Wealth manager sees improvement in its half year pre-tax profits

The Port of Liverpool Building

Wealth management business Rathbone Brothers saw half year pre-tax profits increase in the six months to June 30.

Rathbones, which has a key base in the Port of Liverpool Building, reported a pre-tax profit of £27.3m, compared with £20m a year ago.

It said this reflects a number of expected items, primarily in relation to the acquisition of Speirs & Jeffrey.

Total funds under management and administration reached £49.4bn at June 30, 2020, down 2.0% from £50.4bn at December 31, 2019, but up from £49.2bn at June 30, 2019.

In contrast, the FTSE 100 Index and MSCI PIMFA Private Investor Balanced Index decreased 18.2% and 6.3%, respectively over the six-month period to June 30, 2020.

Total net inflows were £1.3bn in the first six months of 2020, compared with £0.5bn in the corresponding period for 2019, representing an annualised growth rate of 5.3%, up from 2.1% a year ago.

Total net inflows in investment management were £0.8bn in the first six months of 2020 (30 June 2019: £0.1bn).

Net organic inflows in the first half of the year totalled £0.3bn (30 June 2019: net outflows of £0.1bn).

Net inflows in unit trusts were £0.6bn in the first half of 2020, compared with £0.3bn in 2019.

The board announced it is maintaining the interim dividend at 25p, adding: “This reflects our confidence in our medium-term prospects and the strength of our balance sheet.”

Chief executive, Paul Stockton, said: “Underlying profit margins remained resilient as our business model responded strongly to the challenges of the COVID-19 pandemic whilst also creating opportunities to leverage the advantages of remote working and streamlining procedures.

“We continue to prioritise the safety and well-being of our employees and remain dedicated to delivering a high-quality client service.

“Our strong first half performance is testament to the strength of our brand, our market position and our people.

“Our business model has proven to be resilient, agile and adaptable throughout the duration of the COVID-19 pandemic, with little to no impact on business continuity.

“Whilst we expect investment markets to remain volatile and interest rates to remain lower for some time to come, our balance sheet is robust with a strong capital position.

“We are well placed to continue delivering on our organic growth strategy, balancing investment in the business with prevailing market conditions, maintaining strict cost discipline and identifying inorganic growth opportunities that fit our culture.”