Tumultuous equity markets meant that it was an increase in new business that generated the lion's share of the increase in operating income last year for Rathbone Brothers (RAT). Total funds under management grew by 7 per cent to £29.2bn. The group's investment management business achieved inflows of £1.4bn, although half of this came via the wealth manager's 2014 acquisition of part of Deutsche Asset & Wealth Management's private client business and Jupiter’s private client and charity investment management business.
Organic growth within the investment management arm slowed to 3 per cent, against a 5 per cent target, as volatile markets took their toll. But average investment returns across its clients beat the FTSE WMA balanced index, achieving 3.5 per cent total returns against a 0.8 per cent industry benchmark return. The group's unit trusts business, which caters to retail investors, also grew funds under management by around a quarter to £3.1bn.
Rathbone bought the remaining 80.1 per cent stake in Vision Independent Financial Planning and Castle Investment Solutions, broadening its distribution network via IFAs. Underlying operating expenses increased by 14 per cent as the group expanded the business and increased performance-based staff costs.
Analysts at Peel Hunt expect adjusted EPS of 126.9p this year, up from 116.1p in 2015.
RATHBONE BROTHERS (RAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,245p | MARKET VALUE: | £1.08bn | |
| TOUCH: | 2,234-2,245p | 12-MONTH HIGH: | 2,373p | LOW: 2,014p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 624p* | |||
| Year to 31 Dec | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 145 | 39.2 | 66.7 | 46 |
| 2012 | 156 | 38.5 | 66.5 | 47 |
| 2013 | 176 | 44.2 | 76.1 | 49 |
| 2014 (restated) | 209 | 45.7 | 76.0 | 52 |
| 2015 | 230 | 58.6 | 97.4 | 55 |
| % change | +10 | +28 | +28 | +6 |
Ex-div: 28 Apr Payment: 23 May *Includes intangible assets £171m, or 356p a share | ||||
