A more positive investment backdrop helps explain the decent earnings hike at fund manager Rathbone Brothers (RAT) - the FTSE 100 index, after all, has risen by over 10 per cent in the year to the end of June. So too does a hefty 20 per cent year-on-year increase in funds under management, to £19.9bn.
Some of that growth in funds reflects the acquisition of Taylor Young Investment Management's private client base in the period - which added £358m to the total. But, adjust for acquisition-driven growth, and funds under management still grew by an annualised 9.3 per cent in the first six months. What's more, the group's net investment management fee income rose 15 per cent year on year to £50.1m, while the comparative figure for Rathbone's unit trusts was £4.4m - an 11 per cent increase. Net commission income also rose strongly in the period - up 17 per cent to £23.2m.
Costs, however, have also been on the rise - significantly driven by greater staff costs after the headcount rose by 45 on the same period last year, to 821. In fact, total staff costs rose 12 per cent year on year to £32.6m.
Broker Canaccord Genuity expects full-year adjusted pre-tax profit of £51.6m, giving adjusted EPS of 86p (from £44.9m and 78p in 2012).
RATHBONE BROTHERS (RAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,664p | MARKET VALUE: | £768m | |
| TOUCH: | 1,663-1,664p | 12-MONTH HIGH: | 1,691p | LOW: 1,190p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 530p* | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2012 | 19.8 | 34.6 | 17.0 |
| 2013 | 23.2 | 38.0 | 18.0 |
| % change | +17 | +10 | +6 |
Ex-div: 11 Sep Payment: 9 Oct *Includes intangible assets of £106m, or 229p a share | |||
