Rathbone Brothers pleased with first half growth

The FTSE 250 company said its underlying profit margin remained “strong” at 31.5%, compared to 30.4% in 2017.

Underlying earnings per share increased 11.3% to 76.1p.

Rathbone said its profit before tax for the half-year was up 64.3% to £43.7m, which the board said not only reflected the company’s underlying performance, but also a number of “significant” non-underlying items in 2017, which had not recurred in 2018.

Basic earnings per share were up 64.2% to 68.3p, and the board recommended a 24.0p interim dividend for 2018, up from 22.0p a year ago.

Total funds under management as at 30 June were £39.9bn, up 2.0% from £39.1bn at 31 December 2017.

That compared to a decrease of 0.7% in the FTSE 100 index, and a decrease of 0.2% in the MSCI WMA Private Investor Balanced index over the same period.

Total net organic and acquired growth in the funds managed by Rathbone’s investment management business was £0.5bn in the first six months of 2018, representing a net annual growth rate of 2.5%, down from 4.0% last year.

Net organic growth of £0.4bn for the first half represented an underlying annualised rate of net organic growth of 2.1%, falling from 2.9% in 2017.

Rathbone said its underlying operating income in investment management of £135.3m in the first six months of 2018 was up 6.2%.

The average FTSE 100 index was 7,418 on quarterly billing dates in 2018, compared to 7,322 in 2017, an increase of 1.3%.

Funds under management in its unit trusts business were £5.8bn at 30 June, up from £5.3bn at the end of December.

Net inflows there were £299m in the first half, rising from £269m, with underlying operating income in unit trusts reaching £17.9m - an increase of 20.1% year-on-year.

Shareholders equity of £447.8m at 30 June was a 23.3% improvement over 31 December, and 30.8% since 30 June last year, which the board said was largely due to a £60m equity placing in June.

“The first half of 2018 has been a busy one for Rathbones as we progressed a full project agenda and announced the acquisition of Speirs & Jeffrey whilst maintaining our focus on day-to-day operations,” said Rathbone Brothers chief executive Philip Howell.

“We remain confident in the outlook for the business.”