20th Feb 2020 09:19
(Alliance News) - Rathbone Brothers PLC on Thursday reported a rise in funds under management over 2019 on the back of growth from both of the wealth manager's businesses.
At December 31, Rathbone's total funds under management & administration stood at GBP50.4 billion, 14% ahead of the GBP44.1 billion seen at the end of 2018.
In 2019, the FTSE 100 Index increased 12.1% and the MSCI PIMFA Private Investor Balanced Index increased 13.1%.
The wealth manager upped its final dividend by 7.1% to 45 pence, taking its total dividend for 2019 to 70p - 6.1% higher than the 66p distributed in 2018.
Chair Mark Nicholls said: "2019 may well be remembered for political reasons more than any other, but investment markets finished the end of the year strongly. Our own funds under management and administration increased, as we continued to focus on providing a quality service to our clients and worked hard to bring Speirs & Jeffrey fully into Rathbones."
Rathbone's total funds in its Investment Management unit grew 12% over 2019 to GBP43.0 billion, whilst its Unit Trusts unit recorded 32% growth in funds to GBP7.4 billion.
The Investment Management unit saw net outflows of GBP400 million, but this was offset by market performance adding GBP4.9 billion.
"This reflected additional outflows as some pension and other institutional mandates were repositioned by trustees, previously noted investment manager departures and the exit of some lower-margin mandates following the integration of Speirs & Jeffrey, some of which is expected to continue into 2020," Rathbones explained.
The wealth managed did note, however, the unit's "resilient" GBP3.3 billion of gross organic inflows, despite "weaker investor sentiment" in 2019.
Within Unit Trusts, the rise in funds was driven by its Global Opportunities Fund growing 38% over 2019 to GBP1.86 billion.
The Unit Trusts business recorded GBP900 million in net inflows, which Rathbone said was an "outstanding performance" against a "difficult environment". Market performance added a further GBP900 million.
For 2019, Rathbone's pretax profit slipped 35% to GBP39.7 million from GBP61.3 million. Operating income, however, grew 12% to GBP348.1 million from GBP312.0 million.
Rathbone's fee income rose 12% - representing about 75% of total income - with commission income rising 23%.
The slip in profit was blamed on the higher costs following the acquisition of Speirs & Jeffrey.
"Rathbones has grown considerably in the past five years, nearly doubling its funds under management and administration during that time. Opportunities to build our market share remain. Delivering on our strategy will be our focus in the near term as we balance greater productivity with an ongoing desire to invest and grow," Chief Executive Paul Stockton added.
Shares in Rathbone Brothers were slightly higher in early trading in London on Thursday morning at 1,959.76 pence each.
By Paul McGowan; [email protected]
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