On the investment management side, funds under management were essentially flat at £14.76bn, as inflows of £1.97bn were countered by a £0.93bn negative equity performance and outflows of £0.87bn. However, increased charges introduced in March pushed net fee income up from £66.5m to £80.1m. This more than offset a 10 per cent rise in total staff costs and pushed the underlying cost to income ratio down from 68.5 per cent to 66.4 per cent.
Encouragingly, Rathbone Unit Trust Management reversed the previous year's 3.2 per cent fall in assets under management - it actually grew these by 9.6 per cent to £1.09bn. And, with annual management charges and net dealing profits both showing a rise, net operating income rose from £7.4m to £8.2m, although a rise in operating expenses left pre-tax profits here flat at £0.8m.
Numis Securities expects 2012 adjusted pre-tax profits of £44.1m and EPS of 83.5p (£46.2m and 79p in 2011).
|RATHBONE BROTHERS (RAT)|
|ORD PRICE:||1,266p||MARKET VALUE:||£551m|
|TOUCH:||1260-1279p||12-MONTH HIGH:||1,308p||LOW: 950p|
|DIVIDEND YIELD:||3.6%||PE RATIO:||19|
|NET ASSET VALUE:||438p*|
Rathbone Brothers has produced another quality performance and pays a decent dividend, too. However, a forward PE of 15 looks pricey for the sector and leaves that quality looking factored-in. Hold.
Last IC view: Fairly priced, 1,153p, 27 July 2011.