Rathbone Brothers Plc : 2013 Half Year Interim ...

Rathbones' first half profit grows 17%

This statement is a half-yearly financial report in accordance with the UK Listing Authority's Disclosure and Transparency Rules. It covers the six month period ended 30 June 2013.

Andy Pomfret, Chief Executive of Rathbone Brothers Plc, said:

"In the first half of 2013 continued growth in funds under management and positive investment markets have helped to grow Rathbones' profit before tax by 17.2% to £23.2 million.

"Total net growth in funds managed by our investment management business was £780 million in the first half of 2013, representing an annualised growth rate of 9.3% compared to 6.7% in the first half of 2012. Including the impact of market movements, Rathbones' total funds under management at 30 June 2013 were £19.9 billion.

"Rathbones' outlook remains positive. Our continued focus on client service and controlled investment in people and systems ensures that Rathbones is well placed to take advantage of healthier investment markets and future growth opportunities."

Highlights:

• Total funds under management at 30 June 2013 were £19.9 billion, up 10.6% from £18.0 billion at 31 December 2012. This compared to an increase of 5.4% in the FTSE 100 Index and an increase of 5.5% in the FTSE APCIMS Balanced Index over the same period. 

• Total net organic and acquired growth in the funds managed by Rathbone Investment Management was £780 million in the first six months of 2013, representing a net annual growth rate of 9.3% (2012: 6.7%). Net organic growth of £327 million for the first half represents an underlying annualised rate of net organic growth of 3.9% (2012: 3.7%). We have now completed the acquisition of Taylor Young Investment Management's private client base, which added £358 million of funds under management by 30 June 2013. 

• Profit before tax was £23.2 million for the six months ended 30 June 2013, up 17.2% compared to £19.8 million in 2012. Underlying profit before tax (excluding amortisation of client relationship intangible assets and head office relocation costs) increased 13.0% from £23.1 million to £26.1 million. 

• Underlying operating expenses of £62.0 million for the six months ended 30 June 2013 were up 13.6% on £54.6 million in the first half of 2012 largely as a result of business growth and investment. 

• Earnings per share increased 11.6% to 38.6p (2012: 34.6p). The weighted average number of ordinary shares, used to calculate earnings per share, increased 5.6% from 43.2 million at 30 June 2012 to 45.6m at 30 June 2013, largely as a result of the placing in November 2012. 

• Operating income in Investment Management of £83.0 million in the first six months of 2013 (2012: £73.4 million) was up 13.1%.  The average FTSE 100 Index was 6233 on our quarterly billing dates in 2013, compared to 5647 in 2012, an increase of 10.4%. 

• Net interest income of £4.2 million in the first six months of 2013 has decreased 17.6% from £5.1 million in 2012 as lower returns on treasury assets offset growth in the client loan book from £65.1 million at 31 December 2012 to £73.6 million at 30 June 2013. 

• Funds under management in Rathbone Unit Trust Management were £1,443 million at 30 June 2013 (31 December 2012: £1,266 million) after 11 consecutive quarters of net inflows. Net inflows of £67 million in the first half of 2013 have doubled from £32 million in 2012. Underlying operating income in Rathbone Unit Trust Management was £5.1 million in the six months ended 30 June 2013, an increase of 15.9% from £4.4 million in the first half of 2012. 

Issued on 1 August 2013

For further information contact:

Rathbone Brothers Plc Tel: [phone] email: [e-mail] Mark Nicholls, Chairman Andy Pomfret, Chief Executive Paul Stockton, Finance Director

Quill PR Tel: [phone] email: [e-mail] Hugo Mortimer-Harvey

Rathbone Brothers Plc
Rathbone Brothers Plc is a leading provider of high-quality, personalised investment and wealth management services for private clients, charities and trustees. This includes discretionary investment management, unit trusts, tax planning, trust and company management, pension advice and banking services.

Rathbones has over 820 staff in 13 UK locations and Jersey, and has its headquarters in Curzon Street, London.

www.rathbones.com
  

Interim management report

Results and financial highlights
To date we have seen more positive investment markets in 2013 and this, together with continued growth in our funds under management, is reflected in a profit before tax in the first half of £23.2 million; up 17.2% on the £19.8 million reported for the same period last year. The higher number of shares in issue following our placing in November 2012 is included in our earnings per share, which increased 11.6% to 38.6p (2012: 34.6p). Underlying profit before tax (stated before amortisation of client relationships and head office relocation costs) was £26.1 million, up 13.0% on £23.1 million in 2012.

Growth (net organic and acquired) in the funds managed by our investment management business was £780 million in the first half of 2013 (2012: £497 million), representing an annualised growth rate of 9.3% (2012: 6.7%). Our net organic growth of £327 million represents an annualised rate of 3.9% (2012: 3.7%), with our charity team in particular reporting a strong six months. We also welcomed the clients of Taylor Young Investment Management who brought some £358 million of funds under management to Rathbones. Total acquired growth was £453 million in the first half.

Rathbone Unit Trust Management continues to make steady progress in spite of a poor backdrop for industry sales and attracted £67 million of net inflows in the first half of 2013 (2012: net inflows of £32 million). It was named 'Best Income Wealth Manager 2013' by the Financial Times and Investors Chronicle in June 2013.

Our interim dividend has been increased to 18.0p per share and will be paid on 9 October 2013.

Financial markets
Positive sentiment returned to equity markets in the first half of 2013. Markets, as measured by the FTSE 100 Index, were close to their all time high in May although uncertainty over the speed of recovery in key economies resulted in sharp falls in June. This may typify what we will see in the coming months as markets attempt to factor in future growth and inflation expectations versus the impact of government monetary policy in key economies. Nervousness in bond markets was very evident in the first four months of 2013 and rising yields in the latter part of the first half suggested that rate rises were more possible, although recent sentiment has been tempered by comments from Mark Carney, the new Governor of the Bank of England.

The FTSE 100 Index ended the half year at 6216, up 5.4% from 5898 at 31 December 2012 and the FTSE APCIMS Balanced Index was 3230 at 30 June 2013, 5.5% higher than it was at 31 December 2012. Over the first half, Rathbones funds under management increased 10.6% to £19.9 billion.

Credit conditions have been relatively benign in the period with headline threats to Eurozone stability largely limited to the crisis in Cyprus. Risks remain however and we continue to select carefully the counterparties with whom we invest the cash that we hold on a banking basis for our investment management clients. Our treasury portfolio remains conservatively positioned with all counterparties attracting a minimum Fitch rating of A at 30 June 2013 and £213 million in our account with the Bank of England (31 December 2012: £116 million). Yields in interbank markets remain depressed as financial institutions continue to be able to access cheap liquidity from a wide variety of sources. Our overall net interest margin has therefore continued to decline.

Our loan book has grown steadily with loans outstanding to clients of £73.6 million at 30 June 2013, up 13.1% from the £65.1 million outstanding at 31 December 2012. We remain keen to expand this part of our business without changing our lending criteria.

Business review
We continue to attract new funds under management and now have over 40,000 clients. Although we continue to see some clients withdrawing capital from their portfolios to maintain their lifestyle, net organic growth remains positive.  We opened offices in Newcastle and Lymington during the period and are confident that these teams will be able to grow the business and establish a strong presence in these regions.

In addition to the hard work put in by our investment teams we are seeing the benefits from developing our investment process and supporting systems. In May, Rathbone Unit Trust Management were awarded a global pension mandate for some £70 million of funds from Scottish Life which we expect to arrive in two tranches over the third and fourth quarters.

Rathbones was named 'Charity Investment Manager of the Year' at the Citywealth Magic Circle Awards in May and we have been shortlisted for Charity Times' 'Investment Management' 2013 award to be presented in October 2013. We were also nominated for the Citywealth Magic Circle 'Institutional Private Client Asset Manager of the Year' award and our international investment management business in Jersey was named 'Best Wealth Manager (Jersey, Guernsey & Isle of Man)' at the inaugural Wealth Adviser Awards in March.

Net fee income of £54.5 million (2012: £47.6 million) was 14.5% higher than in the first half of 2012 reflecting the continued growth in the business and higher markets. The average FTSE 100 Index based on our key quarterly billing dates was 6233, up 10.4% from an average of 5647 in the corresponding period last year. Net commission income of £23.2 million was strong against last year (2012: £19.9 million) largely reflecting the impact of improved market conditions. Trail commission received in the first half of 2013 was £0.3 million compared to £1.1 million in 2012. Net interest income of £4.2 million (2012: £5.1 million) in the first half was down 17.6% as lower yields on treasury assets offset an increase in average liquidity to £1,111 million (2012: £1,061  million). Fees from advisory services, now reported with other income, increased to £4.3 million (2012: £4.0 million).

Underlying operating expenses (which exclude amortisation of client relationships and head office relocation costs) were £62.0 million, up 13.6% on the £54.6 million last year. This largely reflects salary inflation, a 5.8% increase in average full time equivalent headcount to 821 from 776 in June 2012, higher variable awards (reflecting higher profit levels, continued growth and a strong share price performance, which impacts the charge for LTIP awards) and the costs of new offices in Newcastle and Lymington of £0.8 million. Operating costs in the first half also include £0.8 million of legal fees arising in connection with our proceedings to confirm insurance cover against the insurers of the excess layer of our civil liability (professional indemnity) policy and the related proceedings in Jersey. These costs are likely to increase in the second half, not least because the trial of the insurance claim will start on 7 October 2013.

Our balance sheet at 30 June 2013 has changed a little from the end of 2012. Total equity increased 6.8% from £229.5 million at 31 December 2012 to £245.0 million at 30 June 2013, and increases in long term bond yields and asset values positively impacted our defined benefit pension schemes which moved into a surplus of £9.3 million at 30 June 2013 (31 December 2012: deficit of £2.1 million).

Related party transactions and balances for the half year ended 30 June 2013 are set out in note 17 to the condensed consolidated interim financial statements.

Regulation
The regulatory environment changed significantly in the first six months with the Prudential Regulation Authority and the Financial Conduct Authority formally coming into being on 1 April 2013. We are fortunate in having a named team looking after us at both regulators and we are committed to working with them closely over the coming years.

We await final rules as to how planned European Commission legislation impacting banks' remuneration policies will affect our business and will consider any response to this carefully.

Risks and key judgements
Risk management is an important part of our agenda and the group risk committee continues to work hard to ensure that we strive for best practice in our risk management within an appropriate risk reporting framework.

The principal risks that face Rathbones in 2013 are described in the group risk committee report on pages 27 to 31 of our 2012 annual report and accounts; little has changed in the first half of 2013. We continue to regard the key risks to Rathbones as arising from the growth of the business and from the need to adapt to regulatory change in our sector. We have not identified any new principal risks and uncertainties that we are likely to face in the second half of the financial year. There has been no material change to the Board's view of the legal proceedings referred to on page 7 of our 2012 annual report and accounts, and note 15 of the 2013 condensed consolidated interim financial statements.

The principal areas of judgement and uncertainty in preparing this interim statement are unchanged from those set out in note 2 to the consolidated financial statements as presented in our 2012 annual report and accounts.

Board and management changes
As we referred to in our 2012 annual report and accounts, Philip Howell joined Rathbones in March 2013 as deputy chief executive and two directors stood down at our Annual General Meeting in May 2013. Our search for a new non-executive director is well advanced.

Looking ahead
Rathbones' outlook remains positive and at the date of this report, we manage over £20 billion of funds. Our continued focus on client service and controlled investment in people and systems ensures that we are well placed to take advantage of healthier investment markets and future growth opportunities.

Mark Nicholls    Andy Pomfret
Chairman           Chief Executive
31 July 2013       31 July 2013

This interim statement contains certain forward looking statements which are made by the directors in good faith based on the information available to them at the time of their approval of this interim statement. Forward looking statements contained within the interim statement should be treated with some caution due to the inherent uncertainties, including economic, regulatory and business risk factors, underlying any such forward looking statements.

We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise. The interim statement has been prepared by Rathbone Brothers Plc to provide information to its shareholders and should not be relied upon by any other party or for any other purpose.

Statement of directors' responsibilities in respect of the interim statement

We confirm to the best of our knowledge that:  

• the condensed set of financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; 

• the interim management report includes a fair view of the information required by: 

a)   DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b)   DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Andy Pomfret  
Chief Executive  

31 July 2013  

Consolidated interim statement of comprehensive income
for the six months ended 30 June 2013

		Unaudited	Unaudited	Audited
		Six months to	Six months to	Year to
		30 June 2013	30 June 2012	31 December 2012
		£'000	£'000	£'000
	Note		(restated - note 1)	(restated - note 1)
Interest and similar income		4,540	5,705	11,162
Interest expense and similar charges		(302)	(645)	(1,258)
Net interest income		4,238	5,060	9,904
Fee and commission income		85,991	76,935	152,154
Fee and commission expense		(4,001)	(5,438)	(8,756)
Net fee and commission income		81,990	71,497	143,398
Dividend income		29	28	110
Net trading income		569	306	562
Other operating income		1,209	839	1,586
Share of profit of associates		66	-	21
Operating income		88,101	77,730	155,581
Amortisation of acquired client relationships	10	(2,876)	(3,007)	(6,025)
Head office relocation costs	3	-	(301)	(300)
Other operating expenses		(62,001)	(54,640)	(110,752)
Operating expenses		(64,877)	(57,948)	(117,077)
Profit before tax		23,224	19,782	38,504
Taxation	5	(5,615)	(4,830)	(9,521)
Profit for the period attributable to
equity holders of the Company		17,609	14,952	28,983
Other comprehensive income:
Items that will not be reclassified to profit or loss
Net remeasurement of defined benefit asset/liability		9,671	(602)	968
Deferred tax relating to net remeasurement of
defined benefit asset/liability		(2,224)	21	(474)
Items that may be reclassified to profit or loss
Net gain from changes in fair value of available for sale
investment securities		824	640	923
Deferred tax relating to revaluation of available for sale
investment securities		(190)	(124)	(154)
Other comprehensive income net of tax		8,081	(65)	1,263
Total comprehensive income for the period net of tax
attributable to equity holders of the Company		25,690	14,887	30,246
Dividends paid and proposed for the period per
ordinary share	6	18.0p	17.0p	47.0p
Dividends paid and proposed for the period		8,322	7,448	21,220
Earnings per share for the period attributable to equity
holders of the Company:	7
- basic		38.6p	34.6p	66.5p
- diluted		38.4p	34.3p	65.9p

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

Consolidated interim statement of changes in equity
for the six months ended 30 June 2013

					Available
		Share	Share	Merger	for sale	Own	Retained	Total
		capital	premium	reserve	reserve	shares	earnings	equity
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Note						(restated - note 1)	(restated - note 1)
At 1 January 2012		2,178	34,216	31,835	2,179	(4,729)	124,974	190,653
Profit for the period							14,952	14,952
Net remeasurement of defined
benefit liability							(602)	(602)
Revaluation of available for sale
investment securities					640			640
Deferred tax relating to components
of other comprehensive income					(124)		21	(103)
Other comprehensive income
net of tax		-	-	-	516	-	(581)	(65)
Dividends paid							(12,640)	(12,640)
Issue of share capital	13	16	3,180					3,196
Share-based payments:
- value of employee services							1,015	1,015
- cost of own shares acquired						(1,321)		(1,321)
- cost of own shares vesting						242	(242)	-
- tax on share-based payments							48	48
At 30 June 2012 (unaudited)		2,194	37,396	31,835	2,695	(5,808)	127,526	195,838
Profit for the period							14,031	14,031
Net remeasurement of defined
benefit liability							1,570	1,570
Revaluation of available for sale
investment securities					283			283
Deferred tax relating to components
of other comprehensive income					(30)		(495)	(525)
Other comprehensive income
net of tax		-	-	-	253	-	1,075	1,328
Dividends paid							(7,434)	(7,434)
Issue of share capital	13	104	24,764					24,868
Share-based payments:
- value of employee services							1,114	1,114
- cost of own shares acquired						(309)		(309)
- cost of own shares vesting						273	(273)	-
- tax on share-based payments							57	57
At 31 December 2012 (audited)		2,298	62,160	31,835	2,948	(5,844)	136,096	229,493
Profit for the period							17,609	17,609
Net remeasurement of defined
benefit asset							9,671	9,671
Revaluation of available for sale
investment securities					824			824
Deferred tax relating to components
of other comprehensive income					(190)		(2,224)	(2,414)
Other comprehensive income
net of tax		-	-	-	634	-	7,447	8,081
Dividends paid							(13,800)	(13,800)
Issue of share capital	13	14	2,546					2,560
Share-based payments:
- value of employee services							1,300	1,300
- cost of own shares acquired						(289)		(289)
- cost of own shares vesting						446	(446)	-
- tax on share-based payments							19	19
At 30 June 2013 (unaudited)		2,312	64,706	31,835	3,582	(5,687)	148,225	244,973

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

Consolidated interim balance sheet
as at 30 June 2013

		Unaudited	Unaudited	Audited
		30 June 2013	30 June 2012	31 December 2012
	Note	£'000	£'000	£'000
Assets
Cash and balances with central banks		213,004	5	116,003
Settlement balances		44,157	41,857	12,606
Loans and advances to banks		135,908	126,864	169,795
Loans and advances to customers	8	81,085	55,923	71,711
Investment securities:
- available for sale		37,799	55,421	55,749
- held to maturity		606,008	784,027	559,025
Prepayments, accrued income and other assets		43,561	39,917	40,279
Property, plant and equipment	9	12,067	12,741	11,950
Deferred tax asset		-	2,083	1,930
Investment in associates		1,288	-	1,237
Intangible assets	10	105,808	95,312	97,423
Surplus on retirement benefit schemes	12	9,297	-	-
Total assets		1,289,982	1,214,150	1,137,708
Liabilities
Deposits by banks		-	-	518
Settlement balances		60,012	30,754	18,592
Due to customers		928,952	930,246	828,443
Accruals, deferred income and other liabilities		38,938	38,652	43,795
Current tax liabilities		4,618	3,835	3,528
Provisions for liabilities and charges	11	11,419	9,390	11,209
Deferred tax liability		1,070	-	-
Retirement benefit obligations	12	-	5,435	2,130
Total liabilities		1,045,009	1,018,312	908,215
Equity
Share capital	13	2,312	2,194	2,298
Share premium	13	64,706	37,396	62,160
Merger reserve		31,835	31,835	31,835
Available for sale reserve		3,582	2,695	2,948
Own shares		(5,687)	(5,808)	(5,844)
Retained earnings		148,225	127,526	136,096
Total equity		244,973	195,838	229,493
Total liabilities and equity		1,289,982	1,214,150	1,137,708

The condensed consolidated interim financial statements were approved by the Board of directors and authorised for issue on 31 July 2013 and were signed on their behalf by:

Andy Pomfret            Paul Stockton
Chief Executive         Finance Director

Company registered number: 01000403

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

Consolidated interim statement of cash flows
for the six months ended 30 June 2013

		Unaudited	Unaudited	Audited
		Six months to	Six months to	Year to
		30 June 2013	30 June 2012	31 December 2012
		£'000	£'000	£'000
	Note		(restated - note 1)	(restated - note 1)
Cash flows from operating activities
Profit before tax		23,224	19,782	38,504
Share of profit of associates		(66)	-	(21)
Net interest income		(4,238)	(5,060)	(9,904)
Net impairment charges on impaired loans and
advances		6	2	801
Net charge/(release) for provisions	11	89	(325)	290
Profit on disposal of property, plant and equipment		-	(12)	(9)
Depreciation and amortisation		4,967	5,035	10,237
Defined benefit pension scheme charges		1,570	1,646	3,167
Defined benefit pension contributions paid		(3,326)	(4,156)	(7,409)
Share-based payment charges		2,410	1,620	3,232
Interest paid		(318)	(666)	(1,272)
Interest received		5,611	7,499	12,523
		29,929	25,365	50,139
Changes in operating assets and liabilities:
- net decrease/(increase) in loans and advances to banks and		10,242	(8,385)	(131,154)
customers
- net (increase)/decrease in settlement balance debtors		(31,551)	(28,414)	837
- net increase in prepayments, accrued income and
other assets		(4,352)	(3,047)	(3,209)
- net increase/(decrease) in amounts due to customers and
deposits by banks		99,993	21,079	(80,208)
- net increase/(decrease) in settlement balance creditors		41,420	8,558	(3,604)
- net decrease in accruals, deferred income, provisions and
other liabilities		(6,154)	(6,480)	(742)
Cash generated from/(used in) operations		139,527	8,676	(167,941)
Tax paid		(3,921)	(3,573)	(8,885)
Net cash inflow/(outflow) from operating activities		135,606	5,103	(176,826)
Cash flows from investing activities
Dividends received from associates		15	-	-
Purchase of equity-accounted associate		-	-	(1,216)
Acquisition of subsidiaries, net of cash acquired		-	(519)	(1,244)
Purchase of property, equipment and intangible assets		(13,269)	(5,993)	(11,690)
Proceeds from sale of property, plant and equipment		-	43	42
Purchase of investment securities		(511,008)	(916,244)	(1,353,137)
Proceeds from sale and redemption of investment securities		464,025	975,983	1,638,004
Net cash (used in)/generated from investing activities		(60,237)	53,270	270,759
Cash flows from financing activities
Issue of ordinary shares	16	2,271	1,875	26,434
Dividends paid		(13,800)	(12,640)	(20,074)
Net cash (used in)/generated from financing activities		(11,529)	(10,765)	6,360
Net increase in cash and cash equivalents		63,840	47,608	100,293
Cash and cash equivalents at the beginning of the period		230,165	129,872	129,872
Cash and cash equivalents at the end of the period	16	294,005	177,480	230,165

The accompanying notes form an integral part of the condensed consolidated interim financial statements.

Notes to the condensed consolidated interim financial statements

1. Basis of preparation
Rathbone Brothers Plc ('the Company') is the parent company of a group of companies ('the Group') that provides personalised investment and wealth management services for private clients, charities and trustees. The Group also provides financial planning, private banking, offshore fund management and trust administration services. The Group's primary activities are set out in our business model on pages 8 and 9 of the annual report and accounts for the year ended 31 December 2012 and have not materially changed since that date.

These condensed consolidated interim financial statements are presented in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. The condensed consolidated interim financial statements have been prepared on a going concern basis, using the accounting policies, methods of computation and presentation set out in the Group's financial statements for the year ended 31 December 2012 except as disclosed below. The condensed consolidated interim financial statements should be read in conjunction with the Group's audited financial statements for the year ended 31 December 2012, which are prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS).

The information in this announcement does not comprise statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group's financial statements for the year ended 31 December 2012 have been reported on by its auditors and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified and did not draw attention to any matters by way of emphasis. It also did not contain a statement under section 498 of the Companies Act 2006.

Developments in reporting standards and interpretations
Standards affecting the financial statements
In the current period, the Group has adopted the amendments to IAS 19 'Employee Benefits', which has affected the amounts reported in these financial statements.

The Group has changed its accounting policy with respect to the basis for determining the income or expense related to defined benefit pension schemes ('Schemes'). Under IAS 19, the Group determines the net interest income or expense for the period arising on the Schemes by applying a single discount rate, based on the long-term return on high quality corporate bonds, to the net surplus or deficit at the beginning of the reporting period; taking into account any changes during the period as a result of contributions and benefit payments. Previously, the Group determined interest income on Schemes' assets based on the long-term rate of expected return on those assets.

The amendments to IAS 19 have reduced profit after tax by £131,000 and increased the remeasurements in other comprehensive income by the same amount. There has been no impact on shareholders' equity or total assets. Comparatives have been restated for the impact of the change. Profit after tax for the six months ended 30 June 2012 has been reduced by £109,000 and profit after tax for the year ended 31 December 2012 has been reduced by £233,000.

Standards not affecting the reported results or the financial position
The following new and revised standards and interpretations have been adopted in the current year. Their adoption has not had any significant impact on the amounts reported in these financial statements but may impact the accounting for future transactions and arrangements.

• IFRS 10 'Consolidated Financial Statements'* 

• IFRS 11 'Joint Arrangements'* 

• IFRS 12 'Disclosure of Interests in Other Entities'* 

• IFRS 13 'Fair Value Measurements' 

* These standards were adopted early.  Mandatory adoption is required from 1 January 2014.

New standards and interpretations
A number of new standards and amendments to standards and interpretations are effective for annual and interim periods beginning after 1 January 2013 and, therefore, have not been applied in preparing these condensed consolidated interim financial statements. None of these is expected to have a significant effect on the condensed consolidated interim financial statements and the consolidated financial statements of the Group, except for IFRS 9 'Financial Instruments', which is not expected to become mandatory for periods commencing before 1 January 2015. The Group does not plan to adopt this standard early and the extent of the impact has not been determined. This standard has not yet been adopted by the EU. IFRS 9 'Financial Instruments' could change the classification and measurement of financial assets.

2. Segmental information
For management purposes, the Group is currently organised into two operating divisions: Investment Management and Unit Trusts. The information presented in this note follows the presentation for internal reporting to the executive committee.

	Investment
Six months ended 30 June 2013 (unaudited)	Management	Unit Trusts	Total
	£'000	£'000	£'000
Net investment management fee income	50,062	4,425	54,487
Net commission income	23,188	-	23,188
Net interest income	4,238	-	4,238
Fees from advisory services and other income	5,529	659	6,188
Operating income	83,017	5,084	88,101
Staff costs - fixed	(20,166)	(1,577)	(21,743)
Staff costs - variable	(10,240)	(610)	(10,850)
Total staff costs	(30,406)	(2,187)	(32,593)
Other direct expenses	(8,882)	(1,186)	(10,068)
Allocation of indirect expenses	(18,157)	(1,183)	(19,340)
Underlying operating expenses	(57,445)	(4,556)	(62,001)
Underlying profit before tax	25,572	528	26,100
Amortisation of client relationships (note 10)	(2,876)	-	(2,876)
Segment profit before tax	22,696	528	23,224
Taxation (note 5)			(5,615)
Profit for the period attributable to equity holders of the Company			17,609
Segment total assets	1,247,549	25,619	1,273,168
Unallocated assets			16,814
Total assets			1,289,982

	Investment
Six months ended 30 June 2012 (unaudited) (restated - note 1)	Management	Unit Trusts	Total
	£'000	£'000	£'000
Net investment management fee income	43,609	3,982	47,591
Net commission income	19,851	-	19,851
Net interest income	5,060	-	5,060
Fees from advisory services and other income	4,831	397	5,228
Operating income	73,351	4,379	77,730
Staff costs - fixed	(18,318)	(1,467)	(19,785)
Staff costs - variable	(8,715)	(501)	(9,216)
Total staff costs	(27,033)	(1,968)	(29,001)
Other direct expenses	(7,293)	(991)	(8,284)
Allocation of indirect expenses	(16,210)	(1,145)	(17,355)
Underlying operating expenses	(50,536)	(4,104)	(54,640)
Underlying profit before tax	22,815	275	23,090
Amortisation of client relationships	(3,007)	-	(3,007)
Segment profit before tax	19,808	275	20,083
Head office relocation costs (unallocated) (note 3)			(301)
Profit before tax			19,782
Taxation (note 5)			(4,830)
Profit for the period attributable to equity holders of the Company			14,952
Segment total assets	1,184,437	19,481	1,203,918
Unallocated assets			10,232
Total assets			1,214,150

	Investment
Year ended 31 December 2012 (audited) (restated - note 1)	Management	Unit Trusts	Total
	£'000	£'000	£'000
Net investment management fee income	89,607	8,160	97,767
Net commission income	37,403	-	37,403
Net interest income	9,904	-	9,904
Fees from advisory services and other income	9,766	741	10,507
Operating income	146,680	8,901	155,581
Staff costs - fixed	(36,348)	(2,892)	(39,240)
Staff costs - variable	(16,774)	(913)	(17,687)
Total staff costs	(53,122)	(3,805)	(56,927)
Other direct expenses	(16,052)	(2,189)	(18,241)
Allocation of indirect expenses	(33,228)	(2,356)	(35,584)
Underlying operating expenses	(102,402)	(8,350)	(110,752)
Underlying profit before tax	44,278	551	44,829
Amortisation of client relationships	(6,025)	-	(6,025)
Segment profit before tax	38,253	551	38,804
Head office relocation costs (unallocated) (note 3)			(300)
Profit before tax			38,504
Taxation (note 5)			(9,521)
Profit for the year attributable to equity holders of the Company			28,983
Segment total assets	1,102,144	19,837	1,121,981
Unallocated assets			15,727
Total assets			1,137,708

Included within Investment Management operating income is £415,000 (30 June 2012: £869,000; 31 December 2012: £1,797,000) of fees and commissions receivable from Unit Trusts. Intersegment sales are charged at prevailing market prices.

Centrally incurred indirect expenses are allocated to operating segments on the basis of the cost drivers that generate the expenditure; principally the headcount of staff directly involved in providing those services from which the segment earns revenues, the value of funds under management and the segment's total revenue.

Geographic analysis
The following table presents operating income analysed by the geographical location of the Group entity providing the service:

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Year to
		30 June 2013		30 June 2012		31 December 2012
		£'000		£'000		£'000
United Kingdom		85,371		75,441		150,822
Jersey		2,730		2,289		4,759
Operating income		88,101		77,730		155,581

The Group's non-current assets are all substantially located in the United Kingdom.

Major clients
The Group is not reliant on any one client or group of connected clients for generation of revenues. At 30 June 2013, the Group provided investment management services to over 40,000 clients.

3. Operating expenses
Rathbones completed the move of its head office premises to 1 Curzon Street, London W1J 5FB, on 27 February 2012. No charges relating to the move have been recognised in the six months ended 30 June 2013 (six months ended 30 June 2012: £301,000; year ended 31 December 2012: £300,000). During the second half of 2012, accruals were adjusted for the actual invoices received.

4. Staff numbers
The average number of employees, on a full time equivalent basis, during the period was as follows:

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Year to
		30 June 2013		30 June 2012		31 December 2012
Investment Management:
- investment management services		501		472		483
- advisory services		69		68		67
Unit Trusts		30		30		30
Shared services		221		206		209
		821		776		789

5. Taxation
The tax expense for the six months ended 30 June 2013 was calculated based on the estimated average annual effective tax rate. The overall effective tax rate for this period was 24.2% (30 June 2012: 24.4%; 31 December 2012: 24.7%).

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Year to
		30 June 2013		30 June 2012		31 December 2012
		£'000		£'000		£'000
				(restated - note 1)		(restated - note 1)
United Kingdom taxation		4,986		3,802		8,786
Overseas taxation		24		32		54
Deferred taxation		605		996		681
		5,615		4,830		9,521

The UK Government has proposed that the UK corporation tax rate be reduced to 20.0% over the three years from 2012. At 30 June 2013 only an element of this reduction, taking the UK tax rate to 23.0% from April 2013, had been substantively enacted. The underlying UK corporation tax rate for the year ending 31 December 2013 is 23.2% (2012: 24.5%). Further reductions in the UK tax rate to 21.0% with effect from 1 April 2014 and 20.0% with effect from 1 April 2015 were substantively enacted on 2 July 2013; the impact of these would be to reduce the Group's deferred tax liability by £212,000 at 30 June 2013.

Deferred tax assets and liabilities are calculated at the rate that is expected to be in force when the temporary differences unwind, but limited to the extent that such rates have been substantively enacted.

6. Dividends
An interim dividend of 18.0p per share is payable on 9 October 2013 to shareholders on the register at the close of business on 13 September 2013 (30 June 2012: 17.0p). In accordance with International Accounting Standards, the interim dividend has not been included as a liability in this interim statement. A final dividend for 2012 of 30.0p per share was paid on 16 May 2013.

7. Earnings per share
Earnings used to calculate earnings per share on the bases reported in these condensed consolidated interim financial statements were:

	Unaudited	Unaudited	Unaudited	Unaudited	Audited	Audited
	Six months to	Six months to	Six months to	Six months to	Year to	Year to
	30 June 2013	30 June 2013	30 June 2012	30 June 2012	31 Dec 2012	31 Dec 2012
	Pre-tax	Post-tax	Pre-tax	Post-tax	Pre-tax	Post-tax
	£'000	£'000	£'000	£'000	£'000	£'000
			(restated-note 1)	(restated-note 1)	(restated-note 1)	(restated-note 1)
Underlying profit attributable to shareholders	26,100	19,816	23,090	17,449	44,829	33,759
Amortisation of client relationships (note 10)	(2,876)	(2,207)	(3,007)	(2,270)	(6,025)	(4,549)
Head office relocation costs (note 3)	-	-	(301)	(227)	(300)	(227)
Profit attributable to shareholders	23,224	17,609	19,782	14,952	38,504	28,983

Basic earnings per share has been calculated by dividing profit attributable to shareholders by the weighted average number of shares in issue throughout the period, excluding own shares, of 45,589,267 (30 June 2012: 43,244,354; 31 December 2012: 43,604,542).

Diluted earnings per share is the basic earnings per share, adjusted for the effect of contingently issuable shares under the Long Term Incentive Plan, employee share options remaining capable of exercise and any dilutive shares to be issued under the Share Incentive Plan, weighted for the relevant period (see table below):

	Unaudited	Unaudited	Audited
	30 June 2013	30 June 2012	31 December 2012
Weighted average number of ordinary shares in
issue during the period - basic	45,589,267	43,244,354	43,604,542
Effect of ordinary share options/Save As You Earn	50,045	129,866	122,257
Effect of dilutive shares issuable under the Share
Incentive Plan	48,007	11,266	5,589
Effect of contingently issuable ordinary shares
under the Long Term Incentive Plan	212,570	260,452	258,180
Diluted ordinary shares	45,899,889	43,645,938	43,990,568

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Year to
		30 June 2013		30 June 2012		31 December 2012
				(restated - note 1)		(restated - note 1)
Underlying earnings per share for the period
attributable to equity holders of the Company:
- basic		43.5p		40.4p		77.4p
- diluted		43.2p		40.0p		76.7p

8. Loans and advances to customers

		Unaudited		Unaudited		Audited
		30 June 2013		30 June 2012		31 December 2012
		£'000		£'000		£'000
Overdrafts		3,453		2,431		2,939
Investment management loan book		73,615		48,898		65,067
Trust and pension debtors		1,203		1,137		884
Other debtors		2,814		3,457		2,821
		81,085		55,923		71,711

Other debtors include loan notes ('Notes') that were issued by the acquirer of the Group's Jersey trust operations in 2008. The Notes are unsecured and have no fixed maturity, being repayable on the occurrence of certain events, principally the refinancing of the Jersey trust operations by its existing owner. The Notes are carried at amortised cost, less provision for impairment. The carrying value of the Notes was written down to £2,814,000 (30 June 2012: £3,262,000; 31 December 2012: £2,821,000) using a discounted cash flow model based on the estimated repayment date, using a discount rate equal to the initial effective interest rate of the loan.

9. Property, plant and equipment
During the six months ended 30 June 2013, the Group acquired assets with a cost of £1,495,000 (six months ended 30 June 2012: £3,400,000; year ended 31 December 2012: £4,043,000). No assets were acquired through business combinations (six months ended 30 June 2012: £8,000; year ended 31 December 2012: £8,000).

Leasehold improvements include no additions (six months ended 30 June 2012: £2,192,000; year ended 31 December 2012: £2,023,000) in relation to the relocation of our London head office from New Bond Street to 1 Curzon Street, London W1J 5FB. In the second half of 2012, certain accrued expenses for fixed asset additions relating to the London office move were adjusted for the actual invoices received.

No assets were disposed of in the six months ended 30 June 2013. Assets with a net book value of £31,000 and £35,000 were disposed of during the six months ended 30 June 2012 and the year ended 31 December 2012 resulting in a gain on disposal of £12,000 and £9,000 respectively.

10. Intangible assets

				Software
			Client	development	Purchased
		Goodwill	relationships	costs	software	Total
		£'000	£'000	£'000	£'000	£'000
Cost
At 1 January 2013		47,241	62,824	3,205	14,959	128,229
Internally developed in the period		-	-	162	-	162
Purchased in the period		-	11,081	-	731	11,812
Disposals		-	(384)	-	-	(384)
At 30 June 2013		47,241	73,521	3,367	15,690	139,819
Amortisation
At 1 January 2013		-	17,276	2,538	10,992	30,806
Charge in the period		-	2,876	165	548	3,589
Disposals		-	(384)	-	-	(384)
At 30 June 2013		-	19,768	2,703	11,540	34,011
Carrying value at 30 June 2013		47,241	53,753	664	4,150	105,808
Carrying value at 30 June 2012		47,241	43,853	694	3,524	95,312
Carrying value at 31 December 2012		47,241	45,548	667	3,967	97,423

Purchases of client relationships relate to payments made to investment managers and third parties for the introduction of client relationships. Client relationships purchased in the period includes £9,029,000 (30 June 2012: £nil; 31 December 2012: £nil) relating to the purchase of Taylor Young Investment Management Limited's private client base, of which £4,108,000 is payable in 2014 (see note 11).

11. Provisions for liabilities and charges

		Deferred, variable		Property-
		costs to acquire client	Legal and	related
		relationship intangibles	compensation	and other	Total
		£'000	£'000	£'000	£'000
At 1 January 2012		6,796	1,666	1,547	10,009
Charged to profit or loss		-	-	651	651
Unused amount credited to profit
or loss		-	(555)	(421)	(976)
Net credit to profit or loss		-	(555)	230	(325)
Other movements		4,965	-	-	4,965
Utilised/paid during the period		(3,533)	(766)	(960)	(5,259)
At 30 June 2012		8,228	345	817	9,390
Charged to profit or loss		-	300	419	719
Unused amount credited to profit
or loss		-	(43)	(61)	(104)
Net charge to profit or loss		-	257	358	615
Other movements		4,532	-	-	4,532
Utilised/paid during the period		(2,593)	(386)	(349)	(3,328)
At 1 January 2013		10,167	216	826	11,209
Charged to profit or loss		-	36	82	118
Unused amount credited to profit
or loss		-	-	(29)	(29)
Net charge to profit or loss		-	36	53	89
Other movements		6,243	-	-	6,243
Utilised/paid during the period		(6,043)	(79)	-	(6,122)
At 30 June 2013		10,367	173	879	11,419
Payable within 1 year		1,652	173	-	1,825
Payable after 1 year		8,715	-	879	9,594
		10,367	173	879	11,419

Other movements in provisions relate to deferred payments to investment managers and third parties for the introduction of client relationships, which have been capitalised in the period.

Deferred, variable costs to acquire client relationship intangibles at 30 June 2013 includes £4,108,000 in relation to the purchase of Taylor Young Investment Management Limited's private client base (30 June 2012: £nil; 31 December 2012: £nil). The final amount payable will be calculated based on the value of funds under management that have transferred from Taylor Young Investment Management Limited to the Group, measured on 30 April 2014. In December 2012, this included £1,081,000 in relation to deferred variable consideration for the purchase of R.M. Walkden & Co. Limited (30 June 2012: £1,834,000).

Property-related and other provisions include £879,000 in relation to dilapidation provisions expected to arise on leasehold premises held by the Group (30 June 2012: £599,000; 31 December 2012: £797,000). Dilapidation provisions are calculated using a discounted cash flow model; during the six months ended 30 June 2013, the impact of discounting has increased the provisions by £82,000.

Provisions payable after 1 year are expected to be settled within 2 years of the balance sheet date, except for property-related provisions of £879,000, which are expected to be settled within 23 years of the balance sheet date, which corresponds to the longest lease for which a dilapidations provision is being held.

12. Long term employee benefits
The Group operates two defined benefit pension schemes providing benefits based on pensionable salary for executive directors and staff employed by the Company. For the purposes of calculating the pension benefit obligations, the following assumptions have been used:

		Unaudited		Unaudited		Audited
		30 June 2013		30 June 2012		31 December 2012
		% p.a.		% p.a.		% p.a.
Rate of increase in salaries		4.40		3.90		4.00
Rate of increase of pensions in payment:
- Laurence Keen Scheme		3.60		3.30		3.40
- Rathbones 1987 Scheme		3.30		2.90		3.00
Rate of increase of deferred pensions		3.40		2.90		3.00
Discount rate		4.80		4.50		4.50
Inflation*		3.40		2.90		3.00

* Inflation assumptions are based on the Retail Prices Index

The assumed life expectations of members retiring, aged 65 were:

	Unaudited	Unaudited	Unaudited	Unaudited	Audited	Audited
	30 June	30 June	30 June	30 June	31 December	31 December
	2013	2013	2012	2012	2012	2012
	Males	Females	Males	Females	Males	Females
Retiring today	24.1	26.1	24.0	26.0	24.0	26.0
Retiring in 20 years	26.4	28.1	26.3	28.0	26.3	28.0

The amount included in the balance sheet arising from the Group's obligations in respect of the schemes is as follows:

	Unaudited	Unaudited	Unaudited	Unaudited	Audited	Audited
	Rathbone	Laurence Keen	Rathbone	Laurence Keen	Rathbone	Laurence Keen
	1987 Scheme	Scheme	1987 Scheme	Scheme	1987 Scheme	Scheme
	30 June	30 June	30 June	30 June	31 December	31 December
	2013	2013	2012	2012	2012	2012
	£'000	£'000	£'000	£'000	£'000	£'000
Present value of defined benefit obligations	(116,812)	(13,862)	(109,013)	(13,876)	(114,740)	(14,077)
Fair value of scheme assets	124,647	15,324	103,824	13,630	112,195	14,492
Total surplus/(deficit)	7,835	1,462	(5,189)	(246)	(2,545)	415

The Group made special contributions into its pension schemes of £2,068,000 during the period (30 June 2012: £2,269,000; 31 December 2012: £3,647,000).

13. Share capital
The following movements in share capital occurred during the period:

		Exercise	Share	Share
	Number of	price	capital	premium	Total
	shares	pence	£'000	£'000	£'000
At 1 January 2012	43,561,140		2,178	34,216	36,394
Shares issued:
- to Share Incentive Plan	136,852	1,150.0 - 1,351.0	7	1,711	1,718
- to Save as You Earn scheme	1,160	696.0	-	8	8
- on exercise of options	181,158	415.0 - 1,172.0	9	1,461	1,470
At 30 June 2012	43,880,310		2,194	37,396	39,590
Shares issued:
- on placing	2,000,000	1,235.0	100	23,856	23,956
- to Share Incentive Plan	67,227	1,268.0 - 1,305.0	3	853	856
- on exercise of options	6,534	743.5 - 1,172.0	1	55	56
At 31 December 2012	45,954,071		2,298	62,160	64,458
Shares issued:
- to Share Incentive Plan	79,686	1,296.0 - 1,510.0	4	1,081	1,085
- to Save as You Earn scheme	175,233	696.0 - 984.0	9	1,213	1,222
- on exercise of options	24,786	743.5 - 1,172.0	1	252	253
At 30 June 2013	46,233,776		2,312	64,706	67,018

At 30 June 2013, the Group held 504,610 own shares (30 June 2012: 542,509; 31 December 2012: 530,847).

14. Financial instruments
The fair values of the Group's financial assets and liabilities are not materially different from their carrying values, with the exception of held to maturity debt securities. Debt securities comprise bank and building society certificates of deposit, which have fixed coupons, and at 30 June 2012 the Group also held UK treasury bills. The fair value of debt securities at 30 June 2013 was £607,152,000 (30 June 2012: £786,113,000; 31 December 2012: £561,768,000) and the carrying value was £606,008,000 (30 June 2012: £784,027,000; 31 December 2012: £559,025,000). Fair value for held to maturity assets is based on market bid prices.

The table below analyses financial instruments measured at fair value into a fair value hierarchy based on the valuation technique used to determine the fair value.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. 

• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. 

• Level 3: inputs for the asset or liability that are not based on observable market data. 

			Level 1	Level 2	Level 3	Total
At 30 June 2013			£'000	£'000	£'000	£'000
Assets
Available for sale securities:
- equity securities			4,455	-	692	5,147
- money market funds			-	32,652	-	32,652
Derivative financial instruments			-	-	1,030	1,030
Total financial assets			4,455	32,652	1,722	38,829

There have been no transfers between levels during the period. The fair value of listed equity securities is their quoted price. Money market funds are demand securities and changes to estimates of interest rates will not affect their fair value. The fair value of money market funds is their daily redemption value.

Level 3 financial instruments
Available for sale equity securities
The fair value of unlisted equity securities is calculated by reference to tangible net asset values from the published information of the underlying company with a 25% liquidity discount applied.

A 5 percentage point increase in the liquidity discount applied to the calculation of the fair value of the unlisted equity securities would, in isolation, result in a decrease in fair value of £46,000 (30 June 2012: £39,000; 31 December 2012: £41,000). A 5 percentage point decrease would have an equal and opposite effect.

Derivative financial instruments
In 2012, the Group entered into certain options over the equity instruments of its associates.  Further details regarding these option contracts can be found in note 20 of the annual report and accounts for the year ended 31 December 2012.

The fair value of the option contracts is calculated using a probability weighted expected return model, based on potential valuation outcomes under a range of business growth forecast scenarios. The key assumptions underlying the forecast growth in profitability of the associates in the model are the growth of funds under management, revenue margins and the discount rate used to calculate the present value of the cash flows. The key assumptions are flexed in each scenario to generate a potential valuation for the options. The probability of each scenario occurring is estimated, based on the Group's judgement in light of the economic conditions prevailing at the time. The fair value of the options is calculated as the weighted average of the valuations derived under each scenario, taking account of the associated probabilities of occurrence.

Changing one or more of the key assumptions to reasonably possible alternatives would have the following effects on the fair value of the contracts. These effects have been calculated by running the valuation model using the alternative estimates of the key assumptions. Any interrelationship between the assumptions is not considered to have a significant impact within the range of reasonably possible alternative assumptions.

			Impact on fair value of:
		Increase in	Decrease in
		the assumption	the assumption
		£'000	£'000
10% change in the fees and commission charged to Vision clients		622	(622)
5 percentage point change in commissions payable		(622)	622
10% change in the rate of growth in funds under management		327	(322)
1 percentage point change in the discount rate		(137)	149

Changes in the fair values of financial instruments categorised as level 3 within the fair value hierarchy were as follows:

				Available for	Derivative
				sale equity	financial
				securities	instruments	Total
				£'000	£'000	£'000
At 1 January 2013				614	784	1,398
Total unrealised gains and losses recognised in
- profit or loss				-	246	246
- other comprehensive income				78	-	78
At 30 June 2013				692	1,030	1,722

The gain relating to the derivative financial instruments is included within 'other operating income' and the gain relating to the available for sale equity securities is included within 'changes in fair value of available for sale investment securities' in other comprehensive income.

There were no other gains or losses arising from changes in the fair value of financial instruments categorised as level 3 within the fair value hierarchy.

15. Contingent liabilities and commitments
(a) Indemnities are provided in the normal course of business to a number of directors and employees who provide tax and trust advisory services in connection with them acting as trustees/directors of client companies and providing other services.

A claim relating to the management of a Jersey trust has been filed against a former employee (and director) of Rathbone Trust Company Jersey Limited. Rathbone Trust Company Jersey Limited was a subsidiary of the Company from March 2000 until October 2008. Although the Board believe this claim will be unsuccessful, a possible obligation may exist which is contingent on whether the claim (or any parts of it) is upheld.

The Group has sought to confirm the position of the Company's civil liability (professional indemnity) insurers in relation to the claim. Based on information currently available, the Company's primary layer insurer has confirmed cover (including its share of the excess layer) subject to policy terms and conditions and unless the proceedings referred to below rule there is no liability. The remaining excess insurers have to date refused to confirm cover. On 25 July 2012, the Company issued proceedings to confirm insurance cover against the excess insurers. The trial of those proceedings has been listed to start on 7 October 2013.

Due to the complexity of the claim, the number of parties involved and the impact of insurance cover available to the trustees, it is not practicable to estimate reliably the value of any possible obligation for the Company.

The Board considers that it is unlikely that a material liability to Rathbones will arise from this claim, and accordingly no provision has been made.

(b) Capital expenditure authorised and contracted for at 30 June 2013 but not provided in the condensed consolidated interim financial statements amounted to £708,000 (30 June 2012: £704,000; 31 December 2012: £470,000).

(c) The contractual amounts of the Group's commitments to extend credit to its clients are as follows:

	Unaudited		Unaudited		Audited
	30 June 2013		30 June 2012		31 December 2012
	£'000		£'000		£'000
Guarantees	578		578		578
Undrawn commitments to lend of 1 year or less	6,054		4,320		3,002
	6,632		4,898		3,580

The fair value of the guarantees is £nil (30 June 2012 and 31 December 2012: £nil).

(d) In addition to Financial Services Compensation Scheme levies accrued in the period, further levy charges may be incurred in future years, although the ultimate cost remains uncertain.

16. Consolidated interim statement of cash flows
For the purposes of the consolidated interim statement of cash flows, cash and cash equivalents comprise the following balances with less than three months until maturity from the date of acquisition:

		Unaudited		Unaudited		Audited
		30 June 2013		30 June 2012		31 December 2012
		£'000		£'000		£'000
Cash and balances at central banks		213,004		5		116,003
Loans and advances to banks		48,349		125,864		62,611
Available for sale investment securities		32,652		51,611		51,551
		294,005		177,480		230,165

Available for sale investment securities are amounts invested in money market funds which are realisable on demand.

Cash flows arising from issue of ordinary shares comprise:

	Unaudited		Unaudited		Audited
	Six months to		Six months to		Year to
	30 June 2013		30 June 2012		31 December 2012
	£'000		£'000		£'000
Share capital issued (note 13)	14		16		120
Share premium on shares issued (note 13)	2,546		3,180		27,944
Shares issued in relation to share-based schemes for which
no cash consideration was received	(289)		(1,321)		(1,630)
	2,271		1,875		26,434

17. Related party transactions
The key management personnel of the Group are defined as the Company's directors and other members of senior management who are responsible for planning, directing and controlling the activities of the Group.

Dividends totalling £55,000 were paid in the period (six months ended 30 June 2012: £224,000; year ended 31 December 2012: £418,000) in respect of ordinary shares held by key management personnel.

At 30 June 2013, key management personnel and their close family members had gross outstanding deposits of £1,232,000 (30 June 2012: £1,193,000; 31 December 2012: £1,112,000) and gross outstanding loans of £610,000 (30 June 2012: £1,456,000; 31 December 2012: £559,000) which were made on normal business terms. A number of the Company's directors and their close family members make use of the services provided by companies within the Group. Charges for such services are made at various staff rates.

The Group managed 20 unit trusts and OEICs during the first half of 2013 (six months ended 30 June 2012: 18 unit trusts and OEICs; year ended 31 December 2012: 19 unit trusts and OEICs). Total management charges of £9,015,000 (six months ended 30 June 2012: £7,947,000; year ended 31 December 2012: £16,110,000) were earned during the period, calculated on the bases published in the individual fund prospectuses, which also state the terms and conditions of the management contract with the Group. Management fees owed to the Group as at 30 June 2013 totalled £1,544,000 (six months ended 30 June 2012: £1,149,000; year ended 31 December 2012: £1,172,000).

All amounts outstanding with related parties are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.

18. Events after the consolidated interim balance sheet date
There have been no material events occurring between the consolidated interim balance sheet date and the date of signing this interim statement.

Independent review report to Rathbone Brothers Plc

We have been engaged by the Company to review the condensed set of financial statements in the half yearly financial report for the six months ended 30 June 2013 which comprises the consolidated interim statement of comprehensive income, consolidated interim statement of changes in equity, consolidated interim balance sheet, consolidated interim statement of cash flows and the related explanatory notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Conduct Authority ('the UK FCA'). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities
The half yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU.

Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review.

Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Richard Faulkner (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor

Chartered Accountants
15 Canada Square, London E14 5GL

31 July 2013

---

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.

The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.

Source: Rathbone Brothers PLC via Thomson Reuters ONE

HUG#1720135