Rathbones confident in full-year amid volatile markets

The FTSE 250 firm said £43.1bn of that was in the investment management business compared to £43.8bn at the end of the prior quarter, while £10.6bn was in the Rathbone Funds business, down from £10.9bn, and £4.2bn was in Saunderson House, which was unchanged over the three months.

Discretionary and managed net inflows were described as “resilient” at £0.4bn in the three months ended 30 September, down from £0.6bn a year earlier, and representing an annualised growth rate of 3.3%, down from 4.8%.

Discretionary service net inflows totalled £0.3bn, compared to £0.5bn year-on-year.

Net inflows into Rathbones’ multi-asset fund range were said to be “strong”, totalling £0.1bn and equating to annualised net growth for the period of 17.4%.

Despite continued market volatility and “significant” outflows across the wider asset management industry, net outflows in the firm’s single-strategy fund range remained low at £0.1bn in the quarter, swinging from net inflows of £0.4bn in the same period last year.

The board said the integration of Saunderson House was progressing well, with new propositions launched during the quarter, and net outflows of £0.1bn in line with expectations.

Underlying net operating income was £113m for the three months ended 30 September - an increase of 6.2% year-on-year.

Investment management fees slipped to £67.5m from £72.8m, reflecting lower funds under management and administration, while commission income rose 12% to £12.1m on the back of increased trading volumes amid market volatility.

Net interest income increased “materially”, the board said, to £5.6m from £0.9m year-on-year, reflecting UK base rate rises during the year to date.

Fees from advisory services and other income increased to £12.4m from £4.9m, which the board put down to organic growth and the impact of the Saunderson House acquisition.

Income in Rathbone Funds, which accrues daily, totalled £15.4m in the period, down from £17m in the third quarter of 2021.

“Despite challenging investment markets Rathbones has delivered a resilient quarter, with annualised discretionary and managed net organic growth of 3.3% and overall group investment performance that compares well against industry benchmarks,” said chief executive officer Paul Stockton.

“Market movements in investment values to 30 September adversely impacted total funds under management and administration, however, which fell 1.7% in the quarter to £57.9bn, against the MSCI PIMFA Private Investor Balanced Index, which fell 3.5% over the same period.”

Stockton said the company was placing a high priority on “engaging meaningfully” with clients, both face-to-face and digitally, and was on-track to deliver the first phase of its planned InvestCloud and Charles River implementations by the end of the year.

“Rathbones is well-positioned to take advantage of the future growth opportunities that can arise both during and after periods of investment market volatility.”

Rathbones said it would announce its full-year results for the 12 months ending 31 December on 1 March.

At 0938 BST, shares in Rathbones Group were down 0.67% at 1,780p.

Reporting by Josh White at Sharecast.com.