Rathbones profit drops but second half growth expected
Profit at Rathbones suffered due to weak markets and an increase in costs,but it maintains its growth forecast for 2025.
The wealth manager’s results, which were broadly in line with analyst expectations, revealed that underlying profit before tax declined to £107.7m from £112.1m, while net outflows hit £1bn up from £0.6bn.
This was due to the impact of client migration activity from the Investsec Wealth and Investment platform over to Rathbones, as the FTSE 250 company completed its acquisition.
Gross inflows also fell, dropping from £2.7bn to £2.5bn, as investment managers remained focused on integration of IW&I during the first quarter.
However, operating income increased marginally for the group by 0.4 per cent to £449.1m from £447.4m as the impact of subdued markets, caused by tariffs and other economic tensions, during the first quarter was offset by stronger conditions in the second.
Iain Hooley, chief financial officer at Rathbones, said: “We were affected a bit by the volatility we had in the first half. The first quarter billing took place when the markets were relatively low…but nevertheless they are resilient numbers.”
“We expect a better second half. We’re very much focused on the growth opportunity we now have.”
Shares jumped following the release of results by nearly 2 per cent, indicating investors are buoyed by the expectations of further growth in the second half of the year.
Looking ahead
Despite a challenging start to the year, marked by market volatility and acquisition costs, which have totalled £23.2m so far in 2025, Rathbones continues to expect full year results to be in line with market forecasts.
Further margin improvement is expected in the second half of the year as the IW&I platform is set to be decommissioned and a new CEO [who?] prepares to take over.
The group also acknowledged the opportunities presented from the Mansion House Accords, with a push to increase investing raising hopes the wealth manager can appeal to a new audience.
Hooley said, “The regulator is increasingly looking to support growth and anything the government or regulator can do to encourage people to invest is a good thing for society and it’s a good thing for our business.”
He also acknowledged the growing need for retirement planning amidst an ageing population as well as “general growth in household wealth” requiring an increase in consumers needing advice.
Giving back
Capital surplus remains strong, and the group remains confident in its long term prospects, reflected in the board’s decision to approve an on-market ordinary share buyback programme of up to £50m. Hooley added the FTSE 250 firm “has a strong capital base” and there is “a surplus” to return to shareholders.
Shareholder dividends will also increase by 3.3 per cent to 31p.