Rathbone Brothers Plc (RAT) Announced Q1 FY19 Trading Updates

 Liverpool, the UK based Rathbone Brothers Plc is engaged in the business of providing wealth management and fund administration services to the investors and institutions. Its areas of operation are categorized into two segments, which are investment management and Unit Trust. The group is significantly owned by the institutional investors, with Hargreaves Lansdown Plc, Ashmore Group Plc and Man Group Plc are the major stakeholders in the group, as per Thomson Reuters data.

Last year in August 2018, the fund manager has acquired a Glasgow based investment advisor Spier & Jeffery for a total consideration of £119.03 mn. The consideration was comprised of £79 mn in cash, £15.01 mn in profit-related payments plus the issuance of 1 million new ordinary shares valued at £25.02 mn.

On May 09, 2019, the wealth manager reported its Q1 trading updates for the period ended on March 31, 2019. Despite economic and political uncertainties in the UK, the group managed to report an operating income of £85.3 mn and surged by 13.1 per cent against the same period of the previous financial year. The stellar growth in the operating revenue was primarily led by the acquisition of Spier and Jeffery and 10.7% surge in the FTSE 100 index since December 31, 2018.

Group's total assets under management and administration achieved a record high level at £47.5 bn and increased by 7.7 per cent over the first quarter of the previous financial year. However, despite higher funds under management, the group forecasted a weak investment sentiment in the short-term time spam.

However, the group's net organic and acquired growth in the asset under management increased by 1.4 per cent to £130 mn against the 2.4 per cent or £199 mn growth in the first quarter of FY18. That reflects a weak investment sentiment, and this is going to prevail in the short-term period.

Funds under administration under Unit Trust surged by 8.9 per cent to £6.1 billion during the first quarter of FY19. However net inflows during the quarter stood at £59 mn against the £142 mn during the same period of the previous fiscal year.

Daily Price Chart (as on May 10, 2019), before the market closed. Source: Thomson Reuters

At the time of writing (as on May 10, 2019, at 11:12 AM GMT), shares of the RAT were quoting at GBX 2,365.0 and declined by 0.2 per cent against the previous day closing price. During the past one year, the stock has registered a 52w high of GBX 2,708.0 and a 52w low of GBX 2,158.0. On a yearly basis, the stock has delivered a negative price return of 5.6 per cent. The stock was trading below the 200-day simple moving average price level, which is a bearish technical indicator. Also, from the relative strength index standpoint, stock's 10-day RSI stood at 24.34, which indicates the stock has entered into an oversold zone.

The outstanding market capitalization of the company stood at around £1.29 bn with a dividend yield of 2.83 per cent.