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Brewin Dolphin Hldgs (BRW)

  Print          Annual reports

Wednesday 24 May, 2006

Brewin Dolphin Hldgs

Interim Results

Brewin Dolphin Holdings PLC
24 May 2006

Brewin Dolphin Holdings plc



Interim Financial Report: For the Half Year Ending 31 March 2006



Highlights

•         Total income £88 million (2005: £68 million) an increase of 28%.

•         Profit before tax and exceptional charge £17.3 million (2005: £12.0
          million) an increase of 44%.

•         Profit before tax £17.3 million (2005: £7.2 million) a 140% increase.

•         Diluted earnings per share excluding exceptional charge 5.8p (2005:
          4p) an increase of 45% or 152% increase after 2005 exceptional charge.

•         Basic earnings per share excluding exceptional charge 6p (2005: 4.1p)
          an increase of 46% or 150% increase after 2005 exceptional charge.

•         Total client funds £22 billion of which £19 billion is managed, £8.5
          billion on a discretionary basis.



Jamie Matheson
Executive Chairman said:


'We continue to be successful in attracting both teams and individuals of the
highest calibre to the firm. Since 1 October 2005, a total of 27 fund managers
have joined the Group.

As ever it would be foolhardy to become embroiled in detailed forecasts about
the short-term outlook; however the second half of the year has started well.'



23 May 2006





Media Enquiries:

Brewin Dolphin
Jamie Matheson / John Hall - 020 7248 4400
Charlotte Black - 020 7246 1060

Citigate Dewe Rogerson
Toby Mountford - 020 7282 2820
Anthony Kennaway - 020 7282 1076




Chairman's Statement



I am pleased to report to Shareholders that the first half of the current year
has seen your Group make further good progress.  Income during the period under
review rose by some 28% to just short of £88 million. Profit on ordinary
activities before tax and exceptional charge rose by 44%; or, after taking into
account the 2005 exceptional charge, by 140%.



Diluted earnings per share were 5.8p, a 45% increase or a 152% increase after
the 2005 exceptional charge. Basic earnings per share were 6p, an increase of
46% on 2005 or a 150% increase after the 2005 exceptional charge.



This progress reflects improved performances across the Group.  Discretionary
income moved ahead by 30% giving rise to a 42% increase in profit while income
and profit on advisory funds rose by 8% and 18% respectively.  Our Corporate
Broking activities enjoyed a particularly strong first half with a 125% increase
in turnover giving rise to a 152% increase in profitability.  Clearly this
performance has been achieved against a favourable market background with the
help of the FTSE100 index rising by 20% over the twelve months to 31 March 2006
and 10% over the six months under review.  This illustrates that a significant
element of the Group's progress can therefore be attributed to strong organic
growth, as well as the contribution from new teams joining the Group,
notwithstanding the market rise.



We continue to be successful in attracting both teams and individuals of the
highest calibre to the firm. Since 1 October 2005, a total of 27 fund managers
have joined the Group. At the last year end I reported on the opening of a new
office in Belfast, Northern Ireland, and I am delighted to tell you that this
continues to progress most satisfactorily and our Exeter office, opened the year
before is now making strong profits.  I am also happy to report that good
progress is being made by teams that have joined existing offices within the
Group especially in London and Leicester.



At the end of the period total client funds reached £22 billion (Sept 2005: £19
billion) of which £19 billion (Sept 2005: £17 billion) is managed, including
£8.5 billion (Sept 2005: £6.9 billion) on a discretionary basis.



Within our Corporate Broking Division, it is worthy of note that the increased
level of activity has come hand in hand with a noticeable increase in the size
of transactions and projects that the division is examining and enacting.



Your Company continues to pursue its policy of providing bespoke services to its
clients with a strong emphasis on local presence.  This can only be achieved
with the hard work and dedication of all our people and I have great pleasure in
thanking them for their contribution to the Company's objectives.



We continue to invest in our infrastructure in order to pursue our goal of high
levels of client service. This year has seen material investment in our
Information Systems in particular the work to introduce Business Architects'
eXimius Investment Management System, which will provide a fully integrated
method of managing Client Assets. This has been supported with further
investment in our infrastructure for enhanced resilience and Business
Continuity.  Work is also underway on moving our London office to new open plan
offices which will provide an improved and effective environment for both our
clients and teams that work in London.



A first interim dividend of 2.5 pence per share (2 pence per share in 2005) was
declared at our AGM in February and was paid on 6 April 2006.  As last year, the
Board will consider the payment of a second interim dividend in September 2006,
which would be paid towards the end of October 2006.



I am delighted to be able to inform Shareholders that David McCorkell has joined
the Board today, 23 May 2006.  David is responsible for our offices in Scotland
and Northern Ireland and has been a member of the operating Company board for a
number of years.  I am confident that David will make a meaningful contribution
to the management of the affairs of your Company and I look forward to working
with him.



As ever it would be foolhardy to become embroiled in detailed forecasts about
the short-term outlook; however the second half of the year has started well.





Jamie Matheson
Executive Chairman
23 May 2006





Independent Review Report

Independent Review Report to Brewin Dolphin Holdings PLC



Introduction



We have been instructed by the company to review the financial information for
the 26 week period ended 31 March 2006 which comprises the Consolidated Income
Statement, the Consolidated Statement of Recognised Income and Expense, the
Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related
notes 1 to 10.  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 Bulletin 1999/4
issued by the Auditing Practices Board.  Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review 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 formed.



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 of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



International Financial Reporting Standards



As disclosed in note 1a, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted for use in the EU. Accordingly, the interim report has been prepared in
accordance with the recognition and measurement criteria of IFRS and the
disclosure requirements of the Listing Rules.



Review work performed



We conducted our review in accordance with the guidance contained in Bulletin
1999/4 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 excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions.  It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) 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 26 week period
ended 31 March 2006.





Deloitte & Touche LLP
Chartered Accountants
London
23 May 2006



Consolidated Income Statement
26 week period ended 31 March 2006


                                                   Unaudited     Unaudited        Audited
                                                 26 weeks to   26 weeks to    53 weeks to 
                                                    31 March      25 March   30 September
                                                        2006          2005           2005
                                         Note         £'000s        £'000s         £'000s
Continuing operations
Revenue                                               83,517        64,496        136,563
Other operating income                                 4,100         3,828          8,097
Total income                              3           87,617        68,324        144,660

Staff costs                                         (45,141)      (35,486)       (78,293)
Other operating costs                               (27,557)      (27,558)       (52,899)
                                                    (72,698)      (63,044)      (131,192)

Operating profit                                      14,919         5,280         13,468
Dividend receivable                                        -             -            221
Interest receivable and similar income                 2,355         1,998          4,334
Finance income                                         2,355         1,998          4,555
Finance costs                                            (3)          (96)          (254)

Profit on ordinary activities before      3           17,271        12,020         24,600
exceptional item
Exceptional item                          4                -       (4,838)        (6,831)

Profit before tax                                     17,271         7,182         17,769
Tax                                                  (5,357)       (2,443)        (5,555)
Profit attributable to equity shareholders of         11,914         4,739         12,214
the parent from continuing operations

Earnings per share

From continuing operations
Basic                                     5             6.0p          2.4p           6.2p

Diluted                                   5             5.8p          2.3p           6.0p




Consolidated Statement of Recognised Income and Expense
26 week period ended 31 March 2006

                                                    Unaudited    Unaudited       Audited
                                                  26 weeks to  26 weeks to   53 weeks to
                                                     31 March     25 March  30 September
                                                         2006         2005          2005
                                                       £'000s       £'000s        £'000s

Gain on revaluation of available-for-sale               1,161            -         1,144
 investments
Tax on revaluation of available-for-sale                (348)            -         (343)
 investments
Actuarial loss on defined benefit pension               (530)           34         (666)
 scheme
Tax on actuarial loss on defined benefit                  159         (10)           200
 pension scheme

Deferred tax on share based payments                      795          262           599
Net income recognised directly in equity                1,237          286           934
Profit for period                                      11,914        4,739        12,214
Total recognised income and expense for the            13,151        5,025        13,148
 period attributable to equity shareholders of
 the parent



Consolidated Balance Sheet
As at 31 March 2006
                                                Unaudited as   Unaudited as   Audited as
                                                          at             at           at
                                                    31 March       25 March 30 September
                                                        2006           2005         2005
                                                      £'000s         £'000s       £'000s
                                         Note
ASSETS
Non-current assets
Goodwill                                              44,440         39,074       43,624
Property, plant and equipment                         10,450          7,216        9,168
Available for sale investments                        10,115          7,500        8,954
Other receivables                                      1,938          2,476        1,938
Deferred tax asset                                     3,358          2,230        2,908
                                                      70,301         58,496       66,592
Current assets
Trading investments                                      811          1,057        1,227
Trade and other receivables                          261,024        292,901      231,717
Cash and cash equivalents                             54,203         40,117       50,392
                                                     316,038        334,075      283,336
Total assets                                         386,339        392,571      349,928

Current liabilities
Bank overdraft                                           291          2,293          164
Trade and other payables                             275,426        299,736      251,520
Current tax liabilities                                5,318          2,293        2,259
Shares to be issued including premium                  1,000          2,700        2,928
                                                     282,035        307,022      256,871
Net current assets                                    34,003         27,053       26,465

Non-current liabilities
Retirement benefit obligation             8           13,121         12,430       12,937
Shares to be issued including premium                  3,072              -        3,072
                                                      16,193         12,430       16,009
Total liabilities                                    298,228        319,452      272,880
Net assets                                            88,111         73,119       77,048

Equity
Called up share capital                   9            1,989          1,964        1,965
Share premium account                     9           81,812         79,209       79,287
Revaluation reserve                       9            6,562          4,948        5,749
Merger reserve                            9            4,562          4,562        4,562
Profit and loss account                   9          (6,814)       (17,564)     (14,515)
Total equity                              9           88,111         73,119       77,048



Consolidated Cash Flow Statement
26 week period ended 31 March 2006



                                                   Unaudited    Unaudited       Audited
                                                 26 weeks to  26 weeks to   53 weeks to
                                                    31 March     25 March  30 September
                                                        2006         2005          2005
                                         Note         £'000s       £'000s        £'000s
Net cash flow from operating activities    7          12,285      (5,134)        16,075

Cash flows from investing activities
Purchase of goodwill                                   (758)        (707)       (1,483)
Purchases of property, plant and                     (3,491)      (2,205)       (6,291)
 equipment
Purchases of available-for-sale                            -            -         (310)
 investments
Dividends received from available-for-sale                 -            -           221
 investments

Net cash used in investing activities                (4,249)      (2,912)       (7,863)

Cash flows from financing activities
Dividends paid to equity shareholders                (4,914)      (3,910)       (7,837)
Proceeds on issue of shares                             562          137           210
Net cash used in financing activities                (4,352)      (3,773)       (7,627)

Net increase/(decrease) in cash and cash              3,684      (11,819)          585
 equivalents

Cash and cash equivalents at the start of             50,228       49,643        49,643
 period
Cash and cash equivalents at the end of               53,912       37,824        50,228
 period

Cash
Firm's cash                                           35,417       28,634        38,168
Firm's overdraft                                       (291)      (2,293)         (164)
Firm's net cash                                       35,126       26,341        38,004
Client settlement cash                                18,786       11,483        12,224
                                                      53,912       37,824        50,228



Notes to the Interim Financial Report



1.      Basis of preparation



     a. 2006 interim financial information



For the year ending 30 September 2006 the Group will be required to prepare
consolidated financial statements under 'International Financial Reporting
Standards' as adopted by the European Commission. These will be those
International Accounting Standards, International Financial Reporting Standards
and related Interpretations (SIC-IFRIC interpretations), subsequent amendments
to those standards and related interpretations and future standards and related
interpretations issued or adopted by the International Accounting Standards
Board (IASB) that have been endorsed by the European Commission. This process is
ongoing and the Commission has yet to endorse certain documents issued by the
IASB.



The interim financial report has been prepared in accordance with the
recognition and measurement criteria of International Financial Reporting
Standards, the disclosure requirements of the Listing Rules and the accounting
policies that the directors anticipate will be adopted in the annual financial
statements for the year ending 30 September 2006.  These accounting policies
were set out in the Preliminary IFRS Financial Information included in the
Group's Annual Report and Accounts for the year ended 30 September 2005, which
is available on the Group's web site www.brewindolphin.co.uk.



As permitted by IFRS 1, the Group has elected: to present comparative
information in accordance with IAS 32 Financial Instruments: Disclosure and
Presentation and IAS 39 Financial Instruments: Recognition and Measurement; not
to restate its financial information for acquisitions occurring before 25
September 2004; to recognise all actuarial gains and losses on pensions and
other post-retirement benefits directly in equity attributable to equity holders
of the parent at 25 September 2004; and to apply IFRS 2 to all grants of equity
instruments after 7 November 2002 that had not vested as of 1 January 2005.
Operating profit is stated before finance income and finance costs.



     b. 2005 comparative financial information



In preparing the 2005 comparative information, the Group has adjusted amounts
previously reported under UK Generally Accepted Accounting Principles ('UK
GAAP'). The reconciliation of UK GAAP to IFRS financial information for the 53
week period ended 30 September 2005 is set out in in the Group's Annual Report
and Accounts for the year ended 30 September 2005 which is available on the
Group's web site www.brewindolphin.co.uk. The impact of the transition from UK
GAAP to IFRS as at 25 March 2005 is shown in note 10 of this interim financial
report.

2.      Section 240 statement



The financial information set out in this document in respect of the year ended
30 September 2005 does not constitute the Group's statutory accounts for the
year ended 30 September 2005 within the meaning of section 240 of the Companies
Act 1985. Those accounts were prepared under UK GAAP and have been reported on
by the Company's auditors and delivered to the Registrar of Companies. The
auditors report was unqualified and did not contain a statement under section
237 (2) or (3) of the Companies Act 1985. A copy of this statement is available
at the Company's registered office at 5 Giltspur Street, London EC1A 9BD and a
copy will be posted to all shareholders.



3.      Segmental information



For management purposes, the Group is divided into two business streams: private
client investment management and corporate broking. These form the basis for the
primary segment information reported below. All operations are carried out in
the United Kingdom and the Channel Islands.


                                            Unaudited     Unaudited       Audited
                                          26 weeks to   26 weeks to   53 weeks to
                                             31 March      25 March  30 September
                                                 2006          2005         2005
                                               £'000s        £'000s        £'000s
Total income
Private client investment management
Discretionary portfolio management             38,652        29,641        69,165
Advisory portfolio management                  35,185        32,549        61,243
                                               73,837        62,190       130,408
Corporate broking                              13,780         6,134        14,252
                                               87,617        68,324       144,660

Profit on ordinary activities before exceptional item and tax

Private client investment management
Discretionary portfolio management              6,029         4,244         9,625
Advisory portfolio management                   5,227         4,421         7,809
                                               11,256         8,665        17,434
Corporate broking                               3,663         1,453         2,865
                                               14,919        10,118        20,299
Finance income (net)                            2,352         1,902         4,301
                                               17,271        12,020        24,600





4.      Exceptional item, Split capital trusts, other claims and contingent
        asset

In December 2004 the Group made a £5m contribution to a fund (Fund Distribution
Limited) set up under the auspices of the Financial Services Authority for those
who have lost money in Zero Dividend Shares.  The 2005 exceptional charge,
included within other operating costs and staff costs, represented this payment,
less an insurance recovery, plus other directly attributable costs.  These
charges are considered to be exceptional due to their size and the unusual
nature of their incidence.

The Directors remain in discussion with the Group's insurers in respect of
claims for costs already incurred and expensed regarding split capital trusts.
An estimate of the potential favourable financial effect is not given as the
Directors consider that any such disclosure would seriously prejudice their
ongoing negotiations with insurers.

Various legal actions and complaints have been made against the Group for which
legal proceedings are in progress.  Provision for any payments arising for these
claims has been made and included within trade and other payables, and expected
recoveries from insurers included within trade and other receivables, where the
Group has been advised that it is probable that a specific liability will arise.
These items are not disclosed separately as provisions or debtors, as the
Directors consider that disclosure of any further information would seriously
prejudice the position of the Group.  The Directors believe that any further
claims will be fully covered by insurance.



5.      Earnings per share




                                               Unaudited     Unaudited       Audited
                                             26 weeks to   26 weeks to   53 weeks to
                                                31 March      25 March  30 September
                                                    2006          2005          2005
Earnings attributable to ordinary
shareholders
                                                     No.           No.           No.
                                                    '000          '000          '000
Basic
Weighted average number of shares in issue       197,041       196,027       196,227
 in the period
Diluted
Weighted average number of options                 5,935         2,830         3,070
 outstanding for the period
Estimated weighted average number of               3,628         3,433         5,421
 shares earned under deferred consideration
 arrangements
Diluted weighted average number of options       206,604       202,290       204,718
 and shares for the period
                                                  £'000s        £'000s        £'000s
Basic profit for the period and                   11,914         4,739        12,214
 attributable earnings
Exceptional item                                       -         4,838         6,831
less tax on exceptional item                           -       (1,451)       (2,049)
Adjusted basic profit for the period and          11,914         8,126        16,996
 attributable earnings
From continuing operations

Basic                                               6.0p          2.4p          6.2p
Diluted                                             5.8p          2.3p          6.0p

From continuing operations excluding exceptional item

Basic                                               6.0p          4.1p          8.7p
Diluted                                             5.8p          4.0p          8.3p



6.     Dividend

                                              Unaudited     Unaudited       Audited
                                            26 weeks to   26 weeks to   53 weeks to
                                               31 March      25 March  30 September
                                                   2006          2005          2005
                                                 £'000s        £'000s        £'000s

First interim dividend paid 6 April               4,970         3,927         3,927
2006, 2.5p per share (2005: 2.0p)
Second interim dividend paid 25 October               -             -         4,914
2005, 2.5p per share
                                                  4,970         3,927         8,841



7.     Note to the cash flow statement

                                              Unaudited     Unaudited       Audited
                                            26 weeks to   26 weeks to   53 weeks to
                                               31 March      25 March  30 September
                                                   2006          2005          2005
                                                 £'000s        £'000s        £'000s

Operating profit                                 14,919         5,280        13,468
Adjustments for:
Depreciation of property, plant and               2,209         2,197         4,312
 equipment
Retirement benefit obligation                     (346)         (149)         (671)
Share based payment cost                            333           165           494
Interest income                                   2,355         1,998         4,334
Interest expense                                    (3)           (6)          (15)
Operating cash flows before movements in         19,467         9,485        21,922
 working capital
Increase in debtors and trading                (28,891)      (96,308)      (34,757)
 investments
Increase in creditors                            23,850        84,729        35,020
Cash generated by operating activities           14,426       (2,094)        22,185
Tax paid                                        (2,141)       (3,040)       (6,110)
Net cash flow from operating activities          12,285       (5,134)        16,075



Cash and cash equivalents comprise cash at bank and bank overdrafts.




8.     Retirement benefit obligation


The main financial assumptions used in calculating the Group's retirement
benefit obligation are as follows:

                                    31 March 2006   30 September 2005
Discount rate                       5.0%            5.0%
Inflation                           2.9%            2.8%
Salary increases                    2.9%            2.8%
Expected return on equities         7.7%            7.7%
Expected return on bonds            4.7%            4.7%
Expected return on other assets     4.5%            4.5%



The Trustees are carrying out a valuation of the scheme as at 31 December 2005.
Compared to previous disclosures, the liabilities reflect improved mortality,
and the fact that, on retirement, many members elect to exchange some of their
pension for a tax free lump sum.  These factors have been reflected in the half
year calculation offsetting what would have otherwise been a favourable
movement.




9.      Reconciliation of changes in equity

                                        Called  Shares to       Share  Revaluation     Merger  Profit and      Total
                                            up  be issued     premium      reserve    reserve        loss
                                         share  including     account                             account
                                       capital    premium
                                        £'000s     £'000s      £'000s       £'000s     £'000s      £'000s     £'000s
24 September 2004 *                      1,955          -      79,081        4,948      3,929    (18,827)     71,086
Profit for the period                        -          -           -            -          -       4,739      4,739
Dividends paid                               -          -           -            -          -     (3,927)    (3,927)
Issue of shares                              9          -         128            -        633           -        770
Revaluation                                  -          -           -            -          -           -          -
Deferred tax on items taken directly to 
 equity                                      -          -           -            -          -         252        252
Share based payments                         -          -           -            -          -         165        165
Actuarial gain on defined benefit pension    -          -           -            -          -          34         34
 scheme
25 March 2005                            1,964          -      79,209        4,948      4,562    (17,564)     73,119
Profit for the period                        -          -           -            -          -       7,787      7,787
Dividends paid                               -          -           -            -          -     (4,914)    (4,914)
Issue of shares                              1          -          78            -          -           -         79
Revaluation                                  -          -           -        1,144          -           -      1,144
Deferred tax on items taken directly to 
 equity                                      -          -           -         (343)         -         547        204
Share based payments                         -          -           -            -          -         329        329
Actuarial loss on defined benefit pension    -          -           -            -          -        (700)      (700)
 scheme
30 September 2005                        1,965          -      79,287        5,749      4,562     (14,515)    77,048
Profit for the period                        -          -           -            -          -      11,914     11,914
Dividends paid                               -          -           -            -          -      (4,970)    (4,970)
Issue of shares                             24          -       2,525                       -           -      2,549
Revaluation                                  -          -           -        1,161          -           -      1,161
Deferred tax on items taken directly to 
 equity                                      -          -           -        (348)          -         954        606
Share based payments                         -          -           -            -          -         333        333
Actuarial loss on defined benefit pension    -          -           -            -          -        (530)      (530)
 scheme
31 March 2006                            1,989          -      81,812        6,562      4,562      (6,814)    88,111

Balance at 24 September 2004 - UK GAAP   1,955      3,400      79,081        7,069      3,929     (10,188)    85,246
IFRS adjustments                             -     (3,400)          -       (2,121)         -      (8,639)   (14,160)
* Balance at 24 September 2004 under 
  IFRS                                   1,955          -      79,081        4,948      3,929     (18,827)    71,086



10.       Explanation of transition to IFRS


The reconciliation of equity as at 30 September 2005 (the date of the last UK
GAAP financial statements) and the reconciliation of profit for the 53 week
period ended 30 September 2005, as required by IFRS 1, plus the significant IFRS
accounting policies were set out in the Preliminary IFRS Financial Information
included in the Group's Annual Report and Accounts for the year then ended which
is available on the Group's web site www.brewindolphin.co.uk .



The note references below refer to the notes contained in the Preliminary IFRS
Financial Information within the Group's Annual Report and Accounts for the year
ended 30 September 2005 on pages 52 - 56.



     a. Effect of IFRS on the UK GAAP consolidated balance sheet as at 24
        September 2004 and reconciliation of equity.

                                                Audited UK  Adjustments  Audited IFRS
                                                GAAP as at                      as at
                                              24 September               24 September
                                                      2004                       2004
                                       Note         £'000s       £'000s        £'000s
ASSETS
Non-current assets
Goodwill                                h           38,589            -        38,589
Property, plant and equipment          f,n           7,208            -         7,208
Available for sale investments          g            7,500            -         7,500
Other receivables                                        -        2,438         2,438
Deferred tax asset                      k                -        2,489         2,489
                                                    53,297        4,927        58,224
Current assets
Trading investments                                    298            -           298
Trade and other receivables                        200,374      (2,984)       197,390
Cash and cash equivalents                           50,701            -        50,701
                                                   251,373      (2,984)       248,389
Total assets                                       304,670        1,943       306,613

Current liabilities
Bank overdraft                                       1,058            -         1,058
Trade and other payables                           215,515            -       215,515
Current tax liabilities                              2,851            -         2,851
Shares to be issued including premium   q                -        1,700         1,700
                                                   219,424        1,700       221,124
Net current assets                                  31,949      (4,684)        27,265

Non-current liabilities
Retirement benefit obligation           j                -       12,703        12,703
Shares to be issued including premium   q                -        1,700         1,700
                                                         -       14,403        14,403
Total liabilities                                  219,424       16,103       235,527
Net assets                                          85,246     (14,160)        71,086

Equity
Called up share capital                              1,955            -         1,955
Shares to be issued including premium   q            3,400      (3,400)             -
Share premium account                               79,081            -        79,081
Revaluation reserve                                  7,069      (2,121)         4,948
Merger reserve                                       3,929            -         3,929
Profit and loss account                           (10,188)      (8,639)      (18,827)
Total equity                                        85,246     (14,160)        71,086




b.      Effect of IFRS on the UK GAAP consolidated balance sheet as at 25 March
        2005 and reconciliation of equity.

                                                   Unaudited  Adjustments       Unaudited
                                               UK GAAP as at                   IFRS as at
                                               25 March 2005                25 March 2005
                                      Note            £'000s       £'000s          £'000s
ASSETS
Non-current assets
Goodwill                               h              37,107        1,967          39,074
Property, plant and equipment         f,n              7,216            -           7,216
Available for sale investments         g               7,500            -           7,500
Other receivables                                          -        2,476           2,476
Deferred tax asset                     k                   -        2,230           2,230
                                                      51,823        6,673          58,496
Current assets
Trading investments                                    1,057            -           1,057
Trade and other receivables                          295,377      (2,476)         292,901
Cash and cash equivalents                             40,117            -          40,117
                                                     336,551      (2,476)         334,075
Total assets                                         388,374        4,197         392,571

Current liabilities
Bank overdraft                                         2,293            -           2,293
Trade and other payables                             299,410          326         299,736
Current tax liabilities                                1,935          358           2,293
Shares to be issued including          q                   -        2,700           2,700
premium
                                                     303,638        3,384         307,022
Net current assets                                    32,913      (5,860)          27,053

Non-current liabilities
Retirement benefit obligation          j                   -       12,430          12,430
Shares to be issued including          q                   -            -               -
premium
                                                           -       12,430          12,430
Total liabilities                                    303,638       15,814         319,452
Net assets                                            84,736     (11,617)          73,119

Equity
Called up share capital                                1,964            -           1,964
Shares to be issued including          q               2,700      (2,700)               -
premium
Share premium account                                 79,209            -          79,209
Revaluation reserve                                    7,069      (2,121)           4,948
Merger reserve                                         4,562            -           4,562
Profit and loss account                             (10,768)      (6,796)        (17,564)
Total equity                                          84,736     (11,617)          73,119





     c. Effect of IFRS on the UK GAAP consolidated income statement for the 26
        week period ended 25 March 2005.




                                               Unaudited UK  Adjustments     Unaudited
                                                       GAAP                       IFRS
                                                26 weeks to                26 weeks to
                                              25 March 2005              25 March 2005
                                      Note           £'000s       £'000s        £'000s
Continuing operations
Revenue                               d              64,496            -        64,496
Other operating income                m               3,828            -         3,828
Total income                                         68,324            -        68,324

Staff costs*                          j & o        (35,235)        (251)      (35,486)
Other operating costs                 h            (29,525)        1,967      (27,558)
                                                   (64,760)        1,716      (63,044)

Operating profit                                      3,564        1,716         5,280
Dividend receivable                                       -            -             -
Interest receivable and similar                       1,998            -         1,998
income
Finance costs                         j                 (6)         (90)          (96)

Profit on ordinary activities before                 12,361        (341)        12,020
goodwill amortisation and exceptional item
Exceptional item                                    (4,838)            -       (4,838)
Goodwill amortisation                 h             (1,967)        1,967             -

Profit before tax                                     5,556        1,626         7,182
Tax                                   k             (2,210)        (233)       (2,443)

Profit attributable to equity shareholders            3,346        1,393         4,739
of the parent from continuing operations

 * Staff costs adjustment includes holiday pay adjustment of £325,000 debit.




     d. Effect of IFRS on the consolidated cash flow statement.



There have been no material adjustments to the cash flow statement for the 26
week period ended 25 March 2005 or for the 53 week period ended 30 September
2005 resulting from transition to IFRS.  However, the presentation of the
consolidated cash flow statement has changed, whereby cash flows are classified
as operating, investing or financing.



Funds


                                              At 31 March    At 25 March At 30 September
                                                     2006           2005            2005
                                                £ Billion      £ Billion       £ Billion

In Group's nominee or sponsored member                8.0            5.8             6.5
Stock not held in Group's nominee                     0.5            0.2             0.4
Discretionary funds under management                  8.5            6.0             6.9

In Group's nominee or sponsored member                7.6            6.1             6.7
Other funds where valuations are carried              3.3            3.1             3.3
 out but where the stock is not under the
 Group's control
Advisory funds under management                      10.9            9.2            10.0

Managed funds                                        19.4           15.2            16.9

In Group's nominee or sponsored member                2.3            2.0             2.0
Stock not held in Group's nominee                     0.4            0.3             0.3
Execution only stock                                  2.7            2.3             2.3

Total funds                                          22.1           17.5            19.2

Stock
In Group's nominee or sponsored member               17.9           13.9            15.2
Stock not held in Group's nominee                     4.2            3.6             4.0
                                                     22.1           17.5            19.2







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