Rathbone Brothers increases its 2015 interim dividend by 10.5%

Highlights:

• Total funds under management at 30 June 2015 were £28.3 billion, up 4.0% from £27.2 billion at 31 December 2014. This compared to a decrease of 0.7% in the FTSE 100 Index and an increase of 0.6% in the FTSE WMA Balanced Index over the same period.
   
• Total net organic and acquired growth in the funds managed by Rathbone Investment Management was £0.6 billion in the first six months of 2015, representing a net annual growth rate of 5.1% (2014: 12.2%). Net organic growth of £0.3 billion for the first half represents an underlying annualised rate of net organic growth of 2.8% (2014: 4.1%).
   
• Underlying profit before tax increased 27.0% from £29.3 million to £37.2 million, representing a margin of 31.9% (2014: 29.9%²).
   
• Profit before tax was £31.8 million for the six months ended 30 June 2015, up 3.9% compared to £30.6 million² in 2014.
   
• Basic earnings per share increased 3.9% to 53.2p (2014: 51.2p).
   
• The board recommends a 21p interim dividend for 2015 (2014: 19p), an increase of 10.5% on 2014.
   
• Underlying operating income in Rathbone Investment Management of £106.8 million in the first six months of 2015 (2014: £90.8 million) was up 17.6%, mostly due to growth in funds under management. The average FTSE 100 Index was 6677 on our quarterly billing dates in 2015, compared to 6720 in 2014, a decrease of 0.6%.
   
• Net interest income of £5.5 million in the first six months of 2015 has increased 25.0% from £4.4 million in 2014 largely due to an increase in average liquidity to £1.6 billion for the six months to 30 June 2015 (2014: £1.1 billion).
   
• Underlying operating expenses of £79.6 million for the six months ended 30 June 2015 were up 15.7% from £68.8 million² in the first half of 2014 largely reflecting higher fixed and variable staff costs associated with employees joining us through 2014 acquisitions and increased profitability.
   
• Funds under management in Rathbone Unit Trust Management were £2.7 billion at 30 June 2015 (31 December 2014: £2.5 billion). Net inflows of £107 million in the first half of 2015 have decreased from £338 million in 2014. Underlying operating income in Rathbone Unit Trust Management was £10.0 million in the six months ended 30 June 2015, an increase of 37.0% from £7.3 million in the first half of 2014.
   
• On 27 July 2015, Rathbone Investment Management Limited agreed to issue £20 million of 10-year subordinated notes (callable in year five) to M&G, which will count as Tier 2 capital. This has been made possible by the changes to regulatory capital rules as a result of CRD IV that allow us as a bank to add Tier 2 capital as a way of financing future growth in a cost effective and capital-efficient manner.