FUM at Rathbone back to 2008 levels

24th Feb 2010 08:11

Rathbone Place saw its funds under management rose back above £13bn as confidence returned to the markets in the second half of 2009.The fund and wealth management firm said total funds under management (FUM) at the end of £13.1bn at the end of 2009, almost back to the levels seen at the end of 2007 but up sharply higher from £10.46bn at the end of 2008.More than 2,500 former clients of the Bank of Scotland Portfolio Management Service, which Rathbones purchased from Lloyds Banking in October 2009, have so far consented to join Rathbones, bringing nearly £500m of funds with them.The number of clients transferred over represents around two-thirds of the number on the books at the time of the sale.The annualised rate of net organic growth of funds under management in Rathbone Investment Management was 6.7% in 2009, down from 7.4% in 2008.Underlying profit before tax slipped 27.8% to £32.5m in 2009 from £45m in 2008 while underlying earnings per share fell by a similar percentage to 52.36p from 72.12p.The board is recommending a second interim dividend of 26p in lieu of a final dividend. This will be paid on 31 March in advance of the rise in the tax rate for higher rate tax payers.The full year dividend remains unchanged at 42p. 'The outlook for 2010 remains uncertain as the UK faces an environment of exceptionally low interest rates and a general election before June 2010. The considerable benefits of the transaction with Lloyds Banking Group are expected to arise in 2011, and meanwhile Rathbones continues to grow organically and remains well-capitalised,' the company said.Broker Daniel Stewart believes the outlook is positive and says 2011 will be the first year in which the group really begins to benefit from the Lloyds acquisitions. Forecasts for 2011 adjusted profit before tax of £40.8m, EPS of 67.2p and a dividend of 43p, leaves the group trading on a PE of 12.3x and yielding 5.2%. It says 'buy'.