Trading Statement

RNS Number : 2932L

Rathbone Brothers PLC

08 January 2009

 



8 January 2009

Rathbone Brothers Plc 

Trading Update and Notice of Results

Trading Update

Rathbone Brothers Plc ('Rathbones'), a leading provider of discretionary fund management and wealth management services for private investors and trustees, announces that:

• Total funds under management as at 31 December 2008 were £10.46 billion, down 20.3% compared with £13.12 billion as at 31 December 2007.

• Funds managed by Rathbone Investment Management Limited were £9.43 billion as at 31 December 2008, down 16.0% from £11.23 billion as at 31 December 2007. This compares with a 31.3% fall in the FTSE 100 index and a 20.1% fall in the FTSE APCIMS Balanced index over the same period. 

• The underlying annualised rate of organic growth in funds under management in Rathbone Investment Management was 7.3% in the year ended 31 December 2008.

• Fee income for the three months ended 31 December 2008 was calculated based upon a FTSE 100 index level of 4434. The average FTSE 100 index for 2008, based on quarter end billing dates, was 5227. 

• Cash held in client portfolios was £1.2 billion as at 31 December 2008 compared to £1.0 billion at 31 December 2007. Interest income in the three months ended 31 December 2008 continued to benefit from abnormally high credit spreads. Given the significant recent interest rate reductions, such a high level of interest income is unlikely to continue into 2009. 

• Funds managed by Rathbone Unit Trust Management Limited fell from £1.89 billion as at 31 December 2007 to £1.03 billion as at 31 December 2008, a decrease of 45.5%. In common with other market participants, net unit trust redemptions during the year were high, comprising some £234 million.

• Following the annual salary review, total salary cost has increased by 0.5% on an annualised basis.

Financial Services Compensation Scheme

The recent arrangements put in place by the Financial Services Compensation Scheme ('FSCS') to protect the depositors of Bradford & Bingley and other failed deposit-taking institutions will result in a significant increase in the levies made by the FSCS on the industry. Rathbones anticipates a provision of approximately £1.7 million in its 2008 accounts in respect of its share of the estimated interest cost of FSCS borrowings; this additional charge is expected to be billed as part of the 2008/9 and 2009/10 levy years. Further levy charges are likely to be incurred in future years although the ultimate cost remains uncertain. 

Offshore trust businesses

On 15 October 2008 the Group announced the completion of its disposal of its offshore trust operations in Jersey to Hawksford Holdings Limited ('Hawksford') for a total consideration of £28.5 million. Discussions with Hawksford are continuing regarding the potential sale of the Singapore-based trust company, Rathbone Trust (Singapore) Pte. Limited ('Singapore'); other options are being explored to secure an appropriate future ownership structure.

The Group has also entered into a non-binding heads of terms agreement to sell its Geneva-based trust business, Rathbone Trust Company SA ('Geneva'), to its management. The net asset value of Geneva as at 31 December 2008 was £1.7 million. Discussions regarding the possible sale of the British Virgin Islands-based trust business to its management are ongoing.

Outlook

Whilst investment markets are expected to remain challenging, Rathbones continues to focus on investment management, emphasising the value of close personal attention to the individual needs and circumstances of each client. It is therefore well-positioned to take advantage of organic growth opportunities. Rathbones remains well-capitalised with minimal borrowings and does not make any use of the wholesale market to fund its operations. 

Notice of Results

Rathbone Brothers Plc will issue its preliminary results for the year ended 31 December 2008 on Wednesday 4 March 2009. These results are anticipated to be in line with expectations.

ENDS

For further information contact:

Rathbone Brothers Plc 020 7399 0000

Mark Powell, Chairman

Andy Pomfret, Chief Executive

Paul Stockton, Finance Director

Emily Morris, Marketing Director

Brunswick

Kate Holgate/Helen Barnes 020 7404 5959

Notes for editors:

Rathbone Brothers Plc

Rathbone Brothers Plc specialises in providing, through its subsidiaries, high-quality, personalised investment management and wealth management services for private investors and trustees, including discretionary fund management, unit trusts, tax planning, trust and company management, pension and banking services. It manages £10.46 billion of funds, including £1.03 billion managed by Rathbone Unit Trust Management Limited (as at 31 December 2008).

Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are 'forward-looking statements' within the meaning of the United States federal securities laws. These forward-looking statements reflect Rathbones' current expectations concerning future events and actual results may differ materially from current expectations or historical results.  

Certain data contained within this announcement has been sourced from management accounts and thus has not been audited.

 

END

 

 

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