Rathbones Group (RAT) H2 2025 earnings summary

Executive summary

• Achieved a five-year high in market capitalization, exceeding GBP 2.4 billion.

• Completed the integration of IW&I, creating a unified and scalable organization and launching the first share buyback.

• Announced a 6.5% increase in total dividend to GBP 0.99 per share for 2025, fully covered by statutory earnings.

• Transitioned to a new executive team, including CEO and CTO appointments, and outlined a strategy focused on organic growth and operational excellence for 2026 and beyond.

• Defined a new strategy for the next growth phase, positioning for future expansion.

Financial highlights

• Funds under management and administration (FUMA) rose 5.9% to GBP 115.6 billion by year-end, recovering from Q1 lows.

• Operating income increased 3.1% year-over-year to GBP 923.3 million, with all principal income streams growing.

• Underlying profit before tax grew 4.6% to GBP 238.1 million.

• Statutory profit before tax surged 53.5% to GBP 152.9 million, aided by reduced integration costs.

• Underlying basic EPS rose 5.5% to 161.6p per share.

Outlook and guidance

• Targeting a 30% underlying operating margin by Q4 2026, assuming 3% FUMA growth, stable inflation, and interest rates.

• Margin expected to be lower in H1 2026 due to one-off investments, then rise in H2 as efficiencies materialize.

• Commission income projected to decline 5% in 2026 as activity normalizes; net interest income to remain flat; advice income to grow at 2025 rate.

• Integration costs to fall significantly in 2026, with total costs remaining within GBP 177 million guidance and £17m expected in-year.

• In-year synergy benefits to rise by £16m in 2026.