Rathbone Brothers Plc (LON:RAT) today announced 2018 Preliminary results for the year ended 31 December 2018.
Highlights
– Total funds under management and administration were £44.1 billion at 31 December 2018, up 12.8% from £39.1 billion at 31 December 2017. The FTSE 100 Index decreased by 12.5% and the MSCI WMA Private Investor Balanced Index decreased by 7.2% over the same period.
– The total net annual growth rate of funds under management and administration for Investment Management was 23.5% (2017: 3.9%). This comprised £1.1 billion of net organic growth (2017: £0.9 billion) and £6.8 billion of acquired inflows (£6.7 billion related to the acquisition of Speirs & Jeffrey) compared to acquired growth of £0.3 billion in 2017. The underlying rate of net organic growth was 3.4% in 2018 (2017: 3.0%).
– Underlying operating income in Investment Management totalled £275.3 million for the year ended 31 December 2018 (2017: £254.6 million) and includes £8.7 million of income in relation to Speirs & Jeffrey. The average FTSE 100 Index was 7269 on quarterly billing dates in 2018, compared to 7426 in 2017, a decrease of 2.1%.
– Funds under management in Unit Trusts were £5.6 billion at 31 December 2018 (31 December 2017: £5.3 billion) and net inflows totalled £543 million during 2018 (2017: £883 million). Underlying operating income in Unit Trusts was £36.7 million in the year ended 31 December 2018, an increase of 16.9% from £31.4 million in 2017 and the operating margin was stable at 34.6% (2017: 34.1%).
– Underlying operating expenses of £220.4 million (2017: £198.5 million) increased 11.0% year-on-year, not only reflecting £5.9 million of Speirs & Jeffrey operating costs in the year, but also underlying investment in the business as additional capability is added.
– Underlying profit before tax increased 4.7% from £87.5 million to £91.6 million for the year ended 31 December 2018. Profits of £2.8 million from Speirs & Jeffrey are included for the four month period since completion of the transaction. Underlying profit margin remained strong at 29.4% (2017: 30.6%). Underlying earnings per share increased 2.7% to 142.5p (2017: 138.8p). Profit before tax increased 4.1% from £58.9 million to £61.3 million.
– Work to integrate Speirs & Jeffrey into Rathbones is progressing well and the migration to common systems is planned to be completed by mid 2019 as previously guided.
Declaration of final dividend
– The board recommends a final dividend of 42p for 2018 (2017: 39p), making a total of 66p for the year (2017: 61p), an increase of 8.2% on 2017.
Board changes
– Philip Howell will retire as chief executive by 9 May 2019 and Paul Stockton, current group finance director and managing director of Rathbone Investment Management, will take on the role of chief executive.
– Jennifer Mathias will take on the role of group finance director when she joins the company on 1 April 2019.
