Trading Statement

River and Mercantile Group PLC

Trading Update

River and Mercantile Group PLC (R&M), the advisory and investment management business today provides a trading update. This comprises Assets under Management (AUM) and Notional under Management (NUM) for the one, three and twelve months ended 30 June 2016. This update follows the interim trading update for the period ended 31 May 2016, which was released on 5 July 2016.

Mike Faulkner, CEO of River and Mercantile, said:

"This trading update confirms guidance we gave recently on trading conditions during June 2016. As we had indicated, while this was a more challenging period for Equity Solutions the division still reported positive net flows during June. The marginal negative impact of market movement in Equity Solutions was more than offset by the experience in the other divisions. Fiduciary Management in particular saw a rise in assets of over £600m from investment performance alone. The net effect during June was positive net flows and positive investment performance, leading to AUM/NUM growth of 5% in the month.  

We delivered growth in difficult market conditions and all divisions delivered positive net sales across all quarters, demonstrating the defensive nature of our business model."

Highlights for the one month ended 30 June 2016:

·     Fee earning AUM/NUM increased by 5% to £25.5bn.

·     All divisions had positive net flow which totalled £0.8bn in the period. In addition, at period end mandates in transition were £0.2bn. Redemptions in transition were £0.6bn representing a single client entering into the Pension Protection Fund (PPF).

·     Investment performance added £0.5bn, with strong performance in Fiduciary Management in the period.

Highlights for the three months ended 30 June 2016:

·     Fee earning AUM/NUM increased by 8% to £25.5bn.

·     All divisions had positive net flow which totalled £1.4bn in the period.

·     Investment performance added £0.6bn, with strong performance in Fiduciary Management in the period.

Highlights for the twelve months ended 30 June 2016:

·     Fee earning AUM/NUM increased by 22% from 30 June 2015, to £25.5bn.

·     All divisions had positive net flows which totalled £3.7bn in the period, with net sales of £2.6bn and positive net rebalancing flows in Derivative Solutions of £1.1bn.

·     Investment performance added £0.8bn, in a very challenging market environment.

Assets Under Management (AUM) and Notional Under Management (NUM)

AUM/NUM for the one month ended 30 June 2016.

AUM/NUM for the three months ended 30 June 2016.

AUM/NUM for the 12 months ended 30 June 2016.

For the three months ended 30 June 2016 no performance fees were earned (12 months to 30 June 2016: £1.5m). 

Notes to editors:

River and Mercantile Group PLC (R&M) is an advisory and investment solutions business with a broad range of services, from consulting and advisory, to fully delegated fiduciary management and fund management. 

R&M is focussed on creating investment solutions for institutional pension schemes, insurance and financial intermediaries and operates through four divisions: Investment Solutions encompassing both advisory and fiduciary management, Derivative Solutions providing structured equity and LDI, Equity Solutions providing UK and global equity strategies and Multi Asset Solutions, providing dynamic asset allocation and other multi asset based solutions.

The Group has £26bn under management, including £14bn of Derivatives and advises on assets in excess of £30bn.

For further information please contact:

River & Mercantile Group PLC +44 (0)20 3327 5100

Kevin Hayes, Chief Financial Officer

Chris Rutt, Deputy Chief Financial Officer and Investor Relations

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial conditions, results and business of the Group. By their nature, forward looking statements involve risk and uncertainty because they relate to events, and depend on circumstances that will occur in the future.  River and Mercantile Group's actual results may differ materially from the results expressed or implied in these forward looking statements. Nothing in this announcement should be construed as a profit forecast. 

Notes:

Assets Under Management (AUM) represents the assets over which we act either as a discretionary investment manager on a partial or fully delegated basis in accordance with an investment management agreement. 

Notional Under Management (NUM) represents the aggregate notional of derivative contracts and is the basis on which management fees are charged.

Net rebalance in the Derivative Solutions division represents the net change in billing notional values of Derivatives from existing client mandates and can increase or decrease based on changes in the underlying hedging strategies.

Fee Earning AUM/NUM represents amounts on which management fees and performance fees are charged.

Mandates in Transition represent the AUM/NUM of mandates which have been awarded by clients at the period-end date and will transition into fee earning assets. The timing, and ultimate amount transitioned is determined by the client. We report an estimated AUM/NUM for those mandates where there is a high likelihood of the amount being transitioned within the next three months.

Redemptions in transition are redemptions which have been notified by the client at the period-end date, but where the AUM/NUM is included in fee earning assets at period end. The redemptions will be included in a future period.