Information  X 
Enter a valid email address

Rensburg Sheppards (RBG)

  Print   

Tuesday 15 November, 2005

Rensburg Sheppards

Interim Results

Rensburg Sheppards plc
15 November 2005

                                                                15 November 2005



                             Rensburg Sheppards plc
                     ("Rensburg Sheppards" or "the Company")

           Interim Results for the Ten Months Ended 30 September 2005

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

Key Points:

  • Second set of interim results for the ten months ended 30 September 2005,
    following the change in the group's accounting reference date to 31 March.

  • Profit before tax, amortisation of goodwill and Employee Benefit Trust
    (EBT) prepayment and exceptional items*, £15.1 million (30 September 2004:
    £7.2 million).

  • Basic earnings per share before amortisation of goodwill and EBT
    prepayment and exceptional items*, 32.1p (30 September 2004: 22.7p), an
    increase of 41%.

  • Second interim dividend of 6.6p per ordinary share.

  • The integration of Carr Sheppards Crosthwaite continues to progress well
    and we remain on target to achieve the originally stated synergy savings.

  • Group funds under management at £11.7 billion (30 September 2004: £4.0
    billion).


* Amortisation of goodwill and EBT prepayment and exceptional items before
taxation amount to a net cost of £11.9 million (30 September 2004: £0.2 million)





Mike Burns, Chief Executive of Rensburg Sheppards, commented:

"I am pleased that we remain on track to deliver the synergies we anticipated in
March 2005. In addition, Rensburg Sheppards has made good progress even during
the traditionally quieter summer months and we look forward to further growth. "


For further information, please contact:

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

Nick Lyon                                                  Tel:  020 7796 4133
Hudson Sandler






INTERIM STATEMENT

Financial results

As explained in our interim statement for the six months ended 31 May 2005, the
change in the group's accounting reference date from 30 November to 31 March has
resulted in us now reporting a second set of interim results; these reflect the
performance for the ten months to 30 September 2005, including the results of
Carr Sheppards Crosthwaite Limited (CSC) from 6 May 2005, being the date CSC was
acquired.  The preliminary results for the 16 month accounting period to 31
March 2006 are expected to be announced during mid-May 2006.

During this year we have experienced a gradual, but marked, rise in the strength
of the financial markets in which the group operates; this is reflected in the
results below, which demonstrate a significant improvement in earnings (before
amortisation of goodwill and Employee Benefit Trust (EBT) prepayment and
exceptional items).

The group's profit before tax, amortisation of goodwill and EBT prepayment and
exceptional items for the ten months ended 30 September 2005 was £15.1 million
(30 September 2004: £7.2 million) on a turnover of £57.1 million (30 September
2004: £30.3 million); the basic earnings per share on this basis were 32.1p (30
September 2004: 22.7p) an increase of 41%. 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
such measures better represent underlying business performance.

The exceptional reorganisation costs relating to the integration of CSC have
been and will continue to be, separately identified in the profit and loss
account; at 30 September 2005 we had committed to and hence have accounted for,
£9.1 million of such costs which represents a substantial proportion of the
anticipated total pre-tax spend of approximately £10 million. This is commented
on further within the section on the acquisition and integration of CSC below.

After including a net charge of £11.9 million (30 September 2004: £0.2 million)
for amortisation of goodwill and EBT prepayment and exceptional items (including
the above reorganisation costs), profit before tax for the ten months ended 30
September 2005 was £3.2 million (30 September 2004: £7.0 million) and basic
earnings per share on this basis were 1.1p (30 September 2004: 21.7p).

At 30 September 2005 the group's total funds under management stood at £11.7
billion (30 September 2004: £4.0 billion).

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.

In recognising that the current accounting period extends by a third to 16
months, the directors have declared a second interim dividend of 6.6p per
ordinary share payable on 3 February 2006 to all shareholders on the register as
at the close of business on 6 January 2006.  When combined with the special
dividend of 45p and a first interim dividend of 6.6p per ordinary share (neither
of which were payable to holders of Consideration Shares), this brings the total
dividends declared in this reporting period to 58.2p per ordinary share.

Name change

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.

Adoption of International Financial Reporting Standards (IFRS)

As explained in our last interim results, for the current 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 has continued to be
evaluated and at this point we expect the areas where IFRS will potentially
impact significantly upon reported financial performance of the business to 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 of 1 December 2004, 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
    (IFRS 2).  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
    into the EBT;
  • 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).

Acquisition and integration 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 project to integrate CSC has now been proceeding for approximately six
months and we are pleased to be able to report that the integration is
proceeding well. Our expectations of the ongoing synergies, and the exceptional
reorganisation costs necessary to achieve these synergies, remain in line with
those detailed in the circular to shareholders of 23 March 2005; (being in
summary, annual pre-tax cost synergies of approximately £5.5 million, a
significant proportion of which are expected to be achieved by the year ending
31 March 2007 and in full by the year ending 31 March 2008, with associated
exceptional pre-tax reorganisation costs of approximately £10 million).  Since
completion of the acquisition, both Rensburg Investment Management Limited (RIM)
and Carr Sheppards Crosthwaite Limited have continued to trade as separate
businesses; it is intended that on 1 December 2005 CSC will change its name to
Rensburg Sheppards Investment Management Limited (RSIM) and then from 31 January
2006 the business of RIM will be merged into RSIM; hence, from this time, the
group's core private client investment management business will be fully
operated under the new, single legal entity of Rensburg Sheppards Investment
Management Limited.

Operations

Rensburg Investment Management increased fee-paying clients' funds to £2.55
billion (30 September 2004: £1.97 billion); other managed funds increased to
£1.62 billion (30 September 2004: £1.53 billion). This rise in RIM's fee paying
funds of 29.4% and overall managed funds of 19.1%, compares with an increase in
the FTSE / APCIMS Private Investors Balanced index of 16.1% over the year to 30
September 2005.  RIM has, during this period, benefited from the review of its
charging structure undertaken in the final quarter of the previous financial
year.

Carr Sheppards Crosthwaite had at 30 September 2005 managed funds of £6.39
billion of which £4.27 billion were managed on a discretionary basis; this
represents an increase in total managed funds of 8.5% and of those managed on a
discretionary basis of 8.9% over the four month period from 31 May 2005,
compared to an increase in the FTSE / APCIMS Private Investors Balanced index of
8.2% over this period.  In addition, CSC managed, through its subsidiary
Mayflower Management Company Limited, a charity property fund with £278 million
under management.  CSC has recently undertaken a review of its charging
structure and the changes arising from this will take effect from 1 December
2005.

Rensburg Fund Management (RFM) increased the value of its retail unit trust
based funds under management by 64% to £774 million (30 September 2004: £472
million). In addition, the value of the segregated mandate that has been
investment managed by the company since October 2004, has increased to £76
million from an initial £26 million. On 12 October 2005, RFM commenced managing
a second segregated mandate, with an initial £10 million under management.

Board and employees

As detailed in our first interim results for the period to 31 May 2005, the
acquisition of CSC saw an unprecedented level of simultaneous change on the
board effective from 6 May 2005; Robert Allen, Barry Anysz, Katrina Michel and
Nicko Williams stood down as directors, whilst Nick Bagshawe, Steve Elliott and
Ian Maxwell Scott of CSC joined the board as executive directors and Bernard
Kantor and Stephen Koseff joined the board as non-executive directors.

We have previously indicated that following the acquisition of CSC, an
additional independent non-executive director would be sought; today the board
is pleased to announce the appointment on 14 November 2005 of Michael Haan as an
independent non-executive director.  Mr Haan was until his retirement in July
2004, a Senior Partner in the accountancy practice of BDO Stoy Hayward, having
joined them in 1971 shortly following his qualification as a chartered
accountant. Mr Haan has joined both the audit and remuneration committees and as
a consequence of this (and in accordance with the circular to shareholders of 23
March 2005), Stephen Koseff has now stood down as a member of these committees.
In addition, Mr Haan has also joined the nomination committee.

We are currently undergoing a period of considerable change, which is affecting
all of the group's employees, albeit to varying degrees.  We would like to take
this opportunity to recognise the professionalism that is being demonstrated by
everyone employed across the group during this busy period.

Outlook

We believe that the combination of the Rensburg and CSC businesses, the
integration of which is proceeding well, leaves us with a firm foundation from
which we can achieve future growth.

C.G. Clarke                                              M.H.Burns
Chairman                                                 Chief Executive

14 November 2005


Consolidated profit and loss account
for the ten months ended 30 September 2005


                                                                2005                               2004           2004
                                                   Ten months ended 30 September             Ten months  Twelve months
                                                Continuing operations                             ended          ended
                                               Existing    Acquisitions            Total        30 Sept         30 Nov
                                      Note        £'000             £'000          £'000          £'000          £'000

Turnover                                        37,312            19,756         57,068         30,296         36,936

Operating expenses                             (28,636)          (13,577)       (42,213)       (24,416)       (29,866)
Reorganisation costs                    1            -            (9,068)        (9,068)             -              -
Amortisation of EBT prepayment          2            -            (1,897)        (1,897)             -              -
Goodwill amortisation                   8         (692)           (3,354)        (4,046)          (724)          (868)

Total administrative expenses                 (29,328)           (27,896)       (57,224)       (25,140)       (30,734)

Operating profit/(loss)                          7,984            (8,140)          (156)         5,156          6,202

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

Profit on ordinary activities before                                              2,973          5,156          6,202
interest and investment income

Income from fixed asset investments -                                                 -            490            490
exceptional

Interest receivable and similar                                                   2,104          1,462          1,824
income

Interest payable                        4                                        (1,908)          (155)           (72)

Profit on ordinary activities before                                              3,169          6,953          8,444
taxation

Tax on profit on ordinary activities    5                                        (2,794)        (2,215)        (2,725)

Profit on ordinary activities after                                                 375          4,738          5,719
taxation

Dividends                               6                                       (14,040)        (1,314)        (3,943)

Retained (loss)/profit for the period                                           (13,665)         3,424          1,776

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

     -Basic                                                                        32.1p          22.7p          27.9p

     -Diluted                                                                      31.6p          22.2p          27.3p

Earnings per share                      7

     -Basic                                                                         1.1p          21.7p          26.1p

     -Diluted                                                                       1.1p          21.2p          25.6p

Dividend per share                      6

    - First interim dividend                                                        6.6p           6.0p           6.0p

    - Second interim dividend                                                       6.6p             -              -

    - Final dividend                                                                  -              -           12.0p

    - Special dividend                                                             45.0p             -              -

                                                                                   58.2p           6.0p          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 30 September 2005
                                                                                   2005           2004           2004
                                                                                30 Sept        30 Sept         30 Nov
                                                               Note               £'000          £'000          £'000
Fixed assets
Intangible assets                                               8              174,885         13,831         13,000
Tangible assets                                                                  3,920          4,169          4,132
Investments                                                                        800            500            500

                                                                               179,605         18,500         17,632

Current assets
Debtors - due within one year                                                  112,442         20,286         26,226
Debtors - due after one year                                    9                7,418              -              -
Cash at bank and in hand                                        16              43,589         37,885         40,618

                                                                               163,449         58,171         66,844
Creditors
Amounts falling due within one year                                           (117,968)       (31,065)       (40,389)

Net current assets                                                              45,481         27,106         26,455

Total assets less current liabilities                                          225,086         45,606         44,087

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

Provisions for liabilities and                                  11              (8,028)           (77)          (206)
charges

Net assets                                                                     157,058         45,297         43,649

Capital and reserves
Called up share capital                                         12               4,759          2,209          2,209
Profit and loss account                                                         12,337         27,650         26,002
Other reserves                                                                 139,962         15,438         15,438

Equity shareholders' funds                                      14             157,058         45,297         43,649



Consolidated cash flow statement
for the ten months ended 30 September 2005

                                                                                    2005          2004          2004
                                                                                     Ten           Ten        Twelve
                                                                                  months        months        months
                                                                                   ended         ended         ended
                                                                                 30 Sept       30 Sept        30 Nov
                                                                Note               £'000         £'000         £'000

Net cash inflow from operating activities                        15               9,671         9,294        11,850

Returns on investments and servicing of finance

Interest received                                                                 2,624         1,241         1,565

Interest paid                                                                      (113)          (26)          (69)

Income from fixed asset investments - exceptional                                    -            490           490

Taxation paid                                                                    (2,384)       (2,513)       (2,513)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                                  (724)       (1,286)       (1,354)

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

Acquisitions and disposals

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

Cash acquired with subsidiary undertakings                       13              17,611             -             -

Payment of deferred consideration                                                   (52)            -             -

Equity dividends paid                                                           (24,084)       (3,936)       (3,936)

Cash (outflow)/inflow before financing                                             (103)        3,264         6,033

Financing

Issue of ordinary share capital                                                       9             9             9

Costs associated with issue of shares                                              (180)            -             -

Redemption of loan notes                                                         (1,755)         (808)         (844)

(Decrease)/increase in cash in the period                        16              (2,029)        2,465         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 approximately £10 million, including
£1 million of non-cash items and excluding professional costs associated with
the acquisition, which have been capitalised.  The charge of £9,068,000
represents the element of these costs that have been committed to during the
period from the date of acquisition to 30 September 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 £1,897,000
represents the amortisation for the period from the date of acquisition of 6 May
2005 to 30 September 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
£1,743,000 (Sept 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% (Sept 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
                                                                                     Ten            Ten        Twelve
                                                                                  months         months        months
                                                                                   ended          ended         ended
                                                                                 30 Sept        30 Sept        30 Nov
                                                                                   £'000          £'000         £'000

First interim dividend: 6.6p per share (Sept 2004: 6.0p; Nov 2004: 6.0p)          1,318          1,314         1,314

Second interim dividend: 6.6p per share (Sept 2004: nil; Nov 2004: nil)           2,851              -             -

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

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

                                                                                 14,040          1,314         3,943


The first interim dividend of 6.6p per share was paid in respect of 19,976,441
ordinary shares; this excluded 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 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 do rank
pari passu for the second interim dividend and all future dividends.  The second
interim dividend of 6.6p per share is payable in respect of 43,199,941 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 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
£10,475,000 (September 2004: £4,972,000; November 2004: £6,097,000) and the
weighted average number of shares in issue during the period of 32,631,798
(September 2004: 21,870,604; 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 £375,000 (September
2004: £4,738,000; 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 487,351 shares (September
2004: 504,687; 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, better represent underlying business
performance. The effect of these adjustments on earnings and basic earnings per
share is as follows:

                                      Ten months ended             Ten months ended           Twelve months ended
                                     30 September 2005            30 September 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            375            1.1          4,738           21.7         5,719          26.1

Goodwill amortisation                4,046           12.4            724            3.2           868           4.0

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

Profit on disposal of fixed         (3,129)          (9.6)             -              -             -             -
asset investments

Reorganisation costs                 9,068           27.8              -              -             -             -

Amortisation of EBT prepayment       1,897            5.8              -              -             -             -

Tax arising on exceptional items    (1,782)          (5.4)             -              -             -             -

Earnings and EPS excluding
amortisation of goodwill and

EBT prepayment and
exceptional items                   10,475           32.1          4,972           22.7         6,097          27.9


8. Intangible fixed assets

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

At 30 September 2005                                                                                         182,620

Amortisation:
At 1 December 2004                                                                                             3,689
Provided during the period                                                                                     4,046

At 30 September 2005                                                                                           7,735

Net book value:

At 30 September 2005                                                                                         174,885

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

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

At 1 December 2004                                     -              24            182              -           206
Acquired with subsidiary                               -               -              -            252           252
Charged to the profit and loss                     9,068               -              -              -         9,068
account
Utilised in the period                            (1,343)              -            (25)          (130)       (1,498)

At 30 September 2005                               7,725              24            157            122         8,028


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.  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
                                                                              30 Sept         30 Sept          30 Nov
Authorised:

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

Allotted and fully paid:
43,307,691 ordinary shares of 10 90/91p each                               £4,759,087      £2,208,708      £2,208,708
(Sept 2004 and 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.

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.

14. Reconciliation of movements in shareholders' funds

                                                                                    2005          2004          2004
                                                                                     Ten           Ten        Twelve
                                                                                  months        months        months
                                                                                   ended         ended         ended
                                                                                 30 Sept       30 Sept        30 Nov
                                                                                   £'000         £'000         £'000

Profit for the period after taxation                                                375         4,738         5,719
Dividends                                                                       (14,040)       (1,314)       (3,943)

                                                                                (13,665)        3,424         1,776

Share capital issued                                                            127,254             9             9

Issue costs                                                                        (180)            -             -

Net addition to shareholders' funds                                             113,409         3,433         1,785

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

Shareholders' funds at end of period                                            157,058        45,297        43,649


15. Reconciliation of operating profit to operating cash flows

                                                                                    2005           2004           2004
                                                                                     Ten            Ten         Twelve
                                                                                  months         months         months
                                                                                   ended          ended          ended
                                                                                 30 Sept        30 Sept         30 Nov
                                                                                   £'000          £'000          £'000

Operating (loss)/profit                                                            (156)         5,156          6,202

Amortisation of goodwill                                                          4,046            724            868

Depreciation                                                                        726            384            489

Amortisation of EBT prepayment                                                    1,897              -              -

Loss on disposal of tangible fixed assets                                            58              -              -

Non-cash reorganisation costs                                                       669              -              -

Decrease/(increase) in debtors                                                    8,137          3,585         (2,356)

(Decrease)/increase in creditors and provisions                                  (5,706)          (555)         6,647

Net cash inflow from operating activities                                         9,671          9,294         11,850

Net cash inflow from operating activities comprises:

Continuing operations - acquisitions                                              6,386              -              -

Continuing operations - existing                                                  3,285          9,294         11,850

                                                                                  9,671          9,294         11,850


The net cash inflow from operating activities includes cash outflows relating to
reorganisation costs of £674,000.

16. Analysis and reconciliation of net funds

                                                                    1 Dec          Cash         Other       30 Sept
                                                                     2004         flows       changes          2005
                                                                    £'000         £'000         £'000         £'000

Cash at bank repayable on demand and in hand                      40,618        (2,029)            -        38,589

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

Cash at bank and in hand                                          40,618        (2,029)        5,000        43,589

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          (274)      (56,613)      (17,251)

                                                                                   2005          2004          2004
                                                                                    Ten           Ten        Twelve
                                                                                 months        months        months
                                                                                  ended         ended         ended
                                                                                30 Sept       30 Sept        30 Nov
                                                                                  £'000         £'000         £'000

(Decrease)/increase in cash in the period                                       (2,029)        2,465         5,198

Increase in short term bank deposits                                             5,000             -             -

Repayment of debt                                                                1,755           808           844

Issue of loan notes                                                             (1,613)            -             -

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


Movement in net (debt)/funds in the period                                     (56,887)        3,273         6,042

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


Net (debt)/funds at end of period                                              (17,251)       36,867        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 30 September 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 ten months
ended 30 September 2005.

KPMG Audit Plc
Chartered Accountants
Leeds
14 November 2005

** The page numbers shown above refer to those that will appear in the published
Second Interim Report for the ten months ended 30 September 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