REG - Rathbones Group PLC - First quarter trading update
09/05/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240509:nRSI6810Na&default-theme=true
RNS Number : 6810N Rathbones Group PLC 09 May 2024
Rathbones
Group Plc
first quarter trading update
Rathbones Group Plc ("Rathbones" or the "Group") announces a trading update
for the three months ended 31 March 2024
Paul Stockton, Group Chief Executive Officer of Rathbones, said:
"Rathbones has made a positive start to 2024, with operating income 13.6%
higher than the first quarter of 2023 on a like-for-like basis, and 89.8%
higher incorporating Investec Wealth & Investment ("IW&I"). Total
funds under management and administration ("FUMA") increased by 2.1% in the
quarter (Q1 2023: 1.1%) to £107.6 billion. Despite outflows remaining
elevated overall, Rathbones Investment Management ("RIM") continued to deliver
strong gross inflows in discretionary & managed services, achieving an
annualised net organic growth rate of 2.8% (Q1 2023: 2.6%).
"The integration of IW&I is progressing well with run-rate synergies now
£10.6 million, up from the £8.0 million reported at 31 December 2023. Work
to combine the Group's offices in locations where both Rathbones and IW&I
have offices is also progressing well, with Birmingham, Cheltenham, Exeter,
and Glasgow colleagues already working in combined premises and others,
including our London head office, to follow during this year. We also remain
on track to launch our digital Client Lifecycle Management system in June this
year.
"While economic uncertainty and headwinds remain in the UK and abroad,
Rathbones is well-equipped to navigate challenging market conditions. We
remain confident in our integration and synergy targets and are
well-positioned to take advantage of the future benefits of the Group's
scale."
Financial highlights:
- Total FUMA reached £107.6 billion at the end of the first quarter (31
December 2023: £105.3 billion) comprising:
- £49.2 billion in RIM (31 December 2023: £48.0 billion).
- £42.4 billion in IW&I (31 December 2023: £42.2 billion).
- £1.0 billion remaining in Saunderson House (31 December 2023: £1.3
billion) after FUMA of £0.4 billion were migrated into Rathbones propositions
in the quarter. We have received client agreement to migrate a further £284
million of FUMA which is currently presented as Saunderson House FUMA pending
completion of the migration process.
- £15.0 billion in Rathbones Asset Management ("RAM") (31 December 2023:
£13.8 billion).
- Market and investment performance added £2.8 billion to Group FUMA in the
quarter.
- Total net flows in wealth management were negative in the quarter as
positive inflows in Rathbones were offset by outflows in IW&I:
- Rathbones discretionary and managed net inflows for the quarter totalled
£0.4 billion (Q1 2023: £0.4 billion).
- Net outflows in IW&I were £0.6 billion, with the impact of
previously disclosed investment manager departures in line with the prior
quarter. Total outflows were also impacted by the withdrawal of funds from low
margin mandates in the period, equating to c.£0.2 billion. Post-combination
investment manager turnover continues to be low in both entities.
- Net inflows into our multi-asset fund range totalled £0.1 billion in the
quarter. Net outflows in RAM single strategy funds of £0.2 billion were
resilient against the wider asset management industry backdrop.
- Underlying net operating income totalled £223.6 million for the three
months ended 31 March 2024 (31 March 2023: £117.8 million), representing
growth of 13.6% relative to 2023, excluding the contribution of £89.8 million
from IW&I during the period.
- We continue to expect underlying operating margin for full year 2024 to be
mid-20% and to incur non-underlying costs in line with those stated at the
year-end.
- The final dividend for the year ended 31 December 2023 of 24 pence per share
will be paid on 14 May 2024, subject to shareholder approval at the Annual
General Meeting on 9 May 2024.
Operational highlights:
- In March 2024, we confirmed a new tenant for our London office, 8 Finsbury
Circus. Rathbones' London-based employees will move to 30 Gresham Street later
this year where they will work alongside their IW&I colleagues. The
assignment of the lease is a key milestone in the integration process and has
been achieved ahead of plan.
- In April 2024, the Trustees of Rathbones' two defined benefit pension
schemes entered into an agreement with Canada Life to fully insure the
benefits of members of both schemes in a "Buy-In" arrangement. The arrangement
involved a total cash contribution of £3.7 million by the Group to effect
the insurance contract purchases, and a write-down of scheme assets by
£10.1 million, both taken through reserves.
The Buy-In of members' benefits removes the future obligation on the Group to
fund these benefits and substantially de-risks the Group's balance sheet. We
expect the associated capital benefit to be reported by the end of this
financial year, subject to regulatory approval.
Additional disclosures:
- The transaction to combine with IW&I, which resulted in Investec Plc
("Investec") holding an economic interest of 41.25% of Rathbones' issued share
capital currently necessitates that Investec reports its share of Rathbones'
profit, as an associated undertaking, in its results which will be announced
later this month. To support this reporting requirement, Rathbones announces
the following unaudited results for the three months ended 31 March 2024:
- Underlying profit before tax of £59.3 million, representing an
underlying margin of 26.5% for the quarter, reflecting the effects of
seasonality in the first quarter, and the timing of FSCS levy costs (which are
recognised in full on 1 April each year).
- Statutory profit before tax of £39.1 million, reflecting non-underlying
costs of £20.2 million, comprising £10.7 million in relation to the
amortisation of intangible assets and £9.5 million in relation to integration
and acquisition costs.
- Statutory profit after tax of £27.4 million.
AGM and Interim results dates:
Annual General Meeting
The Annual General Meeting ("AGM") will be held today, 9 May, at 11:00am at
our London head office at 8 Finsbury Circus, London EC2M 7AZ. This year, the
board has made arrangements to enable members to attend and participate in the
meeting electronically should they wish to do so. Instructions on how to
attend and participate electronically are set out in the Notice of AGM.
Interim results
The interim results for the six months to 30 June 2024 will be announced on 31
July 2024.
detailed financial information
Net operating income
3 months ended 31 March
2024 2023 Change
Group 2024 2024 Rathbones
IW&I Rathbones
Investment Management (£m) (£m) (£m) (£m) (%)
- Fees 141.2 67.3 73.9 69.5 6.3
- Commissions 25.0 10.6 14.4 12.5 15.2
- Net interest income 15.9 1.8 14.1 8.6 64.0
- Fees from advisory services & other income(1) 21.9 10.1 11.8 11.2 5.4
204.0 89.8 114.2 101.8 12.2
Rathbones Asset Management 19.6 - 19.6 16.0 22.5
Net operating income 223.6 89.8 133.8 117.8 13.6
MSCI PIMFA Private Investor Balanced Index on principal charging dates(2) 1,815 1,853 1,698 9.1
1. Including income from trust, tax, financial planning services, Vision
Independent Financial Planning, Saunderson House and interest on client money
deposits of £6.9 million (mainly recognised in IW&I).
2. The principal charging dates for Rathbones Investment Management clients
are 5 April, 30 June, 30 September and 31 December. Rathbones Asset Management
income accrues on daily levels of funds under management. The principal
charging dates for IW&I are 29 February, 31 May, 31 August and 30
November. Until the IW&I business is fully integrated in the first quarter
of 2025, its existing quarterly billing date schedule will be maintained.
IW&I FUMA at 29 February were £41.9 billion.
Funds under management and administration
(i) Breakdown of FUMA and flows by service level
Quarter ended 5 April 2024(2) Opening FUMA Net Flows Transfers(3) SHL Migrated Assets Market & Investment Performance (£m) Closing FUMA Ann Net Growth(4)
(£m)
(£m)
(£m)
(£m)
(%)
(£m)
Gross Inflows Gross Outflows
(£m) (£m)
Rathbones Investment Management 48,763 1,276 (1,033) 243 19 439 959 50,423 2.0
Bespoke portfolios 45,008 1,127 (958) 169 (141) 174 889 46,099 1.5
Managed via in-house funds 3,755 149 (75) 74 160 265 70 4,324 7.9
Multi-asset funds(5) 2,545 322 (211) 111 84 - 186 2,926 17.4
Rathbones discretionary & managed 51,308 1,598 (1,244) 354 103 439 1,145 53,349 2.8
Non-discretionary service 752 5 (13) (8) (8) - (7) 729 (4.3)
Investec W&I 42,267 855 (1,434) (579) (183) - 1,166 42,671 (5.5)
Saunderson House(6) 1,590 17 (58) (41) - (440) 10 1,119 (10.3)
Total wealth management 95,917 2,475 (2,749) (274) (88) (1) 2,314 97,868 (1.1)
Single-strategy funds 6,677 393 (572) (179) - - 406 6,904 (10.7)
Execution only 2,746 86 (194) (108) 88 1 95 2,822 (15.7)
Total group 105,340 2,954 (3,515) (561) - - 2,815 107,594 (2.1)
(ii) Breakdown of Investment Management FUMA and flows by channel
Quarter ended 5 April 2024(2) Opening FUMA Net Flows Transfers(3) SHL Migrated Assets Market & Investment Performance (£m) Closing FUMA Ann Net Growth(4)
(£m)
(£m)
(£m)
(£m)
(%)
(£m)
Gross Inflows Gross Outflows
(£m) (£m)
Total direct 34,416 807 (760) 47 (50) - 714 35,127 0.5
Total financial adviser linked 14,347 469 (273) 196 69 439 245 15,296 5.5
Total discretionary service 48,763 1,276 (1,033) 243 19 439 959 50,423 2.0
Execution only 2,746 86 (194) (108) 88 1 95 2,822 (15.7)
Non-discretionary service 752 5 (13) (8) (8) - (7) 729 (4.3)
Total Investment Management 52,261 1,367 (1,240) 127 99 440 1,047 53,974 1.0
Investec W&I 42,267 855 (1,434) (579) (183) - 1,166 42,671 (5.5)
Total Investment Management for enlarged group 94,528 2,222 (2,674) (452) (84) 440 2,213 96,645 (1.9)
(iii) Total Group FUMA
Quarter ended 5 April 2024(2) Opening FUMA Net Flows Transfers(3) SHL Migrated Assets Market & Investment Performance (£m) Closing FUMA Ann Net Growth(4)
(£m)
(£m)
(£m)
(£m)
(%)
(£m)
Gross Inflows Gross Outflows
(£m) (£m)
Rathbones Investment Management 52,261 1,367 (1,240) 127 99 440 1,047 53,974 1.0
Rathbones Asset Management 13,770 1,285 (1,033) 252 84 - 870 14,976 7.3
Investec W&I 42,267 855 (1,434) (579) (183) - 1,166 42,671 (5.5)
Saunderson House(6) 1,590 17 (58) (41) - (440) 10 1,119 (10.3)
Total 109,888 3,524 (3,765) (241) - - 3,093 112,740 (0.9)
Group eliminations(7) (4,548) (570) 250 (320) - - (278) (5,146) 28.1
Total 105,340 2,954 (3,515) (561) - - 2,815 107,594 (2.1)
3. Transfers represent client FUMA which has transferred from one service to
another and other intra-group movements. These are excluded from net inflows.
4. Annualised net growth in flows calculated as net flows/opening FUMA.
5. Net inflows into multi-asset funds include direct flows and flows into
managed solutions via in-house funds.
6. Total funds under advice by Saunderson House, including those clients
transferred to fellow group companies totalled £4.3 billion at 31 March 2024
(31 March 2023: £4.2 billion).
7. Group eliminations represent RAM funds which are held within portfolios
managed by RIM (£4.8 billion), IW&I (£0.2 billion) teams and Saunderson
House (£0.1 billion) teams. Consequently, after excluding the RAM funds,
the FUMA of each entity is £49.2 billion in RIM, £42.4 billion within
IW&I and £1.0 billion within Saunderson House.
For further information contact:
Rathbones Group Plc
Paul Stockton, Group Chief Executive Officer
Iain Hooley, Group Chief Financial Officer
Shelly Patel, Head of Investor Relations
Tel: 020 7399 0071
Email: shelly.patel@rathbones.com
Camarco
Ed Gascoigne-Pees
Julia Tilley
Tel: 020 3757 4984
Email: ed.gascoigne-pees@camarco.co.uk
Rathbones Group Plc
Rathbones provides 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 3,500 employees in 23 locations across the UK and Channel
Islands; its headquarters is 8 Finsbury Circus, London, EC2M 7AZ.
www.rathbones.com
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRFGZGGKVRKGDZMRecent news on Rathbones
See all newsREG-Form 8.3 - LondonMetric Property Plc
AnnouncementREG-Form 8.3 - Picton Property Income Limited
AnnouncementREG-Form 8.3 - Bluefield Solar Income Fund Ltd.
AnnouncementREG-Form 8.3 - Bluefield Solar Income Fund Ltd
AnnouncementREG-Form 8.3 LondonMetric Property Plc
Announcement