Rathbone Brothers Plc - 3rd Quarter Results and Strategic Update

 

 

Rathbone Brothers Plc

Third quarter interim management statement and strategic update           

 

Rathbone Brothers Plc ("Rathbones") announces a trading update for the three months ended 30 September 2019.

 

Paul Stockton, Chief Executive of Rathbone Brothers Plc, said:

"Our funds under management and administration increased marginally in the quarter to £49.4 billion. In difficult markets we continue to focus on providing a quality service to our clients, navigating through ongoing market uncertainty but also selectively investing to pursue organic growth opportunities and develop our business."

 

Financial highlights:

  • Total funds under management and administration increased 4.4% to £49.4 billion at 30 September 2019 (30 September 2018: £47.3 billion). The FTSE 100 Index on the third quarter charging date decreased 1.4% from the equivalent date last year, whilst the MSCI WMA Private Investor Balanced Index increased by 2.0%.
  • £42.4 billion in the Investment Management business (30 September 2018: £41.3 billion)
  • £7.0 billion in the Unit Trusts business (30 September 2018: £6.0 billion)
  • Total net inflows were £0.1 billion in the third quarter (2018: £7.0 billion, largely reflecting the acquisition of Speirs & Jeffrey).  
  • Gross organic inflows in Investment Management in the quarter remained resilient at £0.8 billion (2018: £0.8 billion) in a difficult market for savings. Total net outflows in Investment Management during the quarter were £0.2 billion (2018: net inflows of £6.9 billion largely reflecting the acquisition of Speirs & Jeffrey). This reflected ongoing weak investor sentiment and investment manager departures. Both factors, together with anticipated outflows from short term discretionary mandates, are expected to continue to weigh on net growth in FUMA into 2020.
  • Net inflows in Unit Trusts for the quarter remained strong at £0.3 billion against a difficult environment for asset managers (2018: £0.1 billion).
  • Underlying operating income totalled £86.3 million for the three months ended 30 September 2019, an increase of 7.5% from the £80.3 million recorded in the third quarter of 2018.
  • Income in Investment Management totalled £76.7 million in the quarter, up 8.3% on the £70.8 million reported for the comparable period in 2018. The average FTSE 100 Index was 7427 on quarterly billing dates in 2019, broadly flat against the 7449 recorded in 2018.
  • Income in Unit Trusts totalled £9.6 million for the three months ended 30 September 2019, broadly flat on the £9.5 million reported for the third quarter in 2018 and an increase of 8.9% excluding managers' box dealing profits.

 

Strategic update

The executive management team will outline their vision for the business at the strategic update this morning; a copy of the presentation is available online at https://www.rathbones.com/investor-relations and a recording of the event will be uploaded to the website after the event.

Rathbones has built a leading market position based on a powerful brand, high quality people, a strong operating platform and a stable client base who value our relationship led services. We intend to leverage the core strengths of our business by investing over the next 2-3 years to enhance organic growth.  During this time, we believe it is appropriate to operate the business closer to a mid-twenties underlying operating margin to enable us to create long term growth opportunities, improve client services and deliver productivity gains.