Interim Management Statement

RNS Number : 3074L

Rathbone Brothers PLC

05 May 2010

 



Rathbone Brothers Plc

Rathbones' funds under management grow to over £14 billion

This statement, issued on the day of our Annual General Meeting, is an Interim Management Statement in accordance with the UK Listing Authority's Disclosure and Transparency Rules.  It covers the period from 1 January 2010 to 5 May 2010, and includes trading results for the three months ended 31 March 2010.

At the Annual General Meeting later today, Mark Powell, Chairman of Rathbone Brothers Plc, will say:

"Rathbone Investment Management had a strong first quarter which benefitted from good growth in funds under management, stronger equity markets and high commission levels. Organic and acquired growth in our investment management business was an annualised 11.1% in the three months to 31 March 2010 (2009: 8.1%). To date, our recent transaction with Lloyds Banking Group has introduced some £600 million of new funds and over 3,000 new clients to Rathbones.

"Our positive first quarter results should be seen against a backdrop of a fragile world economy and the unknown impact of the General Election in the UK. Rathbones has a strong balance sheet with minimal borrowings and is well positioned to take advantage of future growth opportunities."

Highlights:

§ Total funds under management were £14.05 billion at 31 March 2010, up 7.3% from £13.10 billion at 31 December 2009. This compares to an increase of 6.1% in the FTSE 100 Index and an increase of 5.7% in the FTSE APCIMS Balanced Index over the same period.

§ Acquired inflows into Rathbone Investment Management totalled £241 million in the first quarter, which when added to net organic growth represents a net annual growth rate of 11.1% (2009: 8.1%). Net organic growth of £96 million for the quarter ended 31 March 2010 represents an annualised growth rate of 3.2% (2009: 5.8%).

§ Net operating income in Rathbone Investment Management of £29.0 million (2009: £27.3 million) was up 6.2% in the first three months of 2010 year on year. Commissions were high in the first quarter in the run up to the 2009/10 tax year end, although have since returned to more normal levels. The FTSE 100 Index was 5745 on our 5 April billing date, up 42.6% compared to 4030 in 2009.  The FTSE APCIMS Balanced Index, measured on the same dates, increased by 26.9%.

§ Net interest and other income of £2.7 million in the first three months of 2010 is 65.8% lower than the £7.9 million earned in the corresponding period in 2009 reflecting the low yields on treasury assets we have highlighted for some time. Cash in client portfolios at 31 March 2010 was £0.90 billion (2009: £1.11 billion).

§ First quarter purchased growth includes £217 million of funds under management from the Lloyds Banking Group transaction which has in total contributed £598 million to funds under management at 31 March 2010 and has resulted in £17.3 million being capitalised as a client relationship intangible asset to that date.

§ Following the transaction with Lloyds Banking Group in October 2009, over 2,800 former clients of the Bank of Scotland Portfolio Management Service (some 70% of the total) have been introduced to Rathbones in addition to 320 former Lloyds Investment Management Service clients (some 15% of the total). Former clients of the Bank of Scotland Portfolio Management Service will be charged fees with effect from 1 November 2010.

§ Funds under management in Rathbone Unit Trust Management increased from £935 million at 31 December 2009 to £942 million at 31 March 2010 as the impact of rising markets offset net redemptions of £42 million in the first quarter.  Net operating income in Rathbone Unit Trust Management of £1.9 million in the three months ended 31 March 2010 increased 5.6% from £1.8 million in 2009.

Net operating income (from continuing operations)

	3 months ended 31 March1
	2010	2009	Change
	£m	£m	%
Investment management
- Fees	16.4	12.3	33.3%
- Commissions	9.9	7.1	39.4%
- Interest & other	2.7	7.9	-65.8%
	29.0	27.3	6.2%
Unit trusts	1.9	1.8	5.6%
Trust and tax (continuing)	1.2	1.3	-7.7%
Net operating income (continuing)	32.1	30.4	5.6%
FTSE 100 Index (5 April)	5745	4030	42.6%
FTSE APCIMS Balanced Index (5 April)	2881	2271	26.9%

(1) Quarterly 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 31 March
	2010	2009
	£m	£m
(i) Investment management
Opening FUM (1 January)	12,158	9,429
Inflows	579	379
Organic new business	338	325
Acquired new business	241	54
Outflows	(242)	(189)
Market adjustment	616	(508)
Closing FUM (31 March)	13,111	9,111
Underlying annualised rate of net organic growth	3.2%	5.8%
Total net organic and acquired growth	11.1%	8.1%
(ii) Unit trusts
Opening FUM (1 January)	935	1,029
Inflows	21	12
Outflows	(63)	(194)
Market adjustment	49	(92)
Closing FUM (31 March)	942	755
Total FUM (31 March)	14,053	9,866

For further information contact:

Rathbone Brothers Plc Tel: [phone]  email: [e-mail] Mark Powell, Chairman Andy Pomfret, Chief Executive Paul Stockton, Finance Director Emily Morris, Marketing Director

Brunswick Tel: [phone] email: [e-mail] Kate Holgate/Claire Gore

Rathbone Brothers Plc

Rathbone Brothers Plc is a leading independent provider of high-quality, personalised investment and wealth management services for private investors, charities and trustees. This includes discretionary investment management, tax and financial planning and unit trusts.

Rathbones has 680 staff in 11 UK locations and Jersey, and has its headquarters in New Bond Street, London.

www.rathbones.com

 

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