Rathbone Brothers (RAT) may be in touching distance of its target for funds under management, but boosting organic growth is proving more of a challenge. The wealth manager grew its funds under management by 14 per cent to £39.1bn last year, very close to a targeted £40bn by the end of 2018. Net inflows were a solid £0.9bn, equivalent to an organic growth rate of 3 per cent, but that’s still behind management’s target of 5 per cent through the cycle.
Market gains of £2.4bn were the real growth driver last year. Still, the wealth manager outperformed the WMA Balanced Index, which was up 7.2 per cent. Net inflows into its unit trusts were particularly strong at £883m, taking funds under management to a record £5.3bn.
Management is trying to boost its organic growth by improving its ties with intermediaries, helped by its acquisition of Vision Independent Financial Planning. That business grew its funds by 40 per cent to £1.4bn, while flows via intermediaries hit £265m, surpassing management’s £200m. Rathbone expects new business via this channel to grow to around £350m.
Analysts at Peel Hunt expect adjusted pre-tax profits of £92.6m during the 12 months to December 2018, giving EPS of 143p (up from £87.5m and 137.5p in 2017).
| RATHBONE BROTHERS (RAT) | ||||
| ORD PRICE: | 2,726p | MARKET VALUE: | £1.40bn | |
| TOUCH: | 2,724-2,728p | 12-MONTH HIGH: | 2,842p | LOW: 2,197p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 708p | |||
| Year to 31 Dec | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 176 | 44.2 | 76.1 | 49 |
| 2014 | 209 | 45.7 | 76.0 | 52 |
| 2015 | 230 | 58.6 | 97.4 | 55 |
| 2016 | 251 | 50.1 | 78.9 | 57 |
| 2017 | 292 | 58.9 | 92.7 | 61 |
| % change | +16 | +18 | +17 | +7 |
| Ex-div: | 19 Apr | |||
| Payment: | 14 May |
