Interim Management Statement

RNS Number : 1987R

Rathbone Brothers PLC

01 November 2011

 



Rathbone Brothers Plc

Rathbones attracts £300m of net new funds in the third quarter

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

Chief Executive, Andy Pomfret, commented:

"Rathbones' tailored and flexible approach to investment management continues to be attractive to clients in spite of the considerable market uncertainties.  The total net inflow of funds under management in Rathbone Investment Management was £284 million (7.4% on an annualised basis) in the three months ended 30 September 2011.

"We expect markets to remain nervous for the remainder of 2011 as inflation expectations and European sovereign debt uncertainties continue to dominate the headlines.  Despite this our brand and commitment to client service continue to position us well to grow as a leading provider of high-quality personalised discretionary investment services."

Highlights:

§ Total funds under management were £15.1 billion at 30 September 2011, down 3.2% from £15.6 billion at 31 December 2010, compared to a decrease of 13.1% in the FTSE 100 Index and a decrease of 8.2% in the FTSE APCIMS Balanced Index in the first nine months of 2011.

§ Underlying annualised rate of net organic growth of funds under management in Rathbone Investment Management was 4.6% for the quarter ended 30 September 2011 (2010: 5.7%) and 6.2% for the nine months ended 30 September 2011 (2010: 4.6%). The total rate of annualised rate of net inflows of 7.4% (2010: 10.4%) for the three months ended 30 September 2011 includes acquired inflows of £109 million.

§ Net operating income of £102.5 million in Rathbone Investment Management for the nine months ended 30 September 2011 was 15.7% higher than 2010 as net growth in new funds combined with higher average market levels. The average value of the FTSE 100 Index on our three principal charging dates¹ in 2011 was 5694 compared to 5403 on the same dates in 2010, a rise of 5.4%.  The average FTSE APCIMS Balanced Index, measured on the same dates, rose 4.5%. Income from new charges applied to client accounts from the second quarter of 2011 is in line with expectations.

§ Net interest and other income of £9.7 million in the first nine months of 2011 includes a one off gain of £1.1 million from the sale of long stock positions, arising from acquisitions in the 1990s and previously held in nominee, which are no longer required. Excluding this gain, net interest and other income of £8.6m (2010: £7.7 million) increased 11.7%.

§ Rathbone Unit Trust Management experienced a fourth consecutive quarter of net inflows attracting £62 million in the nine months ended 30 September 2011. Lower markets in the third quarter reduced funds under management from £1.1 billion at 30 June 2011 to £1.0 billion at 30 September 2011.

§ The project to relocate our London head office to 1 Curzon Street is proceeding according to plan. The move is expected to take place by the end of February 2012.

Net operating income

	3 months ended 30 September1				9 months ended 30 September1
	2011	2010	Change		2011	2010	Change
	£m	£m	%		£m	£m	%
Investment management
- Fees	19.2	17.3	11.0		59.1	48.1	22.9
- Commissions	8.0	8.6	(7.0)		28.0	27.3	2.6
- Net interest & other income2	4.0	2.5	60.0		9.7	7.7	26.0
- Fees from advisory services3	1.8	1.9	(5.3)		5.7	5.5	3.6
	33.0	30.3	8.9		102.5	88.6	15.7
Unit trusts	2.1	1.8	16.7		6.2	5.5	12.7
Net operating income	35.1	32.1	9.3		108.7	94.1	15.5
Average FTSE 100 Index on principal charging dates1	5128	5549	(7.6)		5694	5403	5.4

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

(2)   Net interest and other income includes a one off gain of £1.1 million from the sale of long stock positions, purchased following acquisitions in the 1990's and previously held in nominee, which are no longer required.

(3)   Including income from trust, tax and pension advisory services.

Funds under management

	3 months ended 30 September			9 months ended 30 September
	2011	2010		2011	2010
	£m	£m		£m	£m
(i) Investment management
Opening FUM (1 July / 1 January)	15,270	12,413		14,586	12,158
Inflows	473	500		1,542	1,553
Organic new business	364	354		1,322	1,050
Acquired new business	109	146		220	503
Outflows	(189)	(177)		(643)	(630)
Market adjustment	(1,510)	851		(1,441)	506
Closing FUM (30 September)	14,044	13,587		14,044	13,587
Underlying annualised rate of net organic growth	4.6%	5.7%		6.2%	4.6%
Annualised rate of net inflows	7.4%	10.4%		8.2%	10.1%
(ii) Unit trusts
Opening FUM (1 July / 1 January)	1,089	877		1,043	935
Inflows	63	33		174	95
Outflows	(40)	(41)		(112)	(144)
Market adjustment	(99)	82		(92)	65
Closing FUM (30 September)	1,013	951		1,013	951
Total FUM (30 September)	15,057	14,538		15,057	14,538
Net fund inflows/(outflows)
Investment management	284	323		899	923
Unit trusts	23	(8)		62	(49)
Total net fund flows	307	315		961	874

The FTSE 100 Index closed at 5544 on 31 October 2011, a rise of 8.1% since 30 September 2011, 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 2011.

1 November 2011

For further information contact:

Rathbone Brothers Plc Tel: [phone] email: [e-mail] Mark Nicholls, Chairman Andy Pomfret, Chief Executive Paul Stockton, Finance 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 some 750 staff in 11 UK locations and Jersey, and has its headquarters in New Bond Street, London.

www.rathbones.com

 

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