Drop in Rathbones profits, yet optimistic outlook for the second half of the year indicated
Shares of Rathbones, a leading wealth management company, saw a 2% jump following the release of their latest results. This positive movement indicates investor confidence in the company's future growth prospects, particularly in the second half of the year.
Iain Hooley, the Chief Financial Officer at Rathbones, shares this optimistic outlook. He expects the second half of the year to be better for the company, citing potential growth opportunities presented by the Mansion House Accords.
However, the company's recent results show a mixed picture. Gross inflows for Rathbones decreased from £2.7bn to £2.5bn, while net outflows increased to £1bn from £0.6bn. The increase in net outflows was primarily due to client migration activity from the Investec Wealth and Investment platform.
Despite these challenges, Rathbones' operating income increased marginally by 0.4% to £449.1m from £447.4m. The challenging start to the year, which included market volatility and acquisition costs totaling £23.2m, seems to have had a minimal impact on the company's financial performance.
Rathbones remains focused on growth and maintains its growth forecast for 2025. The company is in the midst of a strategic phase, completing client and asset migration milestones and realizing synergies, which is expected to be realized in the latter half of 2025.
The new CEO, Jonathan Sorrell, is set to take over in the second half of the year. He was appointed as Chief Executive Officer Designate on 1st July 2025 and is expected to assume the CEO role during this period. The current CEO, Paul Stockton, is preparing to hand over to the new leadership team, with the company shifting focus towards future growth following the integration of Investec Wealth & Investment.
The decommissioning of the IW&I platform is also scheduled for the second half of the year. Rathbones expects its full-year results to be in line with market forecasts despite the challenging start.
In addition to this, shareholder dividends will increase by 3.3 per cent to 31p. The board has also approved an on-market ordinary share buyback programme of up to £50m, reflecting the company's confidence in its long-term prospects.
Iain Hooley acknowledges the growing need for retirement planning amidst an ageing population and general growth in household wealth. He believes that the regulator's support for growth and increased investing can benefit society and the business. Capital surplus remains strong at Rathbones, further bolstering its long-term prospects.
The improvement in shares is a promising sign for Rathbones and its investors, indicating a belief in the company's ability to navigate current challenges and capitalize on growth opportunities in the second half of the year.
- Iain Hooley, the Chief Financial Officer at Rathbones, is optimistic about the second half of the year, expecting growth opportunities for the company, particularly due to the Mansion House Accords.
- Rathbones remains focused on growth and maintains its growth forecast for 2025, as it completes client and asset migration milestones and realizes synergies, which is expected to be realized in the latter half of 2025.
- Iain Hooley acknowledges the growing need for retirement planning amidst an ageing population and general growth in household wealth, believing that the regulator's support for growth and increased investing can benefit society and the business.
