Interim Management Statement

RNS Number : 5822V

Rathbone Brothers PLC

04 November 2010

 



Rathbone Brothers Plc

Funds under management up 11.0% in 2010

This statement is an Interim Management Statement in accordance with the UK Listing Authority's Disclosure and Transparency Rules.

Chief Executive, Andy Pomfret, commented:

"Rathbone Investment Management had a very positive third quarter, with annualised net organic growth in funds under management of 5.7% and fee and commission income benefitting from rising investment markets.

 "Whilst the recent equity market rally is welcome, economies remain fragile having yet to face the full effect of deficit reduction plans being implemented by many governments. Whilst this presents a mixed outlook for 2011, Rathbones continues to consolidate its position as a leading provider of high-quality, personalised discretionary investment management services and remains well positioned to take advantage of growth opportunities."

Highlights:

§ Total funds under management were £14.54 billion at 30 September 2010, up 11.0% from £13.10 billion at 31 December 2009, compared to an increase of 2.5% in the FTSE 100 Index and an increase of 4.4% in the FTSE APCIMS Balanced Index in the first nine months of 2010.

§ The underlying annualised rate of net organic growth of funds under management in Rathbone Investment Management was 5.7% for the quarter ended 30 September 2010 (2009: 7.2%) and 4.6% for the nine months ended 30 September 2010 (2009: 6.4%).

§ Acquired inflows of funds under management into Rathbone Investment Management totalled £146 million in the third quarter of 2010, which when added to net organic growth represents a net annual growth rate of 10.4% (2009: 7.9%).

§ Net operating income of £84.8 million in Rathbone Investment Management for the nine months ended 30 September 2010 was 8.0% higher than 2009 as higher market levels combined with client portfolios becoming more fully invested.  The average value of the FTSE 100 Index on our three quarterly charging dates in 2010 was 5403 compared to 4471 on the same dates in 2009, a rise of 20.8%.  The average FTSE APCIMS Balanced Index, measured on the same dates, rose 15.3%.

§ Net interest and other income of £7.6 million in the first nine months of 2010 was 54.8% lower than the £16.8 million earned in the corresponding period in 2009, reflecting the impact of reduced yields on treasury assets.  Client deposits at 30 September 2010 were £0.8 billion (30 September 2009: £0.9 billion).

§ Rathbones' balance sheet remains strong, with a Tier 1 ratio of 26% at 30 September 2010, compared to the recently published Basel III minimum requirement of 7%.

§ Funds under management in Rathbone Unit Trust Management increased from £0.88 billion at 30 June 2010 to £0.95 billion at 30 September 2010, with net redemptions slowing to £8 million in the third quarter.

Net operating income

	3 months ended 30 September1				9 months ended 30 September1
	2010	2009	Change		2010	2009	Change
	£m	£m	%		£m	£m	%
Investment management
- Fees	17.8	15.1	17.9%		49.6	40.5	22.5%
- Commissions	8.7	7.3	19.2%		27.6	21.2	30.2%
- Interest & other	2.5	3.4	-26.5%		7.6	16.8	-54.8%
	29.0	25.8	12.4%		84.8	78.5	8.0%
Unit trusts	1.8	2.0	-10.0%		5.5	5.6	-1.8%
Trust and tax	1.3	1.2	8.3%		3.8	3.6	5.6%
Net operating income	32.1	29.0	10.7%		94.1	87.7	7.3%
Average FTSE 100 Index on charging dates1	5549	5134	8.1%		5403	4471	20.8%

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

Funds under management

	3 months ended 30 September			9 months ended 30 September
	2010	2009		2010	2009
	£m	£m		£m	£m
(i) Investment management
Opening FUM (1 July / 1 January)	12,413	9,685		12,158	9,429
Inflows	500	374		1,553	1,078
Organic new business	354	357		1,050	969
Acquired new business	146	17		503	109
Outflows	(177)	(182)		(630)	(519)
Market adjustment	851	1,356		506	1,245
Closing FUM (30 September)	13,587	11,233		13,587	11,233
Underlying annualised rate of net organic growth	5.7%	7.2%		4.6%	6.4%
Annualised rate of net inflows	10.4%	7.9%		10.1%	7.9%
(ii) Unit trusts
Opening FUM (1 July / 1 January)	877	836		935	1,029
Inflows	33	23		95	85
Outflows	(41)	(50)		(144)	(291)
Market adjustment	82	133		65	119
Closing FUM (30 September)	951	942		951	942
Total FUM (30 September)	14,538	12,175		14,538	12,175

The FTSE 100 index closed at 5749 on 3 November 2010, a rise of 3.6% since 30 September 2010, which has increased the value of funds under management. Investment management fee income in the fourth quarter is dependent upon the value of funds under management at 31 December 2010.

For further information contact:

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

Quill PR Tel: [phone] Hugo Mortimer-Harvey

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 over 700 staff in 11 UK locations and Jersey, and has its headquarters in New Bond Street, London.

www.rathbones.com

 

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