24th Jul 2014 10:02
LONDON (Alliance News) - Rathbone Brothers PLC Thursday said its funds under management increased by 8.6% in the first half, boosted by organic growth and the acquisition of part of Deutsche Asset & Wealth Management's London-based private client investment management business.
In a statement, the wealth manager said that funds under management increased to GBP23.9 billion from GBP22.0 billion in the six months to the end of June. It is awaiting a further increase when the acquisition of the private client and charity investment management business of Jupiter Asset Management completes.
Pretax profit rose to GBP30.9 million in the half year from GBP23.2 million in the corresponding period a year ago. This arose from an increase in net interest income to GBP4.4 million from GBP4.2 million, as well as an increase in net fee and commission income to GBP91.3 million from GBP82.0 million. Operating expenses increased to GBP73.1 million from GBP64.9 million.
"We have been considering a number of further strategic initiatives to develop the Rathbones group, whilst remaining true to our long-term vision to be the UK's leading independently-owned provider of investment management services to private clients, charities and trustees," Chief Executive Philip Howell said in a statement together with Chairman Mark Nicholls.
"The impact of recent acquisitions is expected to have a positive effect on earnings in 2015. We are continuing to invest carefully in the skills and systems required to achieve our growth objectives. Rathbones' outlook therefore remains positive," they added.
Rathbones also said it has plans to settle legal proceedings relating to a former subsidiary, which will result in a GBP15.0 million cash payment in the second-half. Rathbones expects to treat the charge as a GBP15.0 million exceptional cost. The settlement is expected to become unconditional before the end of October, it said.
Howell said that Rathbones is pleased to have closed off the long-running legal issue and to have removed the uncertainty from the business.
"Whilst we believe that the underlying Jersey claim would eventually prove unsuccessful and that effective insurance cover would be confirmed following the recent Appeal Court hearing, we have been mindful that litigation is never without risk and that we could face several more years of very substantial legal expense, having already incurred legal costs of approximately GBP5.0 million," Howell said.
"We have therefore concluded that joining a settlement would be in the best commercial interests of the company, allowing our senior management team to apply its full focus to executing our strategic plans," Howell added.
Rathbones increased its interim dividend by 1 pence to 19p per share.
Rathbones shares were Thursday quoted up 1.2% at 1,989.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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