REG-Rathbone Brothers Plc : 3rd Quarter Results <Origin Href="QuoteRef">RAT.L</Origin>
Rathbone Brothers Plc : 3rd Quarter Results Funds under management grow 8.5% to 33.2 billion
Rathbone Brothers Plc ("the Company") announces a trading update for the three months ended 30 September 2016.
Philip Howell, Chief Executive of Rathbone Brothers Plc, said:
"Our total funds under management reached 33.2 billion at the end of the third quarter, up 8.5% from 30 June 2016, reflecting more favourable investment markets and continued business growth. Our Unit Trust business in particular posted strong net inflows of 170 million against a challenging industry backdrop for inflows as a whole. Our trading outlook for the full year is consistent with market expectations.
"The collapse in long term bond yields was also a key feature of the quarter, re-emphasising the need for the review of our defined benefit pension schemes we announced in July. As a result, we have begun to engage the trustees and affected employees of these schemes with a view to their closure and have today announced a placing, primarily to increase the Group's regulatory capital and also to provide additional financial flexibility."
Highlights:
- Total funds under management were 33.2 billion at 30 September 2016; up 8.5% from 30.6 billion at 30 June 2016, compared to an increase of 6.1% in the FTSE 100 Index and 5.2% in the FTSE WMA Balanced Index in the three months ended 30 September 2016.
- Net operating income was 65.9 million for the three months ended 30 September 2016, up 18.5% from 55.6 million in the third quarter of 2015.
- Total net organic and acquired growth of funds under management in Investment Management was 0.3 billion for the three months ended 30 September 2016 (2015: 0.4 billion). Net organic inflows were 0.2 billion (2015: 0.2 billion), representing an underlying annualised growth rate of 3.0% for the third quarter (2015: 2.5%).
- Net operating income of 59.2 million in Investment Management for the three months ended 30 September 2016 was 17.2% higher than the 50.5 million for the comparable period in 2015. The value of the FTSE 100 Index on our third quarter charging date was 6899 compared with 6062 a year ago. The FTSE WMA Balanced Index was 3915 and 3421 on the equivalent dates.
- Net interest income of 3.1 million in the third quarter was up 14.8% from 2.7 million in the same period in 2015.
- Funds under management in Unit Trusts at 30 September 2016 were 3.9 billion, up 18.2% from 3.3 billion at 30 June 2016. Net inflows for the quarter were 170 million compared to 99 million a year ago.
- The Board has completed a review of the future of its defined benefit pension schemes, and has begun the process of engagement with pension trustees and plans to consult with affected employees with a view to their closure. On an IAS 19 basis, the pension deficit as at 30 September 2016 was (58.3) million, an increase of 26.3 million from (32.0) million at 30 June 2016 and an increase of 53.8 million from (4.5) million at 31 December 2015.
- Rathbones has separately announced this morning plans to raise approximately 38.0 million via a share placing with institutional investors. This placing will primarily fund the expected near-term higher capital requirement associated with the actions we are taking in relation to our defined benefit pension schemes and also provide a measure of additional financial flexibility.
Net operating income
| 3 months ended 30 September | 9 months ended 30 September | ||||||
| 2016 | 2015 | Change | 2016 | 2015 | Change | ||
| m | m | % | m | m | % | ||
| Investment Management | |||||||
| - Fees | 42.7 | 36.4 | 17.3 | 120.0 | 105.5 | 13.7 | |
| - Commissions | 10.2 | 8.6 | 18.6 | 29.7 | 34.9 | (14.9) | |
| - Net interest income | 3.1 | 2.7 | 14.8 | 8.8 | 8.2 | 7.3 | |
| - Fees from advisory services1 and other income | 3.2 | 2.8 | 14.3 | 9.5 | 8.7 | 9.2 | |
| 59.2 | 50.5 | 17.2 | 168.0 | 157.3 | 6.8 | ||
| Unit Trusts | 6.7 | 5.1 | 31.4 | 18.1 | 15.1 | 19.9 | |
| Net operating income | 65.9 | 55.6 | 18.5 | 186.1 | 172.4 | 7.9 | |
| Average FTSE 100 Index on principal charging dates2 | 6899 | 6062 | 13.8 | 6498 | 6472 | 0.4 | |
| Average FTSE WMA Balanced Index on principal charging dates2 | 3915 | 3421 | 14.4 | 3725 | 3561 | 4.6 | |
- 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 | ||||
| 2016 | 2015 | 2016 | 2015 | ||
| m | m | m | m | ||
| (i) Investment Management | |||||
| Opening FUM (1 July/1 January) | 27,256 | 25,628 | 26,126 | 24,672 | |
| Inflows | 708 | 794 | 2,010 | 2,223 | |
| Organic new business | 574 | 538 | 1,650 | 1,689 | |
| Acquired new business | 134 | 256 | 360 | 534 | |
| Outflows | (367) | (375) | (1,118) | (1,177) | |
| Market adjustment | 1,703 | (1,205) | 2,282 | (876) | |
| Closing FUM (30 September) | 29,300 | 24,842 | 29,300 | 24,842 | |
| Underlying annualised rate of net organic growth | 3.0% | 2.5% | 2.7% | 2.8% | |
| Annualised rate of net inflows | 5.0% | 6.5% | 4.6% | 5.7% | |
| (ii) Unit Trusts | |||||
| Opening FUM (1 July/1 January) | 3,334 | 2,720 | 3,073 | 2,520 | |
| Inflows | 454 | 205 | 1,030 | 646 | |
| Outflows | (284) | (106) | (601) | (440) | |
| Market adjustment | 358 | (55) | 360 | 38 | |
| Closing FUM (30 September) | 3,862 | 2,764 | 3,862 | 2,764 | |
| Total FUM (30 September)3 | 33,162 | 27,606 | 33,162 | 27,606 | |
| Net fund inflows | |||||
| Investment Management | 341 | 419 | 892 | 1,046 | |
| Unit Trusts | 170 | 99 | 429 | 206 | |
| Total | 511 | 518 | 1,321 | 1,252 | |
- Includes 1,126 million (30 September 2015: 1,024 million) of execution only funds.
The FTSE 100 Index closed at 7022 on 19 October 2016, an increase of 17.8% since 30 September 2016. Investment Management fee income in the fourth quarter is dependent upon the value of funds under management at 31 December 2016.
20 October 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, tax planning, trust and company management, pension advice and banking services.
Rathbones has over 1,000 staff in 15 UK locations and Jersey, and currently has its headquarters in Curzon Street, London.
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
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