Information  X 
Enter a valid email address

Rensburg Sheppards (RBG)

  Print   

Wednesday 10 August, 2005

Rensburg Sheppards

Interim Results

Rensburg Sheppards plc
10 August 2005

                                                                  10 August 2005



                             Rensburg Sheppards plc
                    ("Rensburg Sheppards" or "the Company")
              Interim Results for the Six Months Ended 31 May 2005

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


Key Points:


  • Profit before tax, amortisation of goodwill and Employee Benefit Trust 
    ("EBT") prepayment and exceptional items* of £6.3 million (2004: £4.2
    million), an increase of 50%.



  • Basic earnings per share before amortisation of goodwill and EBT
    prepayment and exceptional items* of 17.1p (2004: 13.3p), an increase of
    28.6%.



  • Share capital consolidation effected of 91 new ordinary shares for every
    100 old ordinary shares.



  • Interim dividend of 6.6p per new ordinary share (2004: 6.0p per old
    ordinary share) following a special dividend of 45p per old ordinary share
    already having been declared in the six months ended 31 May 2005.



  • Results include 26 days contribution from Carr Sheppards Crosthwaite ('
    CSC'), the integration of which is well underway.



  • Investment management based fee and other recurring income (excluding
    contribution from CSC) at £14.7 million (2004: £11.7 million) an increase of
    25.6 %.



  • Group funds under management at £10.7 billion (2004: £3.9 billion).



* Amortisation of goodwill and EBT prepayment and exceptional items before
taxation amount to net income of £1.6m (2004: net cost of £0.4m).



Mike Burns, Chief Executive of Rensburg Sheppards, commented:



"These results reflect the continued improvement in trading conditions. The
transformational acquisition of Carr Sheppards Crosthwaite provides an exciting
opportunity to consolidate Rensburg Sheppards' position as a leading investment
management group "


For further information, please contact:


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

Nick Lyon
gcg hudson sandler                                  Tel:  020 7796 4133



INTERIM STATEMENT


Financial results


It is pleasing to be able to report results which reflect a continued
improvement in the level both of financial markets and of the confidence shown
by private investors towards equity based investment.



The Group's profit before tax, amortisation of goodwill and Employee Benefit
Trust ('EBT') prepayment and exceptional items for the six months ended 31 May
2005 was £6.3 million (2004: £4.2 million) from a turnover of £24.9 million
(2004: £18.2 million); the basic earnings per share on this basis were 17.1p
(2004: 13.3p): an increase of 28.6%.  Profit before tax for the six months ended
31 May 2005 was £7.9 million (2004: £3.8 million) and basic earnings per share
on this basis were 19.9p (2004: 11.3p).  At 31 May 2005 the Group's total funds
under management stood at £10.7 billion (2004: £3.9 billion).



The results as presented in this interim statement include a contribution from
Carr Sheppards Crosthwaite Limited ('CSC')  from 6 May 2005, being the date CSC
was acquired, up until 31 May 2005; the results of CSC for this short period are
separately analysed within the profit and loss account. Exceptional
reorganisation costs relating to the integration of CSC incurred in the 26 day
period to 31 May 2005 have and will continue to be separately identified in the
profit and loss account. Excluding the contribution from CSC, total income of
£21.7 million represents an underlying increase of 19.2% over the prior
corresponding period; more importantly, on this basis, fee and other recurring
income of £14.7 million represents an increase of 25.6%.



During December 2004, the Group disposed of 662,857 shares in London Stock
Exchange plc ('LSE'); these disposals, which are accounted for as an exceptional
item, gave rise to a taxable gain of £3,129,000 upon which tax of £939,000 is
expected to be paid.  The Group retains a holding of 100,000 shares in LSE.



Share capital consolidation and dividends



On 1 June 2005 a special dividend of 45p per ordinary share was paid, except in
respect of those ordinary shares issued to finance the acquisition of CSC ('
Consideration Shares');  immediately following the ordinary shares going ex this
special dividend on 20 May 2005, all existing ordinary shareholdings (including
the Consideration Shares) were consolidated on the basis of 91 new ordinary
shares for every 100 old ordinary shares.



The Directors have declared an interim dividend of 6.6p per new ordinary share
(2004: 6.0p per old ordinary share) payable on 3 October 2005 to shareholders on
the register as at the close of business on 2 September 2005;  as with the
special dividend, holders of Consideration Shares are not entitled to this
interim dividend, however holders of all ordinary shares (including
Consideration Shares) will be entitled pari passu to future dividends.



Name change and change of accounting reference date



Following shareholder approval given at the Company's Extraordinary General
Meeting on 20 April 2005 and the subsequent formal completion of the acquisition
of CSC, the name of the Company was changed to Rensburg Sheppards plc on 6 May
2005.  The accounting reference date of the Company and the Group was
subsequently changed to 31 March and the current accounting period will
therefore extend to 16 months from 1 December 2004 until 31 March 2006.  Given
this, a second set of interim results will be prepared for the ten month period
to 30 September 2005; these results are expected to be announced in mid November
2005.



Adoption of International Financial Reporting Standards ('IFRS')



For the 16 month accounting period to 31 March 2006, the Group is required to
report its results under UK GAAP.  Thereafter, we are required to report all
interim and full-year results under IFRS.  The impact of adopting IFRS on the
Group's results continues to be evaluated and it is intended that the results
reported for the period to 31 March 2006 will include full guidance as to this
impact. An update on this is, however, intended to be provided in our second set
of interim results as referred to above.



Acquisition of CSC



Following shareholder and regulatory approvals, the acquisition of CSC was
completed on 6 May 2005.  This transformational acquisition took almost five
months to complete since the making of an initial announcement on 10 December
2004, during which time the Company carefully evaluated and ultimately rejected
the approaches to acquire the Company that were made by Rathbone Brothers Plc.



The task of integrating CSC with the existing businesses is now well underway.
This will be a key focus of management over the coming 18 months or so as
everyone works towards ensuring that the integration is achieved within the key
parameters for one off reorganisation costs and synergies, as set out in the
circular relating to the acquisition. At this relatively early stage there are
no indications to suggest that this will not be achieved; moving forward more
detailed reports on the progress of this integration will be given in our
subsequent interim and full-year results.



Operations



Rensburg Investment Management ('RIM') increased fee-paying clients' funds by
24% to £2.34 billion (2004: £1.88 billion).  Other managed funds marginally
decreased to £1.55 billion (2004: £1.58 billion), principally reflecting the
continued conversion of existing clients onto a fee-paying basis. This overall
rise in RIM's managed funds of 12.4% compares with an increase in the FTSE /
APCIMS Private Investors Balanced index of 10.4% over the year.  The review of
RIM's charging structure, which was implemented in the final quarter of 2004,
has resulted in an increase in the average yields achieved on funds under
management.



Carr Sheppards Crosthwaite ('CSC') had audited profit before exceptional items
and taxation of £8.8 million for the year ended 31 March 2005; this compares
favourably with the profit forecast of £8.3 million included within the circular
sent to Rensburg shareholders on 23 March 2005, proposing the acquisition of
CSC.



At 31 May 2005, CSC had managed funds of £5.88 billion of which £3.91 billion
were managed on a discretionary basis; in addition, CSC managed, through its
subsidiary Mayflower Management Company Limited, three OEICs with a total of £11
million under management and a charity property fund with £244 million under
management.



Rensburg Fund Management ('RFM') increased the value of unit trust based funds
under management by 36% to £611 million (2004: £448 million); this growth was
achieved through a combination of net sales of £64 million with the balance
coming from robust investment performance. Additionally, the value of the
segregated mandate that has been investment managed by the company since October
2004, has increased to £45 million from £27 million at 30 November 2004.  As the
profile and reputation of this business rises, the spread of investors continues
to widen.



Board and employees



The transformational acquisition of CSC has led to an unprecedented level of
simultaneous change on the board. We would first like to acknowledge the
significant contribution made to the board since the Company floated by Barry
Anysz and Nicko Williams, who after 17 years service each, both stood down as
executive directors upon completion of the acquisition of CSC.  Additionally, we
would also like to thank Robert Allen and Katrina Michel who also stood down on
6 May 2005, after each providing in an executive / non-executive capacity
respectively, three years valuable service to the board.  We are delighted that
Barry and Robert are remaining in senior management roles within the Group and
wish Nicko well as he enters retirement.



We are pleased to welcome five new members to the board.  First, as regards
executive appointments, Steve Elliott who headed up CSC has joined the Group as
managing director, together with Nick Bagshawe and Ian Maxwell Scott, who have
both served CSC in a senior front office capacity for many years; collectively
these individuals bring a wealth of experience in the arena of financial
services and, in particular, private client management.   As regards
non-executive appointments, Stephen Koseff and Bernard Kantor have joined the
board and bring with them experience from successfully leading the build up of
Investec over the past twenty five years.  As previously indicated, we are
seeking to recruit a further independent non-executive director and the search
for this individual is underway.



The first four months of the year were a period of considerable uncertainty for
employees of the Group and CSC, as the approach from Rathbone Brothers emerged
and then developed.  During this unsettling period, both the Group's and CSC's
employees demonstrated absolute professionalism and a clear commitment to
maintaining client service and for this we would like to offer our sincere
thanks.



Outlook



Since 31 May 2005, the FTSE All-Share Index has risen by a further 8.1%; this
continuing gradual recovery in the equity markets, combined with the income
growth and rationalisation benefits afforded to us as a much enlarged group,
leads us to look forward with confidence.


C.G. Clarke                                             M.H.Burns

Chairman                                                Chief Executive

9 August 2005


Consolidated profit and loss account
for the six months ended 31 May 2005


                                                                2005                               2004           2004
                                                      Six months ended 31 May                Six months         Twelve
                                                                                                                months
                                                Continuing operations                             ended          ended
                                               Existing    Acquisitions            Total         31 May         30 Nov
                                      Note       £'000             £'000           £'000          £'000          £'000

Turnover                                        21,700             3,249         24,949         18,203         36,936

Operating expenses                             (17,070)           (2,334)       (19,404)       (14,692)       (29,866)
Reorganisation costs                    1            -              (176)          (176)             -              -
Amortisation of EBT prepayment          2            -              (345)          (345)             -              -
Goodwill amortisation                   8         (414)             (588)        (1,002)          (434)          (868)

Total administrative expenses                  (17,484)           (3,443)       (20,927)       (15,126)       (30,734)


Operating profit/(loss)                          4,216              (194)         4,022          3,077          6,202


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

Profit on ordinary activities before                                              7,151          3,077          6,202
interest and investment income

Income from fixed asset investments -                                                 -              -            490
exceptional

Interest receivable and similar                                                   1,124           801           1,824
income

Interest payable                        4                                          (340)          (91)            (72)


Profit on ordinary activities before                                              7,935          3,787          8,444
taxation

Tax on profit on ordinary activities    5                                        (2,848)        (1,309)        (2,725)


Profit on ordinary activities after                                               5,087          2,478          5,719
taxation


Dividends                               6                                       (11,189)        (1,313)        (3,943)


Retained (loss)/profit for the period                                            (6,102)         1,165          1,776



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


     -Basic                                                                        17.1p          13.3p          27.9p

     -Diluted                                                                      16.8p          13.0p          27.3p



Earnings per share                      7



     -Basic                                                                        19.9p          11.3p          26.1p

     -Diluted                                                                      19.5p          11.1p          25.6p

Dividend per share                      6

    - Ordinary dividend                                                             6.6p           6.0p          18.0p

    - Special dividend                                                             45.0p             -              -




The Group has no recognised gains and losses other than those included in the
profits above and therefore no separate statement of total recognised gains and
losses is presented.



Consolidated balance sheet

at 31 May 2005


                                                                                   2005           2004           2004
                                                                                 31 May         31 May         30 Nov
                                                               Note               £'000          £'000          £'000

Fixed assets


Intangible assets                                               8              177,929          14,121        13,000

Tangible assets                                                                  4,682           3,552         4,132

Investments                                                                        800             500           500

                                                                               183,411          18,173        17,632


Current assets

Debtors - due within one year                                                  103,757          25,705        26,226

Debtors - due after one year                                    9                8,970              -              -

Cash at bank and in hand                                        16              45,944          36,444        40,618


                                                                               158,671          62,149        66,844

Creditors

Amounts falling due within one year                                           (117,032)       (34,546)       (40,389)


Net current assets                                                              41,639         27,603         26,455


Total assets less current liabilities                                          225,050         45,776         44,087

Creditors

Amounts falling due after more than one                                        (60,000)        (2,660)          (232)
year

Provisions for liabilities and                                  11                (443)           (83)          (206)
charges


Net assets                                                                     164,607         43,033         43,649


Capital and reserves

Called up share capital                                                          4,759          2,208          2,209

Profit and loss account                                                         19,900         25,391         26,002

Other reserves                                                                 139,948         15,434         15,438


Equity shareholders' funds                                                     164,607         43,033         43,649


Consolidated cash flow statement
for the six months ended 31 May 2005


                                                                                    2005          2004          2004
                                                                                     Six           Six        Twelve
                                                                                  months        months        months
                                                                                   ended         ended         ended
                                                                                  31 May        31 May        30 Nov
                                                                Note               £'000         £'000         £'000

Net cash (outflow)/inflow from operating activities              15              (2,539)        4,268        11,850


Returns on investments and servicing of finance

Interest received                                                                 1,178         1,106         1,565

Interest paid                                                                       (15)          (34)          (69)

Income from fixed asset investments - exceptional                                     -             -           490

Taxation paid                                                                    (1,627)       (1,204)       (2,513)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                                  (398)         (496)       (1,354)

Proceeds from sale of tangible fixed assets                                           -             2             -

Proceeds from sale of fixed asset                                                 3,129             -             -
investments


Acquisitions and disposals

Costs associated with purchase of subsidiary                                     (4,469)            -             -
undertakings

Cash acquired with subsidiary undertakings                       13              17,611             -             -

Payment of deferred consideration                                                   (52)            -             -

Equity dividends paid                                                           (12,500)       (2,622)       (3,936)


Cash inflow before financing                                                        318         1,020         6,033

Financing

Issue of ordinary share capital                                                       8             4             9

Redemption of loan notes                                                              -             -          (844)


Increase in cash in the period                                   16                  326        1,024         5,198



Notes to the interim report


1. Reorganisation costs



Reorganisation costs relate to the integration of Carr Sheppards Crosthwaite
Limited, which was acquired on 6 May 2005.  Details of this acquisition are set
out in note 13.  As set out in the listing particulars dated 23 March 2005, it
is expected that the total pre-tax reorganisation costs that will be incurred to
achieve the integration plan will amount to £10 million, including £1 million of
non-cash items and excluding professional costs associated with the acquisition,
which have been capitalised.  The charge of £176,000 represents the element of
these costs that have been committed to during the 26 days from the date of
acquisition to 31 May 2005.



2. Amortisation of EBT prepayment



As set out in note 13 below, Investec 1 Limited ("Investec") established an
Employee Benefit Trust ("EBT") under the terms of the acquisition of Carr
Sheppards Crosthwaite Limited on 6 May 2005.  Of the total of 25,500,000
ordinary shares that were issued by the Company to Investec on 6 May 2005 under
the terms of the acquisition, 2,800,000 shares were immediately transferred by
Investec to the EBT.  The fair value of these shares at the time of transfer to
the EBT was £13,972,000.  The EBT does not fall within the control of the
Rensburg Sheppards Group and, as a result, the fair value of £13,972,000 has
been accounted for as a prepayment by Rensburg Sheppards plc of certain of the
Group's future employment costs; this amount will be amortised evenly through
the consolidated profit and loss account over the three years from 6 May 2005,
being the period to which the prepayment relates.  The charge of £345,000
represents the amortisation for the period from the date of acquisition of 6 May
2005 to 31 May 2005.  This amortisation will not result in any cash flows and
there will be no affect on the Company's distributable reserves.  It is not
anticipated that any tax relief will be available in respect of this charge.



3. Profit on disposal of fixed asset investments



During the period, the Group disposed of 662,857 shares in London Stock Exchange
plc, giving rise to a taxable gain of £3,129,000.  The amount of tax payable on
the gain is expected to be £939,000.  Following this disposal, the Group retains
a holding of 100,000 shares in London Stock Exchange plc, which are included in
fixed asset investments at their historic cost of nil.



4. Interest payable



Interest payable includes amounts due relating to subordinated debt of £306,000
(May 2004: nil; Nov 2004: nil).  Details of subordinated debt are set out in
note 10.



5. Tax on profit on ordinary activities



United Kingdom corporation tax at 30% (May 2004: 30%; Nov 2004: 30%).  No tax
relief is available in respect of the amortisation of goodwill nor is tax relief
anticipated to be available in respect of the amortisation of the EBT
prepayment.



6. Dividends


                                                                                    2005          2004          2004
                                                                                     Six           Six        Twelve
                                                                                  months        months        months
                                                                                   ended         ended         ended
                                                                                  31 May        31 May        30 Nov
                                                                                   £'000         £'000         £'000

Interim dividend: 6.6p per share (May 2004: 6.0p; Nov 2004: 6.0p)                 1,318         1,313         1,314

Final dividend for the year ended 30 November 2004: 12.0p per share                   -             -         2,629

Special dividend: 45.0p per share (May 2004: nil; Nov 2004: nil)                  9,871             -             -


                                                                                 11,189         1,313         3,943



The interim dividend of 6.6p per share is payable in respect of 19,976,441
ordinary shares; this excludes 126,250 shares held by the Employee Share
Ownership Trust, in respect of which all dividends have been waived.  The
ordinary shares issued on 6 May 2005 as part of the consideration for the
acquisition of Carr Sheppards Crosthwaite Limited do not rank for the interim
dividend payable in respect of the six month period ended 31 May 2005, nor did
they rank for the special dividend of 45p per share paid on 1 June 2005, in
accordance with the terms of the acquisition.  However, these shares do rank
pari passu for all future dividends.  The special dividend was paid on 1 June
2005 in respect of 21,935,609 ordinary shares to shareholders on the register at
6.00pm on 20 May 2005.



7. Earnings per share



Basic earnings per share before amortisation of goodwill and EBT prepayment and
exceptional items is calculated with reference to earnings for shareholders of
£4,367,000 (May 2004: £2,912,000; November 2004: £6,097,000) and the weighted
average number of shares in issue during the period of 25,557,966 (May 2004:
21,856,987; November 2004: 21,876,641).  The weighted average number of shares
includes the 2,800,000 shares relating to the EBT from their date of issue on 6
May 2005.  Basic earnings per share is calculated with reference to earnings for
shareholders of £5,087,000 (May 2004: £2,478,000; November 2004: £5,719,000).



Diluted earnings per share is the basic earnings per share, adjusted for the
effect of the conversion into fully paid shares of the weighted average number
of all employee share options outstanding during the period.  The number of
additional shares used for the diluted calculation is 490,491 shares (May 2004:
534,030; November 2004: 495,756).



The Directors believe that the provision of additional earnings per share
figures, in particular before goodwill amortisation, amortisation of the EBT
prepayment and exceptional items, is beneficial to the users of the financial
statements to understand the performance of the Group. The effect of these
adjustments on earnings and basic earnings per share is as follows:


                                      Six months ended             Six months ended           Twelve months ended
                                        31 May 2005                  31 May 2004                  30 November 2004
                                  Earnings        Earnings       Earnings       Earnings      Earnings      Earnings
                                                       per                           per                         per
                                                     share                         share                       share
                                      £'000          Pence          £'000          Pence         £'000         Pence

Unadjusted earnings and EPS          5,087           19.9          2,478           11.3         5,719          26.1

Goodwill amortisation                1,002            3.9            434            2.0           868           4.0

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

Profit on disposal of fixed         (3,129)         (12.2)             -              -             -             -
asset investments

Reorganisation costs                   176            0.7              -              -             -             -



Amortisation of EBT prepayment         345            1.3              -              -             -             -

Tax arising on exceptional items       886            3.5              -              -             -             -


Earnings and EPS excluding
amortisation of goodwill and
EBT prepayment and
exceptional items                    4,367           17.1          2,912           13.3         6,097          27.9




8. Intangible fixed assets
                                                                                              Note           Goodwill
                                                                                                                £'000
Cost:
At 1 December 2004                                                                                            16,689
Additions                                                                                      13            165,931


At 31 May 2005                                                                                               182,620


Amortisation:
At 1 December 2004                                                                                             3,689
Provided during the period                                                                                     1,002


At 31 May 2005                                                                                                 4,691

Net book value:

At 31 May 2005                                                                                               177,929


At 30 November 2004                                                                                           13,000




9. Debtors - due after one year



Amounts falling due after more than one year relate entirely to the prepayment
of employment costs arising from the Employee Benefit Trust, as set out in note
2 above.



10. Subordinated loan



The Company entered into a £60 million subordinated loan agreement with Investec
1 Limited on 6 May 2005.  The loan formed part of the consideration for the
acquisition of Carr Sheppards Crosthwaite Limited, as set out in note 13 below.
A fixed rate of interest of 7.155% per annum is payable on £45 million of the
loan and a floating rate, being 2.25% above LIBOR, is payable on £15 million of
the loan.  The total amount of the loan is repayable in equal instalments over
eight years, with the first instalment becoming payable in 2008.



11. Provisions for liabilities and charges


                                                                 Deferred          Lease          Other         Total
                                                                      tax        rentals
                                                                    £'000          £'000          £'000         £'000

At 1 December 2004                                                    24            182              -           206
Acquired with subsidiary                                               -              -            252           252
Utilised in the period                                                 -            (15)             -           (15)

At 31 May 2005                                                        24            167            252           443



Lease rentals represent future rentals on unoccupied leasehold premises to the
end of the lease term, up to 2013.  Other amounts represent the residue of
amounts previously provided within Carr Sheppards Crosthwaite Limited, prior to
its acquisition by the Company, in respect of the cost of restructuring certain
business activities.



12. Called up share capital



The Company's authorised share capital was increased to £6,000,000, comprising
60,000,000 ordinary shares of 10 pence each, at an extraordinary general meeting
held on 20 April 2005.  On 20 May 2005, the Company's share capital was
consolidated by the issue of 91 new ordinary shares of 10 90/91 pence each for
every 100 existing ordinary shares of 10 pence each.  As a result of the share
consolidation, the Company's authorised share capital was reduced to 54,600,000
ordinary shares of 10 90/91 pence each.
                                                                                 2005            2004            2004
                                                                               31 May          31 May          30 Nov

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


Allotted and fully paid:
43,307,171 ordinary shares of 10 90/91p each                              £4,759,030       £2,208,574      £2,208,708
(May 2004: 22,085,739 ordinary shares of 10p each;
Nov 2004: 22,087,078 ordinary shares of 10p each)


As a result of the share consolidation on 20 May 2005, the shares held by the
Employee Share Ownership Trust ("the Trust") reduced such that the Trust no
longer held sufficient shares to satisfy all options outstanding under the
Group's Employee Share Ownership Plan.  The Trust therefore purchased 13,703
ordinary shares of 10 90/91 pence each on 25 May 2005, representing 0.03% of the
issued share capital on that date.  The amount paid for these shares of £72,626
has been charged to the profit and loss account during the period.


13. Acquisition



On 6 May 2005, the Group acquired the entire share capital of Carr Sheppards
Crosthwaite Limited from Investec 1 Limited ("Investec").  Carr Sheppards
Crosthwaite Limited is a private client investment management business with
offices in London, Reigate, Farnham and Cheltenham.  The consideration paid and
the fair value of the net assets acquired was as follows:


                                                                                Book        Fair value           Fair
                                                                               value       adjustments          value
                                                                               £'000             £'000          £'000

Tangible fixed assets                                                           517                 -            517

Fixed asset investments                                                          30               270            300

Debtors                                                                      90,508               565         91,073

Cash at bank - amounts repayable on demand                                   17,611                 -         17,611

Cash at bank - short term deposits                                            5,000                 -          5,000

Proposed dividend                                                           (10,266)                -        (10,266)

Other creditors                                                             (90,860)                -        (90,860)

Provisions for liabilities and                                                 (252)                -           (252)
charges


Net assets acquired                                                          12,288               835         13,123

Goodwill                                                                                                     165,931


Consideration                                                                                                179,054


The purchase consideration comprised:                                                                           £'000

22,700,000 ordinary shares                                                                                   113,273

Subordinated loan                                                                                             60,000

Direct costs of acquisition                                                                                    5,781

                                                                                                             179,054


Cash at bank - short term deposits of £5 million represent bank deposits with a
maturity of up to one month.



The proposed dividend represents the dividend payable to Investec in accordance
with the terms of the acquisition of Carr Sheppards Crosthwaite Limited.  This
dividend has been paid to Investec since the balance sheet date.



The adjustment to fixed asset investments represents a revaluation of certain
equity investments to their market value at the date of acquisition.  The
adjustment to debtors represents the fair value of future amounts receivable in
respect of the sale of certain business assets.



A total of 25,500,000 ordinary shares were issued to Investec on 6 May 2005
under the terms of the acquisition of Carr Sheppards Crosthwaite Limited.  As
set out in note 2 above, 2,800,000 of these shares were immediately transferred
by Investec to an Employee Benefit Trust ("EBT").  The fair value of these
shares at the time they were transferred by Investec to the EBT was £13,972,000.
  This amount has been accounted for as a prepayment by Rensburg Sheppards plc
of certain of the Group's future employment costs and, as such, does not form
part of the fair value of the purchase consideration in accordance with FRS 7.



The fair values set out above are based on the results of a provisional review
of the net assets acquired and a full review is continuing.  In accordance with
FRS 6, should any adjustments to fair values be required upon completion of this
review, these will be accounted for in the period up to the end of the next
financial year.



The goodwill of £165,931,000 arising upon the acquisition of Carr Sheppards
Crosthwaite Limited is being amortised over the Directors' estimate of its
useful economic life of 20 years.



14. Reconciliation of movements in shareholders' funds


                                                                                    2005          2004          2004
                                                                                     Six           Six        Twelve
                                                                                  months        months        months
                                                                                   ended         ended         ended
                                                                                  31 May        31 May        30 Nov
                                                                                   £'000         £'000         £'000

Profit for the year after taxation                                                5,087         2,478         5,719

Dividends                                                                       (11,189)       (1,313)       (3,943)

                                                                                 (6,102)        1,165         1,776

Share capital issued                                                            127,253             4             9

Issue costs                                                                        (193)            -             -


Net addition to shareholders' funds                                             120,958         1,169         1,785

Shareholders' funds at beginning of period                                       43,649        41,864        41,864


Shareholders' funds at end of period                                            164,607        43,033        43,649



15. Reconciliation of operating profit to operating cash flows


                                                                                    2005           2004           2004
                                                                                     Six            Six         Twelve
                                                                                  months         months         months
                                                                                   ended          ended          ended
                                                                                  31 May         31 May         30 Nov
                                                                                   £'000          £'000          £'000

Operating profit                                                                  4,022          3,077          6,202


Amortisation of goodwill                                                          1,002            434            868

Depreciation                                                                        365            211            489

Amortisation of EBT prepayment                                                      345              -              -

Profit on disposal of tangible fixed assets                                           -             (2)             -

Decrease/(increase) in debtors                                                   18,176         (2,332)        (2,356)

(Decrease)/increase in creditors and provisions                                 (26,449)         2,880          6,647


Net cash (outflow)/inflow from operating activities                              (2,539)         4,268         11,850


Net cash (outflow)/inflow from operating activities comprises:

Continuing operations - acquisitions                                             (2,150)             -              -

Continuing operations - existing                                                   (389)         4,268         11,850


                                                                                 (2,539)         4,268         11,850

16. Analysis and reconciliation of net funds


                                                                 At 1 Dec          Cash         Other        31 May
                                                                     2004         flows       changes          2005
                                                                    £'000         £'000         £'000         £'000

Cash at bank repayable on demand and in hand                      40,618           326             -        40,944


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


Cash at bank and in hand                                          40,618           326         5,000        45,944


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


Debt due within one year                                            (750)            -        (1,845)       (2,595)

Net funds/(debt)                                                  39,636           326       (56,613)      (16,651)


                                                                                   2005          2004          2004
                                                                                    Six           Six        Twelve
                                                                                 months        months        months
                                                                                  ended         ended         ended
                                                                                 31 May        31 May        30 Nov
                                                                                  £'000         £'000         £'000

Increase in cash in the period                                                     326         1,024         5,198

Increase in short term bank deposits                                             5,000             -             -

Repayment of debt                                                                    -             -           844

Issue of loan notes                                                             (1,613)            -             -

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


Movement in net funds in the period                                            (56,287)        1,024         6,042

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


Net (debt)/funds at end of period                                              (16,651)       34,618        39,636



17. Material non-cash transaction



The consideration for the acquisition of Carr Sheppards Crosthwaite Limited on 6
May 2005 comprised shares and subordinated debt.  Details of this transaction
are set out in note 13 above.



18. Post balance sheet events



The listing particulars dated 23 March 2005 set out the financial effects of the
acquisition of Carr Sheppards Crosthwaite Limited, which include the cost of
integrating the business of Carr Sheppards Crosthwaite Limited into the Group.
Upon completion of the integration, the one-off reorganisation costs are
expected to amount to approximately £10 million, including £1 million of
non-cash costs relating to the write-down of certain fixed assets.  The
implementation of the integration plan has continued since 31 May 2005 and there
are currently no indications to suggest that the plan will not ultimately be
achieved within the expected total cost of approximately £10 million.



19. Basis of preparation



In preparing this financial information there have been no material changes to
the accounting policies previously applied by the Company in preparing its
Annual Accounts for the year ended 30 November 2004.



The financial information included in this announcement is unaudited and does
not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. The statutory accounts of Rensburg Sheppards plc for the
year ended 30 November 2004 have been filed with the Registrar of Companies for
England & Wales. The Auditors have reported on those accounts; their report was
unqualified and did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.



Independent review report by KPMG Audit Plc to Rensburg Sheppards plc



Introduction



We have been engaged by the company to review the financial information set out
on pages 5 to 15** and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.



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



Directors' responsibilities



The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.  The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.



Review work performed



We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom.  A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.  A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit.  Accordingly we do
not express an audit opinion on the financial information.


Review conclusion


On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 May 2005.



KPMG Audit Plc
Chartered Accountants
Leeds
9 August 2005



** The page numbers shown above refer to those that will appear in the published
Interim Report for the six months ended 31 May 2005, which will be sent to
shareholders shortly.  The information contained on these pages comprises the
consolidated profit and loss account, consolidated statement of total recognised
gains and losses, consolidated balance sheet, consolidated cash flow statement
and related notes.






                      This information is provided by RNS
            The company news service from the London Stock Exchange

a d v e r t i s e m e n t