Decrease in Rathbones' earnings, anticipation of growth in the second half of the year
Rathbones Group, a FTSE 250 firm specialising in wealth management, has reported a mixed set of interim results for the first half of 2025. Despite a marginal increase in operating income and a strong capital base, the company's underlying profit before tax declined, and net outflows rose significantly.
Operating income for the group increased by 0.4 per cent to £449.1m, according to the company's latest financial report. Iain Hooley, the group's chief financial officer, expressed optimism about the growth prospects, praising the regulator's support for business growth as beneficial for both society and the company.
However, the group's underlying profit before tax declined to £107.7m from £112.1m, a slight dip that Hooley attributes to the challenging market conditions. Net outflows at Rathbones increased to £1bn from £0.6bn, primarily due to client migration activity from the Investsec Wealth and Investment (IW&I) platform.
Despite these challenges, Hooley remains optimistic about the second half of the year, expecting a better performance. He also acknowledged the growing need for retirement planning amidst an ageing population and "general growth in household wealth."
Rathbones is focusing on the growth opportunities it now has, particularly from the Mansion House Accords, and plans to increase investing to appeal to a new audience. The group maintains its growth forecast for 2025, despite weak markets and increased costs.
The group's strong capital surplus has allowed it to approve an on-market ordinary share buyback programme of up to £50m. However, the IW&I platform is set to be decommissioned in the second half of the year. Gross inflows at Rathbones fell from £2.7bn to £2.5bn, reflecting the impact of the IW&I platform's closure.
Shares of Rathbones jumped following the release of results by nearly 2 per cent, likely due to investor confidence in the expectations of further growth in the second half of the year. Shareholder dividends will increase by 3.3 per cent to 31p.
While a new CEO is preparing to take over at the group, the identity of the successor to current CEO, Paul Stockton, who is set to retire at the end of September 2025, has not been disclosed. As of late July 2025, the incoming CEO for Rathbones in the second half of 2025 is not publicly identified.
Despite the challenges faced in the first half of the year, Rathbones remains optimistic about its future, with a focus on growth and a commitment to delivering value to its shareholders.
- Iain Hooley, the group's chief financial officer, attributes the slight dip in the group's underlying profit before tax to the challenging market conditions, highlighting the need for continued investing for growth opportunities.
- Hooley emphasizes the growing need for retirement planning, acknowledging an ageing population and "general growth in household wealth," signifying a potential focus on retirement planning services for the company.
- With a strong capital surplus and investor confidence, Rathbones is planning to increase its investing efforts, hoping to appeal to a wider audience and maintain its growth forecast for 2025, despite market fluctuations and increased costs.
