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Pre-tax profits soar at Rathbone

While funds under management rose year on year, pre-tax profits benefitted from the reassignment of leases on Rathbone’s legacy Curzon Street offices
July 25, 2018

Overall, it was a positive first half for Rathbone Brothers (RAT), which lifted its funds under management to £39.9bn – up from £39.1bn at the end of December. Within the investment management business, funds under management rose 6.6 per cent to £34.1bn. The underlying, annualised net organic growth rate here was 2.1 per cent, slightly lower than the previous year, but management anticipates that improvements in client documentation and automated systems will "improve workflow in investment teams".

IC TIP: Hold at 2398p

The unit Trusts business continues to impress, with positive momentum across the three largest funds. Funds under management climbed 26 per cent year on year to a record £5.8bn, with net inflows up 11.2 per cent to £299m and underlying operating income up 20.1 per cent to £17.9m.

Meanwhile, a significant rise in pre-tax profits was buoyed by a £2.9m net write-back of head office relocation costs, after Rathbone successfully reassigned the leases on its old Curzon Street offices. This compared with net costs of £15.8m as at June 2017.

Broker Numis forecasts pre-tax profits of £92.6m and EPS of 142p for 2018 (2017: £87.5m and 138p).

RATHBONE BROTHERS (RAT)  
ORD PRICE:2,398pMARKET VALUE:£ 1.3bn
TOUCH:2,388-2,398p12-MONTH HIGH:2,842pLOW: 2,254p
DIVIDEND YIELD:2.6%PE RATIO:20
NET ASSET VALUE:826p  
Half-year to 30 JunTotal operating income (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201714826.641.622.0
201815343.768.324.0
% change+4+64+64+9
Ex-div:06 Sep   
Payment:02 Oct