Rathbones exceeds expectations amidst Investec merger
Deal News | Feb 26, 2025 | EIN
Rathbones, a wealth management firm, has surpassed market expectations with significant growth in 2024 as its merger with Investec Wealth and Investment (IW&I) progresses. The firm reported an increased operating income of £895.9m and a near doubling of pre-tax profit from £57.6m to £99.6m. Underlying pre-tax profit rose to £227.6m, exceeding forecasts. While funds under management were slightly below expectations, the merger's strategic benefits have been substantial, providing the group with scale and anticipated synergies of £60m. Analysts note the company's shares are trading at an attractive valuation, highlighting structural growth opportunities in the sector. Rathbones aims for a 30% underlying operating margin by 2026, bolstered by the merger, with record gross inflows and a 6.9% dividend increase in 2024.
Sectors
- Wealth Management
- Financial Services
- Mergers & Acquisitions
Geography
- United Kingdom – Rathbones and Investec Wealth and Investment, the companies involved in the merger and financial results, are based in the United Kingdom.
Industry
- Wealth Management – The article discusses Rathbones, a wealth management firm, and its merger with Investec Wealth and Investment, reflecting significant developments in the wealth management industry.
- Financial Services – Rathbones' activities and financial performance are indicative of trends and dynamics within the broader financial services sector.
- Mergers & Acquisitions – The article focuses on the merger between Rathbones and Investec Wealth and Investment, highlighting M&A as a key theme.
Financials
- £895.9m – Operating income of Rathbones in 2024.
- £99.6m – Pre-tax profit of Rathbones, nearly doubled from previous year.
- £227.6m – Underlying pre-tax profit, exceeding analyst forecasts.
- £839m – Value of the merger between Rathbones and IW&I.
- £60m – Expected synergies from the merger.
- 5% – The yield of Rathbones shares, presenting an attractive investment.
- 109.2bn – Funds under management, slightly below the anticipated £110.1bn.
- 6.9% – Increase in Rathbones' dividend in the year 2024.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Rathbones | Target company | Company | A wealth management firm undergoing a merger with Investec Wealth and Investment. |
| Investec Wealth and Investment (IW&I) | Selling Company | Company | The company merging with Rathbones to form an enlarged group. |
| Paul Stockton | Chief Executive of Rathbones | Person | The CEO of Rathbones, commenting on the company's merger and financial results. |
| Peel Hunt | Analyst Firm | Company | Provided analysis and commentary on the merger and financial performance of Rathbones. |
| Stuart Duncan | Analyst | Person | An analyst at Peel Hunt who commented on the merger's strategic benefits and Rathbones' valuation. |