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Liontrust bounces from 7yr low on news of redundancies and share buyback

Liontrust Asset Management (LSE:LIO) roared 8% higher to 450p after a cost-cutting plan and share buyback were announced to try and counter a poor run that has seen the shares fall over 60% since the start of last year to a seven-year low earlier in the week.

The fund manager plans to cut around 12% of its workforce, making roughly 25 staff redundant, as it moves towards a "new target operating model", supplemented by investment in technology and other efficiency measures.

A £5 million share buyback programme was also announced to boost the share price.

With redundancies made "across the business and across levels of seniority" £4.5 million of annualised cost savings are expected, though implementing the programme is expected to cost about £4 million.

Results for the six months to end-September showed a 28% fall in adjusted pre-tax profit to £25.8 million.

Liontrust had previously reported a 6.7% decline in assets under management during the period to £26.0bn due to continuing high levels of outflows, and this has reduced further to £25.2 billion as of last week.

The interim dividend was maintained at 22p and management intends to target a maintained full year payout of 72p.