British investment manager Rathbones has recorded a drop in 2019 profit due to acquisition-related expenses and announced plans to trim its workforce.
For the full year ended 31 December 2019, the firm reported a pre-tax profit of £39.7m. This is a decrease from the prior year’s figure of £61.3m.
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The fall was said to be driven by costs related to the £104m takeover of Scottish investment manager Speirs and Jeffrey, including £26.1m in deferred staff payouts.
Total funds under management and administration at the group as of 31 December 2019 were £50.4bn, a 14% rise from £44.1bn in 2018.
Funds under management (FuM) at the investment management business increased 12% to £43bn from £38.5bn over the period.
However, clients pulled off £600m from the business in 2019, reversing its 2018 performance when it reported inflows of £1.1bn.
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By GlobalDataOn the positive side, FuM at the unit trust business reached £7.4bn in 2019 compared to £5.6bn in 2018. The business reported net inflows of £943m last year versus £543m in 2018.
Rathbones CEO Paul Stockton said: “Rathbones has grown considerably in the past five years, nearly doubling its funds under management and administration during that time.
“Opportunities to build our market share remain. Delivering on our strategy will be our focus in the near term as we balance greater productivity with an ongoing desire to invest and grow.”
Job cuts
Rathbones has made over 50 jobs redundant in Glasgow following the Speirs & Jeffrey purchase.
“Planned reductions in headcount following the successful integration of Speirs & Jeffrey into the group will take effect in early 2020,” the firm said in its earnings statement.
Staff costs at Rathbones increased 15% year-on-year to £110.8m, with Speirs & Jeffrey accounting for £6.8m of the growth.
Rathbones’ headcount of 1,509 in 2019 was 13% higher than the previous year.
Software project scrapped
Rathbones also faced a £3.1m hit after terminating a software project that was being carried out to boost internal workflow. However, the project was scrapped as it failed to provide value for money, the firm noted.
Lookout for a replacement of chairman in progress
At the same time, Rathbones announced that it conducting a search to appoint a successor for its existing chairman Mark Nicholls.
Nicholls has held the role since May 2011.
