Rathbones Group (RAT) H2 2025 earnings summary

Executive summary

• Achieved a five-year high in market capitalization exceeding GBP 2.4 billion, completed IW&I integration, and renewed the executive team to position for future growth.

• Announced a 6.5% increase in the total dividend to GBP 0.99, reflecting a 20-year CAGR of 6.2% in dividends.

• Launched and extended a GBP 50 million share buyback by an additional GBP 20 million, demonstrating disciplined capital allocation.

• Outlined a strategy for 2026 and beyond focused on organic growth, operational efficiency, and technology investment.

Financial highlights

• FUMA rose 5.9% to GBP 115.6 billion by year-end, recovering from early-year volatility.

• 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 PBT surged 53.5% to GBP 152.9 million due to reduced integration costs.

• Underlying basic EPS rose 5.5% to 161.6p per share, supported by the share buyback.

• Final dividend proposed at GBP 0.68 per share, total dividend at GBP 0.99, up 6.5% from 2024.

Outlook and guidance

• Targeting a 30% underlying operating margin in Q4 2026, with margin expected in the upper 20s for 2026 overall.

• Margin in H1 2026 will be lower due to a GBP 9 million investment in consolidating client lifecycle management systems; improvement expected in H2.

• Fee income growth tied to FUMA, which started 2026 higher than 2025 average; commission income expected to decline 5% as volumes normalize.

• Net interest income projected to be flat year-on-year, balancing lower margins with synergy benefits.

• In-year synergy benefits to rise by GBP 16 million in 2026; integration costs expected at GBP 17 million.