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Rensburg Sheppards (RBG)

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Wednesday 17 May, 2006

Rensburg Sheppards

Final Results

Rensburg Sheppards plc
17 May 2006

                                                                     17 May 2006

                             Rensburg Sheppards plc
                     ('Rensburg Sheppards' or 'the Company')
           Preliminary Results for the 16 Months Ended 31 March 2006


Rensburg Sheppards, (formerly Rensburg plc), the Investment Management Group   -


Key Points:

  • Profit before tax, amortisation of both goodwill and the Employee Benefit
    Trust ('EBT') prepayment and exceptional items* for the 16 months ended 31
    March 2006 of £29.3 million (12 months ended 30 November 2004: £8.8
    million).

  • Basic earnings per share before amortisation of both goodwill and the EBT
    prepayment and exceptional items* for the 16 months ended 31 March 2006 of
    55.6p (12 months ended 30 November 2004: 27.9p).

  • Final dividend of 13.2p per ordinary share.

  • In respect of the acquisition of  Carr Sheppards Crosthwaite, we continue
    to expect to achieve annualised pre-tax cost synergies of approximately £5.5
    million per annum by the year ending 31 March 2008.

  • Group funds under management at 31 March 2006 of £13.1 billion (30
    November 2004: £4.2 billion).


* Amortisation of both goodwill and the EBT prepayment and exceptional items
before taxation amount to a net charge of £19.6 million (12 months ended 30
November 2004: £0.4 million)


Mike Burns, Chief Executive of Rensburg Sheppards, commented:

"It is pleasing to report such good progress even during the major integration
of CSC. I look forward to the year ahead with considerable optimism."


For further information, please contact:

Michael Burns, Chief Executive                                                          Tel:  0151 227 2030
Rensburg Sheppards plc

Nick Lyon                                                                               Tel:  020 7796 4133
Hudson Sandler



CHAIRMAN'S STATEMENT

I am delighted to be presenting what we consider to be very creditable results
for the 16 month period to 31 March 2006, helped of course by favourable stock
market conditions and continued development of the enlarged group. The Company
has been transformed by the acquisition, around twelve months ago, of Carr
Sheppards Crosthwaite Limited ('CSC') and the deal has proved rewarding so far,
with more benefits expected to come.


Acquisition and integration of CSC

Before moving on to the financial results, I should like to comment on the
acquisition and integration of CSC. Following shareholder and regulatory
approvals, this acquisition was completed on 6 May 2005 and the name of the
Company was then changed to Rensburg Sheppards plc. For practical reasons, the
accounting reference date of the Company and the group was subsequently changed
to 31 March; this has resulted in the elongation of the accounting period now
being reported upon to 16 months. With regard to the integration of CSC, much
has been done but much work also lies ahead. Importantly, we remain confident
that we will reap the expected ongoing benefits of the acquisition, being £5.5
million of annualised pre-tax cost synergies by the year ending 31 March 2008.


Financial results

This entire section is necessarily quite complex, but in essence we are pleased
with the results from all the different business units, with activity levels
well ahead of the previous year. Due to the amount of detailed information to be
disclosed, this follows for the first time in a separate report from the Finance
Director. I would however like to point out one specific figure that gives us
particular encouragement for the future. This is that total group funds under
management at 31 March 2006 exceeded £13 billion, and your Company is now placed
firmly amongst the leading quoted companies in the investment management
industry.


Share capital consolidation and dividends

On 1 June 2005 a special dividend of 45p per ordinary share was paid on the
issued ordinary shares other than those 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 are now recommending a final dividend of 13.2p per ordinary share
payable on 11 August 2006 to all shareholders on the register as at the close of
business on 21 July 2006.  When combined with the special dividend of 45p and
the two interim dividends each of 6.6p per ordinary share (the second interim
dividend being paid as a consequence of the four month extension to the
accounting period), this brings the total dividends declared in respect of this
reporting period to 71.4p per ordinary share.


Board and employees

The acquisition of CSC from Investec was accompanied by a reorganisation of the
board. Effective from 6 May 2005, Robert Allen, Barry Anysz, Katrina Michel and
Nicko Williams stood down as directors and I should like to thank them all for
their considerable and varied contributions over many years. We welcomed in
their place Nick Bagshawe, Steve Elliott and Ian Maxwell Scott of CSC as
executive directors and, representing Investec's major stake in the business
going forward, Stephen Koseff and Bernard Kantor joined as non-executives. On 14
November 2005 we announced the appointment of Michael Haan to the board as an
additional independent non-executive director.

The Company has been transformed during the past 18 months.  Deals such as ours
create tremendous opportunities, but also significant challenges as changes to
working practices evolve. To varying degrees this has inevitably had an effect
on all our employees, whom I thank and congratulate for their unstinting efforts
throughout this lengthy period.


Outlook

Significant progress has been made since the first statement about the possible
acquisition by Rensburg of CSC which was made in December 2004, and we are
confident about the full delivery of the ongoing benefits of this deal coming
through in line with the timetable outlined when the deal was put to
shareholders in April 2005. The combination of the historic Rensburg and CSC
businesses into the single, higher profile brand of Rensburg Sheppards, together
with the positive environment for equity based investment and wider recognition
by individuals of the need to provide for their own long term futures, leaves
the group well placed for the challenges that lie ahead.


C.G. Clarke
Chairman
16 May 2006



CHIEF EXECUTIVE'S REVIEW OF OPERATIONS

The acquisition of Carr Sheppards Crosthwaite Limited ('CSC') was completed on 6
May 2005. This major 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 integration of CSC is the largest of its kind and I am pleased to report
that the project is well advanced. In the circular proposing the acquisition of
CSC, which was sent to shareholders on 23 March 2005 ('the Circular'), we
anticipated annual pre-tax cost synergies of approximately £5.5 million by the
year ending 31 March 2008, with a significant proportion of these synergies we
expected being achieved in the year ending 31 March 2007. We have delayed until
the third quarter of this year the consolidation of the two existing settlement
functions and this means that the pre-tax cost synergies we now expect to
achieve in the financial year ending 31 March 2007 will be approximately £3
million. However, more importantly, thereafter we continue to expect to benefit
from annualised pre-tax cost synergies of approximately £5.5 million.

Given the acquisition of CSC described above, this has been a period of
significant change for the group and I would like to thank the patience of our
clients, particularly the Rensburg clients who have over recent months endured a
considerable increase in paper output as we migrated IT systems. We are
currently producing our 5 April packs, which effectively completes this dual
running process for our clients. We have now embarked upon a programme of
enhancements to client output.

It has been customary for me to acknowledge the dedication and hard work shown
by our staff towards the end of my statement. I believe however that it is most
appropriate, following an unparalleled period in the history of our group, to
bring this forward. We operate in a 'people's business' and the commitment of
all staff, particularly those under threat of redundancy who have continued to
act with complete professionalism throughout, merits special recognition. The
desire to provide a stable service to our clients has been uppermost in their
minds and I thank them all most sincerely for their considerable efforts.


Rensburg Sheppards Investment Management

On 1 February 2006 the historic businesses of Rensburg Investment Management
Limited ('RIM') and Carr Sheppards Crosthwaite Limited were formally combined.
From this date the group's core private client investment management business
has been operated under the new, single brand, of Rensburg Sheppards Investment
Management Limited ('RSIM').

During the period under review, the consistently rising financial markets, which
have brought with them a gradual return of investor confidence, assisted RSIM in
growing its funds under management to a total of £11.9 billion by 31 March 2006
including £334 million contributed by the Charity Property Fund.

The review of RIM's charging structure that was implemented during the quarter
ended 30 November 2004 has benefited this business over the period under review,
primarily in terms of an increase in the absolute level of income.  CSC also
undertook a fundamental review of its charging structure during the latter half
of 2005 to enable RSIM to operate with a common rate card and this was
implemented with effect from 1 December 2005.  The early indications are that
this review has led to a marked increase in the quality of CSC's income, with a
significant migration of clients away from CSC's previous heavily commission
orientated income structure over to a pure fee or fee/commission mixed basis,
accompanied by a positive effect on the absolute level of income.  The principal
quarterly period ends for the ad valorem fee billings across RSIM have now been
consolidated and for the majority of services are based upon the value of client
portfolios as at the last working day of February, May, August and November.

Given the fundamental changes during the period, we have concluded that it is of
little benefit at this point to make either year on year comparisons of funds
under management or analyse out income into its key streams. However  with these
major changes behind us, in future reporting we will provide more detailed
analysis of these and potentially other areas of interest.

Since the integration of CSC began, employees across RSIM have continued to
adapt admirably to the opportunities and challenges faced as we move towards
achievement of our goal of a single operating platform run by a settlement
function located primarily in one geographical location. December 2005 saw the
move onto a common operating platform achieved and the initial months of 2006
has seen great effort invested in 'bedding down' this new system.  The
consolidation in Liverpool of the majority of the settlement functions is
scheduled to take place over the next half year and we remain fully aware of the
operational risk surrounding the successful achievement of this and to the
benefits that will be forthcoming as this is completed.


Rensburg Fund Management

Rensburg Fund Management Limited ('RFM') has continued to perform extremely well
in terms of attracting significant net new money inflows.  Net sales over the
sixteen months of £225 million have, combined with the rising financial markets
and solid investment performance, led to an increase in the value of RFM's
retail unit trust based funds under management to £942 million as at 31 March
2006 (30 November 2004: £505 million). In addition, the company now acts as
investment manager to two segregated mandates; the total funds managed under
these mandates have increased from £27 million on 30 November 2004 to £223
million at 31 March 2006. This brings the total assets managed by RFM to £1.17
billion (30 November 2004: £0.53 billion).

Combining RSIM and RFM brings the group's total funds under management as at 31
March 2006 to £13.1 billion (30 November 2004: £4.2 billion).


Regulation

The group devotes considerable human and financial resources to regulatory
matters; currently, FSA's initiative of Treating Customers Fairly is being
firmly embedded into the enlarged group. We, together with our peer group, pride
ourselves on our personal service to our clients - it is our raison d'etre. We
believe that our clients value a relationship that understands their needs and
is not reduced to a 'box ticking' exercise. We welcome the FSA's shift to '
principle based' regulation and hope and expect that all supervisory teams will
also adopt this approach.

We are, in accordance with EU directives, currently preparing for the Capital
Requirements Directive ('CRD'), which comes into effect in January 2007, and in
November 2007 we will see the implementation of MiFID (Markets in Financial
Instruments Directive) which is intending to co-ordinate financial services
across Europe. We are grateful for the assistance of APCIMS (Association for
Private Client Investment Managers), our trade association, who not only edit
the vast reading material that arrives, but also represent actively our interest
with the regulator.


Outlook

We have another extremely busy and exciting year in front of us as we complete
the integration and seek to attract additional funds to manage. With the
continued commitment of all of our staff, I look forward to the year ahead with
considerable optimism.


M.H. Burns
Chief Executive

16 May 2006

                                          

FINANCE DIRECTOR'S REPORT


Financial results

The group's profit before tax, amortisation of both goodwill and the EBT
prepayment and exceptional items for the 16 months ended 31 March 2006 was £29.3
million (12 months ended 30 November 2004: £8.8 million) from a turnover of
£109.4 million (30 November 2004: £36.9 million). The basic earnings per share
on this basis were 55.6p (30 November 2004: 27.9p). These adjusted measurements
of profit before tax and basic earnings per share have been provided in addition
to the unadjusted measurements detailed below, as it is the directors' opinion
that they represent better measures of underlying business performance.

The results as now presented include those of Carr Sheppards Crosthwaite Limited
('CSC') from 6 May 2005, being the date CSC was acquired, up until 31 March
2006. The results of CSC for this period are separately analysed within the
profit and loss account.  The profit before tax for the 16 months ended 31 March
2006 as stated above includes the benefit of approximately £0.5 million of
synergy benefits.  This reflects the commencement during the latter months of
this period of certain of the ongoing synergy benefits expected to be derived
from the acquisition of CSC.

At 31 March 2006 we had committed to £9.9 million of exceptional pre-tax
reorganisation costs relating to the integration of CSC; these costs have been
fully expensed in the profit and loss account.  The board now estimates that the
total of exceptional pre-tax reorganisation costs ultimately to be incurred will
fall within the range £10 million to £10.5 million, compared with the original
estimate in the circular to shareholders dated 23 March 2005 ('the Circular') of
approximately £10 million; these figures include £0.7 million of actual non-cash
reorganisation costs relating to certain asset write-downs, which is lower than
that predicted in the Circular of approximately £1 million, a consequence of
certain assets being determined as suitable to be retained for ongoing use in
the enlarged group. This overall potential increase in the exceptional pre-tax
reorganisation costs reflects additional costs anticipated to arise from the
delay described in the Chief Executive's Review in consolidating the two
existing settlement functions. In the Circular, we estimated £0.7 million of
additional capital expenditure would be necessary as a consequence of the
integration plan; to date, approximately £0.44 million has been incurred and we
now ultimately expect the total to be incurred will be no more than the original
estimate.

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 on which tax of £939,000 has
been provided.  The group retains a holding of 100,000 shares in LSE at their
historic cost of nil.

After including a net charge of £19.6 million (30 November 2004: £0.4 million)
for amortisation of both goodwill and the EBT prepayment and exceptional items
(including the above reorganisation costs and LSE disposal), profit before tax
for the 16 months ended 31 March 2006 was £9.7 million (12 months ended 30
November 2004: £8.4 million) and basic earnings per share were 7.6p (30 November
2004: 26.1p).

The corporation tax charge for the 16 months ended 31 March 2006 of £7.0 million
(12 months ended 30 November 2004: £2.7 million) represents 72% of the group's
profit before tax of £9.7 million (12 months ended 30 November 2004: £8.4m).
This apparently high rate of tax reflects the fact that no tax relief is
available in respect of goodwill amortisation, nor is any tax relief anticipated
in respect of the amortisation of the EBT prepayment.

CSC had audited profit before exceptional items and taxation of £8.8 million for
the year ended 31 March 2005. This compared 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.


Adoption of International Financial Reporting Standards ('IFRS')

For the current 16 month accounting period to 31 March 2006, the group is
required to report its results under UK Generally Accepted Accounting Principles
('UK GAAP').  Thereafter, we are required to report all results under IFRS.
Hence, the group's interim results for the six months ending 30 September 2006,
which we expect to announce during mid-November 2006, will be the initial
results reported under IFRS. The effect of adopting IFRS on the group has
continued to be evaluated and it is expected that the areas of significant
impact on reported financial performance of the business will be as follows:

  • Goodwill will no longer be amortised, but will be subject to an annual
    impairment review (IFRS 3);
  • The acquisition of Carr Sheppards Crosthwaite Limited, which arose after
    the date of transition to IFRS, will be restated and accounted for under
    IFRS 3 . This restatement will principally relate to the write back of
    goodwill previously amortised and the recognition of deferred tax
    liabilities in respect of assets adjusted to fair value (IFRS 1 & IFRS 3);
  • The fair value of options granted under the group's Save As You Earn share
    option scheme after 7 November 2002 and outstanding at 1 April 2005 will be
    charged to the profit and loss account (IFRS 2);
  • The charge relating to the Employee Benefit Trust ('EBT') will be based on
    the fair value of the benefits that are expected to be provided by the
    trust. Currently, the amortisation of the EBT prepayment is based on the
    value of the shares at the date they were transferred by Investec 1 Limited
    ('Investec') into the EBT (IFRS 2).
  • Equity investments, being assets that are available-for-sale, will be
    measured at fair value (IAS 39);
  • Where retained initial charge income received on the sale of units
    represents the provision of ongoing investment management services, this
    income will be recognised on a straight line basis over the estimated life
    of the unit holding (IAS 18);
  • Where applicable, the tax effect and the provision of deferred tax in
    respect of the above items will be recognised (IAS 12);
  • Dividends payable will only be recognised in the period in which they are
    declared (IAS 10).

In order to enable readers of our accounts to better understand the impact of
IFRS, it is our intention to publish ahead of our next interim results, a
transitional statement explaining how the changes in accounting treatment under
IFRS impact on the group's reported financial information for the 16 month
period ended 31 March 2006, as previously prepared under UK GAAP.


J.P. Wragg
Finance Director

16 May 2006


Consolidated profit and loss account
for the 16 months ended 31 March 2006

                                                                              2006                                2004
                                                                    16 months ended 31 March                 12 months
                                                              Continuing operations                              ended
                                                             Existing    Acquisitions            Total          30 Nov
                                                    Note        £'000             £'000          £'000           £'000

Turnover                                                      62,779            46,606        109,385          36,936

Operating expenses                                           (46,745)          (32,453)       (79,198)        (29,866)
Reorganisation costs - exceptional                    1            -            (9,907)        (9,907)              -
Amortisation of EBT prepayment                        2            -            (4,226)        (4,226)              -
Goodwill amortisation                                 8       (1,104)           (7,501)        (8,605)           (868)

Total administrative expenses                                (47,849)          (54,087)      (101,936)        (30,734)

Operating profit/(loss)                                       14,930            (7,481)         7,449           6,202

Profit on disposal of fixed asset                     3        3,129                 -          3,129               -
investments

Profit/(loss) on ordinary activities before                   18,059            (7,481)        10,578           6,202
interest and investment income

Income from fixed asset investments -                                                               -             490
exceptional

Interest receivable and similar income                                                          3,365           1,819

Interest payable and similar charges                  4                                        (4,205)            (67)

Profit on ordinary activities before                                                            9,738           8,444
Taxation

Tax on profit on ordinary activities                  5                                        (6,975)         (2,725)

Profit for the financial period                                                                 2,763           5,719

Dividends                                             6                                       (19,827)         (3,943)

Retained (loss)/profit for the period                                                         (17,064)          1,776

Earnings per share before amortisation of goodwill    7
and EBT prepayment and exceptional items

     -Basic                                                                                      55.6p           27.9p

     -Diluted                                                                                    54.8p           27.3p


Earnings per share                                    7

     -Basic                                                                                       7.6p           26.1p

     -Diluted                                                                                     7.5p           25.6p

Dividend per share                                    6

    - First interim dividend                                                                      6.6p            6.0p

    - Second interim dividend                                                                     6.6p              -

    - Final dividend                                                                             13.2p           12.0p

    - Special dividend                                                                           45.0p              -

                                                                                                 71.4p           18.0p



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 March 2006

                                                                                                  2006           2004
                                                                                              31 March         30 Nov
                                                                              Note               £'000          £'000
Fixed assets

Intangible assets                                                              8              170,326         13,000

Tangible assets                                                                                 4,540          4,132

Investments                                                                                       800            500

                                                                                              175,666         17,632

Current assets

Debtors - due within one year                                                                 173,829         26,226

Debtors - due after one year                                                   9                5,089              -

                                                                                              178,918         26,226

Cash at bank and in hand                                                       16              49,958         40,618

                                                                                              228,876         66,844

Creditors

Amounts falling due within one year                                                          (183,693)       (40,389)

Net current assets                                                                             45,183         26,455


Total assets less current liabilities                                                         220,849         44,087

Creditors

Amounts falling due after more than one year                                                  (60,000)          (232)

Provisions for liabilities and charges                                         11              (7,174)          (206)


Net assets                                                                                    153,675         43,649


Capital and reserves

Called up share capital                                                        12               4,760          2,209

Profit and loss account                                                                         8,938         26,002

Other reserves                                                                                139,977         15,438


Equity shareholders' funds                                                     14             153,675         43,649




Consolidated cash flow statement
for the 16 months ended 31 March 2006
                                                                                                 2006           2004
                                                                                            16 months      12 months
                                                                                                ended          ended
                                                                                             31 March         30 Nov
                                                                             Note               £'000          £'000

Net cash inflow from operating activities                                     15              24,384         11,850

Returns on investments and servicing of finance

Interest received                                                                              3,823          1,565

Interest paid                                                                                 (2,496)           (69)

Income from fixed asset investments - exceptional                                                  -            490

Taxation paid                                                                                 (5,595)        (2,513)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                                             (1,834)        (1,354)

Proceeds from sale of fixed asset investments                                                  3,129              -


Acquisitions and disposals

Costs associated with purchase of subsidiary undertakings                     13              (5,781)             -

Cash acquired with subsidiary undertakings                                    13              17,611              -

Payment of deferred consideration                                                                (52)             -

Equity dividends paid                                                                        (26,939)        (3,936)


Cash inflow before financing                                                                   6,250          6,033

Financing

Issue of ordinary share capital                                                                   25              9

Costs associated with issue of shares                                                           (180)             -

Redemption of loan notes                                                                      (1,755)          (844)


Increase in cash in the period                                                16               4,340          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.  The charge of £9,907,000 represents the element of these costs
that have been committed to during the period from the date of acquisition to 31
March 2006.


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 by Rensburg Sheppards plc 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 £4,226,000 represents the amortisation for the period
from the date of acquisition of 6 May 2005 to 31 March 2006.  This amortisation
will not result in any cash flows and there will be no effect 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
£3,858,000 (November 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% (November 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

                                                                                                 2006           2004
                                                                                            16 months      12 months
                                                                                                ended          ended
                                                                                             31 March         30 Nov
                                                                                                £'000          £'000

First interim dividend: 6.6p per share (November 2004: 6.0p)                                   1,319          1,314

Second interim dividend: 6.6p per share (November 2004: nil)                                   2,854              -

Final dividend: 13.2p per share (November 2004: 12.0p)                                         5,783          2,629

Special dividend: 45.0p per share (November 2004: nil)                                         9,871              -

                                                                                              19,827          3,943



The proposed final dividend of £5,783,000 is payable in respect of 43,808,579
ordinary shares; this excludes 76,660 ordinary shares held by the Employee
Ownership Trust, in respect of which all dividends have been waived.  The first
interim dividend of 6.6p per share was paid in respect of 19,983,531 ordinary
shares, which excluded 126,250 shares held by the Employee Share Ownership
Trust.  The ordinary shares issued on 6 May 2005 as part of the consideration
for the acquisition of Carr Sheppards Crosthwaite Limited did not rank for the
first interim dividend paid 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
did rank for the second interim dividend and rank pari passu for all future
dividends.  The second interim dividend of 6.6p per share was paid in respect of
43,221,408 ordinary shares, excluding 107,750 shares held by the Employee Share
Ownership Trust.  The special dividend was paid on 1 June 2005 in respect of
21,935,609 ordinary shares.


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
£20,339,000 (November 2004: £6,097,000) and the weighted average number of
shares in issue during the period of 36,595,582 (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.  The effect of the share
consolidation on the weighted average number of shares is recognised from 1 June
2005, being the date of payment of the related special dividend.  Basic earnings
per share is calculated with reference to earnings for shareholders of
£2,763,000 (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 491,190 shares (November
2004: 495,756).

The directors believe that the provision of additional earnings per share
figures, in particular before amortisation of both goodwill and the EBT
prepayment and exceptional items, better represent underlying business
performance. The effect of these adjustments on earnings and basic earnings per
share is as follows:

                                                                    16 months ended              12 months ended
                                                                     31 March 2006                30 November 2004
                                                                Earnings        Earnings       Earnings       Earnings
                                                                                     per                           per
                                                                                   share                         share
                                                                    £'000          Pence          £'000          Pence

Unadjusted earnings and EPS                                        2,763            7.6          5,719           26.1

Goodwill amortisation                                              8,605           23.5            868            4.0

Income from fixed asset                                                -              -           (490)          (2.2)
investments - exceptional

Profit on disposal of fixed                                       (3,129)          (8.6)             -              -
asset investments

Reorganisation costs                                               9,907           27.1              -              -

Amortisation of EBT prepayment                                     4,226           11.5              -              -

Tax arising on exceptional items                                  (2,033)          (5.5)             -              -


Earnings and EPS excluding
amortisation of goodwill and
EBT prepayment and
exceptional items                                                 20,339           55.6          6,097           27.9



8. Intangible fixed assets

                                                                                              Note           Goodwill
                                                                                                                £'000
Cost:
At 1 December 2004                                                                                            16,689
Additions                                                                                      13            165,931

At 31 March 2006                                                                                             182,620

Amortisation:
At 1 December 2004                                                                                             3,689
Provided during the period                                                                                     8,605

At 31 March 2006                                                                                              12,294

Net book value:
At 31 March 2006                                                                                             170,326

At 30 November 2004                                                                                           13,000


Goodwill is being amortised over the directors' estimate of its useful economic
life of 20 years.


9. Debtors - due after one year

Amounts falling due after more than one year of £5,089,000 (November 2004: nil)
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 loan is repayable in equal instalments over eight years, with the
first instalment becoming payable in 2008.


11. Provisions for liabilities and charges

                                  Reorganisation      Deferred        Lease  Restructuring       Property        Total
                                           costs           tax      rentals          costs  dilapidations
                                           £'000         £'000        £'000          £'000          £'000        £'000

At 1 December 2004                            -            24          182              -              -          206
Acquisition                                   -             -            -            252              -          252
Charged/(released) to the profit and
  loss account                            9,907            (9)           -              -             75        9,973
Transferred from accruals                     -             -            -              -             75           75
Utilised in the period                   (3,111)            -          (34)          (187)             -       (3,332)

At 31 March 2006                          6,796            15          148             65            150        7,174


Reorganisation costs relate to the integration of Carr Sheppards Crosthwaite ('
CSC') into the group.  CSC was acquired on 6 May 2005 and details of this
acquisition are set out in note 13.

Lease rentals represent future rentals on unoccupied leasehold premises to the
end of the lease term, up to 2013.

The restructuring provision represents 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.

Property dilapidations represent potential costs of reinstatement of the group's
leasehold premises upon expiry of property leases, up to 2017.


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.
                                                                                                 2006            2004
                                                                                             31 March          30 Nov
Authorised:

54,600,000 ordinary shares of 10 90/91p each                                               £6,000,000      £3,000,000
(Nov 2004: 30,000,000 ordinary shares of 10p each)

Allotted and fully paid:
43,314,068 ordinary shares of 10 90/91p each                                               £4,759,788      £2,208,708
(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 company 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.

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 provisional.  In accordance with FRS 6, should
any adjustments to fair values subsequently be required, 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.

The profit and loss account of Carr Sheppards Crosthwaite Limited and its
subsidiary companies for the period from 1 April 2005 to the date of acquisition
of 6 May 2005 is summarised as follows:

                                                                                                               £'000

Turnover                                                                                                      4,566

Operating expenses                                                                                           (3,430)


Operating profit                                                                                              1,136

Net interest receivable and similar income                                                                      109


Profit on ordinary activities before taxation                                                                 1,245

Tax on profit on ordinary activities                                                                           (395)


Profit for the financial period                                                                                 850


Carr Sheppards Crosthwaite Limited 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 for the period.


14. Reconciliation of movements in equity shareholders' funds

                                                                                                 2006           2004
                                                                                            16 months      12 months
                                                                                                ended          ended
                                                                                             31 March         30 Nov
                                                                                                £'000          £'000

Profit for the financial period                                                                2,763          5,719

Dividends                                                                                    (19,827)        (3,943)


Retained (loss)/profit for the period                                                        (17,064)         1,776

Net proceeds of issue of ordinary share capital                                              127,090              9


Net addition to equity shareholders' funds                                                   110,026          1,785

Equity shareholders' funds at beginning of period                                             43,649         41,864


Equity shareholders' funds at end of period                                                  153,675         43,649


Equity shareholders' funds are stated net of an amount of £140,000, representing
the cost of 76,660 shares in Rensburg Sheppards plc held by the Employee
Ownership Trust at 31 March 2006.


15. Reconciliation of operating profit to operating cash flows
                                                                                                 2006           2004
                                                                                            16 months      12 months
                                                                                                ended          ended
                                                                                             31 March         30 Nov
                                                                                                £'000          £'000

Operating profit                                                                               7,449          6,202


Amortisation of goodwill                                                                       8,605            868

Amortisation of EBT prepayment                                                                 4,226              -

Depreciation                                                                                   1,274            489

Loss on disposal of tangible fixed assets                                                         58              -

Non-cash reorganisation costs                                                                    669              -

Increase in debtors                                                                          (52,992)        (2,356)

Increase in creditors and provisions                                                          55,095          6,647


Net cash inflow from operating activities                                                     24,384         11,850


Net cash inflow from operating activities comprises:

Continuing operations - acquisitions                                                          15,560              -

Continuing operations - existing                                                               8,824         11,850

                                                                                              24,384         11,850


The net cash inflow from operating activities includes cash outflows relating to
reorganisation costs of £2,442,000.


16. Analysis and reconciliation of net funds

                                                                 1 Dec           Cash           Other        31 March
                                                                  2004          flows         changes            2006
                                                                 £'000          £'000           £'000           £'000

Cash at bank repayable on demand and in hand                   40,618          4,340               -          44,958

Short term bank deposits                                            -              -           5,000           5,000


Cash at bank and in hand                                       40,618          4,340           5,000          49,958

Debt due after one year                                          (232)             -         (59,768)        (60,000)

Debt due within one year                                         (750)         1,755          (1,845)           (840)


Net funds/(debt)                                               39,636          6,095         (56,613)        (10,882)


                                                                                                 2006            2004
                                                                                            16 months       12 months
                                                                                                ended           ended
                                                                                             31 March          30 Nov
                                                                                                £'000           £'000

Increase in cash in the period                                                                 4,340           5,198

Increase in short term bank deposits                                                           5,000               -

Repayment of debt                                                                              1,755             844

Issue of loan notes                                                                           (1,613)              -

Increase in debt - subordinated loan capital                                                 (60,000)              -


Movement in net (debt)/funds in the period                                                   (50,518)          6,042

Net funds at beginning of period                                                              39,636          33,594


Net (debt)/funds at end of period                                                            (10,882)         39,636


Cash and deposits at 31 March 2006 includes segregated amounts in the course of
settlement of £5,976,000 (November 2004: £2,541,000).


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.
The implementation of the integration plan has continued since 31 March 2006 and
further details are set out in the Chief Executive's and Finance Director's
reports above.


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 in this document does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985, but is
derived from the accounts.  Statutory accounts for the 12 months ended 30
November 2004 have been delivered to the Register of Companies, and those for
the 16 months ended 31 March 2006 will be delivered following the company's
annual general meeting.  The independent auditor has reported on the accounts
for both 2004 and 2006; its reports were unqualified and did not contain
statements under section 237 (2) or (3) of the Companies Act 1985.


Full Accounts

It is anticipated that the full accounts will be posted to shareholders on 14
June 2006 and will be available at the company's registered office from this
date, and on the group's website at www.rensburgsheppards.co.uk.



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