Rathbones Group funds decline, net income rises

Rathbones Group reported total funds under management and administration of £58.9bn at the end of its first half on Thursday, down from £59.2bn year-on-year and £68.2bn at the end of 2021.

The FTSE 250 company noted that the MSCI PIMFA Private Investor Balanced index fell 10.0% over the same six-month period to 30 June.

It said £43.8bn of those funds were in its investment management business, down from £47.8bn, while Rathbone Funds saw a fall to £10.9b from £11.4bn, and Saunderson House recorded a maiden interim figure under Rathbones ownership of £4.2bn.

The board said that, despite a “difficult” market backdrop, net inflows in the first half were positive.

Total discretionary and managed net inflows came in at £0.6bn, down from £1bn a year earlier, representing an annualised growth rate of 2.3%, compared to 4.5% year-on-year.

Discretionary service net inflows totalled £0.4bn, narrowing from £0.7bn, while net inflows into its multi-asset fund range were described as “resilient”, totalling £0.2bn and equating to annualised net growth for the period of 22.3%, compared to £0.3bn in the first half of 2021.

Underlying net operating income rose 8.6% year-on-year to £231.9m, with income in investment management growing 8.3% to £200.1m and income from the funds business jumping 10.8% to £31.8m.

Underlying profit before tax slid to £50m in the first six months, from £62.9m a year ago, and reported profit before tax fell to £32.6m from £48.8m.

Rathbones noted that both reported and underlying profit were net of planned expenditure of £8m to further its digital and data capabilities in the first half.

In line with its progressive policy, the board increased the company’s interim dividend by 3.7% to 28p.

“The first half of 2022 has been a turbulent one for investors but despite this volatility, net inflows remained positive in the period,” said group chief executive Paul Stockton.

“Our net operating income totalled £231.9m to 30 June, an increase of 8.6% from the £213.5m last year, reflecting continued net organic and acquired growth in funds under management and stronger advisory revenues.”

Stockton said Rathbones remained focussed on delivering the strategic plans it set out at its full-year results.

“Investment in our digital and data capabilities remains critical to our future success which, supported by high client retention and a robust balance sheet, places Rathbones in a strong position to navigate short-term market fluctuations and take advantage of future growth opportunities in the sector.”

At 1017 BST, shares in Rathbones Group were down 1.6% at 1,842p.

Reporting by Josh White at Sharecast.com.