Rathbone Brothers Plc
Funds under management reach £37.5 billion
Rathbone Brothers Plc ("the Company") announces a trading update for the three months ended 30 September 2017.
Philip Howell, Chief Executive of Rathbone Brothers Plc, said:
"In a quarter where investment markets remained relatively benign, our total funds under management grew 2.5% to £37.5 billion in the three months to 30 September 2017. Funds managed by Rathbone Investment Management reached £32.5 billion and within this our ethical investment service, Greenbank, reached £1.0 billion. Funds under management in our Unit Trusts business reached £5.0 billion towards the end of the quarter. Both Greenbank and Unit Trusts have reached these strategic milestones well ahead of plan.
"We continue to progress our strategic initiatives and invest in our core infrastructure to support client service and meet the demands of forthcoming regulation. We are well positioned for the future and will continue to pursue growth opportunities both organically and through acquisition, approaching each with discipline."
Financial highlights:
- Total funds under management were £37.5 billion at 30 September 2017; up 2.5% from £36.6 billion at 30 June 2017, compared to an increase of 0.8% in the FTSE 100 Index and 0.8% in the MSCI WMA Private Investor Balanced Index in the three months ended 30 September 2017. Underlying net operating income was £70.5 million for the three months ended 30 September 2017, up 7.0% from £65.9 million in the third quarter of 2016.
- Total net growth of funds under management in Investment Management was £0.3 billion, representing a total net annualised growth rate of 3.5% (2016: 5.0%). This comprises net organic growth of £0.2 billion (2016: £0.2 billion), and acquired inflows of £0.1 billion for the quarter. Net organic growth in the third quarter represents an annualised growth rate of 2.6% (2016: 3.0%) contributing to a 2.9% organic growth rate for the nine month period to 30 September 2017 (2016: 2.7%).
- Net operating income of £62.5 million in Investment Management for the three months ended 30 September 2017 was 5.6% higher than the £59.2 million for the comparable period in 2016. The value of the FTSE 100 Index on the third quarter charging date was 7373 compared with 6899 a year ago. The MSCI WMA Private Investor Balanced Index was 1545 and 1457 on the equivalent dates.
- Funds under management in Unit Trusts at 30 September 2017 were £5.0 billion, up 8.7% from £4.6 billion at 30 June 2017. Net inflows for the quarter were a record £342 million compared to £170 million a year ago. Net operating income of £8.0 million for the three months ended 30 September 2017 was 19.4% higher than the £6.7 million for the comparable period in 2016.
Net operating income
| 3 months ended 30 September | 9 months ended 30 September | ||||||
| 2017 | 2016 | Change | 2017 | 2016 | Change | ||
| £m | £m | % | £m | £m | % | ||
| Investment Management | |||||||
| - Fees | 47.7 | 42.7 | 11.7 | 140.2 | 120.0 | 16.8 | |
| - Commissions | 8.2 | 10.2 | (19.6) | 30.1 | 29.7 | 1.3 | |
| - Net interest income | 2.9 | 3.1 | (6.5) | 8.5 | 8.8 | (3.4) | |
| - Fees from advisory services1 and other income | 3.7 | 3.2 | 15.6 | 11.2 | 9.5 | 17.9 | |
| 62.5 | 59.2 | 5.6 | 190.0 | 168.0 | 13.1 | ||
| Unit Trusts | 8.0 | 6.7 | 19.4 | 22.9 | 18.1 | 26.5 | |
| Underlying net operating income | 70.5 | 65.9 | 7.0 | 212.9 | 186.1 | 14.4 | |
| Average FTSE 100 Index on principal charging dates2 | 7373 | 6899 | 6.9 | 7339 | 6498 | 12.9 | |
| Average FTSE WMA Balanced Index on principal charging dates2 | 1545 | 1457 | 6.0 | 1538 | 1386 | 11.0 | |
- Including income from trust, tax, pension advisory services and Vision Independent Financial Planning.
- 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 | ||||
| 2017 | 2016 | 2017 | 2016 | ||
| £m | £m | £m | £m | ||
| (i) Investment Management | |||||
| Opening FUM (1 July/1 January) | 31,981 | 27,256 | 30,184 | 26,126 | |
| Inflows | 809 | 708 | 2,542 | 2,010 | |
| Organic new business | 742 | 574 | 2,311 | 1,650 | |
| Acquired new business | 67 | 134 | 231 | 360 | |
| Outflows | (532) | (367) | (1,663) | (1,118) | |
| Market adjustment | 277 | 1,703 | 1,472 | 2,282 | |
| Closing FUM (30 September) | 32,535 | 29,300 | 32,535 | 29,300 | |
| Underlying annualised rate of net organic growth | 2.6% | 3.0% | 2.9% | 2.7% | |
| Annualised rate of net inflows | 3.5% | 5.0% | 3.9% | 4.6% | |
| (ii) Unit Trusts | |||||
| Opening FUM (1 July/1 January) | 4,634 | 3,334 | 4,051 | 3,073 | |
| Inflows | 521 | 454 | 1,254 | 1,030 | |
| Outflows | (179) | (284) | (643) | (601) | |
| Market adjustment | 6 | 358 | 320 | 360 | |
| Closing FUM (30 September) | 4,982 | 3,862 | 4,982 | 3,862 | |
| Total FUM (30 September)3, 4 | 37,517 | 33,162 | 37,517 | 33,162 | |
| Net fund inflows | |||||
| Investment Management | 277 | 341 | 879 | 892 | |
| Unit Trusts | 342 | 170 | 611 | 429 | |
| Total | 619 | 511 | 1,490 | 1,321 | |
- Includes £1,027 million (30 September 2016: £937 million) of execution only funds, Greenbank funds of £1.0 billion and Charities funds of £4.5 billion.
- Cash in client portfolios continued to be higher than average at £2.3 billion (2016 average: £1.8 billion). Loans and advances to customers were £126.0 million at 30 September 2017, up 2.2% on the £123.3 million at 30 June 2017.
The FTSE 100 Index closed at 7516 on 17 October 2017, an increase of 1.9% since 30 September 2017. Investment Management fee income in the fourth quarter is dependent upon the value of funds under management at 31 December 2017.
18 October 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 |
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. Our services include discretionary investment management, unit trusts, banking and loan services, financial planning, unitised portfolio services, and UK trust, legal, estate and tax advice.
Rathbones has over 1,100 staff in 16 UK locations and Jersey; its headquarters is 8 Finsbury Circus, London.