In light of the results for the year, the Rathbone Brothers Board has proposed a final dividend for 2019 of 45.0p. This results in a full year dividend of 70.0p, an increase of 4.0p on 2018 (6.1%). The proposed full year dividend is covered 0.7 times by basic earnings and 1.9 times by underlying earnings.
Other financial highlights include:
- Total funds under management and administration passed a significant milestone, reaching £50.4 billion at 31 December 2019, up 14.3% from £44.1 billion at 31 December 2018. The FTSE 100 Index increased 12.1% and the MSCI PIMFA Private Investor Balanced Index increased 13.1% over 2019.
- Funds in Rathbone Investment Management grew 11.7% to £43.0 billion (31 December 2018: £38.5 billion). Operating income in Investment Management was strong, increasing 12.9% to £310.9 million for the year ended 31 December 2019 (2018: £275.3 million), reflecting a full year of income of Speirs & Jeffrey. The average FTSE 100 Index was 7456 on quarterly billing dates in 2019, compared to 7269 in 2018. Net organic outflows for the year totalled £0.6 billion (2018: net inflows £1.1 billion).
- Rathbone Unit Trust Management continued to perform exceptionally well with funds under management increasing 32.1% to £7.4 billion at 31 December 2019 (31 December 2018: £5.6 billion). Net inflows increased 73.7% to £943 million during 2019 (2018: £543 million) and operating income totalled £37.2 million in the year ended 31 December 2019 (2018: £36.7 million).
- Underlying operating expenses of £259.4 million (2018: £220.4 million) not only included the full year impact of a number of growth led investments and Speirs & Jeffrey, but also software impairment costs of £3.1 million and a considerable increase in the Financial Services Compensation Scheme levy (2019: £4.5 million, 2018: £2.8 million).
- Underlying profit before tax of £88.7 million (2018: £91.6 million) reflected the above in addition to the expected cessation of 'risk-free' managers' box dealing profits in our Unit Trusts business from mid-January 2019 and the acceleration of some deferred executive awards in relation to recent executive retirements.
- Statutory profit before tax of £39.7 million (2018: £61.3 million) reflected anticipated items, most notably the costs associated with the acquisition of Speirs & Jeffrey. The majority of these costs were in relation to deferred consideration payments to former shareholders of the business which have been treated as remuneration in accordance with accounting standards.