Interim Management Statement

RNS Number : 8180R

Rathbone Brothers PLC

07 May 2009

 



Rathbone Brothers Plc

Resilient performance at Rathbones with continuing organic growth

This statement, issued on the day of our Annual General Meeting, is an Interim Management Statement in accordance with the UK Listing Authority's Disclosure and Transparency Rules. It covers the period from 1 January 2009 to 7 May 2009, and includes trading results for the three months ended 31 March 2009.

At the Annual General Meeting later today Mark Powell, chairman of Rathbone Brothers Plc, will say:

'Rathbone Investment Management continues to perform well with organic growth remaining strong at 5.8%, notwithstanding significant market uncertainty in the first quarter of 2009, which is likely to continue.

'Our plans to restructure the range of funds in our unit trust business are well-advanced and have been well-received.  Initiatives supporting previously announced cost reductions have been completed.

'As disclosed in the recently published annual report for 2008, Rathbones has a very strong balance sheet. Although we expect markets to remain difficult and volatile during 2009, we believe that our surplus regulatory capital provides greater flexibility for us to take advantage of growth opportunities.'

Highlights:

• The underlying annualised rate of net organic growth of funds under management in Rathbone Investment Management was 5.8% for the first three months of 2009 (Q1 2008: 7.6%).

• Total funds under management were £9.87 billion at 5 April 2009, down 5.6% from £10.46 billion at 31 December 2008 compared to a fall of 9.1% in the FTSE 100 Index and a fall of 6.0% in the FTSE APCIMS Balanced Index over the first quarter.

• Net operating income in Rathbone Investment Management of £27.3 million was down 4.5% on the first quarter of 2008, compared to a fall of 32.2% in the FTSE 100 Index and a fall of 20.8% in the FTSE APCIMS Balanced Index over the same period.

• Net interest income of £7.9 million in the first three months of 2009 is 19.7% higher than the £6.6 million earned in the corresponding period in 2008 reflecting continuing benefits from reductions in interest rates in the first quarter of 2009. Client deposits at 31 March 2009 were £1.0 billion (31 March 2008: £1.1 billion).  Interest margins are expected to reduce significantly in the second half of 2009 as yields on treasury assets continue to fall.

• Funds under management in our unit trust business fell from £1,029 million at 31 December to £755 million at 31 March 2009 reflecting market falls and net redemptions of £182 million, which included the withdrawal of two mandates totalling £130 million.  Initiatives supporting annualised cost savings of £0.8 million in 2010 have also been implemented.

2009 Budget

The budget announced by the Chancellor of the Exchequer on 23 April 2009 contained a number of proposals which, if implemented, will have the effect of increasing the tax burden on many of our clients; in particular, the changes to tax relief on pension contributions.  Whilst these changes may affect the relative efficiency of investment options open to clients, we do not expect that they will have a material impact on Rathbones' business.

Net operating income (from continuing operations)

	3 months ended 31 March
	2009	2008	Change
	£m	£m	%
Investment management
- Fees	12.3	14.0	-12.1%
- Commissions	7.1	8.0	-11.3%
- Interest & other	7.9	6.6	19.7%
	27.3	28.6	-4.5%
Unit trusts	1.8	3.3	-45.5%
Trust and tax (continuing operations)	1.3	1.5	-13.3%
Net operating income (continuing operations)	30.4	33.4	-9.0%
FTSE 100 Index (5 April1)	4030	5947	-32.2%

Funds under management

	2009	2008
	£m	£m
(i) Investment management
Opening FUM (1 January)	9,429	11,226
Inflows	379	376
Organic new business	325	376
Acquired new business	54	-
Outflows	(189)	(161)
Market adjustment	(508)	(695)
Closing FUM (5 April1)	9,111	10,745
Underlying annualised rate of net organic growth	5.8%	7.6%

(ii) Unit trusts
Opening FUM (1 January)	1,029	1,894
Inflows	12	49
Outflows	(194)	(115)
Market adjustment	(93)	(150)
Closing FUM (5 April1)	755	1,678
Total FUM (5 April1)	9,866	12,423

 (1) 5 April is the first quarterly charging date for investment management clients. The other charging dates are 30 June, 30 September and 31 December. Unit trust income accrues on daily levels of funds under management.

For further information contact:

Rathbone Brothers Plc Tel: [phone]  email: [e-mail]   Mark Powell, Chairman Andy Pomfret, Chief Executive Paul Stockton, Finance Director Emily Morris, Marketing Director

Brunswick Tel: [phone] email: [e-mail]   Helen Barnes/Claire Gore

Rathbone Brothers Plc 

Rathbone Brothers Plc is a leading independent provider of high-quality, personalised investment and wealth management services for private investors, charities and trustees. This includes discretionary investment management, tax and financial planning, and unit trusts. 

Rathbones has nearly 700 staff in 10 UK locations and Jersey, and has its headquarters in New Bond Street, London.

 

END

 

 

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