REG - Rathbones Group PLC - First quarter trading update
04/05/2023 07:00
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RNS Number : 3339Y Rathbones Group PLC 04 May 2023
Rathbones Group Plc
First quarter trading update
Rathbones Group Plc ("Rathbones") announces a trading update for the three
months ended 31 March 2023.
Paul Stockton, Group Chief Executive Officer of Rathbones, said:
"Total funds under management and administration rose 1.1% in the first
quarter to £60.9 billion, reflecting positive market and investment
performance. Net inflows in our discretionary and managed business were £303
million, representing a 2.6% annual growth rate with net operating income
increasing 6.4% compared with the previous quarter to £117.8 million.
Rathbones remains on track to meet the operating margin targets provided in
the 2022 preliminary results, supported by the successful delivery of
Saunderson House synergies and the launch of an enhanced digital capability.
Over the coming months Rathbones expects to complete the combination with
Investec that was announced on 4 April, subject to regulatory approvals. The
Prospectus and Circular in relation to the combination will be published later
this quarter. This transaction represents a significant opportunity in our
sector to become the UK's leading discretionary wealth manager."
Financial highlights:
- Total funds under management and administration totalled £60.9
billion at the end of the first quarter* (31 December 2022: £60.2 billion).
- £45.8 billion in the Investment Management business (31 December
2022: £45.1 billion).
- £11.4 billion in the Rathbone Funds business (31 December 2022:
£11.0 billion).
- £3.7 billion in Saunderson House (31 December 2022: £4.1
billion).
- Discretionary and managed net inflows totalled £0.3 billion (Q1 2022:
£0.3 billion), representing an annualised growth rate of 2.6% (Q1 2022: 2.5%,
Q4 2022: 3.1%).
- Underlying net operating income totalled £117.8 million for the three
months ended 31 March 2023, a decrease of 2.2% from the £120.5 million in the
corresponding period last year.
- Investment Management fees decreased 3.7% to £69.5 million (Q1
2022: £72.2 million) on lower FUMA.
- Commissions totalled £12.5 million (Q1 2022: £14.9 million),
with lower commissions in line with trading volumes.
- Net interest income grew to £8.6 million (Q1 2022: £2.1
million), reflecting the increase in Bank of England base rates over the year,
from 0.75% at 31 March 2022 to 4.25% currently.
- Fees from advisory services and other income decreased 23.8% to
£11.2 million (Q1 2022: £14.7 million), as advisers focused on the migration
of Saunderson House clients.
- Income in Rathbone Funds decreased 3.6% to £16.0 million (Q1
2022: £16.6 million) on lower FUM.
- The final dividend for 31 December 2022 of 56 pence per share will be
paid on 9 May 2023.
* Funds under management at the end of the first quarter are measured at 5
April for Investment Management (to coincide with the first charging date for
Investment Management private clients) and at 31 March for Rathbone Funds and
Saunderson House.
Additional Comments:
Annual General Meeting
The Annual General Meeting will be held today, 4 May, at 10:00am at our London
head office at 8 Finsbury Circus, London EC2M 7AZ.
Interim results
The interim results for the six months to 30 June 2023 will be announced on 26
July 2023.
Detailed financial information:
Net operating income
3 months ended 31 March 3 months ended 31 December
2023 2022 Change 2022 Change
Investment Management £m £m % £m %
- Fees 69.5 72.2 (3.7) 68.0 2.2
- Commissions 12.5 14.9 (16.1) 9.9 26.3
- Net interest income 8.6 2.1 309.5 6.1 41.0
- Fees from advisory services(1) & other income 11.2 14.7 (23.8) 11.2 0.0
101.8 103.9 (2.0) 95.2 6.9
Rathbone Funds 16.0 16.6 (3.6) 15.5 3.2
Net operating income 117.8 120.5 (2.2) 110.7 6.4
MSCI PIMFA Private Investor Balanced Index on principal charging dates(2) 1,698 1,806 (6.0)
1,661 2.2
(1) Including income from trust, tax, financial planning services, Vision
Independent Financial Planning and Saunderson House.
(2) The principal charging dates for Investment Management clients are 5
April, 30 June, 30 September and 31 December. Rathbone Funds income accrues on
daily levels of funds under management.
Funds under management and administration
(i) Breakdown of FUMA and flows by service level
Quarter ended 5 April 2023 Opening FUMA Net flows Service level transfers(3) Market & investment performance Closing FUMA Ann net growth(4) (Q1 2023) Ann net growth(4) (Q1 2022) Ann net growth(4) (Q4 2022)
£m
£m
£m
£m
£m
% % %
SHL migrated assets
£m
Discretionary service 44,322 240 (93) 352 386 45,207
Bespoke portfolios 42,894 191 (188) 165 345 43,407 1.8 1.4 2.1
Managed via in-house funds 1,428 49 95 187 41 1,800 13.7 16.3 10.9
Multi-asset funds 2,159 63 - - 9 2,231 11.7 20.4 19.1
Total discretionary & managed 46,481 303 (93) 352 395 47,438 2.6 2.5 3.1
Non-discretionary service 757 - (20) - 6 743 0.0 (5.4) (12.0)
Total wealth management 47,238 303 (113) 352 401 48,181 2.6 2.4 2.9
Single-strategy funds 6,474 (150) - - 205 6,529 (9.3) (3.1) (3.9)
Execution only & banking 2,404 (76) 113 - 11 2,452 (12.6) (10.2) (8.6)
Total 56,116 77 - 352 617 57,162 0.5 1.1 1.6
Saunderson House(5) 4,117 (90) - (352) 41 3,716 (8.7) (2.1) (6.5)
Total group 60,233 (13) - - 658 60,878 (0.1) 0.9 1.0
(ii) Breakdown of Rathbones Investment Management FUMA and flows by channel
Quarter ended 5 April 2023 Opening FUMA Net flows Service level transfers(3) Market & investment performance Closing FUMA Ann net growth(4) (Q1 2023) Ann net growth(4) (Q1 2022) Ann net growth(4) (Q4 2022)
£m
£m
£m
£m
£m
% % %
SHL migrated assets
£m
Total direct 33,639 87 (100) - 255 33,881 1.0 0.7 1.4
Total financial adviser linked 10,683 153 7 352 131 11,326 5.7 5.5 5.6
Total discretionary service 44,322 240 (93) 352 386 45,207 2.2 1.8 2.4
Execution only & banking 2,404 (76) 113 - 11 2,452 (12.6) (5.4) (8.6)
Non-discretionary service 757 - (20) - 6 743 0.0 (10.2) (12.0)
Total Investment Management 47,483 164 - 352 403 48,402 1.4 1.1 1.6
(3) Service Level Transfers represent client FUMA which has transferred
from one service to another within the group during the period.
(4) Annualised net growth in flows calculated as net flows/opening FUMA.
(5) Total funds under advice by Saunderson House, including those clients
transferred to fellow group companies totalled £4.2 billion at 31 March 2023.
At 5 April At 31 December
(iii) Total Group FUMA
2023 2022 Change 2022 Change
£m £m % £m %
Rathbones Investment Management Gross FUMA 48,402 50,490 (4.1) 47,483 1.9
Rathbone Funds 11,431 12,156 (6.0) 11,005 3.9
Saunderson House(5) 3,716 4,675 (20.5) 4,117 (9.7)
Of which: discretionary wrapped funds(6) (2,671) (2,593) 3.0 (2,372) 12.6
Total Group FUMA 60,878 64,728 (5.9) 60,233 1.1
(6) Discretionary wrapped funds represent funds operated by Rathbone
Funds, managed by both Rathbones Investment Management teams and Rathbone
Funds managers.
The MSCI PIMFA Private Investor Balanced Index closed at 1,701 on 2 May 2023,
an increase of 0.2% since 5 April 2023. Investment Management fee income in
the second quarter is dependent upon the value of funds under management at 30
June 2023.
4 May 2023
For further information contact:
Rathbones Group Plc
Paul Stockton, Group Chief Executive Officer
Jennifer Mathias, Group Chief Financial Officer
Sarah Lewandowski, Head of Investor Relations
Tel: 07702605524
Email: sarah.lewandowski@rathbones.com
Camarco
Ed Gascoigne-Pees
Julia Tilley
Tel: 020 3757 4984
Email: ed.gascoigne-pees@camarco.co.uk
Rathbones Group Plc
Rathbones provides individual investment and wealth management services for
private clients, charities, trustees and professional partners. We have been
trusted for generations to manage and preserve our clients' wealth. Our
tradition of investing and acting for everyone's tomorrow has been with us
from the beginning and continues to lead us forward.
Rathbones has over 2,200 employees in 15 UK locations and Jersey; its
headquarters is 8 Finsbury Circus, London.
www.rathbones.com
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