Despite flat equity market conditions, asset manager Rathbone (RAT) grew funds under management by 9 per cent in the first half to £23.9bn. This was helped by the acquisition of Deutsche Asset & Wealth Management's private client business, which came with £617m of funds. Even without deals, Rathbone's net funds under management grew 4.1 per cent.
That partly reflects continued progress within the independent financial advisor (IFA) market: around 39 per cent of new fund inflows came through IFAs, up from 30 per cent a year earlier. But with a trend towards consolidation among smaller players, along with an ongoing tendency at larger financial groups to sell non-core businesses, Rathbone expects more acquisition-driven growth. Indeed, funds under management will receive a further boost when the acquisition of Jupiter Asset Management's private client and charity investment business completes in the current quarter. Moreover, Rathbone raised £23.6m in April through a placing to fund further deals.
Still, growth-driven costs - such as remuneration and headcount - helped push operating expenses up 10 per cent year on year to £68.5m. Rathbone will also shell out £15m during the second half as part of a legal settlement, after having reached an agreement in a long-running dispute involving a former employee of an old subsidiary.
Broker Numis Securities expects underlying pre-tax profit for the full-year of £62.6m, giving EPS of 102p (from £50.5m and 86.1p).
RATHBONE BROTHERS (RAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,991p | MARKET VALUE: | £952m | |
| TOUCH: | 1,984-1,991p | 12-MONTH HIGH: | 2,195p | LOW: 1,473p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 575p* | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2013 | 23.2 | 38.6 | 18 |
| 2014 | 30.9 | 51.6 | 19 |
| % change | +33 | +34 | +6 |
Ex-div: 10 Sep Payment: 8 Oct *Includes intangible assets of £118m, or 246p a share | |||
