Income down as growth slows at Rathbone Brothers

Net operating income at Rathbone Brothers fell in the first quarter, it reported on Wednesday, by 0.7% to £58.9m.

The FTSE 250 company saw closing funds under management grow in the three months to 31 March, to £26.15bn from £26.13bn in its investment management division, and to £3.2bn from £2.7bn in its unit trusts.

Total funds under management grew 1.6% by the end of the quarter, to £29.32bn from £28.86bn.

In its investment management division, Rathbone reported an underlying annualised rate of net organic growth of 1.5%, down from 3.6% a year ago, and total annualised net organic and acquired growth of 3.6%, down from 6.5%.

"Volatile investment markets have presented challenges that are reflected both in commission income and new business inflows for the period to 31 March,” said Rathbone Brothers chairman Mark Nicholls.

“The FTSE 100 index was 6091 on our 5 April billing date, down 2.4% from 31 December 2015, and 10.9% from a year ago,” he added.

Nicholls said the company’s growth initiatives remain important for it to maintain its position as a leading discretionary wealth manager.

As a result, the board has decided to pursue longer-term initiatives in spite of its expectation that markets will continue to lack direction in the short term.

“Rathbones remains alert to acquisition opportunities that may arise as a consequence of these market conditions,” he explained.