Interim Results

Brooks Macdonald Group PLC 12 March 2007 CHAIRMAN'S STATEMENT - INTERIM RESULTS BROOKS MACDONALD GROUP PLC I am pleased to report a strong set of results for the first half of the financial year. On a turnover of Â£5.1 million, an increase of 50% over the first half of last year, we have achieved a rise in pre-tax profits from Â£187,000 to Â£511,000. In Brooks Macdonald Asset Management Funds under management at 31 December 2006 were Â£750 million, an increase of Â£113 million or 17% over the six month period, and an increase of Â£236 million or 45% over the calendar year 2006. These results reflect stable markets but with the FTSE100 index rising by 4% over the six month period the increase in our funds under management is in larger measure the result of the out-performance of our clients' assets and strong new business flow. Our organic growth is due to a number of factors: our success in the growing Self Invested Personal Pensions (SIPP) market; the links we have established with an increasing number of professional introducers; the continued growth in clients wishing to establish discretionary portfolios; and our excellent performance record. In December 2006 we launched our first Offshore Unit Trust: this is satisfying a specific demand and has been well received. Brooks Macdonald Financial Consulting recorded increased turnover in the half year, a pleasing performance given that a large constituent of its business is based around tax planning and is biased towards the second half of our financial year. We have successfully expanded our Employee Benefits capability where we see significant potential as part of our consultancy services to the small and medium enterprises sector. Brooks Macdonald Services, into which we transferred clients in August 2006, provides us with our own nominee, custody and dealing services. It will allow us to expand our back office capability as well as improve our client reporting without a commensurate increase in costs. With this service fully operational we are now focusing on further developing our systems, in particular the use of web based delivery. We will continue to expand the services we offer private clients and as a result anticipate the need for further recruitment. Our staff are central to our success. We will continue to develop remuneration policies to encourage share ownership and to reward our staff for their performance, enthusiasm and commitment. Christopher Knight Chairman Brooks Macdonald Group plc Consolidated profit and loss account for the six months ended 31 December 2006 Six months ended Six months ended Year ended Note 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ Turnover 5,089,023 3,426,293 8,168,713 Administrative costs (4,826,485) (3,406,425) (7,767,849) 262,538 19,868 400,864 Other operating income 74,265 78,615 155,460 Operating profit 336,803 98,483 556,324 Income from current asset investments - - 7,191 Interest receivable 174,602 88,588 257,509 174,602 88,588 264,700 Profit on ordinary activities 511,405 187,071 821,024 before tax Tax on profit on ordinary 2 (163,200) (56,000) (237,794) activities Profit on ordinary activities 348,205 131,071 583,230 after taxation Dividends payable 3 (147,197) - (98,110) Retained profit for the period 201,008 131,071 485,120 Earnings per share Basic 9 3.55p 1.34p 5.95p Diluted 9 3.28p 1.28p 5.60p Brooks Macdonald Group plc Consolidated balance sheet at 31 December 2006 Note Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ Fixed assets Tangible assets 205,895 155,130 169,468 Current assets Debtors 4 3,172,899 1,638,918 1,960,876 Investments 37 18,022 37 Cash at bank and in hand 2,683,518 2,799,366 3,532,442 5,856,454 4,456,306 5,493,355 Creditors, amounts falling due (2,502,413) (1,869,651) (2,346,329) within one year Net current assets 3,354,041 2,586,655 3,147,026 Total assets less current 3,559,936 2,741,785 3,316,494 liabilities Creditors, amounts falling due (26,563) (32,813) (26,563) after one year Provisions for liabilities and (208,134) (118,500) (193,300) charges Net assets 3,325,239 2,590,472 3,096,631 Capital and reserves Called up share capital 6 98,131 98,131 98,131 Share premium 7 1,365,910 1,365,910 1,365,910 Merger reserve 191,541 191,541 191,541 Share option reserve 81,600 - 54,000 Profit and loss account 1,588,057 934,890 1,387,049 Shareholder funds 8 3,325,239 2,590,472 3,096,631 Brooks Macdonald Group plc Consolidated cash flow statement for the six months ended 31 December 2006 Note Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ Net cash (outflow)/inflow from 5 (807,353) 152,193 886,832 operating activities Returns on investments and servicing of finance Interest received 174,602 88,588 257,509 174,602 88,588 257,509 Taxation Corporation tax refund received 4,275 - (146,553) /(paid) Capital expenditure and financial investment Purchase of plant and equipment (73,251) (62,797) (111,905) Sales of investments - - 25,177 (73,251) (62,797) (86,728) Equity dividends paid (147,197) (98,110) (98,110) Financing Increase in share capital - 3,265 3,265 3,265 3,265 Net cash (outflow)/inflow in (848,924) 83,139 816,215 period Net funds at beginning of 3,532,442 2,716,227 2,716,227 period Net (outflow)/inflow (848,924) 83,139 816,215 Net funds at end of period 2,683,518 2,799,366 3,532,442 Brooks Macdonald Group plc Notes to the interim results for the period ended 31 December 2006 1 Basis of preparation The accounting policies used in preparing the interim report are as set out in the statutory accounts for the year ended 30 June 2006. The figures for the year ended 30 June 2006 have been extracted from the financial statements for that year, which have been filed with the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain any statement under Section 237 (2) or (3) of the Companies Act 1985. 2 Taxation The corporation tax charge is based on the taxable profits at the current rate of 30% 3 Dividends A dividend was paid in the period in respect of the results for the year ended 30 June 2006 The Board do not recommend the payment of an interim dividend. Six months ended Six months ended Year ended 31 December 2006 31 December 30 June 2006 2005 Unaudited Unaudited Audited Â£ Â£ Â£ Final dividend paid on ordinary shares 147,197 - 98,110 4 Debtors Included within debtors is Â£431,959 (31 December 2005: Â£537,535,30 June 2006: Â£498,480) which relates to payments made to key fee earners in return for an alternative commission structure and the costs in acquiring new funds under management. Â£298,216 (31 December 2005: Â£397,783, 30 June 2006: Â£365,438) of this relates to more than one year. 5 Reconciliation of operating profit and net cash outflow from operating activities Six months ended Six months ended Year ended Six months ended Six months Year ended 31 December 2006 31 December 30 June 2006 2005 Unaudited Unaudited Audited Â£ Â£ Â£ Operating profit 336,803 98,483 556,324 Depreciation 36,824 26,623 61,392 (Increase) in debtors (1,212,023) (495,134) (817,090) Increase/(decrease) in (11,391) 551,751 993,186 creditors Increase/(decrease) in 14,834 (29,530) 39,020 provisions Share based payments 27,600 - 54,000 Net (outflow)/inflow (807,353) 152,193 886,832 6 Share capital Authorised Six months Six months Year ended Six months Six months Year ended ended ended ended ended 31 December 31 December 2005 30 June 2006 31 December 2006 31 December 30 June 2006 2005 2006 Unaudited Unaudited Audited Unaudited Unaudited Audited Â£ Â£ Â£ no. no. no. Ordinary shares of Â£0.01 each 200,000 200,000 200,000 20,000,000 20,000,000 20,000,000 Allotted, issued and fully paid Six months Six months Year ended Six months Six months Year ended ended ended ended ended 31 December 31 December 2005 30 June 2006 31 December 2006 31 December 30 June 2006 2005 2006 Unaudited Unaudited Audited Unaudited Unaudited Audited Â£ Â£ Â£ no. no. no. Ordinary shares of Â£0.01 each At 1 July 2006 98,131 98,110 98,110 9,813,100 9,811,000 9,811,000 Issued during the period - 21 21 - 2,100 2,100 At 31 December 2006 98,131 98,131 98,131 9,813,100 9,813,100 9,813,100 On 31 October 2005 under the terms of the employee free share scheme adopted by the Board on 1 March 2005, seven new employees were issued with 300 shares each at a mid market price of Â£1.555 per ordinary share of Â£0.01 each making a total of 2,100 shares. 7 Share premium account Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ At 1 July 2006 1,365,910 1,362,666 1,362,666 Issue 160 'B' ordinary shares - 3,244 3,244 At 31 December 2006 1,365,910 1,365,910 1,365,910 The share premium arose as a result of issuing the following shares at the following considerations: 42,745 bonus shares issued 1 for 1 - cost of Â£42,745 arising 160 'B' ordinary shares of Â£1 each at Â£125 each - premium of Â£19,840 arising 1,262,000 ordinary shares of Â£0.01 each at Â£1.40 each - premium of Â£1,754,180 arising less floatation costs incurred of Â£638,049 2,100 ordinary shares of Â£0.01 each at Â£1.555 each - premium of Â£3,244 arising 8 Reconciliation of shareholders funds Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ Opening shareholders funds 3,096,631 2,456,136 2,456 136 at 1 July as previously stated Prior year adjustments - - 98,110 Opening shareholders funds 3,096,631 2,456,136 2,456 136 at 1 July as previously stated Prior year adjustments - - 98,110 Opening shareholders funds 3,096,631 2,456,136 2,554,246 at 1July as restated Profit for the period 348,205 131,071 583,230 Share option reserves 27,600 - 54,000 Dividends (147,197) - (98,110) New share capital subscribed - 21 21 Share premium increase - 3,244 3,244 Net addition to shareholders funds 228,608 134,336 542,385 Closing shareholders funds 3,325,239 2,590,472 3,096,631 9 Earnings per share Six months ended Six months ended Year ended 31 December 2006 31 December 2005 30 June 2006 Unaudited Unaudited Audited Â£ Â£ Â£ Earnings Profit after tax for the financial period 348,205 131,071 583,230 Weighted average number of No. (m) No. (m) No. (m) shares Number of ordinary shares at start of period 9.81 9.81 9.81 Share issues 0.00 0.00 0.00 Basic earnings per share denominator 9.81 9.81 9.81 Issuable on exercise of options 0.79 0.44 0.61 Diluted earnings per share denominator 10.60 10.25 10.42 Basic earnings per share 3.55p 1.34p 5.95p Diluted earnings per share 3.28p 1.28p 5.60p This information is provided by RNS The company news service from the London Stock Exchange

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