RIV.L Regulatory News (RIV)

29 July 2019

LEI: 2138005C7REHURGWHW31

River and Mercantile Group PLC

Trading Update

Year ending 30 June 2019

River and Mercantile Group PLC (R&M), the asset management and investment solutions business, today provides a trading update for the three and twelve months ended 30 June 2019.

Summary of the three months ended 30 June 2019:

Summary of the twelve months ended 30 June 2019:

James Barham, CEO of River and Mercantile Group PLC, commented:

This quarter has seen strong growth in AUM/NUM, with continued positive sales of structured equity mandates in Derivatives Solutions and global equity mandates in Institutional Equities. In addition, investment performance for the period was positive across all divisions.

This was a record year of AUM growth for R&M with total sales of £7 billion and net sales of £4 billion. It was encouraging to see the continued penetration into the LGPS market with our structured equity and LDI solutions. We have made a significant commitment and investment in Australia with the opening of our first offices in Sydney and Brisbane following a number of years developing relationships. It has been very rewarding to see the continued growth in this market with a recent AU$390m global equities mandate appointment from a superannuation fund.

We have discussed the benefits of our diversified business model for a number of years and in particular our low beta characteristics compared to many of our asset management peers. It was interesting to see this proven during the fourth calendar quarter when equity markets fell significantly, yet both our assets and revenues remained resilient. We continue to develop a range of Macro strategies, many of which will provide positive absolute returns in negative equity markets.

In the year, we have seen a strong return to growth from our Fiduciary Management business as the market normalises following the CMA review. We expect activity levels to increase as we move into a window during which we expect a significant number of legacy mandates across the market to undertake formal reviews.

We continue to have a positive outlook on markets, which we believe are supported by a stable environment. Globally, valuations still look fair, credit conditions are improving and overall economic conditions are on the up. Accordingly, our River FOURcast is indicating STABLE over the next six month period and we have therefore positioned our client portfolios for continued growth, however, there is obvious political risk in certain markets and we will continue to monitor developments in this area.

Our progress during the last twelve months, together with the recent senior management restructure, means that we end our financial year well positioned to continue our growth in line with our strategic objectives.

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

AUM/NUM for the three months ended 30 June 2019.

*Redemptions in transition include £0.7bn of structured equity mandates, which will reach their contractual maturity date in the next 3 months. It is unknown at this stage whether these will "roll" as has been the case with the majority of other similar structures.

AUM/NUM for the twelve months ended 30 June 2019.

Performance and advisory fees

For the year ended 30 June 2019, performance fee revenues are estimated to be £12.0m, £2.0m from Equity Solutions and £10.0m from Fiduciary Management. Advisory fee revenues for the year are estimated to be £10.0m.

Notes to editors:

R&M is an asset management and investment solutions business with a broad range of services, from consulting and advisory, to fully delegated fiduciary management and asset management.

R&M is focussed on creating investment solutions for institutional pension schemes, insurance and financial intermediaries.

River FOURcast is a proprietary economic model developed by R&M which is used to indicate our future views of the financial markets. The model uses a number of economic and sentiment indicators to determine the potential future direction of financial markets as being: "STABLE", "UPWARD RERATING", "APPREHENSION" or "DOWNTURN".

For further information, please contact:

River and Mercantile Group PLC

Kevin Hayes

Chief Financial Officer

Tel: +44 (0)20 3327 5100

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial conditions, results and business of R&M. 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. R&M'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.

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

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

Net rebalance and transfers represents the net change in billing notional values of Derivatives (including Gilts) from existing client mandates and can increase or decrease based on changes in the underlying hedging strategies.

The category also represents transfers of client assets between divisions. The different billing structures between divisions, including the use of AUM or NUM, means that transfers will not net to zero.