Interim Results
Rensburg Sheppards plc
10 August 2005
10 August 2005
Rensburg Sheppards plc
("Rensburg Sheppards" or "the Company")
Interim Results for the Six Months Ended 31 May 2005
Rensburg Sheppards, (formerly Rensburg plc), the Investment Management Group -
Key Points:
• Profit before tax, amortisation of goodwill and Employee Benefit Trust
("EBT") prepayment and exceptional items* of £6.3 million (2004: £4.2
million), an increase of 50%.
• Basic earnings per share before amortisation of goodwill and EBT
prepayment and exceptional items* of 17.1p (2004: 13.3p), an increase of
28.6%.
• Share capital consolidation effected of 91 new ordinary shares for every
100 old ordinary shares.
• Interim dividend of 6.6p per new ordinary share (2004: 6.0p per old
ordinary share) following a special dividend of 45p per old ordinary share
already having been declared in the six months ended 31 May 2005.
• Results include 26 days contribution from Carr Sheppards Crosthwaite ('
CSC'), the integration of which is well underway.
• Investment management based fee and other recurring income (excluding
contribution from CSC) at £14.7 million (2004: £11.7 million) an increase of
25.6 %.
• Group funds under management at £10.7 billion (2004: £3.9 billion).
* Amortisation of goodwill and EBT prepayment and exceptional items before
taxation amount to net income of £1.6m (2004: net cost of £0.4m).
Mike Burns, Chief Executive of Rensburg Sheppards, commented:
"These results reflect the continued improvement in trading conditions. The
transformational acquisition of Carr Sheppards Crosthwaite provides an exciting
opportunity to consolidate Rensburg Sheppards' position as a leading investment
management group "
For further information, please contact:
Michael Burns, Chief Executive Tel: 0151 227 2030
Rensburg Sheppards plc
Nick Lyon
gcg hudson sandler Tel: 020 7796 4133
INTERIM STATEMENT
Financial results
It is pleasing to be able to report results which reflect a continued
improvement in the level both of financial markets and of the confidence shown
by private investors towards equity based investment.
The Group's profit before tax, amortisation of goodwill and Employee Benefit
Trust ('EBT') prepayment and exceptional items for the six months ended 31 May
2005 was £6.3 million (2004: £4.2 million) from a turnover of £24.9 million
(2004: £18.2 million); the basic earnings per share on this basis were 17.1p
(2004: 13.3p): an increase of 28.6%. Profit before tax for the six months ended
31 May 2005 was £7.9 million (2004: £3.8 million) and basic earnings per share
on this basis were 19.9p (2004: 11.3p). At 31 May 2005 the Group's total funds
under management stood at £10.7 billion (2004: £3.9 billion).
The results as presented in this interim statement include a contribution from
Carr Sheppards Crosthwaite Limited ('CSC') from 6 May 2005, being the date CSC
was acquired, up until 31 May 2005; the results of CSC for this short period are
separately analysed within the profit and loss account. Exceptional
reorganisation costs relating to the integration of CSC incurred in the 26 day
period to 31 May 2005 have and will continue to be separately identified in the
profit and loss account. Excluding the contribution from CSC, total income of
£21.7 million represents an underlying increase of 19.2% over the prior
corresponding period; more importantly, on this basis, fee and other recurring
income of £14.7 million represents an increase of 25.6%.
During December 2004, the Group disposed of 662,857 shares in London Stock
Exchange plc ('LSE'); these disposals, which are accounted for as an exceptional
item, gave rise to a taxable gain of £3,129,000 upon which tax of £939,000 is
expected to be paid. The Group retains a holding of 100,000 shares in LSE.
Share capital consolidation and dividends
On 1 June 2005 a special dividend of 45p per ordinary share was paid, except in
respect of those ordinary shares issued to finance the acquisition of CSC ('
Consideration Shares'); immediately following the ordinary shares going ex this
special dividend on 20 May 2005, all existing ordinary shareholdings (including
the Consideration Shares) were consolidated on the basis of 91 new ordinary
shares for every 100 old ordinary shares.
The Directors have declared an interim dividend of 6.6p per new ordinary share
(2004: 6.0p per old ordinary share) payable on 3 October 2005 to shareholders on
the register as at the close of business on 2 September 2005; as with the
special dividend, holders of Consideration Shares are not entitled to this
interim dividend, however holders of all ordinary shares (including
Consideration Shares) will be entitled pari passu to future dividends.
Name change and change of accounting reference date
Following shareholder approval given at the Company's Extraordinary General
Meeting on 20 April 2005 and the subsequent formal completion of the acquisition
of CSC, the name of the Company was changed to Rensburg Sheppards plc on 6 May
2005. The accounting reference date of the Company and the Group was
subsequently changed to 31 March and the current accounting period will
therefore extend to 16 months from 1 December 2004 until 31 March 2006. Given
this, a second set of interim results will be prepared for the ten month period
to 30 September 2005; these results are expected to be announced in mid November
2005.
Adoption of International Financial Reporting Standards ('IFRS')
For the 16 month accounting period to 31 March 2006, the Group is required to
report its results under UK GAAP. Thereafter, we are required to report all
interim and full-year results under IFRS. The impact of adopting IFRS on the
Group's results continues to be evaluated and it is intended that the results
reported for the period to 31 March 2006 will include full guidance as to this
impact. An update on this is, however, intended to be provided in our second set
of interim results as referred to above.
Acquisition of CSC
Following shareholder and regulatory approvals, the acquisition of CSC was
completed on 6 May 2005. This transformational acquisition took almost five
months to complete since the making of an initial announcement on 10 December
2004, during which time the Company carefully evaluated and ultimately rejected
the approaches to acquire the Company that were made by Rathbone Brothers Plc.
The task of integrating CSC with the existing businesses is now well underway.
This will be a key focus of management over the coming 18 months or so as
everyone works towards ensuring that the integration is achieved within the key
parameters for one off reorganisation costs and synergies, as set out in the
circular relating to the acquisition. At this relatively early stage there are
no indications to suggest that this will not be achieved; moving forward more
detailed reports on the progress of this integration will be given in our
subsequent interim and full-year results.
Operations
Rensburg Investment Management ('RIM') increased fee-paying clients' funds by
24% to £2.34 billion (2004: £1.88 billion). Other managed funds marginally
decreased to £1.55 billion (2004: £1.58 billion), principally reflecting the
continued conversion of existing clients onto a fee-paying basis. This overall
rise in RIM's managed funds of 12.4% compares with an increase in the FTSE /
APCIMS Private Investors Balanced index of 10.4% over the year. The review of
RIM's charging structure, which was implemented in the final quarter of 2004,
has resulted in an increase in the average yields achieved on funds under
management.
Carr Sheppards Crosthwaite ('CSC') had audited profit before exceptional items
and taxation of £8.8 million for the year ended 31 March 2005; this compares
favourably with the profit forecast of £8.3 million included within the circular
sent to Rensburg shareholders on 23 March 2005, proposing the acquisition of
CSC.
At 31 May 2005, CSC had managed funds of £5.88 billion of which £3.91 billion
were managed on a discretionary basis; in addition, CSC managed, through its
subsidiary Mayflower Management Company Limited, three OEICs with a total of £11
million under management and a charity property fund with £244 million under
management.
Rensburg Fund Management ('RFM') increased the value of unit trust based funds
under management by 36% to £611 million (2004: £448 million); this growth was
achieved through a combination of net sales of £64 million with the balance
coming from robust investment performance. Additionally, the value of the
segregated mandate that has been investment managed by the company since October
2004, has increased to £45 million from £27 million at 30 November 2004. As the
profile and reputation of this business rises, the spread of investors continues
to widen.
Board and employees
The transformational acquisition of CSC has led to an unprecedented level of
simultaneous change on the board. We would first like to acknowledge the
significant contribution made to the board since the Company floated by Barry
Anysz and Nicko Williams, who after 17 years service each, both stood down as
executive directors upon completion of the acquisition of CSC. Additionally, we
would also like to thank Robert Allen and Katrina Michel who also stood down on
6 May 2005, after each providing in an executive / non-executive capacity
respectively, three years valuable service to the board. We are delighted that
Barry and Robert are remaining in senior management roles within the Group and
wish Nicko well as he enters retirement.
We are pleased to welcome five new members to the board. First, as regards
executive appointments, Steve Elliott who headed up CSC has joined the Group as
managing director, together with Nick Bagshawe and Ian Maxwell Scott, who have
both served CSC in a senior front office capacity for many years; collectively
these individuals bring a wealth of experience in the arena of financial
services and, in particular, private client management. As regards
non-executive appointments, Stephen Koseff and Bernard Kantor have joined the
board and bring with them experience from successfully leading the build up of
Investec over the past twenty five years. As previously indicated, we are
seeking to recruit a further independent non-executive director and the search
for this individual is underway.
The first four months of the year were a period of considerable uncertainty for
employees of the Group and CSC, as the approach from Rathbone Brothers emerged
and then developed. During this unsettling period, both the Group's and CSC's
employees demonstrated absolute professionalism and a clear commitment to
maintaining client service and for this we would like to offer our sincere
thanks.
Outlook
Since 31 May 2005, the FTSE All-Share Index has risen by a further 8.1%; this
continuing gradual recovery in the equity markets, combined with the income
growth and rationalisation benefits afforded to us as a much enlarged group,
leads us to look forward with confidence.
C.G. Clarke M.H.Burns
Chairman Chief Executive
9 August 2005
Consolidated profit and loss account
for the six months ended 31 May 2005
2005 2004 2004
Six months ended 31 May Six months Twelve
months
Continuing operations ended ended
Existing Acquisitions Total 31 May 30 Nov
Note £'000 £'000 £'000 £'000 £'000
Turnover 21,700 3,249 24,949 18,203 36,936
Operating expenses (17,070) (2,334) (19,404) (14,692) (29,866)
Reorganisation costs 1 - (176) (176) - -
Amortisation of EBT prepayment 2 - (345) (345) - -
Goodwill amortisation 8 (414) (588) (1,002) (434) (868)
Total administrative expenses (17,484) (3,443) (20,927) (15,126) (30,734)
Operating profit/(loss) 4,216 (194) 4,022 3,077 6,202
Profit on disposal of fixed asset 3 3,129 - -
investments
Profit on ordinary activities before 7,151 3,077 6,202
interest and investment income
Income from fixed asset investments - - - 490
exceptional
Interest receivable and similar 1,124 801 1,824
income
Interest payable 4 (340) (91) (72)
Profit on ordinary activities before 7,935 3,787 8,444
taxation
Tax on profit on ordinary activities 5 (2,848) (1,309) (2,725)
Profit on ordinary activities after 5,087 2,478 5,719
taxation
Dividends 6 (11,189) (1,313) (3,943)
Retained (loss)/profit for the period (6,102) 1,165 1,776
Earnings per share before 7
amortisation of goodwill and EBT
prepayment and exceptional items
-Basic 17.1p 13.3p 27.9p
-Diluted 16.8p 13.0p 27.3p
Earnings per share 7
-Basic 19.9p 11.3p 26.1p
-Diluted 19.5p 11.1p 25.6p
Dividend per share 6
- Ordinary dividend 6.6p 6.0p 18.0p
- Special dividend 45.0p - -
The Group has no recognised gains and losses other than those included in the
profits above and therefore no separate statement of total recognised gains and
losses is presented.
Consolidated balance sheet
at 31 May 2005
2005 2004 2004
31 May 31 May 30 Nov
Note £'000 £'000 £'000
Fixed assets
Intangible assets 8 177,929 14,121 13,000
Tangible assets 4,682 3,552 4,132
Investments 800 500 500
183,411 18,173 17,632
Current assets
Debtors - due within one year 103,757 25,705 26,226
Debtors - due after one year 9 8,970 - -
Cash at bank and in hand 16 45,944 36,444 40,618
158,671 62,149 66,844
Creditors
Amounts falling due within one year (117,032) (34,546) (40,389)
Net current assets 41,639 27,603 26,455
Total assets less current liabilities 225,050 45,776 44,087
Creditors
Amounts falling due after more than one (60,000) (2,660) (232)
year
Provisions for liabilities and 11 (443) (83) (206)
charges
Net assets 164,607 43,033 43,649
Capital and reserves
Called up share capital 4,759 2,208 2,209
Profit and loss account 19,900 25,391 26,002
Other reserves 139,948 15,434 15,438
Equity shareholders' funds 164,607 43,033 43,649
Consolidated cash flow statement
for the six months ended 31 May 2005
2005 2004 2004
Six Six Twelve
months months months
ended ended ended
31 May 31 May 30 Nov
Note £'000 £'000 £'000
Net cash (outflow)/inflow from operating activities 15 (2,539) 4,268 11,850
Returns on investments and servicing of finance
Interest received 1,178 1,106 1,565
Interest paid (15) (34) (69)
Income from fixed asset investments - exceptional - - 490
Taxation paid (1,627) (1,204) (2,513)
Capital expenditure and financial investment
Purchase of tangible fixed assets (398) (496) (1,354)
Proceeds from sale of tangible fixed assets - 2 -
Proceeds from sale of fixed asset 3,129 - -
investments
Acquisitions and disposals
Costs associated with purchase of subsidiary (4,469) - -
undertakings
Cash acquired with subsidiary undertakings 13 17,611 - -
Payment of deferred consideration (52) - -
Equity dividends paid (12,500) (2,622) (3,936)
Cash inflow before financing 318 1,020 6,033
Financing
Issue of ordinary share capital 8 4 9
Redemption of loan notes - - (844)
Increase in cash in the period 16 326 1,024 5,198
Notes to the interim report
1. Reorganisation costs
Reorganisation costs relate to the integration of Carr Sheppards Crosthwaite
Limited, which was acquired on 6 May 2005. Details of this acquisition are set
out in note 13. As set out in the listing particulars dated 23 March 2005, it
is expected that the total pre-tax reorganisation costs that will be incurred to
achieve the integration plan will amount to £10 million, including £1 million of
non-cash items and excluding professional costs associated with the acquisition,
which have been capitalised. The charge of £176,000 represents the element of
these costs that have been committed to during the 26 days from the date of
acquisition to 31 May 2005.
2. Amortisation of EBT prepayment
As set out in note 13 below, Investec 1 Limited ("Investec") established an
Employee Benefit Trust ("EBT") under the terms of the acquisition of Carr
Sheppards Crosthwaite Limited on 6 May 2005. Of the total of 25,500,000
ordinary shares that were issued by the Company to Investec on 6 May 2005 under
the terms of the acquisition, 2,800,000 shares were immediately transferred by
Investec to the EBT. The fair value of these shares at the time of transfer to
the EBT was £13,972,000. The EBT does not fall within the control of the
Rensburg Sheppards Group and, as a result, the fair value of £13,972,000 has
been accounted for as a prepayment by Rensburg Sheppards plc of certain of the
Group's future employment costs; this amount will be amortised evenly through
the consolidated profit and loss account over the three years from 6 May 2005,
being the period to which the prepayment relates. The charge of £345,000
represents the amortisation for the period from the date of acquisition of 6 May
2005 to 31 May 2005. This amortisation will not result in any cash flows and
there will be no affect on the Company's distributable reserves. It is not
anticipated that any tax relief will be available in respect of this charge.
3. Profit on disposal of fixed asset investments
During the period, the Group disposed of 662,857 shares in London Stock Exchange
plc, giving rise to a taxable gain of £3,129,000. The amount of tax payable on
the gain is expected to be £939,000. Following this disposal, the Group retains
a holding of 100,000 shares in London Stock Exchange plc, which are included in
fixed asset investments at their historic cost of nil.
4. Interest payable
Interest payable includes amounts due relating to subordinated debt of £306,000
(May 2004: nil; Nov 2004: nil). Details of subordinated debt are set out in
note 10.
5. Tax on profit on ordinary activities
United Kingdom corporation tax at 30% (May 2004: 30%; Nov 2004: 30%). No tax
relief is available in respect of the amortisation of goodwill nor is tax relief
anticipated to be available in respect of the amortisation of the EBT
prepayment.
6. Dividends
2005 2004 2004
Six Six Twelve
months months months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Interim dividend: 6.6p per share (May 2004: 6.0p; Nov 2004: 6.0p) 1,318 1,313 1,314
Final dividend for the year ended 30 November 2004: 12.0p per share - - 2,629
Special dividend: 45.0p per share (May 2004: nil; Nov 2004: nil) 9,871 - -
11,189 1,313 3,943
The interim dividend of 6.6p per share is payable in respect of 19,976,441
ordinary shares; this excludes 126,250 shares held by the Employee Share
Ownership Trust, in respect of which all dividends have been waived. The
ordinary shares issued on 6 May 2005 as part of the consideration for the
acquisition of Carr Sheppards Crosthwaite Limited do not rank for the interim
dividend payable in respect of the six month period ended 31 May 2005, nor did
they rank for the special dividend of 45p per share paid on 1 June 2005, in
accordance with the terms of the acquisition. However, these shares do rank
pari passu for all future dividends. The special dividend was paid on 1 June
2005 in respect of 21,935,609 ordinary shares to shareholders on the register at
6.00pm on 20 May 2005.
7. Earnings per share
Basic earnings per share before amortisation of goodwill and EBT prepayment and
exceptional items is calculated with reference to earnings for shareholders of
£4,367,000 (May 2004: £2,912,000; November 2004: £6,097,000) and the weighted
average number of shares in issue during the period of 25,557,966 (May 2004:
21,856,987; November 2004: 21,876,641). The weighted average number of shares
includes the 2,800,000 shares relating to the EBT from their date of issue on 6
May 2005. Basic earnings per share is calculated with reference to earnings for
shareholders of £5,087,000 (May 2004: £2,478,000; November 2004: £5,719,000).
Diluted earnings per share is the basic earnings per share, adjusted for the
effect of the conversion into fully paid shares of the weighted average number
of all employee share options outstanding during the period. The number of
additional shares used for the diluted calculation is 490,491 shares (May 2004:
534,030; November 2004: 495,756).
The Directors believe that the provision of additional earnings per share
figures, in particular before goodwill amortisation, amortisation of the EBT
prepayment and exceptional items, is beneficial to the users of the financial
statements to understand the performance of the Group. The effect of these
adjustments on earnings and basic earnings per share is as follows:
Six months ended Six months ended Twelve months ended
31 May 2005 31 May 2004 30 November 2004
Earnings Earnings Earnings Earnings Earnings Earnings
per per per
share share share
£'000 Pence £'000 Pence £'000 Pence
Unadjusted earnings and EPS 5,087 19.9 2,478 11.3 5,719 26.1
Goodwill amortisation 1,002 3.9 434 2.0 868 4.0
Income from fixed asset - - - - (490) (2.2)
investments - exceptional
Profit on disposal of fixed (3,129) (12.2) - - - -
asset investments
Reorganisation costs 176 0.7 - - - -
Amortisation of EBT prepayment 345 1.3 - - - -
Tax arising on exceptional items 886 3.5 - - - -
Earnings and EPS excluding
amortisation of goodwill and
EBT prepayment and
exceptional items 4,367 17.1 2,912 13.3 6,097 27.9
8. Intangible fixed assets
Note Goodwill
£'000
Cost:
At 1 December 2004 16,689
Additions 13 165,931
At 31 May 2005 182,620
Amortisation:
At 1 December 2004 3,689
Provided during the period 1,002
At 31 May 2005 4,691
Net book value:
At 31 May 2005 177,929
At 30 November 2004 13,000
9. Debtors - due after one year
Amounts falling due after more than one year relate entirely to the prepayment
of employment costs arising from the Employee Benefit Trust, as set out in note
2 above.
10. Subordinated loan
The Company entered into a £60 million subordinated loan agreement with Investec
1 Limited on 6 May 2005. The loan formed part of the consideration for the
acquisition of Carr Sheppards Crosthwaite Limited, as set out in note 13 below.
A fixed rate of interest of 7.155% per annum is payable on £45 million of the
loan and a floating rate, being 2.25% above LIBOR, is payable on £15 million of
the loan. The total amount of the loan is repayable in equal instalments over
eight years, with the first instalment becoming payable in 2008.
11. Provisions for liabilities and charges
Deferred Lease Other Total
tax rentals
£'000 £'000 £'000 £'000
At 1 December 2004 24 182 - 206
Acquired with subsidiary - - 252 252
Utilised in the period - (15) - (15)
At 31 May 2005 24 167 252 443
Lease rentals represent future rentals on unoccupied leasehold premises to the
end of the lease term, up to 2013. Other amounts represent the residue of
amounts previously provided within Carr Sheppards Crosthwaite Limited, prior to
its acquisition by the Company, in respect of the cost of restructuring certain
business activities.
12. Called up share capital
The Company's authorised share capital was increased to £6,000,000, comprising
60,000,000 ordinary shares of 10 pence each, at an extraordinary general meeting
held on 20 April 2005. On 20 May 2005, the Company's share capital was
consolidated by the issue of 91 new ordinary shares of 10 90/91 pence each for
every 100 existing ordinary shares of 10 pence each. As a result of the share
consolidation, the Company's authorised share capital was reduced to 54,600,000
ordinary shares of 10 90/91 pence each.
2005 2004 2004
31 May 31 May 30 Nov
Authorised:
54,600,000 ordinary shares of 10 90/91p each £6,000,000 £3,000,000 £3,000,000
(May 2004 and Nov 2004: 30,000,000 ordinary shares of 10p each)
Allotted and fully paid:
43,307,171 ordinary shares of 10 90/91p each £4,759,030 £2,208,574 £2,208,708
(May 2004: 22,085,739 ordinary shares of 10p each;
Nov 2004: 22,087,078 ordinary shares of 10p each)
As a result of the share consolidation on 20 May 2005, the shares held by the
Employee Share Ownership Trust ("the Trust") reduced such that the Trust no
longer held sufficient shares to satisfy all options outstanding under the
Group's Employee Share Ownership Plan. The Trust therefore purchased 13,703
ordinary shares of 10 90/91 pence each on 25 May 2005, representing 0.03% of the
issued share capital on that date. The amount paid for these shares of £72,626
has been charged to the profit and loss account during the period.
13. Acquisition
On 6 May 2005, the Group acquired the entire share capital of Carr Sheppards
Crosthwaite Limited from Investec 1 Limited ("Investec"). Carr Sheppards
Crosthwaite Limited is a private client investment management business with
offices in London, Reigate, Farnham and Cheltenham. The consideration paid and
the fair value of the net assets acquired was as follows:
Book Fair value Fair
value adjustments value
£'000 £'000 £'000
Tangible fixed assets 517 - 517
Fixed asset investments 30 270 300
Debtors 90,508 565 91,073
Cash at bank - amounts repayable on demand 17,611 - 17,611
Cash at bank - short term deposits 5,000 - 5,000
Proposed dividend (10,266) - (10,266)
Other creditors (90,860) - (90,860)
Provisions for liabilities and (252) - (252)
charges
Net assets acquired 12,288 835 13,123
Goodwill 165,931
Consideration 179,054
The purchase consideration comprised: £'000
22,700,000 ordinary shares 113,273
Subordinated loan 60,000
Direct costs of acquisition 5,781
179,054
Cash at bank - short term deposits of £5 million represent bank deposits with a
maturity of up to one month.
The proposed dividend represents the dividend payable to Investec in accordance
with the terms of the acquisition of Carr Sheppards Crosthwaite Limited. This
dividend has been paid to Investec since the balance sheet date.
The adjustment to fixed asset investments represents a revaluation of certain
equity investments to their market value at the date of acquisition. The
adjustment to debtors represents the fair value of future amounts receivable in
respect of the sale of certain business assets.
A total of 25,500,000 ordinary shares were issued to Investec on 6 May 2005
under the terms of the acquisition of Carr Sheppards Crosthwaite Limited. As
set out in note 2 above, 2,800,000 of these shares were immediately transferred
by Investec to an Employee Benefit Trust ("EBT"). The fair value of these
shares at the time they were transferred by Investec to the EBT was £13,972,000.
This amount has been accounted for as a prepayment by Rensburg Sheppards plc
of certain of the Group's future employment costs and, as such, does not form
part of the fair value of the purchase consideration in accordance with FRS 7.
The fair values set out above are based on the results of a provisional review
of the net assets acquired and a full review is continuing. In accordance with
FRS 6, should any adjustments to fair values be required upon completion of this
review, these will be accounted for in the period up to the end of the next
financial year.
The goodwill of £165,931,000 arising upon the acquisition of Carr Sheppards
Crosthwaite Limited is being amortised over the Directors' estimate of its
useful economic life of 20 years.
14. Reconciliation of movements in shareholders' funds
2005 2004 2004
Six Six Twelve
months months months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Profit for the year after taxation 5,087 2,478 5,719
Dividends (11,189) (1,313) (3,943)
(6,102) 1,165 1,776
Share capital issued 127,253 4 9
Issue costs (193) - -
Net addition to shareholders' funds 120,958 1,169 1,785
Shareholders' funds at beginning of period 43,649 41,864 41,864
Shareholders' funds at end of period 164,607 43,033 43,649
15. Reconciliation of operating profit to operating cash flows
2005 2004 2004
Six Six Twelve
months months months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Operating profit 4,022 3,077 6,202
Amortisation of goodwill 1,002 434 868
Depreciation 365 211 489
Amortisation of EBT prepayment 345 - -
Profit on disposal of tangible fixed assets - (2) -
Decrease/(increase) in debtors 18,176 (2,332) (2,356)
(Decrease)/increase in creditors and provisions (26,449) 2,880 6,647
Net cash (outflow)/inflow from operating activities (2,539) 4,268 11,850
Net cash (outflow)/inflow from operating activities comprises:
Continuing operations - acquisitions (2,150) - -
Continuing operations - existing (389) 4,268 11,850
(2,539) 4,268 11,850
16. Analysis and reconciliation of net funds
At 1 Dec Cash Other 31 May
2004 flows changes 2005
£'000 £'000 £'000 £'000
Cash at bank repayable on demand and in hand 40,618 326 - 40,944
Short term bank deposits - - 5,000 5,000
Cash at bank and in hand 40,618 326 5,000 45,944
Debt due after one year (232) - (59,768) (60,000)
Debt due within one year (750) - (1,845) (2,595)
Net funds/(debt) 39,636 326 (56,613) (16,651)
2005 2004 2004
Six Six Twelve
months months months
ended ended ended
31 May 31 May 30 Nov
£'000 £'000 £'000
Increase in cash in the period 326 1,024 5,198
Increase in short term bank deposits 5,000 - -
Repayment of debt - - 844
Issue of loan notes (1,613) - -
Increase in debt - subordinated loan (60,000) - -
Movement in net funds in the period (56,287) 1,024 6,042
Net funds at beginning of period 39,636 33,594 33,594
Net (debt)/funds at end of period (16,651) 34,618 39,636
17. Material non-cash transaction
The consideration for the acquisition of Carr Sheppards Crosthwaite Limited on 6
May 2005 comprised shares and subordinated debt. Details of this transaction
are set out in note 13 above.
18. Post balance sheet events
The listing particulars dated 23 March 2005 set out the financial effects of the
acquisition of Carr Sheppards Crosthwaite Limited, which include the cost of
integrating the business of Carr Sheppards Crosthwaite Limited into the Group.
Upon completion of the integration, the one-off reorganisation costs are
expected to amount to approximately £10 million, including £1 million of
non-cash costs relating to the write-down of certain fixed assets. The
implementation of the integration plan has continued since 31 May 2005 and there
are currently no indications to suggest that the plan will not ultimately be
achieved within the expected total cost of approximately £10 million.
19. Basis of preparation
In preparing this financial information there have been no material changes to
the accounting policies previously applied by the Company in preparing its
Annual Accounts for the year ended 30 November 2004.
The financial information included in this announcement is unaudited and does
not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. The statutory accounts of Rensburg Sheppards plc for the
year ended 30 November 2004 have been filed with the Registrar of Companies for
England & Wales. The Auditors have reported on those accounts; their report was
unqualified and did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.
Independent review report by KPMG Audit Plc to Rensburg Sheppards plc
Introduction
We have been engaged by the company to review the financial information set out
on pages 5 to 15** and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
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 Listing
Rules of the Financial Services Authority. 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 interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 May 2005.
KPMG Audit Plc
Chartered Accountants
Leeds
9 August 2005
** The page numbers shown above refer to those that will appear in the published
Interim Report for the six months ended 31 May 2005, which will be sent to
shareholders shortly. The information contained on these pages comprises the
consolidated profit and loss account, consolidated statement of total recognised
gains and losses, consolidated balance sheet, consolidated cash flow statement
and related notes.
This information is provided by RNS
The company news service from the London Stock Exchange
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