Against a backdrop of economic uncertainty and volatile investment markets, Rathbone Brothers (RAT) managed to grow its funds under management by 24 per cent to over £27bn in 2014 and attract more than 5,000 new clients. The resulting higher fees and commissions at the fund manager - whose clientele runs the gamut from private investors to charities and trustees - drove a 14 per cent rise in underlying operating income to £201m.
Rathbone has made the most of industry consolidation and larger companies' propensity for selling off non-core businesses, acquiring £3.2bn in funds from Jupiter Asset Management and Deutsche Asset & Wealth Management in the period. Moreover, its unit trust management division posted a 39 per cent rise in funds under management to £2.5bn and doubled its underlying operating margin, helping Rathbone to widen its group underlying operating margin to 30.6 per cent.
Strip out acquisitions and Rathbone's core investment management segment delivered net organic growth of 4 per cent - below the group's 5 per cent target. Costs may be a concern, too: underlying operating expenses rose about 11 per cent to £139m due to inflation, higher performance-based payments to staff and increased headcount.
Broker Peel Hunt forecasts full-year pre-tax profit of £74.2m in 2015, giving EPS of 122p, up from £59.9m and 98.9p.
| RATHBONE BROTHERS (RAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,182p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 2,182-2,189p | 12-MONTH HIGH: | 2,280p | LOW: 1,686p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 566p* | |||
| Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
|---|---|---|---|---|
| 2010 | 30.1 | 49.8 | 44.0 | |
| 2011 | 39.2 | 66.7 | 46.0 | |
| 2012 | 38.5 | 66.5 | 47.0 | |
| 2013 | 44.2 | 76.1 | 49.0 | |
| 2014 | 45.7 | 75.9 | 52.0 | |
| % change | +3 | - | +6 | |
Ex-div: 23 Apr Payment: 19 May *Includes intangible assets of £160m, or 334p a share | ||||
