Rathbones sees profits soar by 30%

Rathbone Brothers has reported a pre-tax profit of £20.6m for the first six months of 2011, up 30.4% year-on-year.

The figure, up from £15.8m reported in the six months to 30 June 2010, was accompanied by an 18.5% rise in net operating income over the same period, from £62m to £73.5m.

Funds under management also rose from £15.6bn at 31 December 2010 to £16.4bn at 30 June 2011. Rathbone Unit Trust Management saw net inflows of £38m in the first half of the year, versus net redemptions of £41m in the first half of 2010, bringing total FUM to £1.1bn.

"The first half of 2011 has been positive for Rathbones as investment markets have remained resilient and we have seen the full benefit of recent acquisitions and continuing net organic growth," said Rathbones chief executive Andy Pomfret.

The business also benefitted from a significant rise in net investment management fee income, which rose by 27% year-on-year to £43.7m, in part due to the higher level of the FTSE. Strong trading volumes helped boost net commission income by 7% to £20m.

New charges applied to client accounts in the second quarter of 2011 would help further boost margins in future, Rathbones said.

The group remains optimistic in its outlook despite a number of macroeconomic headwinds.

"Uncertainties surrounding financial markets are continuing, in particular the increased potential for future adverse events impacting the European banking sector.

"Notwithstanding this uncertainty, we look to the future with confidence as Rathbones remains well positioned to take advantage of growth opportunities," Pomfret concluded.