TIDMRAT
RNS Number : 0080P
Rathbone Brothers PLC
14 October 2021
Rathbone Brothers Plc
Third quarter trading update
Rathbone Brothers Plc ("Rathbones") announces a trading update
for the three months ended 30 September 2021.
Paul Stockton, Chief Executive, said:
"Following a strong third quarter of growth, our total funds
under management and administration reached GBP60.9 billion at 30
September 2021. Positive net organic inflows in Investment
Management and record net inflows into Rathbone Funds reflect our
continuing momentum and delivery against the strategic priorities
we have set out for growth. We continue to transform our digital
capability and client experience and welcome the addition of
Saunderson House's capability in the fourth quarter. With a clear
direction and strong balance sheet, we are confident that our
current plans place us in a strong position to take advantage of
future growth opportunities across the Rathbones Group."
Highlights:
- Total funds under management and administration ('FUMA')
increased 11.3% to GBP60.9 billion during the first nine months of
the year (31 December 2020: GBP54.7 billion).
- GBP48.8 billion in the Investment Management business (31 December 2020: GBP44.9 billion).
- GBP12.1 billion in the Rathbone Funds business (31 December 2020: GBP9.8 billion).
- The Investment Management business recorded gross inflows of
GBP1.1 billion in the third quarter, nearly doubling the GBP639
million recorded in Q3 2020. Net organic inflows continued to be
positive at GBP329 million (Q3 2020: net outflows of GBP169
million), representing an annualised organic growth rate of
2.8%.
- Rathbone Funds recorded GBP1.1 billion gross inflows in the
period (Q3 2020: GBP867 million). Net inflows totalled GBP563
million (Q3 2020: GBP395 million), representing annualised net
organic growth of 19.8% (Q3 2020: 19.6% annualised), with
particularly strong net inflows into the Multi-Asset Portfolio
Funds, Ethical Bond Fund and Global Opportunities Fund. Rathbone
Funds also ranked 7th for overall net retail sales during the
second quarter in the most recent Pridham report.
- Underlying net operating income was GBP106.4 million for the
three months ended 30 September 2021, an increase of 22.3% from the
GBP87.0 million for the three months ended 30 September 2020.
- Investment Management fees were up 28.2% compared to Q3 2020
due to positive markets and the transition of former Speirs &
Jeffrey clients to Rathbones standard tariffs.
- Commission income of GBP10.8 million was 8.9% lower than Q3
2020, reflecting a return to more normalised levels.
- Net interest income totalled GBP0.9 million (Q3 2020: GBP2.2
million) reflecting UK base rate reductions in place since March
2020.
- Fees from advisory services and other income increased by
11.1% to GBP4.9 million (Q3 2020: GBP4.5 million), reflecting good
growth in both Vision Independent Financial Planning and Rathbone
Financial Planning.
- Income in Rathbone Funds, which accrues daily, totalled
GBP17.0 million as a result of substantial funds growth throughout
the year, an increase of 45.9% on the GBP11.7 million reported for
the third quarter in 2020.
- The acquisition of Saunderson House is anticipated to complete
during the fourth quarter and will be reported as acquired new
business in that period.
Note: During the period, Rathbones issued GBP40 million of
10-year tier 2 notes with a call option in October 2026 and
annually thereafter. Interest is payable at a fixed rate of 5.642%
per annum until the first call option date and at a fixed rate of
4.893% over Compounded Daily SONIA thereafter. Rathbone Investment
Management Limited repaid its previous GBP20.0 million 10-year
callable subordinated loan note as the notes were no longer
efficient for regulatory capital purposes.
Net operating income:
3 months ended 30 September 9 months ended 30 September
2021 2020 Change 2021 2020 Change
GBPm GBPm % GBPm GBPm %
Investment Management
- Fees 72.8 56.8 28.2 213.5 163.2 30.8
- Commissions 10.8 11.8 (8.9) 42.0 49.2 (14.6)
- Net interest income 0.9 2.2 (61.3) 3.3 7.0 (53.7)
* Fees from advisory services(1) and other income 4.9 4.5 11.1 15.5 14.6 6.6
-------- --------- ------- --------- --------- -------
89.4 75.3 18.7 274.3 234.0 17.2
Rathbone Funds 17.0 11.7 45.9 45.7 32.0 42.5
-------- --------- ------- --------- --------- -------
Total net operating
income 106.4 87.0 22.3 320.0 266.0 20.2
-------- --------- ------- --------- --------- -------
Annualised basis point
return:
Investment Management(2) 68.8
bps 66.4 bps 72.4 bps 73.1 bps
Rathbone Funds(3) 56.7
bps 54.7 bps 55.1 bps 54.5 bps
FTSE 100 Index on principal
charging dates(4) 7086 5866 20.8 6954 5817 19.6
MSCI PIMFA Private
Investor Balanced Index
on principal charging
dates(4) 1781 1568 13.6 1754 1510 16.2
(1) Including income from trust and tax services, Rathbones
Financial Planning and Vision Independent Financial Planning.
(2) Net operating income excluding interest on own reserves,
interest payable on Tier 2 notes issued, fees from
advisory and other income, divided by the average funds under
management on the quarterly billing dates.
(3) Net annual management charges as a percentage of average
funds under management.
(4) The principal charging dates for Investment Management
clients are 5 April, 30 June, 30 September and 31 December.
Rathbone Funds income accrues on daily levels of funds under
management.
Funds under management and administration ('FUMA'):
3 months ended 9 months ended 12 months
30 September 30 September ended 31
(i) Investment Management December
2021 2020 2021 2020 2020
GBPm GBPm GBPm GBPm GBPm
Opening FUM (1 July/1 January) 47,798 41,321 44,912 42,965 42,965
Inflows 1,119 639 3,501 3,000 3,915
-------------------------------- -------- ------- -------- -------- ----------
Organic new business 1,083 595 3,414 2,480 3,329
Acquired new business(5) 36 44 87 520 586
-------------------------------- -------- ------- -------- -------- ----------
Outflows (754) (764) (2,662) (2,343) (3,308)
Market effect and investment
performance 596 567 3,008 (1,859) 1,340
-------- ------- -------- -------- ----------
Closing FUMA (30 September) 48,759 41,763 48,759 41,763 44,912
-------- ------- -------- -------- ----------
Annualised rate of net organic
growth 2.8% (1.6%) 2.2% 0.4% 0.1%
Total annualised net organic
and acquired growth 3.1% (1.2%) 2.5% 2.0% 1.4%
(ii) Rathbone Funds
Opening FUM (1 July/1 January) 11,386 8,044 9,820 7,438 7,438
Inflows 1,050 867 3,270 2,550 3,574
Outflows (487) (472) (1,677) (1,601) (2,076)
Market effect and investment
performance 194 290 730 342 884
-------- ------- -------- -------- ----------
Closing FUM (30 September) 12,143 8,729 12,143 8,729 9,820
-------- ------- -------- -------- ----------
Annualised rate of net organic
growth 19.8% 19.6% 21.6% 17.0% 20.1%
Total FUMA (30 September) (6) 60,902 50,492 60,902 50,492 54,731
-------- ------- -------- -------- ----------
(5) Acquired new business is defined as corporate or team acquisitions.
(6) Includes Greenbank funds of GBP2.2 billion (31 December
2020: GBP1.9 billion) and funds managed with a charitable mandate
of GBP7.1 billion (31 December 2020: GBP6.5 billion).
Investment Management: Service level breakdown of FUMA
30 September 31 December 30 September Change Change
2021 2020 2020 9 months 12 months
GBPm GBPm GBPm % %
--------------------------------- ------------- ------------ ------------- ---------- -----------
Direct 36,678 33,678 30,812 8.9 19.0
Financial Adviser linked 10,596 9,347 8,730 13.4 21.4
--------------------------------- ------------- ------------ ------------- ---------- -----------
Total Discretionary 47,274 43,025 39,542 9.9 19.6
Non-Discretionary Investment
Management 1,060 1,392 1,805 (23.9) (41.3)
Execution Only 3,000 2,658 2,381 12.9 26.0
--------------------------------- ------------- ------------ ------------- ---------- -----------
Gross Investment Management
FUMA 51,335 47,075 43,728 9.0 17.4
--------------------------------- ------------- ------------ ------------- ---------- -----------
Discretionary wrapped funds(7) (2,576) (2,163) (1,965) 19.1 31.1
--------------------------------- ------------- ------------ ------------- ---------- -----------
Total Investment Management
FUMA 48,759 44,912 41,763 8.6 16.8
--------------------------------- ------------- ------------ ------------- ---------- -----------
Proportion of non-discretionary
investment management to
total gross FUMA 2.1% 3.0% 4.1%
(7) Discretionary wrapped funds represent funds operated by
Rathbone Funds, managed by both Investment Management teams and
Rathbone Funds managers.
The FTSE 100 Index closed at 7142 on 13 October 2021, an
increase of 0.8% since 30 September 2021. Investment Management fee
income in the fourth quarter is dependent upon the value of funds
under management at 31 December 2021.
14 October 2021
For further information contact:
Rathbone Brothers Plc
Paul Stockton, Chief Executive
Jennifer Mathias, Group Finance Director
Shelly Patel, Head of Investor Relations
Tel: 020 7399 0071
email: shelly.patel@rathbones.com
Camarco
Ed Gascoigne-Pees
Julia Tilley
Tel: 020 3757 4984
email: ed.gascoigne-pees@camarco.co.uk
Rathbone Brothers Plc
Rathbones provides individual investment and wealth management
services for private clients, charities, trustees and professional
partners. We have been trusted for generations to manage and
preserve our clients' wealth. Our tradition of investing and acting
responsibly has been with us from the beginning and continues to
lead us forward. Our ambition is to be recognised as the UK's most
responsible wealth manager.
Rathbones has over 1,600 staff in 15 UK locations and Jersey;
its headquarters is 8 Finsbury Circus, London.
www.rathbones.com
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END
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