Half year underlying profit before tax increases 27%
This statement is a half-yearly financial report in accordance with the UK Listing Authority’s Disclosure and Transparency Rules. It covers the six month period ended 30 June 2015.
Philip Howell, Chief Executive of Rathbone Brothers Plc, said:
“In the first half of 2015, we have been working steadily towards our strategic goals. In a period when markets made little progress, we continued to grow both organically and through acquisition, adding a combined total net funds under management of £0.7 billion in the first half. The full benefit of 2014 acquisitions is reflected in our 2015 half year results.
“We will continue to invest in the skills and systems necessary to deliver our strategic plans and achieve our growth objectives. We face the future with cautious optimism.”
- Total funds under management at 30 June 2015 were £28.3 billion, up 4.0% from £27.2 billion at 31 December 2014. This compared to a decrease of 0.7% in the FTSE 100 Index and an increase of 0.6% in the FTSE WMA Balanced Index over the same period.
- Total net organic and acquired growth in the funds managed by Rathbone Investment Management was £0.6 billion in the first six months of 2015, representing a net annual growth rate of 5.1% (2014: 12.2%). Net organic growth of £0.3 billion for the first half represents an underlying annualised rate of net organic growth of 2.8% (2014: 4.1%).
- Underlying profit before tax1 increased 27.0% from £29.3 million2 to £37.2 million, representing a margin of 31.9% (2014: 29.9%2).
- Profit before tax was £31.8 million for the six months ended 30 June 2015, up 3.9% compared to £30.6 million2 in 2014.
- Basic earnings per share increased 3.9% to 53.2p (2014: 51.2p2).
- The board recommends a 21p interim dividend for 2015 (2014: 19p), an increase of 10.5% on 2014.
- Underlying operating income in Rathbone Investment Management of £106.8 million in the first six months of 2015 (2014: £90.8 million) was up 17.6%, mostly due to growth in funds under management. The average FTSE 100 Index was 6677 on our quarterly billing dates in 2015, compared to 6720 in 2014, a decrease of 0.6%.
- Net interest income of £5.5 million in the first six months of 2015 has increased 25.0% from £4.4 million in 2014 largely due to an increase in average liquidity to £1.6 billion for the six months to 30 June 2015 (2014: £1.1 billion).
- Underlying operating expenses of £79.6 million for the six months ended 30 June 2015 were up 15.7% from £68.8 million2 in the first half of 2014 largely reflecting higher fixed and variable staff costs associated with employees joining us through 2014 acquisitions and increased profitability.
- Funds under management in Rathbone Unit Trust Management were £2.7 billion at 30 June 2015 (31 December 2014: £2.5 billion). Net inflows of £107 million in the first half of 2015 have decreased from £338 million in 2014. Underlying operating income in Rathbone Unit Trust Management was £10.0 million in the six months ended 30 June 2015, an increase of 37.0% from £7.3 million in the first half of 2014.
- On 27 July 2015, Rathbone Investment Management Limited agreed to issue £20 million of 10-year subordinated notes (callable in year five) to M&G, which will count as Tier 2 capital. This has been made possible by the changes to regulatory capital rules as a result of CRD IV that allow us as a bank to add Tier 2 capital as a way of financing future growth in a cost effective and capital-efficient manner.
1 Excluding charges in relation to client relationships and goodwill and, in 2014, gain on disposal of financial securities and transaction costs
2 Restated following the adoption of IFRIC 21, as described in note 1 to the condensed consolidated interim financial statements
Issued on 28 July 2015
For further information contact:
Rathbone Brothers Plc
020 7399 0000
Mark Nicholls, Chairman
Philip Howell, Chief ExecutivE
Paul Stockton, Finance Director
020 7466 5054
Rathbone Brothers Plc
Rathbone Brothers Plc, 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 950 staff in 14 UK locations and Jersey, and has its headquarters in Curzon Street, London.