This was an impressive performance from wealth management group Rensburg Sheppards, given the harsh economic climate that prevailed throughout last year. And while assets under management (AUM) in the investment management business fell 22 per cent from £11.48bn to £8.93bn in the financial year, this compares favourably with a 32.2 per cent fall in the FTSE All-Share index over the same period. Moreover, funds managed on a discretionary basis - where fee income is higher - fell less steeply and now account for 72.3 per cent of AUM, close to the group's stated target of having 75 per cent of funds under discretionary management.
Weakness in equity markets accounted for the majority of the decline in the value of assets, which was partly offset by a small net inflow of funds on the investment management arm as well as in the fund management division, reversing an outflow seen in the previous year. However, there was an inevitable fall in fee and other recurring income of 7.5 per cent to £26m from investment management. On the fund management side, fee income was down 24 per cent at £9m, mainly reflecting a 26 per cent slump in AUM to £1.08bn as the unit trust business suffered.
Given the tough back-drop, Rensburg has been keeping a close eye on costs, with underlying operating expenses across the business falling from £79.1m to £73.6m. And since the year-end Rensburg has clinched a deal to transfer its corporate bond trust to Gartmore Fund Managers, allowing the fund management side to concentrate on UK equity investment management. At the year end, the corporate bond trust had assets of £98.7m, and Rensburg will receive a share of the annual management fee generated over the next three years.
Subject to revision following the results, broker Numis Securities is forecasting 2010 pre-tax profits to fall to £27.2m and EPS of 40.3p.
| RENSBURG SHEPPARDS(RBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 475p | MARKET VALUE: | £208m | |
| TOUCH: | 470-480p | 12-MONTH HIGH: | 568p | LOW: 352p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 450p* | NET CASH: | £31m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2004*** | 37 | 8.4 | 26.1 | 18.1 |
| 2006** | 109 | 13.0 | 20.9 | 26.4^ |
| 2007 | 122 | 25.7 | 37.5 | 22.5 |
| 2008 | 133 | 31.2 | 47.9 | 25.5 |
| 2009 | 119 | 30.5 | 49.0 | 25.5 |
| % change | -11 | -2 | +2 | - |
Ex-div:15 Jul Payment:07 Aug *Includes intangible assets of £177m, or 402p a share **16-month period ***12 months to 30 November 2004 ^Excludes 45p special dividend | ||||
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