Rathbones Group Plc
Preliminary results for the twelve months ended 31 December 2021
Strategic momentum leading to strong financial results
Paul Stockton, Group Chief Executive, said:
“We set out our focused strategy over two years ago and it has driven some considerable and positive changes within the business over that period. It is clear from the results we are publishing today that Rathbones is building strong organic growth momentum, complemented by value-added acquisitions, which has led to total funds under management and advice (FUMA) growth of 24.7% to £68.2 billion in the year.
Our financial results for 2021 are strong and include meaningful investments that are enabling further strategic progress. Statutory profit before tax of £95.0 million is up 116.9% on the £43.8 million reported a year ago. The business ends 2021 in good health and our confidence in the future is reflected in our full-year dividend of 81p, up 12.5% from 72p last year. This financial outcome gives us a strong platform to enter the next phase of our strategy which will further leverage technology to deliver a holistic digital experience to clients, advisers and colleagues, and harness efficiency opportunities.
After a decade of significant growth, the Rathbones of today offers a holistic range of wealth management and advice services, complemented by a high-quality fund management business; our December 2021 announcement to rename the company to Rathbones Group Plc reflects this.”
Financial highlights
– Total FUMA reached £68.2 billion at 31 December 2021, up 24.7% from £54.7 billion at 31 December 2020:
– £50.3 billion in Investment Management (excluding Saunderson House), up 12.0% (2020: £44.9 billion).
– £4.9 billion of Saunderson House FUMA following completion of the acquisition in October 2021.
– £13.0 billion in Rathbone Funds, up 32.7% (2020: £9.8 billion).
– In 2021, we enhanced our reporting capability to represent more closely the way we deliver our products and services:
– Discretionary service net inflows totalled £1.3 billion in the year (2020: £1.0 billion), while inflows into our multi-asset fund range totalled £0.5 billion (2020: £0.2 billion). Total discretionary and managed net inflows therefore were £1.8 billion (2020: £1.2 billion), representing an annualised growth rate of 4.1% (2020: 2.9%), demonstrating growing momentum in both direct-to-client business and the indirect financial adviser market.
– Net flows into our single strategy fund range grew by 20.0% year-on-year to £1.2 billion (2020: £1.0 billion).
– In total, Rathbone Funds generated net inflows of £2.1 billion (2020: £1.5 billion), an exceptional growth rate of 21.1% (2020: 20.1%).
|
|
2021 |
2020 |
Change |
|
Operating income |
435.9 |
366.1 |
19.1% |
|
Underlying operating expenses1 |
(315.2) |
(273.6) |
15.2% |
|
Underlying profit before tax1 |
120.7 |
92.5 |
30.5% |
|
Underlying operating margin1 |
27.7% |
25.3% |
|
|
Profit before tax |
95.0 |
43.8 |
116.9% |
|
Underlying earnings per share1 |
172.2p |
133.3p |
29.2% |
|
Earnings per share |
133.5p |
49.6p |
169.2% |
1. A reconciliation between the underlying measure and its closest IFRS equivalent is provided in the financial performance section.
Outlook and guidance
Rathbones is in a strong position to implement the next phase of its digital strategy, secure the delivery of its ambitions for Saunderson House, and continue its organic growth momentum whilst being mindful of an inflationary post-pandemic period and current tensions in Ukraine.
Net interest income in 2022 is expected to increase as a result of recent Bank of England base rate rises and those widely anticipated in the remainder of 2022.
The progression of our digital strategy has been carefully considered and is expected to result in an additional investment of £40 million in total, split between 2022 and 2023. At market levels consistent with conditions at 31 December 2021, we plan to manage this investment within existing underlying operating margin guidance of mid-20%s in 2022 and 2023 with a view to returning to 27-30% from 2024 onwards.
Rathbones' balance sheet is well capitalised which places it in a strong position to invest to drive organic inflows, continue to improve services to clients and explore further opportunities for growth.
Declaration of final dividend
The board recommends a final dividend of 54p for 2021 (2020: 47p), making a total of 81p for the year (2020: 72p), an increase of 12.5% on 2020. This is consistent with our progressive policy and is supported by our strong capital position and robust balance sheet. The dividend will be paid on 10 May 2022, subject to shareholder approval at our 2022 Annual General Meeting on 5 May 2022.