Rathbone Brothers Rathbone Brothers Plc : 3rd Quarter Results

 
TIDMRAT 
 
 
   Funds under management grow 8.5% to GBP33.2 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 GBP33.2 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 GBP170 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 GBP33.2 billion at 30 September 2016; 
      up 8.5% from GBP30.6 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 GBP65.9 million for the three months ended 30 
      September 2016, up 18.5% from GBP55.6 million in the third quarter of 
      2015. 
 
   -- Total net organic and acquired growth of funds under management in 
      Investment Management was GBP0.3 billion for the three months ended 30 
      September 2016 (2015: GBP0.4 billion). Net organic inflows were GBP0.2 
      billion (2015: GBP0.2 billion), representing an underlying annualised 
      growth rate of 3.0% for the third quarter (2015: 2.5%). 
 
   -- Net operating income of GBP59.2 million in Investment Management for the 
      three months ended 30 September 2016 was 17.2% higher than the GBP50.5 
      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 GBP3.1 million in the third quarter was up 14.8% 
      from GBP2.7 million in the same period in 2015. 
 
   -- Funds under management in Unit Trusts at 30 September 2016 were GBP3.9 
      billion, up 18.2% from GBP3.3 billion at 30 June 2016. Net inflows for 
      the quarter were GBP170 million compared to GBP99 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 (GBP58.3) million, an increase of GBP26.3 million from (GBP32.0) 
      million at 30 June 2016 and an increase of GBP53.8 million from (GBP4.5) 
      million at 31 December 2015. 
 
   -- Rathbones has separately announced this morning plans to raise 
      approximately GBP38.0 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          9 months ended 30 
                                                              September                      September 
                                                        2016  2015   Change    2016   2015    Change 
                                                        GBPm  GBPm      %      GBPm   GBPm       % 
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 services(1) 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 dates(2)   6899  6062       13.8   6498   6472        0.4 
Average FTSE WMA Balanced Index on principal charging 
 dates(2)                                               3915  3421       14.4   3725   3561        4.6 
 
 
   1. Including income from trust, tax and pension advisory services. 
 
   2. 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    9 months ended 
                                            30 September      30 September 
                                           2016     2015     2016     2015 
                                           GBPm     GBPm     GBPm     GBPm 
 (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 
 
 
   1. Includes GBP1,126 million (30 September 2015: GBP1,024 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                       Camarco 
 Tel: [phone]                          Tel: [phone] 
 email: [e-mail]          email: [e-mail] 
 Philip Howell, Chief Executive              Ed Gascoigne-Pees 
 Paul Stockton, Finance Director 
 Shelly Chadda, Investor Relations Manager 
 
 
   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. 
 
   rathbones.com http://www.rathbones.com 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   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 
 
 
  http://www.rathbones.com/ 
 

(END) Dow Jones Newswires

October 20, 2016 02:02 ET (06:02 GMT)

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