19th Feb 2015 09:25
LONDON (Alliance News) - Rathbone Brothers PLC Thursday said it is wary of the potential for political and economic uncertainty at home and abroad to hurt the markets, but is keeping a close eye on opportunities to further grow the business.
A challenging year did not stop the British investment manager from reporting an increase in funds under management and pretax profit in 2014, even with heightened volatility in the second half. The company raised its total dividend for 2014 to 52 pence from 49 pence for 2013.
"Rathbones looks forward to future growth opportunities in the sector, but remains aware of the possible adverse market effects that current political and economic uncertainty, both in this country and overseas, may have," Chairman Mark Nicholls said in a statement.
The note of caution to Rathbone Brothers' growth plans came as the company reported a GBP45.7 million pretax profit for 2014, representing a 3.3% increase on the prior year.
Rathbone Brothers, which manages the investments and wealth of private clients, charities and trustees, grew its funds under management over the course of 2014, increasing by 24% to GBP27.2 billion on December 31.
Some of the growth in funds managed was due to the acquisition of part of Deutsche Asset & Wealth Management's London-based private client investment management business last June, followed up with the purchase of Jupiter's private client and charity investment management business in September.
"I look forward to seeing the full benefit of our 2014 acquisitions in 2015, and working with our board in the coming years to develop and grow the business," Nicholls said.
New acquired business in the company's main subsidiary, Rathbone Investment Management, was up to GBP3.2 billion from about GBP600 million in 2013.
The investment management division also posted a net organic growth rate of 4.0%, which the company noted was below its 5.0% target.
Meanwhile, the unit trust business saw funds under management grow to GBP2.5 billion from GBP1.8 billion over the year.
Although Rathbone Brothers reported a 6.4% rise in net interest income to GBP9.2 million and a 14% rise in net fee and commission income to GBP187.5 million, both of which helped to boost operating income to GBP209.3 million from GBP176.4 million, the rise in pretax profit lagged as operating expenses increased to GBP163.6 million from GBP132.2 million.
Operating expenses included the GBP15.0 million Rathbone Brothers paid as part of a settlement of legal proceedings in Jersey. The matter involved a former director and employee of a former subsidiary, as well as some of Rathbones' professional indemnity insurers.
Underlying pretax profit grew by 22% to GBP61.5 million. It strips out the refund of levies for the Financial Services Compensation Scheme, gains on disposals of financial securities and its pension administration business, charges relating to client relationships and goodwill, the legal settlement, and transaction costs.
Rathbone Brothers shares were down 1.3% at 2,192.00 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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