerging markets performed relatively well with positive returns across fixed income and certain key equity markets, reflecting the ongoing robust macroeconomic fundamentals in many emerging countries and attractive valuations.

Ashmore's AuM ended the period broadly unchanged at US$48.8 billion (30 June 2024: US$49.3 billion), with positive investment performance of US$0.6 billion and an improved total net outflow of US$1.1 billion (H1 2024: US$4.5 billion; H2 2024: US$4.0 billion). During the period, increasing client engagement and improving sentiment towards emerging markets, set against a backdrop of extremely low investor allocations, meant that subscription levels were maintained and redemptions fell to deliver reduced net outflows of US$0.4 billion in Q2 compared with US$0.7 billion in Q1.

The Group's operational performance reflects the impact of 6% lower average AuM compared with the prior year period, which, notwithstanding a reduction in operating costs, resulted in a 21% decline in adjusted EBITDA. The Group's efficient business model continues to operate effectively and has delivered an adjusted EBITDA margin of 42% in this period, which remains relatively high by industry standards even at this point in the market cycle.

Consistent with the more volatile market environment in this period, a lower level of mark-to-market gains on the Group's seed capital means that profit before tax is 33% lower than in the prior year period. Statutory diluted EPS is 5.4 pence, and on an adjusted basis, diluted EPS is 4.8 pence, 17% lower than in the prior year period.

The emerging markets continue to offer significant diversification and resilience, which is reflected in higher client activity levels in this period. There are increasingly strong arguments for investors to rebalance allocations from heavily overweight US positions in favour of the attractive valuations and investment opportunities in emerging markets. Ashmore's active investment management processes are delivering as expected for clients and the Group is well-positioned to navigate asset price volatility resulting from the US election, and to capture the longer-term upside from current market levels.

Based on the Group's performance over the six-month period, the Group's strong financial position, cash generation, and the near-term outlook, the Board has maintained the interim dividend at 4.8 pence per share.

Reconciling items:

Market review

While most emerging markets indices delivered positive returns over the six-month period, this masks notable differences in performance between the first and second quarters.

In the three months to 30 September, index returns were strong and ranged from +4.5% (corporate debt) to +9% (local currency bonds), reflecting the first Fed rate cut in this cycle, and government policies to support the Chinese equity market.

In contrast, over the three months to 31 December, index returns were between -1% (corporate debt) and -8% (equities) due to the combination of positioning for the US election, renewed strength in the US dollar and a more hawkish Fed that resulted in a repricing of the US Treasury curve and other bond markets.

Although the detailed implications of the US election result remain to be seen, the prospects for emerging markets are skewed to the upside given the stretched valuation of the US equity market following a period of outperformance including a post-election boost; investor allocations that are overweight US markets and have very limited, cyclically low (or, some cases, nil) exposure to emerging markets, which argues for a significant rebalancing; and attractive valuations of emerging markets in both absolute and relative terms.

The sections below briefly describe the performance in each of the main emerging markets asset classes for the period.

External debt

The EMBI GD increased by +4% over the six months to 31 December 2024 (Q1: +6%; Q2: -2%), outperforming the +1.5% return from the Bloomberg Global Agg bond index. The EMBI GD was flat in the period following the US election.

The principal driver of performance was spread compression, with the index spread over US Treasuries tightening from 390bps in June to 325bps in December. Notably, HY bonds outperformed IG bonds with returns of +7% and +1%, respectively, over the six months, again due to tighter spreads in the HY market, in part reflecting the completion of debt restructurings in countries such as Zambia, together with the higher rates sensitivity evident in the IG market.

The composition of the EMBI GD is roughly split between IG and HY issuance, and the index currently yields 7.6%. It is important to recognise that the simple aggregate index statistics mask the breadth of investment opportunities among the 72 constituent countries and more than 160 issuers. To illustrate the wide range of returns available, while the index returned 4% over the past six months, the range of country returns was between -11% and +91%. Therefore, active management is critical to maximise the investment return opportunities presented by this asset class.

Local currency

The GBI-EM GD delivered a +1% return over the period notwithstanding the headwind of a stronger US dollar following the US election result (Q1: +9%; Q2 -7%). This demonstrates the significant value available in a diverse set of countries with relatively high real yields and effective economic policies. The index yield of 6.4% is attractive both in absolute terms and relative to global bonds, which yield around half that level.

Although the US dollar has some short-term momentum against other currencies, the stretched state of the US economy with its twin deficits suggests that the currency may retreat from its current levels in 2025. This will benefit returns to investors in local currency-denominated assets, both bonds and equities.

Corporate debt

The CEMBI BD's relatively short duration, high yield (6.6%) and improving credit quality provided for a resilient performance. The index returned +4% over the six months (Q1: +5%; Q2: -1%), broadly in line with external sovereign debt and the US HY index (+5%). While there was some spread tightening (219bps to 206bps) the performance was underpinned by the rally in the short end of the US Treasury curve early in the period. The HY component of CEMBI outperformed with a return of +5% while IG bonds returned +3%.

The 12-month default rate reduced over the period from 6.3% to 4.2%, which is a little higher than the rates in the US (3.1%) and Europe (3.5%). By emerging markets region, the default rate remains relatively high in Asia (9.0%) but is lower in Latin America (4.1%) and Europe (0.9%).

The corporate debt asset class has appealing characteristics that support higher allocations: diversification with approximately 750 issuers in 63 countries; lower net leverage and higher spreads than developed world issuers with equivalent credit ratings; and attractive yields in both IG and HY markets (5.7% and 8.2% index yields, respectively).

Equities

The MSCI EM declined -1% over the six-month period (Q1: +8%; Q2: -8%), with some weakness after the US election through a combination of the stronger US currency and softer investor sentiment based on the potential for trade tariffs to be implemented. Frontier markets were more resilient, with the MSCI FM index rising by +2% (Q1: +3%; Q2 -2%).

Absolute valuations are appealing with the MSCI EM trading on 12x estimated 2025 earnings, broadly in line with its average of the past 20 years, and with low-teens earnings growth expected by the market over the next couple of years to give an attractive price/earnings to growth ratio of less than one.

On a relative basis, the valuations are even more striking since the index trades at a substantial discount (34%) to the MSCI ACWI's price/earnings ratio of 18x, which given its US weighting of 66% has been a major beneficiary of pro-cyclical policies by successive US administrations and also reflects the short-term momentum in a small number of technology-related companies.

Although US foreign and trade policies will have consequences for emerging countries, as well as other developed countries, the impact is unlikely to be uniform. Active management is therefore crucial to deliver alpha in a diversified asset class with many attractively valued investment opportunities. As with local bonds, there is the potential for a weaker US dollar to enhance returns for emerging markets equity investors.

Emerging markets outlook

The near-term outlook for emerging markets centres on two themes: the robust fundamental position of many economies, and the potential impact of, and other countries' response to, policy decisions by the new US administration.

Robust fundamentals

In aggregate, emerging markets have demonstrated notable resilience in recent years and they continue to deliver GDP growth of c.4% (or 3.5% excluding China), which is more than double the level of the developed world. As the latter faces structural challenges stemming from unfavourable demographics, high levels of indebtedness and a lack of reforms, the emerging markets growth premium is likely to expand over the medium term.

The major emerging countries have managed inflation effectively over the past few years and they enter 2025 with relatively high real rates and the potential to ease monetary policy further. There has also been strong fiscal discipline, notwithstanding a few notable exceptions such as Brazil, with a period of significant consolidation following COVID-related stimulus. Again, this is in contrast to the developed world.

Finally, a number of emerging countries held elections in 2024 and many governments are pursuing reforms that underpin future economic growth, for example in Colombia, Indonesia and South Africa.

This overall macroeconomic picture is reflected in the recent momentum shown in credit ratings, with net increases for emerging countries and an increase in positive outlooks by each of the three main agencies. For example, in respect of emerging markets, two-thirds of rating changes in 2024 were upgrades, and all three agencies have significantly more positive than negative issuer outlooks.

Implications of US election

The US election result exaggerated the already stretched valuation of the US equity market, contributed to higher volatility in rates markets and kept a focus on various conflicts and geopolitical risks around the world. While markets have moved to reflect much of the Trump campaign rhetoric, for example in terms of trade policy, there is a realistic chance of the eventual policy mix being less severe and more nuanced. This could involve using tariffs as an effective negotiating tool alongside growth-focused deregulation and potentially therefore deliver a less hawkish rates outlook.

Such a scenario would deliver modest growth in the US economy, but more importantly would provide meaningful upside to current valuations in fixed income and equity emerging markets. This would therefore put pressure on the technical position given that investor allocations to these markets are at extremely low levels, and nil in some instances, in contrast to the heavily overweight positioning in the US equity market.

Of course, the impact of US policies will be felt not only by emerging nations, and not uniformly across the world. For example, more aggressive US tariffs could increase trade between emerging countries. Furthermore, the risk of short-term political posturing is high and therefore investor sentiment and asset prices may remain volatile in early 2025.

In this context, the significant diversification available in emerging markets is notable, with more than 70 countries and multiple investment opportunities in sovereign debt, corporate credit, listed equities and private markets. Active management remains critical to navigate the economic and political 'noise' and to optimise the investment opportunities in this broad set of asset classes.

In conclusion, while some volatility in asset prices may persist, the emerging markets offer resilience and diversification, and therefore can serve as a refuge from many of the current tail risks faced by global capital markets. This should be reflected in rising investor interest in the emerging markets and a consequent rebalancing of allocations in favour of the highly attractive market opportunities available.

Assets under management

AuM were broadly unchanged at the end of the six-month period at US$48.8 billion.

Investment performance added US$0.6 billion and net outflows of US$1.1 billion were significantly lower than in the prior year period (H1 2024: US$4.5 billion net outflow) and the preceding six months (H2 2024: US$4.0 billion). As described below, this was the result of higher subscriptions across a range of investment themes and a reduced level of gross redemptions as investors' risk appetite improves.

Subscriptions of US$4.1 billion represent 8% of opening AuM, higher than in the prior year period (H1 2024: US$3.0 billion, 5% of opening AuM) as investor sentiment increasingly recognises the robust fundamentals across a broad range of emerging economies and consequently the attractive market returns delivered over the past two years.

The flows reflect new institutional local currency bond mandates as well as top ups to existing funds in this theme, and also in external debt and equities. There was a notable US$0.3 billion first close for Ashmore Colombia's second infrastructure debt fund in the alternatives theme. Gross subscriptions were at a consistent level through the six-month period.

Redemptions of US$5.2 billion, or 11% of opening AuM, were lower than in the prior year period (H1 2024: US$7.5 billion, 13% of opening AuM), again consistent with the steadily improving environment and higher levels of investor risk appetite. There was no discernible impact on redemptions from the US election result.

That said, some investors reduced risk in the period, driving redemptions in the local currency, blended debt and external debt themes. Within the external debt theme, Ashmore closed a liquidity fund, which included US$0.2 billion of the Group's cash deposits, and therefore excluding this flow, net client redemptions in the period were US$5.0 billion or 10% of opening AuM.

Redemptions in the alternatives theme relate to the profitable realisation of private equity investments in the Middle East and Latin America, and the subsequent return of capital to investors.

On a net basis, the total outflow of US$1.1 billion in the period, or US$0.9 billion excluding the liquidity fund impact, reduced significantly compared with both the prior year period (US$4.5 billion) and the preceding six months (US$4.0 billion). Given the net inflows in the equities and alternatives themes, the overall improvement in client sentiment and activity, and adjusting for the liquidity fund flow, the Group delivered a significantly lower client net outflow of US$0.2 billion in Q2 compared with US$0.7 billion in Q1.

Average AuM of US$50.1 billion over the six-month period was 6% lower than in the same period in the prior year (H1 2024: US$53.3 billion).

The Group's AuM remains geographically diverse and the mix is broadly consistent with recent periods, with 39% of AuM invested in Latin America, 25% in Asia Pacific, 15% in Eastern Europe and 21% in the Middle East and Africa.

Local platforms

Total AuM in the Group's local offices increased by 2% over the six months to US$7.6 billion. There was notable growth in Ashmore India (+16% to US$2.1 billion) as a consequence of net client flows, and Ashmore Colombia AuM increased by 21% to US$1.8 billion, reflecting net inflows to its listed equity strategy and the first close of its second senior debt infrastructure fund, partially offset by the return of capital to investors following private equity realisations. Similarly, Ashmore Saudi Arabia successfully realised the remaining assets in a private equity fund focused on the education sector.

The private equity realisations contributed to the performance fees delivered by the Group in this period.

Clients

The Group's clients are predominantly a diversified set of institutions, representing 96% of AuM, with the remainder sourced through intermediary retail channels. Segregated accounts represent 83% of AuM (30 June 2024: 82%) and, in line with the third phase of the Group's strategy, an increasing proportion (38%) of the Group's AuM has been sourced from clients domiciled in emerging markets (30 June 2024: 37%).

Overall, the Group's AuM has been sourced from clients across a diversified mix of geographies with 31% from Asia Pacific, 31% from Europe, 23% from the Middle East and Africa, 11% from the Americas and 4% from the UK.

Ashmore's principal mutual fund platforms represent AuM of US$3.5 billion in 44 funds. The European SICAV range comprises 32 funds with AuM of US$3.0 billion (30 June 2024: US$3.5 billion in 33 funds) and the US 40-Act range has 12 funds with AuM of US$0.5 billion (30 June 2024: US$0.5 billion in 12 funds).

Investment performance

Ashmore continues to deliver medium- and longer-term outperformance across a broad range of strategies, and as is typically the case, its active investment processes have used recent periods of market weakness (as described in the Market review) to identify opportunities to add risk and to embed in portfolios the potential for further outperformance. Overall, as of 31 December 2024, 43% of AuM is outperforming over one year, 58% over three years and 57% over five years (30 June 2024: 40%, 59% and 62%, respectively).

AuM movements by investment theme as classified by mandate

The table below shows the development during the period of AuM by investment theme. The local currency investment theme includes US$7.8 billion of overlay/liquidity AuM (30 June 2024: US$7.6 billion).

Financial review

Revenues

Net management fees were £14.3 million lower than in the prior year period and the Group delivered a comparable level of performance fees. Consequently, net revenue declined by 14% compared with the prior year period to £81.0 million. On an adjusted basis, excluding FX translation effects, net revenue also fell by 14% to £79.9 million.

Net revenue

Net management fee income declined by 17% to £68.3 million, reflecting lower average AuM together with an average net management fee margin of 36 basis points (H1 2024: 39 basis points) and a less favourable average GBP:US$ rate of 1.2876 over the period (H1 2024: 1.2572). At constant H1 2024 exchange rates, net management fee income fell by 15%.

The reduction in the average net management fee margin is due to a number of factors. For example, while there was a positive impact from investment theme mix, for example higher average AuM in equities, this was more than offset by the impact of growth in lower margin overlay mandates, successful private equity realisations and subsequent return of capital by alternatives funds, the effect of higher margin redemptions and lower margin subscriptions, together with the ongoing impact of competition by other active investment managers.

Performance fees of £7.9 million were realised in the period by funds in the alternatives, external debt and blended debt themes. The proportion of AuM eligible to earn performance fees is 22% as of 31 December 2024 (30 June 2024: 23%).

Translation of the Group's non-Sterling assets and liabilities, excluding seed capital investments, resulted in an unrealised FX gain of £1.1 million. The combination of hedging and active selling of US dollars for Sterling delivered an FX gain of £2.4 million over the period. Therefore, the total FX gain for the period recognised in revenues was £3.5 million.

Fee income and net management fee margin by investment theme

Operating costs

Total operating costs of £49.2 million include £1.1 million of expenses incurred by seeded funds that are required to be consolidated under IFRS 10. On an adjusted basis, taking into account the impact of seed capital and the proportion of the variable remuneration accrual that relates to FX translation gains, operating costs were reduced by 9% compared with the prior year period. Adjusted operating costs 8% lower at constant H1 2024 exchange rates.

Operating costs

Staff costs of £15.8 million were slightly lower than in the prior year period, due to lower average headcount of 283 compared with 290 in the prior year period, adjusted for the impact of business disposals in FY2024. The Group's headcount was stable in the period at 284 (30 June 2024: 283).

Other operating costs, excluding consolidated fund expenses and depreciation and amortisation, were reduced by £1.3 million year-on-year to £11.1 million, primarily because of lower legal and professional fees.

Variable remuneration has been accrued at 30.0% of EBVCT, resulting in a charge of £19.6 million for the six-month period (H1 2024: 27.5%; FY2024: 31.0%).

Adjusted EBITDA

Consistent with the decline in net revenue and notwithstanding the reduction in operating costs, adjusted EBITDA reduced by 21% to £33.7 million (H1 2024: £42.6 million).

Ashmore's efficient operating model continues to deliver a relatively high operating margin across market cycles, and in this period delivered an adjusted EBITDA margin of 42% (H1 2024: 46%; FY2024: 41%).

Finance income

Net finance income of £19.4 million (H1 2024: £40.1 million) includes profits relating to seed capital investments, which are described in more detail below. Excluding these profits, net interest income for the period of £11.8 million (H1 2024: £12.8 million) reflects lower average cash balances.

Seed capital

The table below summarises the principal IFRS items relating to the Group's seed capital programme and its impact on profit before tax. The Group's seed capital investments generated realised gains of £0.2 million (£0.6 million on a life-to-date basis) and an unrealised mark-to-market gain of £4.8 million to give a total gain of £5.0 million for the six months.

The overall gain is lower than in the prior year period as a result of higher market returns experienced in the six months to 31 December 2023.

Impact of seed capital investments on profits

Profit before tax

Taking into account the level of adjusted EBITDA and the lower mark-to-market gains on the Group's seed capital investments, PBT declined by 33% to £49.9 million (H1 2024: £74.5 million).

Taxation

The effective tax rate of 21.6% (H1 2024: 19.2%) is lower than the prevailing UK corporation tax rate of 25.0% primarily because of the geographic mix of the Group's profits for the period.

Note 9 to the interim condensed financial statements provides a reconciliation of the tax charge to the UK corporation tax rate.

The Group's current effective tax rate, based on its geographic mix of profits and prevailing tax rates, is approximately 21% to 22%.

Diluted earnings per share

Consistent with the PBT development, diluted earnings per share fell by 37% from 8.5 pence to 5.4 pence. On an adjusted basis, excluding the effects of FX translation, seed capital-related items and relevant tax, diluted earnings per share were 17% lower at 4.8 pence (H1 2024: 5.7 pence).

Balance sheet

As of 31 December 2024, following the payment of the final ordinary dividend in respect of FY2024, total equity attributable to shareholders of the parent was £818.1 million (31 December 2023: £867.1 million; 30 June 2024: £882.6 million).

The Board has determined that the level of capital required to support the Group's activities, including its regulatory requirements, is £96.8 million. As of 31 December 2024, the Group had total capital resources of £646.1 million, equivalent to 91 pence per share, and representing an excess of £549.3 million over the level of required capital.

Cash

Ashmore maintains a strong, liquid cash position and has £347.5 million of cash and deposits as of 31 December 2024.

Excluding cash held in consolidated funds, the Group's cash and deposits declined by £163.4 million over the six-month period to £342.3 million (30 June 2024: £505.7 million). This movement primarily reflects three factors: the payment of the final ordinary dividend and variable remuneration in respect of the prior financial year, both of which impact cash flows only in the first half of the financial year; seed capital investments to underpin future AuM growth; and the purchase of ordinary shares to satisfy employee equity awards.

Cash and deposits by currency

Ashmore's business model delivers a high conversion rate of operating profits to cash. Based on operating profit of £30.3 million for the period (H1 2024: £34.2 million), the Group generated £26.9 million of cash from operations (H1 2024: £39.0 million). The operating cash flows after excluding consolidated funds represent 84% of adjusted EBITDA (H1 2024: 94%).

Seed capital investments

Ashmore invests seed capital in its funds to achieve a number of commercial objectives, including to provide initial scale, to support the development of an investment track record, and to enhance existing funds' scale for intermediary distributors.

The Group's seed capital programme has delivered growth in third-party AuM, with nearly US$5 billion of AuM in funds that have been seeded, representing 10% of current Group AuM.

The diversified mix of seed capital investments means that the underlying fund portfolios, some of which are consolidated in accordance with IFRS 10, have exposure to a range of emerging markets asset classes, including sovereign and corporate fixed income, listed equities and alternatives.

Movements in seed capital

Market value £m

The additions in the period were i) to establish new funds in the alternatives, equities and blended debt themes, including a frontier debt product and a senior debt infrastructure fund; and ii) to provide additional scale to existing funds in anticipation of client demand as investor interest in the emerging markets asset classes continues to gain momentum.

Realisations were mainly from funds in the fixed income themes, as client flows facilitated the profitable recycling of the Group's investments.

The positive index performance over the period, as described in the Market review, combined with the alpha delivered by Ashmore's active investment processes, resulted in a 4% uplift in the market value of the seed capital investments.

Overall, the market value of the Group's seed capital investments increased to £347.9 million as of 31 December 2024 (30 June 2024: £257.6 million). The unrealised life-to-date gains on seed capital investments increased over the six months from £32.3 million to £40.7 million.

Ashmore has seed capital commitments to funds of £19.3 million that were undrawn at the period end, giving a total value for the Group's seed capital programme of approximately £367 million.

Shares held by the EBT

The Group's EBT continues to purchase and hold shares in anticipation of the vesting of employee share awards. As of 31 December 2024, the EBT owned 56,975,506 ordinary shares (30 June 2024: 49,481,410 ordinary shares), representing 8.0% of the Group's issued share capital (30 June 2024: 6.9%).

Foreign exchange

The GBP:US$ rate moved from 1.2641 to 1.2524 over the period but traded within a relatively wide range and therefore the average rate for the six months was 1.2876 (H1 2024: 1.2572).

Dividend

Accordingly, the Board has declared an interim dividend of 4.8 pence per share (H1 2024: 4.8 pence per share), which will be paid on 31 March 2025 to all shareholders on the register on 28 February 2025.

Mark Coombs

Chief Executive Officer

Risk management

A detailed description of Ashmore's risk management function and internal control framework, which provides a process for identifying, evaluating, and managing the Group's emerging and principal risks, was included in the Risk management section of the 2024 Annual Report and Accounts, together with a list of principal risks and examples of associated controls and mitigants. There have been no material changes to the principal risks and associated controls and mitigants during the six-month period.

Interim Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 December 2024

Other comprehensive income/(loss), net of related tax effect

Items that may be reclassified subsequently to profit or loss:

Earnings per share attributable to equity holders of the parent

Equity and liabilities

Capital and reserves - attributable to equity holders of the parent

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

General information

These interim condensed consolidated financial statements of Ashmore Group plc (the Company or Ashmore) and its subsidiaries (together the Group) for the six months ended 31 December 2024 were authorised for issue by the Directors on 6 February 2025. Ashmore is listed on the London Stock Exchange and incorporated and domiciled in the United Kingdom.

Basis of preparation

The interim condensed consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34 (IAS 34) Interim Financial Reporting and the DTR of the FCA.

The interim condensed consolidated set of financial statements has been prepared by applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 30 June 2024, which were prepared in accordance with UK-adopted international accounting standards and in conformity with the requirements of the Companies Act.

These interim condensed consolidated financial statements and accompanying notes are unaudited, do not constitute statutory accounts within the meaning of Section 434 of the Companies Act and do not include all the information and disclosures required in annual statutory financial statements. They should be read in conjunction with the Group's Annual Report and Accounts for the year ended 30 June 2024 which are available on the Group's website. Those statutory accounts were approved by the Board of Directors on 4 September 2024 and have been filed with Companies House. The auditors' opinion on those accounts was unmodified, did not contain an Emphasis of Matter paragraph and did not contain a statement made under Section 498 of the Companies Act.

Going concern

The Board of Directors has considered the resilience of the Group, taking into account its current financial position, and the principal and emerging risks facing the business in the context of the current economic outlook. The Board reviewed cash flow forecasts for a period of 12 months from the date of approval of these interim financial statements, which indicate that the Group will have sufficient funds to meet its liabilities as they fall due for that period. The Board applied stressed scenarios, including severe but plausible downside assumptions on assets under management, profitability of the Group and known commitments. While there are wider market uncertainties that may impact the Group, the stressed scenarios, which assumed a significant reduction in revenue for the entire forecast period, show that the Group and Company would continue to meet their liabilities as they fall due for a period of 12 months from the date of the release of these results. The interim financial statements have therefore been prepared on a going concern basis.

Principal estimates and judgements

In preparing these interim condensed consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty, were the same as those that applied to the Annual Report and Accounts for the year ended 30 June 2024.

New accounting standards and interpretations

The Group did not implement the requirements of any standards or interpretations that were in issue but were not required to be adopted by the Group at the half year. No other standards or interpretations have been issued that are expected to have a material impact on the Group's interim consolidated financial statements.

Segmental information

The Group's operations are reported to and reviewed by the Board on the basis of the investment management business as a whole, hence the Group is treated as a single segment. The key management information considered is adjusted EBITDA which is £33.7 million for the period as reconciled in the Financial review (H1 2024: adjusted EBITDA of £42.6 million).

The disclosures below are supplementary, and provide the location of the Group's non-current assets at period end, which comprise intangible assets, property, plant and equipment and investment in associates, excluding financial assets and deferred tax assets.

Analysis of non-current assets by geography

Revenue

Management fees are accrued throughout the period in line with prevailing levels of assets under management and performance fees are recognised when they are crystallised, and there is deemed to be a low probability of a significant reversal in future periods.

The Group is not considered to be reliant on any single source of revenue. During the period, none of the Group's funds (H1 2024: none; FY2024: none) provided more than 10% of total revenue in the period respectively when considering management fees and performance fees on a combined basis.

Disclosures relating to revenue by location are provided below.

Analysis of revenue by geography

Foreign exchange

The foreign exchange rates which had a material impact on the Group's results are the US dollar, the Euro, the Indonesian rupiah, Saudi riyal and the Colombian peso.

Foreign exchange gains are shown below.

Included within interest and investment income is interest earned on cash deposits of £12.0 million (H1 2024: £12.9 million; FY2024: £25.2 million) and investment income of £7.4 million (H1 2024: £7.7 million; FY2024: £13.9 million) on consolidated funds (note 15c).

Included within net realised and unrealised gains on seed capital investments totalling £0.2 million are £0.5 million losses on financial assets measured at FVTPL (note 15a), £0.5 million gains on non-current financial assets measured at fair value (note 15b) and £0.2 million realised gains on consolidated funds.

Share-based payments

The cost related to share-based payments recognised by the Group in the interim condensed consolidated statement of comprehensive income is shown below:

The total expense recognised for the period in respect of equity-settled share-based payment awards was £9.8 million (H1 2024: £12.5 million; FY2024: £27.9 million), of which £0.9 million relates to share awards granted to key management personnel (H1 2024: £0.7 million; FY2024: £2.0 million).

The Executive Omnibus Incentive Plan (Omnibus Plan)

Share awards outstanding under the Omnibus Plan were as follows:

The weighted average share price of awards granted to employees under the Omnibus Plan during the period was £1.75 (H1 2024: £1.91; FY2024: £1.91), as determined by reference to the average Ashmore closing share price for the five business days prior to grant.

The liability arising from cash-settled awards under the Omnibus Plan at the end of the period and reported within trade and other payables on the Group consolidated balance sheet is £0.3 million (H1 2024: £0.3 million; FY2024: £0.3 million) of which £nil relates to vested awards.

Taxation

Analysis of tax charge for the period

Earnings per share

Basic earnings per share for the six months to 31 December 2024 of 5.52 pence (H1 2024: 8.65 pence; FY2024: 13.94 pence) is calculated by dividing the profit after tax for the financial period attributable to equity holders of the parent of £37.1 million (H1 2024: £58.2 million; FY2024: £93.7 million) by the weighted average number of ordinary shares in issue during the period, excluding own shares.

Diluted earnings per share is calculated based on basic earnings per share adjusted for dilutive potential ordinary shares. There is no difference between the profit for the year attributable to equity holders of the parent used in the basic and diluted earnings per share calculations.

In addition, the Group paid £1.5 million (H1 2024: £2.1 million; FY2024: £4.5 million) in dividends to non-controlling interests.

Dividends declared/proposed

The Board has approved an interim dividend for the six months to 31 December 2024 of 4.80 pence per share payable on 31 March 2025 to shareholders on the register on 28 February 2025.

Goodwill and intangible assets

Goodwill

The Group's goodwill balance relates to the acquisition of the business from ANZ in 1999 and subsidiaries in subsequent periods.

The Group's goodwill is allocated to a single cash-generating unit, and it is the Group's judgement that the lowest level of cash-generating unit used to determine impairment is the investment management segment level.

Goodwill is tested for impairment at least annually or whenever there is an indication that the carrying amount may not be recoverable. The key assumption used to determine the recoverable amount is based on fair value less costs of disposal calculation using the Company's market share price.

Based on the calculation as at 31 December 2024 using a market share price of £1.60, the recoverable amount was substantially in excess of the carrying value of goodwill. In terms of the sensitivity of the recoverable amount to impairment, the Company's share price could decline by at least 15% and there would not be an impairment. Therefore, no impairment loss has been recognised in the current or preceding periods.

Property, plant and equipment

The Group's property, plant and equipment include right-of-use assets recognised on office leases for which the Group is a lessee under operating lease arrangements. Information about leases is provided below.

Lease liabilities are presented in the interim condensed consolidated statement of financial position as follows:

The carrying value of the Group's right-of-use assets, lease liabilities and the movement during the period are set out below.

Total cash outflow included within financing activities in the interim condensed consolidated cash flow statement in respect of principal and interest paid on lease liabilities during the period amounted to £1.3 million.

Fair value of financial instruments

The accounting policies relating to the estimation of fair values are consistent with those applied in the preparation of the Group's Annual Report and Accounts for the year ended 30 June 2024.

The Group has an established control framework with respect to the measurement of fair values. This framework includes committees that have overall responsibility for all significant fair value measurements. Each committee regularly reviews significant inputs and valuation adjustments. If third-party information is used to measure fair value, the valuation committee assesses and documents the evidence obtained from the third parties to support such valuations.

Fair value hierarchy

• Level 2: Valuation techniques are based upon observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This fair value measure relates to the valuation of quoted equity securities in inactive markets or in interests in unlisted funds whose net asset values are referenced to the fair values of the listed or exchange traded securities held by those funds. Valuation techniques may include using a broker quote in an inactive market or an evaluated price based on a compilation of primarily observable market information utilising information readily available via external sources.

For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The fair value hierarchy of financial instruments which are carried at fair value is summarised below:

Transfer between levels

Investments with a carrying value of £2.8 million were transferred out of level 2 into level 3 as their value was determined based on valuation techniques that include unobservable inputs as at 31 December 2024. There were no transfers between level 1 and level 2 of the fair value hierarchy during the period.

Financial instruments not measured at fair value

Financial assets and liabilities that are not measured at fair value include cash and cash equivalents, trade and other receivables, and trade and other payables. The carrying value of financial assets and financial liabilities not measured at fair value is considered a reasonable approximation of fair value as at 31 December 2024, 31 December 2023 and 30 June 2024.

Fair value measurements using significant unobservable inputs (level 3)

The following table presents the changes in level 3 financial assets and liabilities for the period.

Valuation of level 3 financial assets recognised at fair value on a recurring basis using valuation techniques

Investments valued using valuation techniques include financial investments which, by their nature, do not have an externally quoted price based on regular trades, and financial investments for which markets are no longer active as a result of market conditions, e.g. market illiquidity. The valuation techniques used in the estimation of fair values are consistent with those applied in the preparation of the Group's Annual Report and Accounts for the year ended 30 June 2024. The following tables show the valuation techniques and the significant unobservable inputs used to estimate the fair value of level 3 investments as at 31 December 2024 and 30 June 2024, and the associated sensitivity to changes in unobservable inputs to a reasonable alternative:

• Seed capital investments
• Financial assets measured at fair value through profit or loss

Financial assets measured at FVTPL comprise shares held in debt and equity funds as follows:

Included within finance income are net losses of £0.5 million (H1 2024: net gains of £2.0 million; FY2024: net gains of £4.7 million) on the Group's financial assets measured at FVTPL.

Non-current financial assets measured at fair value

Non-current financial assets include the Group's interests in funds that are expected to be realised within a period longer than 12 months from the balance sheet date.

Included within finance income are net gains of £0.5 million (H1 2024: net gains of £15.9 million; FY2024: net gains of £19.1 million) on the Group's non-current financial assets measured at fair value.

Consolidated funds

The Group has consolidated 24 investment funds as at 31 December 2024 (31 December 2023: 18 investment funds; 30 June 2024: 18 investment funds), over which the Group is deemed to have control. Consolidated funds are seed capital investments where the Group interest represents a controlling stake in the fund in accordance with IFRS 10. Consolidated fund assets and liabilities are presented line by line after intercompany eliminations.

The table below sets out an analysis of the carrying amounts of fund assets and liabilities consolidated by the Group.

Included within the interim condensed consolidated statement of comprehensive income are £4.8 million gains (H1 2024: £nil; FY2024: net losses of £4.7 million) relating to the results of the consolidated funds, as follows:

Included in the Group's cash generated from operations is £1.5 million cash utilised in operations (H1 2024: £1.2 million cash utilised in operations; FY2024: £1.0 million cash utilised in operations) relating to consolidated funds.

As at 31 December 2024, the Group's consolidated funds were domiciled in Guernsey, Cayman Islands, Luxembourg, Indonesia, India and the United States.

Cash and deposits

Term deposits are fixed term interest-yielding cash investments with an original maturity of greater than three months. Term deposits have an average annual interest rate of 4.9% and average remaining maturity term of six months as at 31 December 2024.

Financial risk management

The Group is subject to strategic, business, client, investment, operational and treasury risks throughout its business as discussed in the Risk management section of the Group's Annual Report and Accounts for the year ended 30 June 2024, which provides further detail on the Group's exposure to and the management of risks derived from the financial instruments it uses.

Those risks and the risk management policies have not changed significantly during the six months to 31 December 2024.

Share capital

Authorised share capital

As at 31 December 2024, there were equity-settled share awards issued under the Omnibus Plan totalling 55,697,870 shares (31 December 2023: 47,637,675 shares; 30 June 2024: 47,014,898 shares) that have release dates ranging from September 2025 to October 2029.

Own shares

The Trustees of The Ashmore 2004 Employee Benefit Trust (EBT) acquire and hold shares in Ashmore with a view to facilitating the vesting of share awards. The EBT is periodically funded by the Company for these purposes.

The total number of shares in the Company held within the EBT comprise:

Related party transactions

Key management personnel

The compensation paid to or payable to key management personnel is shown below:

Short-term benefits include salary and fees, benefits and cash bonus. Share-based payment benefits represent the cost of equity-settled awards charged to the interim condensed consolidated statement of comprehensive income.

Aggregate key management personnel interests in consolidated funds at 31 December 2024 were £37.5 million (31 December 2023: £39.2 million; 30 June 2024: £32.2 million). During the period, there were no other transactions entered into with key management personnel (H1 2024 and FY2024: none).

Transactions with Ashmore funds

During the period, the Group received £24.7 million of gross management fees and performance fees (H1 2024: £27.1 million; FY2024: £61.7 million) from the 98 funds (H1 2024: 96 funds; FY2024: 96 funds) it manages and which are classified as related parties. As at 31 December 2024, the Group had receivables due from funds of £4.8 million (31 December 2023: £5.4 million; 30 June 2024: £4.9 million) that are classified as related parties.

Transactions with the EBT

The EBT has been provided with a loan facility to allow it to acquire Ashmore shares in order to satisfy outstanding unvested share awards. The EBT is consolidated within the results of the Group. As at 31 December 2024, the loan outstanding was £151.7 million (31 December 2023: £149.2 million; 30 June 2024: £138.4 million).

Transactions with the Ashmore Foundation

The Ashmore Foundation is a related party to the Group. The Foundation was set up to provide financial grants to worthwhile causes within the Emerging Markets countries in which Ashmore invests and/or operates with a view to giving back into the countries and communities. The Group made donations of £0.2 million to the Foundation during the period to 31 December 2024 (H1 2024: £0.3 million; FY2024: £0.6 million).

Commitments

The Group has undrawn investment commitments relating to seed capital investments as follows:

Contingent assets and liabilities

The Company and its subsidiaries can be party to legal claims arising in the normal course of business. The Directors do not anticipate that the outcome of any such proceedings and claims will have a material adverse effect on the Group's financial position and at present there are no such claims where their financial impact can be reasonably estimated. There are no other material contingent assets or liabilities.

Post-balance sheet events

There are no post-balance sheet events that require adjustment or disclosure in these interim condensed consolidated financial statements.

By order of the Board

Mark Coombs

Chief Executive Officer

independent REVIEW REPORT TO ASHMORE GROUP PLC

Conclusion

We have been engaged by the Ashmore Group Plc and its subsidiaries (together 'the Group') to review the interim condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 31 December 2024, which comprises the interim condensed consolidated statement of comprehensive income, interim condensed consolidated statement of financial position, interim condensed consolidated statement of changes in equity, interim condensed consolidated cash flow statement and the related explanatory notes (1 to 23). We have read the other information contained in the half-yearly financial 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 consolidated 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 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' (ISRE) issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of consolidated 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

Responsibilities of the directors

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Group a conclusion on the condensed set of consolidated 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.

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the Group in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

Alternative performance measures

Ashmore discloses alternative performance measures (APMs) to assist shareholders' understanding of the Group's operational performance during the accounting period and to allow consistent comparisons with prior periods.

Net revenue

As shown in the interim CSCI, net revenue is total revenue less distribution costs and including FX. This provides a comprehensive view of the revenues recognised by the Group in the period.

Net management fee margin

The net management fee margin is defined as the ratio of annualised net management fees to average AuM for the period, in US dollars since it is the primary currency in which fees are received and it matches the Group's AuM disclosures. The average AuM excludes assets where fees are not recognised in revenues, for example AuM related to associates. The margin is a principal measure of the firm's revenue generating capability and is a commonly used industry performance measure.

Variable compensation ratio

The linking of variable annual pay awards to the Group's profitability is one of the principal methods by which the Group controls its operating costs. The variable compensation ratio is defined as the charge for VC divided by EBVCT.

The charge for VC is a component of personnel expenses and comprises share-based payments and performance-related cash bonuses. It has been accrued in the interim accounts at 30.0% of EBVCT (H1 2024: 27.5%).

EBVCT is defined as profit before tax excluding the charge for VC, charitable donations, share of profit from associate and unrealised seed capital-related items; and including net seed capital gains realised in the period on a life-to-date basis. The unrealised seed capital items are net gains or losses on investment securities, expenses in respect of consolidated funds and net unrealised gains or losses in finance income.

Adjusted net revenue, adjusted operating costs and adjusted EBITDA

Earnings before interest, tax, depreciation and amortisation (EBITDA) provides a view of the operating performance of the business before certain non-cash items, financing income and charges, and taxation.

Adjusted EBITDA margin

The ratio of adjusted EBITDA to adjusted net revenue. This is an appropriate measure of the Group's operational efficiency and its ability to generate returns for shareholders.

Adjusted diluted EPS

Diluted earnings per share excluding items relating to FX translation and seed capital, as described above, and the related tax impact.

Capital resources

Ashmore has calculated its capital resources in a manner consistent with the Investment Firms Prudential Regime (IFPR). Note that goodwill and intangible assets include associated deferred tax liabilities and deferred acquisition costs, and foreseeable dividends relate to the declared interim dividend of 4.8 pence per share.