At a glance

5 year record

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Interim Statement

Rathbones' 2011 interim statement is available to download from the download centre or from the investor relations section of the corporate website.

Relationships

We do not sell products – we offer a service. For us, that is an important distinction.

Private clients want to be treated as individuals and trust us to manage their investments in their best interests.

We strongly believe that clients value having direct access to the person who is managing their investments and we aim to build long term relationships with individuals, their families and advisers.

Stability

We have looked after clients for generations. We have a trusted reputation for high-quality service and integrity.

We value our people and are committed to developing their skills.

Our high staff retention gives clients confidence that the individuals at Rathbones they know and trust will remain with us for years to come.

In an ever-changing world our heritage and permanence provide reassurance to our clients.

Independence

Rathbone Brothers Plc is a FTSE 250 listed company and independence lies at the heart of our thinking.

We pride ourselves on being free to make investment decisions on our clients’ behalf, unconstrained by conflicting interests.

We select investment products and assets based on merit and suitability from the full universe of opportunities, including collectives and alternative investments.

Skill

Our Investment Process provides structure and well-researched guidance for Investment Managers. This is non-prescriptive and allows Investment Managers the latitude to take investment decisions based on specific client requirements.

The Rathbone Investment Process supports managers in their choice of a growing range of investment options, including alternatives as well as more traditional investment choices.

Internal performance monitoring and risk control processes ensure that the appropriate quality of service and fulfilment of client objectives are achieved.

Operational excellence

We believe that to sustain successful, long term relationships our services must be underpinned by high-quality administration.

Our aim is to provide first-class administration which exceeds client expectations at reasonable cost.

We continue to invest in this area as we see the needs of our private clients, charity trustees and professional intermediaries evolve.

Chairman's statement

"Rathbones continues
to exhibit the ability
to grow both
organically and
by attracting
investment
managers..."

more

Chief Executive's statement

"In spite of the continuing
uncertain economic
climate, 2010
has been a
better year
than 2009."

more

Business review

  • Taxation

    Taxation

    The effective tax rate for the year is 28.4% (2009: 31.5%), calculated as the total tax charge on continuing operations of £8.5 million (2009: £9.3 million) divided by the profit before income tax on continuing operations of £30.1 million (2009: £29.5 million).

    The effective rate of tax in 2010 is higher than the composite UK standard rate of 28.0% due principally to the impact of disallowable expenses and a small over-provision for tax in prior years.

    A full reconciliation of income tax expense is included in note 9 to the consolidated financial statements.

  • Dividend

    Dividend

    An interim dividend of 16.0p per share was paid to shareholders on 6 October 2010 and the Board is recommending that a final dividend of 28.0p be paid on 18 May 2011. This results in a total payment of 44.0p (2009: 42.0p) for the year. This dividend is covered 1.1 times by reported basic earnings per share and 1.4 times by basic underlying earnings per share (see note 12).

  • Capital management

    Capital management

    Rathbones is classified under the Capital Requirements Directive as a banking group and performs an Internal Capital Adequacy Assessment Process (ICAAP) on an annual basis. The Group has adopted the standardised approach to calculating its Pillar I credit risk component and the basic indicator approach to calculating its operational risk component.

    In addition to a variety of stress tests performed as part of ICAAP work, and daily reporting for regulatory purposes, capital levels are monitored and forecast on a monthly basis to ensure that dividends and investment requirements are appropriately managed and appropriate buffers are kept against adverse business conditions. Subject to regulatory minimums, capital is freely transferable across the Group and regular exercises are run to ensure that Group structures remain optimal. Investment of proprietary funds is controlled by the treasury team.

    Rathbones remains well capitalised and does not rely on the wholesale market to fund its operations. On a Basel III basis, the Group's Tier 1 ratio, calculated as Tier 1 capital as a proportion of total risk weighted assets, was 28.3% at 31 December 2010 (2009: 36.3%).

    Rathbones' Pillar III disclosure is presented on our website at www.rathbones.com. Further details on capital management processes can be found in note 29 to the consolidated financial statements.

Strategy and KPIs

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Our aim is to be a leading provider of high-quality, personalised investment management, trust, tax and pension advisory services to private clients, charities and trustees.

Our aim is to provide shareholders with a growing stream of dividend income, delivered by steady and consistent growth in earnings per share as market conditions allow.

Our aim is to provide staff with an interesting and stimulating career environment, involving a commitment for all staff to share in the equity and profits of Rathbones, and to encourage and reward organic growth.

Rathbones' total funds under management exceed £15 billion for the first time in November 2010.

£1.24 billion of net new funds under management gained by Rathbone Investment Management in the year.

Funds under management in our offices in Scotland grow by 39.4% from £1.42 billion to £1.98 billion.

17 qualified investment professionals join Rathbones during the year.

The first Rathbones Charity Symposium hosted by the charity team is held at the Royal Society

Mark Nicholls joins the Board as Chairman-designate.

The five Rathbone Unit Trust Management authorised unit trust funds marketed to IFAs all achieve first quartile performance in 2010.

  • Funds under management
    2010 2009 % change
    £15.63bn £13.10bn +19.3%
  • Operating income
    Continuing operations1
    2010 2009 % change
    £127.2m £116.8m +8.9%
    1 Continuing operations exclude businesses disposed of and classified as held for sale in 2009 (see note 10 to the consolidated financial statements).
  • Underlying profit before tax2
    Continuing operations1
    2010 2009 % change
    £38.5m £32.4m +18.8%
    1 Continuing operations exclude businesses disposed of and classified as held for sale in 2009 (see note 10 to the consolidated financial statements).
    2 Underlying profit before tax excludes Financial Services Compensation Scheme levies, amortisation of client relationships and Lloyds Banking Group transaction costs.
  • Profit before tax
    Continuing operations1
    2010 2009 % change
    £30.1m £29.5m +2.0%
    1 Continuing operations exclude businesses disposed of and classified as held for sale in 2009 (see note 10 to the consolidated financial statements).
  • Underlying earnings per share2
    Continuing operations1
    2010 2009 % change
    63.76p 52.36p +21.8%
    1 Continuing operations exclude businesses disposed of and classified as held for sale in 2009 (see note 10 to the consolidated financial statements).
    2 Underlying profit before tax excludes Financial Services Compensation Scheme levies, amortisation of client relationships and Lloyds Banking Group transaction costs.
  • Basic earnings per share
    2010 2009 % change
    49.76p 45.55p +9.2%
  • Dividends per share
    2010 2009 % change
    44.0p 42.0p +4.8%