Philip Howell, Chief Executive of Rathbones Group Plc, said:
“The first six months of 2017 has seen another busy period for Rathbones as we continue to deliver our strategic plans without detracting from our high standards of service to our clients. We remain confident in the medium term potential of our growth initiatives. Short term market conditions are dominated by a backdrop of ongoing geopolitical uncertainty and we will continue to invest with discipline.”
Highlights:
- Underlying profit before tax* increased 22.7% from £35.3 million to £43.3 million in the first six months of 2017. Underlying profit margin remained strong at 30.4% compared to 29.4% in 2016. Underlying earnings per share increased 21.1% to 68.4p (2016: 56.5p).
- Profit before tax for the half year increased 16.7% from £22.8 million to £26.6 million, reflecting £15.8 million of costs associated with the London office move, offset by a plan amendment gain of £5.5 million arising from the closure of our defined benefit pension schemes. Basic earnings per share increased 16.5% to 41.6p (2016: 35.7p).
- The board recommends a 22.0p interim dividend for 2017 (2016: 21.0p).
- Total funds under management at 30 June 2017 were £36.6 billion, up 7.0% from £34.2 billion at 31 December 2016. This compared to an increase of 2.4% in the FTSE 100 Index and an increase of 2.7% in the MSCI WMA Private Investor Balanced Index over the same period.
- Total net organic and acquired growth in the funds managed by Investment Management was £0.6 billion in the first six months of 2017, representing a net annual growth rate of 4.0% (2016: 4.2%). Net organic growth of £0.4 billion for the first half represents an underlying annualised rate of net organic growth of 2.9% (2016: 2.5%). In the period, we experienced higher outflows from low margin accounts and adjusting for this, the annualised net organic growth rate was 3.4%.
- Underlying operating income in Investment Management of £127.4 million in the first six months of 2017 (2016: £108.8 million) was up 17.1%, largely due to growth in funds under management. The average FTSE 100 Index was 7322 on quarterly billing dates in 2017, compared to 6298 in 2016, an increase of 16.3%.
- Underlying operating expenses of £99.1 million (2016: £84.9 million) increased 16.7% year-on-year largely as a result of variable staff costs, reflecting both the higher profitability in the period and an improved investment performance element for growth awards.
- Funds under management in Unit Trusts were £4.6 billion at 30 June 2017 (31 December 2016: £4.0 billion). Net inflows were £269 million in the first half of 2017 (2016: £259 million). Underlying operating income in Unit Trusts was £14.9 million in the six months ended 30 June 2017, an increase of 30.7% from £11.4 million in the first half of 2016.
- Shareholders equity of £342.4 million at 30 June 2017 increased 5.4% since 31 December 2016 (£324.8 million) and 22.4% since 30 June 2016 (£279.7 million), largely as a result of the fall in value of retirement benefit obligations, which totalled £20.0 million at 30 June 2017, 49.4% lower than the £39.5 million recorded at 31 December 2016.
* Excluding a plan amendment gain on the closure of the defined benefit pension schemes and charges in relation to client relationships and goodwill, acquisition-related costs and London head office relocation costs.
25 July 2017
For further information contact:
Rathbone Brothers Plc
Tel: 020 7399 0000
email: shelly.patel@rathbones.com
Philip Howell, Chief Executive
Paul Stockton, Finance Director
Shelly Patel, Investor Relations Manager
Camarco
Tel: 020 3757 4984
email: ed.gascoigne-pees@camarco.co.uk
Ed Gascoigne-Pees