Andy Pomfret, Chief Executive of Rathbone Brothers Plc, said:
"Market conditions remained challenging for private clients in 2012 but Rathbones did increase its funds under management by 13.4% to £18 billion in the year. Profit before tax of £38.8 million for the year to 31 December 2012 was marginally lower than the £39.2 million in 2011 but basic earnings per share of 67.00p were up 0.4% on 66.72p in 2011.
"After a challenging 2012 UK equity markets ended the year on a more positive note and this has continued into 2013. Rathbones looks forward to 2013 with more optimism although markets do remain fragile as governments, particularly in the US, the UK and the eurozone, battle with difficult economic and financial conditions. Rathbones continues to grow and consolidate its position as a leading provider of high-quality, personalised discretionary investment management services.
"I am also pleased to announce that Philip Howell will be joining us on 4 March as Deputy Chief Executive. Most recently Philip has been chief executive of Williams de Broë and his considerable experience will add to the strength and depth of our management team."
Highlights:
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Total funds under management were £17.98 billion at 31 December 2012, up 13.4% from £15.85 billion at 31 December 2011. In comparison over the same period the FTSE 100 Index and FTSE APCIMS Balanced Index increased by 5.9% and 5.8% respectively.
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The total net annual growth rate of funds under management for Rathbone Investment Management was 6% (2011: 8%). This comprised £0.48 billion of acquired inflows (2011: £0.31 billion) from new investment teams and private client acquisitions of R.M. Walkden & Co. in April 2012 and AIB Jersey in October 2012, and £0.44 billion of net organic growth (2011: £0.79 billion). The underlying annualised rate of net organic growth was 3% (2011: 5%) in 2012 reflecting both a £31 million outflow from Albany Investment Trust plc in August and £31 million of outflows following the end of contractual arrangements with Cavanagh Financial Management Limited in November 2012.
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Profit before tax was £38.8 million for the year ended 31 December 2012, a decrease of 1.0%, compared to £39.2 million in 2011. Basic earnings per share increased by 0.4% to 67.00p (2011: 66.72p).
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Underlying profit before tax (excluding amortisation of client relationship intangible assets, head office relocation costs and in 2011 gains on disposal of financial securities) decreased 2.4% to £45.1 million from £46.2 million. Basic underlying earnings per share decreased by 1.1% to 77.96p (2011: 78.79p).
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The Board recommends a 30p final dividend for 2012 (2011: 29p), making a total of 47p for the year (2011: 46p).
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Underlying net operating income in Rathbone Investment Management of £146.7 million for the year ended 31 December 2012 (2011: £135.1 million) represents an increase of 8.6%. This excludes gains on disposal of financial securities of £1.1 million in 2011. The average FTSE 100 Index was 5734 on our quarterly billing dates (2011: 5663), an increase of 1.3%.
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Net interest income in Rathbone Investment Management of £9.9 million compared to £10.0 million in 2011.
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Underlying operating expenses increased 13.8% to £110.5 million largely reflecting business growth and investment, higher performance-based staff costs, legal costs, a £0.6 million increase in Financial Services Compensation Scheme levies and inflation.
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Rathbone Unit Trust Management saw positive net monthly sales throughout 2012 helping its funds under management to increase by 16.5% to £1.27 billion at 31 December 2012 (2011: £1.09 billion). Profit before tax in Rathbone Unit Trust Management was £0.6 million for the year ended 31 December 2012 (2011: £0.8 million).
