Rathbone Brothers beats forecasts thanks to unit trust growth - UPDATE

9th Jan 2014 14:07

- Funds under management up 22.2 per cent- Results expected in line with expectations- Outlook positive, well positioned for growthRathbone Brothers grew funds under management last year by more than many analysts had forecast and the company is eyeing potential opportunities for accelerating growth. Total funds under management (FuM) rose 22.2% over the calendar year to £22bn, up 5.8% in the last quarter, as the smaller Unit Trust arm enjoyed stronger organic growth than anticipated, on top of the robust gains from the core Investment Management division. Management said in a statement that: "Our outlook remains positive as we start 2014, in line with the current sentiment in investment markets. "Rathbones remains well positioned to take advantage of growth opportunities as they arise and continues to consolidate its position as a leading provider of high-quality, personalised investment and wealth management services."The FTSE 250 group saw a total rate of net inflows in FuM into Investment Management of 9.0% over the year, slowing to 8.5% on an annualised basis in the fourth quarter as market growth slowed in December. The division acquired £600m of FuM during 2013.The Unit Trust division saw FuM rise 38.5% to £1.8bn by year end, with total net fund inflows of £170m in the fourth quarter and £327m for the full year. Brokers Numis and Canaccord both admitted their forecasts had been surpassed.Canaccord said the Unit Trust growth was especially significant as this growth should lift the division's margins and the momentum should continue into 2014. Strong net inflows suggest it might raise our 2014 and 2015 forecasts. Numis analyst David McCann said: "We regard Rathbones as one of the quality names in the wealth management sector and thus we believe it merits a slight premium rating, due to its consistent net inflow record, consistent circa-30% operating margin and significant bias towards recurring fee income."OH