Profits rose markedly at the UK wealth manager last year while AuM growth defied trends in the broader equity market.

London-listed wealth manager Rathbone Brothers today reported that underlying profit before tax (excluding acquisition-related costs) increased by 14.3 per cent year-on-year to £70.4 million ($98.6 million) in 2015.
     
Pre-tax profit was £58.6 million for the year ended 31 December 2015, up by 28.2 per cent.

“In spite of subdued investment markets, 2015 was a strong year for Rathbones with our total funds under management growing by 7.4 per cent to £29.2 billion. During the year we took the opportunity to raise £20.0 million of long term subordinated loan notes to support our future growth and we have continued to pursue acquisition opportunities which will increase shareholder value,” Mark Nicolls, chairman of the group, said in a statement.

“We look forward to completing our recently announced London office move in early 2017, and notwithstanding an uncertain market outlook, have decided to continue progressing our strategic initiatives,” he said.

While AuM rose by 7.4 per cent last year, this contrasted with a fall of 4.9 per cent to the FTSE 100 Index; the FTSE WMA Balanced Index also dropped by 0.2 per cent over the same period.
     
The total net annual growth rate of funds under management for investment management was 5.7 per cent (2014: 19.6 per cent). This comprised £700 million of acquired inflows (2014: £3.2 billion including £2.6 billion in relation to the Jupiter Asset Management and Deutsche Asset & Wealth Management transactions) and £700 million of net organic growth (2014: £800 million). The underlying rate of net organic growth was 3 per cent in 2015 (2014: 4 per cent).
     
Underlying operating income in investment management of £209.0 million for the year (2014: £185.4 million) represented an increase of 12.7 per cent.

Underlying operating expenses rose by 14.1 per cent to £158.8 million, largely reflecting growth of the business, higher performance-based staff costs and salary inflation, Rathbones said.

The board recommended a final dividend of 34 pence for 2015 (2014: 33 pence), making a total of 55 pence for the year (2014: 52 pence), an increase of 5.8 per cent on 2014.