REG-Rathbone Brothers Plc : 1st Quarter Results <Origin Href="QuoteRef">RAT.L</Origin>

RathbonesAnnouncement

18/05/2016 07:05

Rathbone Brothers Plc 
 Funds under management reach £29.3 billion                      
                                                   
                                                 
 Rathbone Brothers Plc ("Rathbones") announces a trading update for the period
from 1 January 2016 to 31 March 2016. 
 
 At the Annual General Meeting later today, Mark Nicholls, Chairman of
Rathbones, will say: 
 
 "Volatile investment markets have presented challenges that are reflected
both in commission income and new business inflows for the period to 31 March.
The FTSE 100 index was 6091 on our 5 April 2016 billing date, down 2.4% from
31 December 2015, and 10.9% from a year ago. 
 
 
 "Our growth initiatives remain important for us to maintain our position as a
leading discretionary wealth manager. Accordingly, the Board has decided to
pursue these longer term initiatives in spite of our expectation that markets
will continue to lack direction in the short term. Rathbones remains alert to
acquisition opportunities that may arise as a consequence of these market
conditions." 

 Highlights:      
 
 * Total funds under management were £29.3 billion at the end of the first
quarter*, up 0.3% from £29.2 billion at 31 December 2015 and 1.4% from £28.9
billion a year ago. In the first quarter, the FTSE 100 Index decreased 2.4%
and the FTSE WMA Balanced Index increased 0.2%. 
 * Total net growth of funds under management in Investment Management was
£234 million, representing a total net annualised growth rate of 3.6% (2015:
6.5%). This comprises acquired inflows of £134 million and net organic growth
of £100 million for the quarter. Net organic growth in the first quarter
represents an annualised growth rate of 1.5% compared to 3.6% in the first
three months of 2015. 
 * Underlying net operating income in Investment Management of £53.5 million
(2015: £54.7 million) was down 2.2% year on year in the first three months of
2016. The FTSE 100 Index was 6091 on our 5 April billing date, down 10.9%
compared to 6834 on the same date in 2015. The FTSE WMA Balanced Index,
measured over the same period, decreased by 4.5%. 
 * Fee income of £37.7 million (2015: £34.8 million) rose 8.3% year on year
in spite of lower markets, which reflects growth over the period and tariff
changes made in 2015. 
 * Commission income of £9.8 million (2015: £14.4 million) was down 31.9%
year on year, largely reflecting lower trading volumes and settlement values,
and a continuing trend towards higher quality fee based income.     
 * Net interest income of £2.8 million in the first three months of 2016 was
up 7.7% on £2.6 million earned in the corresponding period in 2015. Cash in
client portfolios averaged £1.6 billion in the first quarter of 2016 (2015
average: £1.5 billion). Loans and advances to customers were £121.3 million
at 31 March 2016, up 3.4% on the £117.3 million at 31 December 2015. 
 * Fees from advisory services and other income grew 10.3% from £2.9 million
to £3.2 million, largely reflecting additional income from the Vision group
following its acquisition in 2015. 
 * Funds under management in Unit Trusts increased 3.2% to £3.2 billion at 31
March 2016 from £3.1 billion at 31 December 2015, with net inflows of £130
million during the quarter. Underlying net operating income of £5.4 million
(2015: £4.6 million) was up 17.4% year on year in the first three months of
2016. 
 * Development of the Rathbone Private Office ("RPO") advanced with the
agreement of an External Asset Manager relationship with Credit Suisse. This
arrangement will enable the RPO to offer a wealth advisory service that has
access to a full range of specialist private banking products, services and
lending solutions to complement Rathbones' own discretionary fund management,
tax, trust, financial planning and banking services.    
 
 
 * Funds under management at the end of the first quarter are measured at 5
April for Investment Management (to coincide with the first key charging date
for Investment Management private clients) and at 31 March for Unit Trusts. 
 
 
 Net operating income 
 
                                                      3 months ended 31 March      
                                                       2016       2015     Change  
  Investment Management                                  £m        £m          %  
  - Fees                                                37.7       34.8       8.3%  
  - Commissions                                          9.8       14.4     -31.9%  
  - Net interest income                                  2.8        2.6       7.7%  
  - Fees from advisory services 1 & other income         3.2        2.9      10.3%  
                                                       53.5       54.7      -2.2%  
  Unit Trusts                                            5.4        4.6      17.4%  
  Net operating income                                  58.9       59.3      -0.7%  
 
 (1)   Including income from trust, tax and advisory services. 
 
 Funds under management 
 
  (i) Investment Management                               Period ended 5 April 2      
                                                         2016       2015     Change  
                                                          £m        £m          %  
  Opening FUM (1 January)                               26,126     24,672            
  Inflows                                                  616        812            
    Organic new business                                  482        635            
    Acquired new business                                 134        177            
  Outflows                                               (382)      (414)            
  Market effect and investment performance               (210)      1,064            
  Closing FUM (5 April)                                 26,150     26,134       0.1%  
                                                                                  
  Underlying annualised rate of net organic growth        1.5%       3.6%            
  Total annualised net organic and acquired growth        3.6%       6.5%            
                                                                                  
  FTSE 100 Index (5 April)                                6091       6834     -10.9%  
  FTSE WMA Balanced Index (5 April)                       3538       3705      -4.5%  
                                                                                     
  (ii) Unit Trusts                                       3 months ended 31 March      
                                                         2016       2015     Change  
                                                          £m        £m          %  
  Opening FUM (1 January)                                3,073      2,520            
  Inflows                                                  263        221            
  Outflows                                               (133)      (171)            
  Market effect and investment performance                (35)        155            
  Closing FUM (31 March)                                 3,168      2,725      16.3%  
                                                                                  
  Total funds under management 3                        29,318     28,859       1.6%  
 
 (2)   Key charging dates for investment management clients are 5 April, 30
June, 30 September and 31 December.  Unit trusts income accrues on daily
levels of funds under management. 
 (3)   Includes £1,014 million (2015: £814 million) of execution only
funds. 
 
 The FTSE 100 Index closed at 6168 on 17 May 2016, a rise of 1.3% since 5
April 2016, which has increased the value of funds under management.
Investment management fee income in the first quarter is dependent upon the
value of funds under management at 5 April 2016. 
 
 Rathbone Brothers Plc's interim results for the six months to 30 June 2016
will be announced on 27 July 2016. 
 
 18 May 2016 
 
 For further information contact: 
 
  Rathbone Brothers Plc Tel: 020 7399 0000 email: shelly.chadda@rathbones.com   Philip Howell, Chief Executive Paul Stockton, Finance Director Shelly Chadda, Investor Relations Manager    Camarco Tel: 020 3757 4984 email: ed.gascoigne-pees@camarco.co.uk   Ed Gascoigne-Pees   
 
     
 Rathbone Brothers Plc 
 
 Rathbone Brothers Plc ("Rathbones"), through its subsidiaries, is a leading
provider of high-quality, personalised investment and wealth management
services for private clients, charities and trustees. This includes
discretionary investment management, unit trusts, financial planning, trust
and company management and banking services. 
 
 Rathbones has over 1,000 staff in 15 UK locations and Jersey, and currently
has its headquarters in Curzon Street, London. 
 rathbones.com 
 

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 The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein. 
 Source: Rathbone Brothers Plc via Globenewswire 
 HUG#2013389