REG-Rathbone Brothers PLC : 3rd Quarter Results <Origin Href="QuoteRef">RAT.L</Origin>

RathbonesAnnouncement

22/10/2015 07:00

Rathbones' net income rises 13% year on year
Rathbone Brothers Plc ("the Company") announces a trading update for the three months ended 30 September 2015. 
Philip Howell, Chief Executive of Rathbone Brothers Plc, said:
"Third quarter net operating income increased 13% compared to a year ago in spite of subdued investment markets. Although our outlook remains cautious in light of recent markets, our agreement in early October to purchase the remaining 80% of the Vision group is an example of the investment we continue to make to take advantage of future growth opportunities."
Highlights:
Total funds under management (FUM) were 27.6 billion at 30 September 2015; down 2.5% from 28.3 billion at 30 June 2015, compared to a decrease of 7.0% in the FTSE 100 Index and 3.8% in the FTSE WMA Balanced Index in the three months ended 30 September 2015. 
Net operating income was 55.6 million for the three months ended 30 September 2015, up 13.5% from 49.0 million in the third quarter of 2014.
Total net organic and acquired growth of funds under management in Rathbone Investment Management was 419 million for the three months ended 30 September 2015 (2014: 2,406 million which included the acquisition of Jupiter Asset Management Limited's private client and charity investment management business). Net organic inflows were 163 million (2014: 289 million), representing an underlying annualised growth rate of 2.5% for the third quarter (2014: 5.3%).
Underlying net operating income of 50.5 million in Rathbone Investment Management for the three months ended 30 September 2015 was 12.0% higher than the 45.1 million for the comparable period in 2014. The value of the FTSE 100 Index on our third quarter charging date was 6062 compared with 6623 a year ago. The FTSE WMA Balanced Index was 3421 and 3454 on the equivalent dates. 
Net interest income of 2.7 million in the third quarter was up 17.4% from 2.3 million in the same period in 2014. 
FUM in Rathbone Unit Trust Management at 30 September 2015 were 2.8 billion, up 3.7% from 2.7 billion at 30 June 2015. Net inflows for the quarter were 99 million compared to 100 million a year ago.
As announced on 17 July 2015, in order to strengthen the executive team, chief risk officer Sarah Owen-Jones joined the executive committee along with four senior investment managers; Rupert Baron, Ivo Clifton, Andrew Morris and Richard Smeeton. 
Following the announcement on 28 July 2015, Rathbone Investment Management Limited completed the issue of 20 million of 10-year subordinated notes to M&G on 3 August 2015. 
On 1 October 2015, the Company announced that it had agreed to purchase the remaining 80.1% of Vision Independent Financial Planning Limited and Castle Investment Solutions Limited to support its strategy of broadening its distribution network. 
Net operating income
3 months ended 30 September
9 months ended 30 September
2015
2014
Change
2015
2014
Change
m
m
%
m
m
%
 Investment Management 
  
  
 - Fees 
 36.4 
 30.5 
 19.3 
  
 105.5 
 87.3 
 20.8 
 - Commissions 
 8.6 
 9.4 
 (8.5) 
  
 34.9 
 32.9 
 6.1 
 - Net interest income 
 2.7 
 2.3 
 17.4 
  
 8.2 
 6.7 
 22.4 
 - Fees from advisory services1 and other income 
 2.8 
 2.9 
 (3.4) 
  
 8.7 
 9.0 
 (3.3) 
  
 50.5 
 45.1 
 12.0 
  
 157.3 
 135.9 
 15.7 
 Unit Trusts 
 5.1 
 3.9 
 30.8 
  
 15.1 
 11.2 
 34.8 
Underlying net operating income
55.6
49.0
13.5
172.4
147.1
17.2
 Net income from sale of available for sale investment securities 
 - 
 - 
  
  
 - 
 5.9 
  
Net operating income
55.6
49.0
13.5
172.4
153.0
12.7
 Average FTSE 100 Index on principal charging dates2
 6062 
 6623 
 (8.5) 
  
 6472 
 6687 
 (3.2) 
 Average FTSE WMA Balanced Index on principal charging dates2
 3421 
 3454 
 (1.0) 
  
 3561 
 3432 
 3.8 
Including income from trust, tax and pension advisory services.
The principal charging dates for Investment Management clients are 5 April, 30 June, 30 September and 31 December. Unit Trust income accrues on daily levels of funds under management.
Funds under management 
3 months ended
 30 September
9 months ended
 30 September
2015
2014
2015
2014
  
m
m
m
m
(i) Investment Management
  
  
  
  
  
 Opening FUM (1 July/1 January) 
 25,628 
 21,637 
  
 24,672 
 20,191 
 Inflows 
 794 
 2,781 
  
 2,223 
 4,748 
  Organic new business 
 538 
 664 
  
 1,689 
 1,813 
  Acquired new business  
 256 
 2,117 
  
 534 
 2,935 
 Outflows 
 (375) 
 (375) 
  
 (1,177) 
 (1,108) 
 Market adjustment 
 (1,205) 
 (120) 
  
 (876) 
 92 
Closing FUM (30 September)
24,842
23,923
24,842
23,923
  
  
  
  
  
  
 Underlying annualised rate of net organic growth 
 2.5% 
 5.3% 
  
 2.8% 
 4.7% 
 Annualised rate of net inflows 
 6.5% 
 44.5% 
  
 5.7% 
 24.0% 
  
  
  
  
  
  
(ii) Unit Trusts
 Opening FUM (1 July/1 January) 
 2,720 
 2,214 
  
 2,520 
 1,856 
 Inflows 
 205 
 209 
  
 646 
 749 
 Outflows 
 (106) 
 (109) 
  
 (440) 
 (310) 
 Market adjustment 
 (55) 
 19 
  
 38 
 38 
Closing FUM (30 September)
2,764
2,333
2,764
2,333
Total FUM (30 September)3
27,606
26,256
27,606
26,256
Net fund inflows
 Investment Management 
 419 
 2,406 
  
 1,046 
 3,640 
 Unit Trusts 
 99 
 100 
  
 206 
 439 
Total
518
2,506
1,252
4,079
   3.Includes 1,024 million (30 September 2014: 858 million) of execution only funds, of which 536 million was introduced following the acquisition of Jupiter Asset Management Limited's private client and charity investment management business.
The FTSE 100 Index closed at 6348 on 21 October 2015, an increase of 4.7% since 30 September 2015 and the FTSE WMA Balanced Index closed at 3506, an increase of 2.5%. Investment Management fee income in the fourth quarter is dependent upon the value of funds under management at 31 December 2015.
22 October 2015
For further information contact:
Rathbone Brothers Plc
Tel: 020 7399 0000
email: shelly.chadda@rathbones.com

   

 Philip Howell, Chief Executive
Paul Stockton, Finance Director  
Camarco
Tel: 020 3757 4984
email: ed.gascoigne-pees@camarco.co.uk



 Ed Gascoigne-Pees 
 Shelly Chadda, Investor Relations Manager 
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, tax planning, trust and company management, pension advice and banking services. 
Rathbones has over 1,000 staff in 14 UK locations and Jersey, and has its headquarters in Curzon Street, London.
rathbones.com


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Source: Rathbone Brothers PLC via Globenewswire
HUG#1960589