Interim Results - Replacement

RATHBONE BROTHERS PLC 9 September 1999 The issuer has made the following alteration to the Interim Results announcement issued today at 07:31 under RNS No 1808w. The interim dividend of 8p net per share is payable on 12th October 1999 to shareholders on the register at the close of business on 24th September 1999 rather than 17th September 1999. All other details shown below remain unchanged. -------------------------------------------------------------------------------- Strong growth continues at Rathbones Rathbone Brothers Plc (Rathbones), which now has over £4.5 billion of investors funds under discretionary management, announces interim results for the six months ended 30 June 1999 (Six months to 30 June 1998). The highlights are: * Interim pre-tax profit increased by 27% to £11.6m (£9.1m) * Earnings per share increased by 14% to 23.20p (20.39p) * Interim dividend raised by 14% to 8.0p net (7.0p net) * Discretionary funds under management up by 12% to over £4.5bn Interim pre-tax profit and Earnings per share are stated before goodwill amortisation Commenting on these record interim results, Micky Ingall, Chairman, said: 'Further progress has been made in streamlining our main investment management systems and the integration of the investment management companies into one entity, Rathbone Investment Management Limited. It is planned that this will be completed in the first half of 2000. 'Rathbones has demonstrated its ability to grow profits and earnings substantially from the existing business base and we look forward to a satisfactory outcome for 1999 as a whole' For further information please contact: Micky Ingall, Chairman Mark Powell, Group Managing Director Rathbone Brothers Plc Tel: 0171 399 0000 Hamish McFall / Tony Rose Tavistock Communications Tel: 0171 600 2288 Chairman's Statement I am pleased to report that by comparison with last year, profit before tax and goodwill amortisation for the first six months of 1999 rose 27% to £11.6 million. Also, earnings per share before goodwill amortisation has risen 14% to 23.20p per share. The interim dividend is increased by 14% to 8p payable on 12th October 1999. We have continued to attract new investment management clients and funds under full discretionary investment management have grown during the period to over £4.5 billion (December 1998 - £4 billion). This is a very satisfactory result bearing in mind that no acquisitions took place during the period and the main UK indices recorded more modest gains than in recent years. Further progress has been made in streamlining our main investment management systems and the integration of the investment management companies into one entity, Rathbone Investment Management Limited, should be completed in the first half of 2000. The trust activities have continued to make good progress and, in particular, Curzon Secretaries & Trustees Limited based in Jersey, which was acquired in December 1998 has fully lived up to expectations and is being successfully integrated. All our computer systems, apart from minor aspects for which solutions are in hand, and other business facilities have been successfully tested for year 2000 compliance. Rigorous enquiries have been made of all third party suppliers to the effect that they also are compliant. We have undertaken a comprehensive business continuity survey to review the potential impact of the Millennium and we are confident that the Group is well equipped to withstand any problems which may occur. Your Company has demonstrated its ability to grow profits and earnings substantially from the existing business base and we look forward to a satisfactory outcome for 1999 as a whole. Micky Ingall Chairman 8th September 1999 Unaudited consolidated profit and loss account For six months ended 30th June 1999 Six months Six months Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited Restated Restated (Note 3) (Note 3) £'000 £'000 £'000 Turnover 36,307 30,518 61,982 Operating costs (25,059) (21,461) (43,993) Operating Profit before goodwill amortisation 11,617 9,097 18,063 Goodwill amortisation (369) (40) (74) Operating profit being profit on ordinary activities before 11,248 9,057 17,989 taxation Tax on profit on ordinary (3,543) (2,943) (5,766) activities -------- -------- -------- Profit for the period attributable to shareholders 7,705 6,114 12,223 Dividends (2,786) (2,206) (6,304) -------- -------- -------- Retained profit for the period 4,919 3,908 5,919 -------- -------- -------- Basic Earnings per ordinary share before goodwill amortisation 23.20p 20.39p 39.55p after goodwill amortisation 22.47p 20.25p 39.31p Diluted earnings per share before goodwill amortisation 22.94p 19.49p 37.24p after goodwill amortisation 22.21p 19.37p 37.02p Unaudited consolidated balance sheet 30th June 1999 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited Restated Restated (Note 3) (Note 3) £'000 £'000 £'000 Fixed assets Intangible assets 14,120 1,567 14,423 Tangible assets 6,753 7,227 6,791 Investments 65 65 65 -------- -------- -------- 20,938 8,859 21,279 -------- -------- -------- Current assets Work in progress 469 401 402 Debtors 56,679 55,174 44,985 Investments 104,791 88,634 109,618 Cash and short term deposits 33,222 39,716 33,434 -------- -------- -------- 195,161 183,925 188,439 Creditors: amounts falling due within one year (163,833) (160,963) (162,542) -------- -------- -------- Net current assets 31,328 22,962 25,897 -------- -------- -------- Total assets less current liabilities 52,266 31,821 47,176 Creditors: amounts falling due after more than one year (206) (73) (449) Provision for liabilities and charges (3,630) (983) (6,314) -------- -------- -------- Net assets 48,430 30,765 40,413 -------- -------- -------- Capital and reserves Called up share capital 1,732 1,576 1,648 Share premium account 13,411 5,279 10,326 Other reserves 5,332 3,073 5,414 Profit and loss account 27,955 20,837 23,025 -------- -------- -------- Equity shareholders' funds 48,430 30,765 40,413 -------- -------- -------- Approved by the Board on 8th September 1999 Consolidated cash flow statement For the six months ended 30th June 1999 Six months Six months Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Unaudited Unaudited Audited Restated Restated (Note 3) (Note 3) £'000 £'000 £'000 Net cash inflow from operating activities 4,329 9,012 16,736 -------- -------- -------- Taxation - Corporation tax including (95) (495) (3,793) ACT - Overseas tax (250) (54) (107) -------- -------- -------- (345) (549) (3,900) Capital expenditure - Purchase of tangible fixed (1,526) (1,255) (2,911) assets - Sale of tangible fixed 72 50 1,428 assets -------- -------- -------- Net cash outflow for capital expenditure (1,454) (1,205) (1,483) Acquisition and disposals - Acquisition of subsidiaries (89) (1,109) (1,300) - Net cash acquired with subsidiary - 602 629 undertakings -------- -------- -------- Net cash outflow for (89) (507) (671) acquisitions Equity dividends paid (4,115) (2,674) (4,880) -------- -------- -------- Cash (outflow)/inflow before financing (1,674) 4,077 5,802 -------- -------- -------- Financing - Issue of shares 460 933 1,029 - Repayment of secured loan - - (1,500) - Capital element of finance lease (15) (15) (31) rental payments -------- -------- -------- Net cash inflow/(outflow) from financing 445 918 (502) -------- -------- -------- (Decrease)/Increase in cash in the period (1,229) 4,995 5,300 -------- -------- -------- Notes to the Interim Accounts For the six months ended 30th June 1998 1. Basis of preparation The unaudited interim financial information, which has been approved by the Board of Directors, has been prepared on the basis of accounting policies set out in the Group's accounts for the year ended 31st December 1998 except for the change to the basis of consolidation. The comparative balance sheet figures as at 31st December 1998 are not the Group's statutory accounts for that financial year but have been derived from them expect for the restatements described in note 3 below. Those accounts have been reported on by the Group's former auditors and delivered to the registrar of companies. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 2. Basis of Consolidation The consolidation accounts are based on the accounts of Rathbone Brothers Plc, its subsidiary undertakings and its quasi subsidiary made up to 30th June. The consolidated profit and loss account includes the results of subsidiary undertakings acquired during the period from the effective date of acquisition. 3. Quasi Subsidiary The consolidated profit and loss account and balance sheet have been restated for the periods ended 30th June 1998 and 31st December 1998 to include Rathbone International Finance BV, a quasi subsidiary from 1st January1998. The quasi subsidiary provides back to back loan facilities for Rathbone's clients. The inclusion of this quasi subsidiary has no impact on the results or net assets of the Group but increases current assets and current liabilities by £8,134,000 at 30th June 1998 and £9,403,000 at 31st December 1998 and turnover and operating costs by £198,000 for the six month period to 30th June 1998 and £436,000 for the year to 31st December 1998. 4. Goodwill Purchased goodwill arising on consolidation in respect of acquisitions before 1st January 1998, when FRS 10 Goodwill and intangible assets was adopted, was written off to reserves in the year of acquisition. Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value of the separable net assets acquired) arising on consolidation in respect of acquisitions since 1st January 1998 is capitalised. Positive goodwill is amortised to nil by equal annual installments over its estimated useful life, normally 20 years. Such goodwill is subject to periodic review for impairment in accordance with FRS 11: Impairment of tangible fixed assets and goodwill. 5. Turnover All amounts derive from continuing activities. 6. Taxation The interim taxation charge is calculated by applying the Directors' best estimate of the effective annual corporation tax rate (31.5% (1998: 32.5%)) to the profit for the period. 7. Earnings per ordinary share The calculation of basic earnings per share is based on profit after taxation, before dividends, for each period and 34,296,278 ordinary shares at 30th June 1999, 31,091,573 ordinary shares at 31st December 1998, and 30,182,134 ordinary shares at 30th June 1998, where this is the weighted average number of ordinary shares in issue during the relevant period. Diluted earnings per share is the basic earnings per share, adjusted for the effect of contingently issuable shares in relation to deferred consideration for the acquisition of subsidiary undertakings and employee share options remaining capable of exercise weighted for the relevant periods. Six months Six months Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Weighted average number of ordinary shares in issue during the period. 34,296,278 30,182,134 31,091,573 Effect of ordinary share 396,310 396,327 408,346 options. Weighted average numbers Of contingently issuable ordinary shares during the period. - 989,995 1,519,754 -------- -------- -------- Diluted ordinary shares 34,692,588 31,568,456 33,019,673 -------- -------- -------- 8. Dividend per share The directors have declared an interim dividend of 8p net per share amounting to £2,786,000 payable on 12th October 1999 to shareholders on the register at the close of business on 24th September 1999. 9. Year 2000 Costs IT projects and staff costs contain an element of year 2000 costs but these have not been separately identified as they are not considered material. It is not expected that there will be any further year 2000 costs of a material amount during the year. 10. Segmental information Turnover Profit before taxation Six Six Year Six Six Year Months Months ended Months Months Ended ended ended Ended ended 30th 30th 31st 30th 30th 31st June June Dec. June June Dec. 1999 1998 1998 1999 1998 1998 Restated Restated (Note 3) (Note 3) £'000 £'000 £'000 £'000 £'000 £'000 By class of business: Investment management 27,209 23,354 47,758 8,619 7,505 14,827 Banking 3,949 3,839 6,941 816 695 1,237 Trust services 5,149 3,325 7,283 1,813 857 1,925 ------ ------- ------- ------ ------ ------- 36,307 30,518 61,982 11,248 9,057 17,989 ------ ------- ------- ------ ------ ------- By geographical segment: United Kingdom 32,431 27,999 57,038 10,472 8,364 16,606 Europe 2,867 1,543 3,154 498 391 736 The Americas 1,009 976 1,790 278 302 647 ------ ------- ------- ------ ------ ------- 36,307 30,518 61,982 11,248 9,057 17,989 ------ ------- ------- ------ ------ ------- Net Assets Six months ended Six months ended Year ended 30th June 30th June 31st 1999 1998 December 1998 £'000 £'000 £'000 By class of business: Investment management 25,029 15,813 21,551 Banking 9,147 9,414 9,555 Trust services 14,254 5,538 9,307 ------- ------- ------- 48,430 30,765 40,413 ------- ------- ------- By geographical segment: United Kingdom 31,298 25,809 34,724 Europe 13,688 2,216 2,674 The Americas 3,444 2,740 3,015 ------- ------- ------- 48,430 30,765 40,413 ------- ------- ------- 11. Consolidated Cash Flow Statement Six months Six months Year ended ended ended 30th June 30th June 31st 1999 1998 December 1998 Restated Restated (Note 3) (Note 3) Reconciliation of operating profit to net cash inflow from £'000 £'000 £'000 operating activities Operating profit 11,248 9,057 17,989 Profit on disposal of fixed assets (54) (35) (157) Depreciation charges 1,538 1,055 1,884 Exchange adjustments 19 - (16) Amortisation of goodwill 369 40 74 Increase in debtors (11,694) (20,764) (10,789) Increase in work in progress (67) (154) (155) Increase in creditors 14 39,635 45,862 Decrease/(Increase) in time deposits 2,956 (19,743) (38,014) (Increase)/Decrease in investments held for trading - (79) 58 ------- ------- ------- Net cash inflow from operating activities 4,329 9,012 16,736 ------- ------- ------- Six months Six months Year ended ended ended 30th June 30th June 31st December 1999 1998 1998 Restated Restated (Note 3) (Note 3) Reconciliation of net cash £'000 £'000 £'000 flow to movement in net funds (Decrease)/Increase in cash for the period (1,229) 4,995 5,300 Exchange movements 179 (80) (33) Finance charges on leases (3) (5) (10) Change in net debt resulting 15 15 31 from cash flows ------- ------- ------- Movements in net funds in the period (1,038) 4,925 5,288 Net funds at the beginning of period 24,845 19,557 19,557 ------- ------- ------- Net funds at end of period 23,807 24,482 24,845 ------- ------- ------- 12. Interim report The interim report will today be sent to registered shareholders. Further copies will be available to the public from the Company's registered office: 159 New Bond Street, London W1Y 9PA.

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