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Rensburg Sheppards (RBG)

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Tuesday 14 November, 2006

Rensburg Sheppards

Interim Results

Rensburg Sheppards plc
14 November 2006

                                                                14 November 2006

                             Rensburg Sheppards plc
                     ('Rensburg Sheppards' or 'the Company')
                                Interim Results

Rensburg Sheppards, the investment management group, today announces its interim
results for the six months ended 30 September 2006

Key points:

  • Profit before tax of £10.2 million (2005: loss before tax of £2.2
    million).

  • Adjusted* profit before tax of £15.3 million (2005: £11.0 million).

  • Basic earnings per share of 14.4p (2005: loss per share of 5.4p).

  • Adjusted* basic earnings per share of 24.2p (2005: 19.4p).

  • Interim dividend of 7.5p per ordinary share.

  • The integration of Carr Sheppards Crosthwaite has been completed and we
    continue to expect to achieve in full, the originally stated annualised
    pre-tax cost synergies of £5.5 million from the financial year beginning 1
    April 2007.

  • Group funds under management total £13.3 billion (2005: £11.7 billion).

  • Mike Burns to retire as the Chief Executive with effect from 31 March 2007
    and to be succeeded by Steve Elliott, currently the Managing Director.


* Before amortisation of the client relationships intangible asset, share-based
charges relating to the Employee Benefit Trust ('EBT') and reorganisation costs.
These items amount to a net charge before tax of £5.1 million (2005: £13.2
million) and a net charge after tax of £4.3 million (2005: £9.8 million).

Mike Burns, Chief Executive of Rensburg Sheppards, commented:

"These results reflect the successful integration with CSC and the enlarged
group is now in a strong position to achieve further growth."

An analysts meeting will be held today at 9.30am at the offices of Hudson
Sandler, 29 Cloth Fair, London, EC1A 7NN.


For further information, please contact:

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

Steve Elliott, Managing Director                             Tel:  020 7597 1234
Rensburg Sheppards plc

Nick Lyon / James White                                      Tel:  020 7796 4133
Hudson Sandler


CHAIRMAN'S STATEMENT

Financial results and dividend

It is pleasing to be able to report an improvement in the group's underlying
financial performance for the six months ended 30 September 2006.  This reflects
an increased level of synergy benefits that have been derived from the
acquisition in May 2005 of Carr Sheppards Crosthwaite ('CSC') and the continued
improvement in the UK financial markets.

From revenue (net of fees and commissions payable to introducers) of £53.6
million (2005: £42.5 million), the group's profit before tax was £10.2 million
(2005: loss before tax of £2.2 million).  After removing charges totalling £5.1
million (2005: £13.2 million) in respect of the amortisation of the client
relationships intangible asset, the share-based charges relating to the Employee
Benefit Trust ('EBT') and the reorganisation costs associated with the
integration of CSC, the resulting adjusted profit before tax increased to £15.3
million (2005: £11.0 million).  It is the directors' opinion that this adjusted
measure of profit before tax and that of earnings given below represent better
measures of the group's underlying financial performance.

Basic earnings per share were 14.4p (2005: loss per share of 5.4p) and on the
basis of adjusting for the items detailed in the above paragraph, together with
the associated tax consequences of these adjustments, the adjusted basic
earnings per share were 24.2p (2005: 19.4p).

The results for the six months ended 30 September 2006 have been prepared under
International Financial Reporting Standards ('IFRS').  The effect of the
transition to IFRS on the group's figures for the last full financial period
ended 31 March 2006 was announced during October 2006 and further details are
set out in note 12 to the interim results.

The directors have declared a dividend of 7.5p per ordinary share payable on 2
February 2007 to all shareholders on the register as at the close of business on
5 January 2007.

Operations

Rensburg Sheppards Investment Management ('RSIM') had discretionary funds under
management totalling £7.9 billion (2005: £6.7 billion) and non-discretionary
funds under management of £4.0 billion (2005: £4.1 billion). This gives total
funds under management at 30 September 2006 of £11.9 billion (2005: £10.8
billion); an increase over the year of 10.2%, compared with an increase of 7.2%
over the corresponding period in the FTSE/APCIMS Private Investors Balanced
index, which ended the period at 2,856.90.

At the two key quarterly fee billing points during this reporting period the
FTSE/APCIMS Private Investors Balanced index was as follows:

31 May 2006        -  2,758.69

31 August 2006     -  2,813.78

During this reporting period all central functions have been merged, information
technology systems integrated and the alignment of employee remuneration
structures has been decided.

As announced on 11 October 2006, the final stage of the integration of CSC,
being the consolidation of the two settlement functions, was completed on 30
September 2006.  During the half year under review the group benefited from
approximately £1 million of pre-tax cost synergy benefits derived from the
acquisition of CSC.  Given that the settlement functions have now combined, the
board expects the group to benefit from approximately £2 million of such
synergies in the second half of this financial year and the board continues to
expect that from 1 April 2007 onwards the group will benefit from approximately
£5.5 million of annual pre-tax cost synergies.

The level of exceptional pre-tax reorganisation costs incurred to achieve the
above synergies will be finalised over the second half of this financial year.
At this advanced stage, with the majority of the reorganisation costs firmly
agreed, the final total cost of such expenditure is not now expected to exceed
our original estimate of £10 million.  This compares with the board's last
estimate stated on 16 May 2006 of in the range £10 million to £10.5 million.

Now that we are operating on a single settlement platform, and following the
alignment of our charging structures onto a common rate card, we have commenced
a full scale review of the output delivered to our clients, with improvements
already starting to filter through.  We have identified an extensive programme
of alterations to ensure we keep our services at the forefront of those
available across our peer group.  The committees that determine our investment
process are now well settled and are delivering a consistent message that is
tailored for each client by their investment manager.

Rensburg Fund Management ('RFM') increased the value of its retail unit trust
based funds under management by 34% to £1.03 billion (2005: £0.77 billion). On 1
September 2006 RFM successfully launched the UK Managers' Focus Trust, which by
30 September 2006 had grown to £42 million.  The total value of the two
segregated mandates that are investment managed by the company have increased to
£348 million (2005: £76 million), bringing RFM's total funds under management to
£1.38 billion (2005: £0.85 billion).

People

Our Chief Executive, Mike Burns, will be 60 next year and will retire from the
Company as both Chief Executive and as a director at the end of the current
financial year on 31 March 2007.  Having served the Company with such
effectiveness for more than 10 years, Mike will be missed greatly, but in Steve
Elliott, currently Managing Director of the Company and previously Chief
Executive of CSC prior to the merger with Rensburg, we have an ideal successor.
Steve will therefore become our Chief Executive on 1 April 2007.

I would also like to record my sincere thanks to all of the group's staff for
their efforts over the period, but notably to those whose drive and
determination allowed us to complete the integration of CSC and Rensburg.

Outlook

Since 30 September 2006 the UK financial markets have advanced further, which
augurs well for the second half of the financial year.  The completion of the
integration of CSC now enables the group to focus its attention upon the organic
growth opportunities that are undoubtedly available and to evaluate carefully
any opportunities to acquire businesses that may arise.


C.G. Clarke
Chairman
13 November 2006





Consolidated income statement
for the six months ended 30 September 2006


                                                                               2006              2005            2006
                                                                           6 months          6 months       16 months
                                                                              ended             ended           ended
                                                                       30 September      30 September        31 March
                                                            Note              £'000             £'000           £'000

Revenue                                                                     58,050            45,396         117,389
Fees and commissions payable                                                (4,456)           (2,907)         (8,004)

Net revenue                                                   2             53,594            42,489         109,385

Reorganisation costs                                                             -            (9,068)         (9,907)
Share-based charges - EBT                                                   (2,328)           (1,897)         (4,226)
Share-based charges - other                                                    (31)              (93)           (246)
Amortisation of intangible assets - client relationships                    (2,802)           (2,272)         (5,066)
Other operating expenses                                                   (37,317)          (30,831)        (79,222)

Operating expenses                                                         (42,478)          (44,161)        (98,667)

Operating profit/(loss)                                                     11,116            (1,672)         10,718

Profit on disposal of available-for-sale investments                             -                 -           3,129

Finance income                                                               1,285             1,341           3,365

Finance charges                                               3             (2,236)           (1,876)         (4,205)

Profit/(loss) before tax                                                    10,165            (2,207)         13,007

Income tax expense                                            4             (3,897)               73          (5,374)

Profit/(loss) for the period attributable to the equity                      6,268            (2,134)          7,633
holders of the parent

Earnings/(loss) per share                                     6

Basic                                                                        14.4p             (5.4p)           20.9p

Diluted                                                                      14.3p             (5.3p)           20.6p


Details of dividends are set out in note 5.



Consolidated balance sheet
at 30 September 2006


                                                                                2006              2005            2006
                                                                        30 September      30 September        31 March
                                                            Note               £'000             £'000           £'000

Assets

Non-current assets

Intangible assets                                            7              190,668           195,974         193,611

Property, plant and equipment                                                 4,569             4,595           4,775

Available-for-sale investments                                                2,349             1,664           2,188

Deferred tax assets                                                           1,977             2,467           2,984

                                                                            199,563           204,700         203,558

Current assets

Trade and other receivables                                                 123,200           106,077         167,257

Cash and cash equivalents                                                    42,047            44,907          49,958

                                                                            165,247           150,984         217,215

Total assets                                                                364,810           355,684         420,773

Current liabilities

Trade and other payables                                                   (118,745)         (112,659)       (174,276)

Financial liabilities                                                          (379)             (840)           (840)

Current tax liabilities                                                      (3,388)           (1,618)         (2,794)

                                                                           (122,512)         (115,117)       (177,910)

Non-current liabilities

Subordinated loan                                            8              (60,000)          (60,000)        (60,000)

Deferred tax liabilities                                                    (17,125)          (18,612)        (17,920)

Provisions                                                   9               (3,281)           (8,004)         (7,159)

                                                                            (80,406)          (86,616)        (85,079)

Total liabilities                                                          (202,918)         (201,733)       (262,989)

Net assets                                                                  161,892           153,951         157,784

Equity attributable to the
equity holders of the parent

Share capital                                              10,11              4,822             4,759           4,760

Share premium                                                11              10,603             9,260           9,276

Capital redemption reserve                                   11                 100               100             100

Available-for-sale reserve                                   11               1,085               605             972

Revaluation reserve                                          11                 966               979             972

Other reserves                                               11             130,601           130,601         130,601

Retained earnings                                            11              13,715             7,647          11,103

Total equity                                                 11             161,892           153,951         157,784




Consolidated statement of recognised income and expense
for the six months ended 30 September 2006


                                                                               2006              2005            2006
                                                                           6 months          6 months       16 months
                                                                              ended             ended           ended
                                                                       30 September      30 September        31 March
                                                                              £'000             £'000           £'000

Revaluation of available-for-sale investments

-gain arising from changes in fair value                                       161               156             738

-gain on disposal transferred to the income statement                            -                 -          (2,709)

Deferred tax on revaluation of available-for-sale
investments

-on gain arising from changes in fair value                                    (48)              (47)           (221)

-on gain on disposal transferred to the income statement                         -                 -             813

Net income/(expense) recognised directly in equity                             113               109          (1,379)

Profit/(loss) for the period                                                 6,268            (2,134)         7,633

Total recognised income and expense for the period                           6,381            (2,025)          6,254




Consolidated cash flow statement
for the six months ended 30 September 2006


                                                                               2006              2005            2006
                                                                           6 months          6 months       16 months
                                                                              ended             ended           ended
                                                                       30 September      30 September        31 March
                                                                              £'000             £'000           £'000

Cash flows from operating activities

Profit/(loss) before taxation                                               10,165            (2,207)         13,007
Adjustments for:

- Amortisation of intangible assets                                          3,103             2,523           5,617
- Finance charges                                                            2,236             1,876           4,205
- Finance income                                                            (1,285)           (1,341)         (3,365)
- Depreciation                                                                 325               263             747

Share-based charges                                                          2,359             1,990           4,472
Profit on disposal of available-for-sale investments                             -                 -          (3,129)
Loss on disposal of tangible fixed assets                                        -                56              58
Non-cash reorganisation costs                                                    -               669             669
Decrease/(increase) in trade and other receivables                          44,050            17,017         (52,992)
(Decrease)/increase in trade payables and provisions                       (59,435)          (14,209)         55,095

Cash generated from operations                                               1,518             6,637          24,384

Interest received                                                            1,292             1,458          3,823
Interest paid                                                                  (98)             (101)           (317)
Income taxes paid                                                           (3,378)             (798)         (5,595)

Net cash (outflow)/inflow from operating activities                           (666)            7,196          22,295

Cash flows from investing activities
Purchase of property, plant and equipment                                     (119)             (315)         (1,024)
Purchase of intangible software                                               (160)             (258)           (810)
Proceeds from disposal of available-for-sale investments                         -                 -           3,129
Acquisition of subsidiaries, net of cash acquired                                -             16,830         16,830
Deferred consideration paid                                                      -                 -             (52)

Net cash used in investing activities                                        (279)            16,257          18,073

Cash flows from financing activities
Dividends paid to shareholders                                5             (5,783)          (22,766)        (26,939)
Proceeds from issue of ordinary share capital                                1,389                 3              25
Costs associated with issue of shares                                            -              (180)           (180)
Redemption of loan notes                                                      (461)           (1,755)         (1,755)
Interest paid on subordinated loan                                          (2,111)                -          (2,179)

Net cash used in financing                                                  (6,966)          (24,698)        (31,028)

Net (decrease)/increase in cash and cash equivalents                        (7,911)           (1,245)          9,340





Notes to the interim report

1. Basis of preparation

For the year ending 31 March 2007, Rensburg Sheppards plc is required by EC
Regulation No. 1606/2002 to report its consolidated financial statements in
accordance with International Financial Reporting Standards as endorsed by the
European Union ('EU') and adopted by the EU ('adopted IFRSs').  The financial
information contained within these interim results has been prepared in
accordance with current standards and interpretations as issued by the
International accounting standards Board ('IASB') and its predecessors and
adopted by the European Commission ('EC').  However, the standards that are in
issue are subject to ongoing review and endorsement by the IASB and the EC,
whilst the application of the standards continues to be subject to review by the
International Financial Reporting Interpretations Commission ('IFRIC').
Accordingly, modifications may be required to be made to the information as
presented in these interim results as further guidance is issued and as practice
develops, before its inclusion in the 2007 Report and Accounts, which will be
the group's first full financial statements prepared in accordance with IFRS.

The financial information included in these interim results is unaudited and
does not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. The comparative figures for the 16 month period ended 31
March 2006 are not the company's statutory accounts for that period. Those
accounts, which were prepared under UK Generally Accepted Accounting Practices,
have been reported on by the company's auditor and delivered to the Registrar of
Companies.   The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain a statement
under section 237 (2) or (3) of the Companies Act 1985.

The accounting policies that the directors expect will apply to the preparation
of the first annual IFRS financial statements for the year ending 31 March 2007
are set out in the IFRS transitional statement issued by the company on 13
October 2006.  The statement is available on the group's website at
www.rensburgsheppards.co.uk.

2. Segmental information

For management purposes, the group is organised into two business segments,
being Investment Management and Fund Management.  Transactions between the two
business segments are undertaken on an arm's length basis on normal commercial
terms.  All of the group's activities are undertaken in the United Kingdom and
hence relate to a single geographical segment.

Six months ended 30 September 2006


                                                         Investment              Fund
                                                         Management        Management      Eliminations          Group
                                                              £'000             £'000             £'000          £'000

Revenue
  - External                                                49,831             8,219                 -         58,050
  - Inter-segment                                              272                 -              (272)             -

                                                            50,103             8,219              (272)        58,050
Fees and commissions payable                                (1,907)           (2,821)              272         (4,456)

Segmental net revenue                                       48,196             5,398                 -         53,594

Share-based charges - EBT                                   (2,328)                -                 -         (2,328)
Share-based charges - other                                    (29)               (2)                -            (31)
Amortisation of intangible assets - client                  (2,802)                -                 -         (2,802)
relationships
Other operating expenses                                   (32,857)           (3,338)                -        (36,195)

Segmental expenses                                         (38,016)           (3,340)                -        (41,356)


Segmental operating profit                                  10,180             2,058                 -         12,238

Central expenses                                                                                               (1,122)
Finance income                                                                                                  1,285
Finance charges                                                                                                (2,236)

Profit before tax                                                                                              10,165




Six months ended 30 September 2005


                                                         Investment              Fund
                                                         Management        Management      Eliminations          Group
                                                              £'000             £'000             £'000          £'000

Revenue
  - External                                                40,012             5,384                 -         45,396
  - Inter-segment                                              243                 -              (243)             -

                                                            40,255             5,384              (243)        45,396
Fees and commissions payable                                (1,307)           (1,843)              243         (2,907)

Segmental net revenue                                       38,948             3,541                 -         42,489

Reorganisation costs                                        (9,068)                -                 -         (9,068)
Share-based charges - EBT                                   (1,897)                -                 -         (1,897)
Share-based charges - other                                    (87)               (5)                -            (92)
Amortisation of intangible assets - client                  (2,272)                -                 -         (2,272)
relationships
Other operating expenses                                   (27,311)           (2,658)                -        (29,969)

Segmental expenses                                         (40,635)           (2,663)                -        (43,298)

Segmental operating profit                                  (1,687)              878                 -           (809)

Central expenses                                                                                                 (863)
Finance income                                                                                                  1,341
Finance charges                                                                                                (1,876)

Loss before tax                                                                                                (2,207)




Sixteen months ended 31 March 2006


                                                         Investment              Fund
                                                         Management        Management      Eliminations          Group
                                                              £'000             £'000             £'000          £'000

Revenue
  - External                                               101,885            15,504                 -        117,389
  - Inter-segment                                              788                 -              (788)             -

                                                           102,673            15,504              (788)       117,389
Fees and commissions payable                                (3,492)           (5,300)              788         (8,004)

Segmental net revenue                                       99,181            10,204                 -        109,385

Reorganisation costs                                        (9,907)                -                 -         (9,907)
Share-based charges - EBT                                   (4,226)                -                 -         (4,226)
Share-based charges - other                                   (230)              (12)                -           (242)
Amortisation of intangible assets - client                  (5,066)                -                 -         (5,066)
relationships
Other operating expenses                                   (69,817)           (7,280)                -        (77,097)

Segmental expenses                                         (89,246)           (7,292)                -        (96,538)

Segmental operating profit                                   9,935             2,912                 -         12,847

Central expenses                                                                                               (2,129)
Profit on disposal of available-for-sale                                                                        3,129
investments
Finance income                                                                                                  3,365
Finance charges                                                                                                (4,205)

Profit before tax                                                                                              13,007


3. Finance charges

Finance charges include amounts payable relating to subordinated debt of
£2,142,000 (September 2005: £1,743,000; March 2006: £3,858,000).  Details of
subordinated debt are set out in note 8.

4. Income tax expense

United Kingdom corporation tax at 30% (September 2005: 30%; March 2006: 30%).
No tax relief is available in respect of the amortisation of the client
relationships intangible asset nor is tax relief anticipated to be available in
respect of share-based charges in relation to the EBT.

5. Dividends

The interim dividend declared for the six months ended 30 September 2006 of 7.5p
per share is payable on 2 February 2007 to shareholders on the register as at
the close of business on 5 January 2007.  In accordance with the group's
accounting policies and the requirements of IAS 10 'Post Balance Sheet Events',
this dividend has not been recognised as a liability at 30 September 2006.
Dividends have been recognised in the periods set out below:


                                                                                 2006              2005           2006
                                                                             6 months          6 months      16 months
                                                                                ended             ended          ended
                                                                         30 September      30 September       31 March
                                                                                £'000             £'000          £'000



Amounts recognised as distributions to equity holders during the
period:

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

First interim dividend for the six months ended 31 May 2005 of 6.6p                 -                 -          1,319
per share

Second interim dividend for the four months ended 30 September 2005 of
6.6p per share                                                                      -                 -          2,854

Final dividend for the sixteen months ended 31 March 2006 of 13.2p per
share                                                                           5,783                 -              -

Special dividend of 45.0p per share                                                 -             9,871          9,871


                                                                                5,783            12,500         16,673


The amounts recognised as distributions to equity holders shown above for the
six months ended 30 September 2005 and the 16 months ended 31 March 2006 exclude
the dividend of £10,266,000 paid by Carr Sheppards Crosthwaite Limited ('CSC')
to Investec following the group's acquisition of CSC on 6 May 2005, as the
liability for this dividend formed part of the net assets of CSC at the date of
acquisition.  However, this payment does represent a cash outflow from the group
during the six months ended 30 September 2005 and the 16 months ended 31 March
2006 and is included in the cash flow statement in these periods.

6. Earnings per share

Basic earnings per share is calculated with reference to earnings for
shareholders of £6,268,000 (September 2005: loss for shareholders of £2,134,000;
March 2006: earnings for shareholders of £7,633,000) and the weighted average
number of shares in issue during the period of 43,632,112 (September 2005:
39,722,435; March 2006: 36,595,582).  Basic earnings per share before
amortisation of the client relationships intangible asset, share-based charges
relating to the EBT, reorganisation costs and profit on disposal of
available-for-sale investments is calculated with reference to earnings for
shareholders of £10,557,000 (September 2005: £7,701,000; March 2006:
£20,150,000)

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 181,929 shares (September
2005: 478,023; March 2006: 491,190).

The directors believe that the provision of additional earnings per share
figures, in particular before amortisation of the client relationships
intangible asset, share-based charges relating to the EBT, reorganisation costs
and profit on disposal of available-for-sale investments, better represent
underlying business performance. The effect of these adjustments on earnings and
basic earnings per share is as follows:


                                       Six months ended             Six months ended            Sixteen months ended
                                      30 September 2006            30 September 2005               31 March 2006
                                   Earnings        Earnings       Earnings       Earnings       Earnings       Earnings
                                                        per                           per                           per
                                                      share                         share                         share
                                      £'000           Pence          £'000          Pence          £'000          Pence

Unadjusted earnings and EPS           6,268           14.4         (2,134)          (5.4)         7,633           20.9

Share-based charges - EBT             2,328            5.3          1,897            4.8          4,226           11.5

Amortisation of intangible assets     2,802            6.4          2,272            5.7          5,066           13.9
- client relationships

Reorganisation costs                      -              -          9,068           22.8          9,907           27.1

Profit on disposal of available-
for-sale investments                      -              -              -              -         (3,129)          (8.6)

Tax arising on adjusted items         (841)           (1.9)        (3,402)          (8.5)        (3,553)          (9.7)

Adjusted earnings and EPS            10,557           24.2          7,701           19.4         20,150           55.1



7. Intangible assets


                                                                               2006              2005            2006
                                                                       30 September      30 September        31 March
                                                                              £'000             £'000           £'000

Goodwill                                                                   136,385           136,385         136,385

Client relationships                                                        53,270            58,866          56,072

Software                                                                     1,013               723           1,154

                                                                           190,668           195,974         193,611


8. 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.  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.

9. Provisions


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

At 1 April 2006                           6,796               148                65               150           7,159

Utilised in the period                   (3,855)              (13)              (10)                -          (3,878)

At 30 September 2006                      2,941               135                55               150           3,281



Reorganisation costs relate to the integration of Carr Sheppards Crosthwaite ('
CSC') into the group.

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

The restructuring provision represents the residue of amounts previously
provided within Carr Sheppards Crosthwaite Limited, prior to its acquisition by
the company, in respect of the cost of restructuring certain business
activities.

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

10. Share capital


                                                                               2006              2005             2006
                                                                       30 September      30 September         31 March

Authorised:

54,600,000 ordinary shares of 10 90/91p each                             £6,000,000        £6,000,000       £6,000,000
(September 2005 and March 2006: 54,600,000 ordinary shares
of 10 90/91p each)

Allotted and fully paid:
43,881,382 ordinary shares of 10 90/91p each                             £4,822,130        £4,759,087       £4,759,788
(September 2005: 43,307,691 ordinary shares of 10 90/91p each;
March 2006: 43,314,068 ordinary shares of 10 90/91p each)


During the period the company issued 567,314 ordinary shares at a price of £2.45
per share under the group's Savings Related Share Option Scheme (SAYE).

11. Reconciliation of equity

Sixteen months ended 31 March 2006 and six months ended 30 September 2006

                                 Share    Share     Capital  Available-  Revaluation      Other   Retained      Total
                               capital  premium  redemption    for-sale      reserve   reserves   earnings     equity
                                                    reserve     reserve
                                 £'000    £'000       £'000       £'000        £'000      £'000      £'000      £'000

At 1 December 2004              2,209    9,252         100       2,351          989      6,086     29,028     50,015

Profit after taxation               -        -           -           -            -          -      7,633      7,633

Dividends                           -        -           -           -            -          -    (16,673)   (16,673)

Issue of shares:

  - ordinary shares issued      2,551       24           -           -            -    124,695          -    127,270

  - EBT shares issued for nil       -        -           -           -            -          -    (13,972)   (13,972)
consideration

  - costs associated with           -        -           -           -            -       (180)         -       (180)
issue of shares

Share-based payments                -        -           -           -            -          -      4,472      4,472

Deferred tax on share-based         -        -           -           -            -          -        598        598
payments

Changes in value of
available-for-sale
investments:

  - gain arising from changes       -        -           -         738            -          -          -        738
in fair value

  - gain on disposal                -        -           -      (2,709)           -          -          -     (2,709)
transferred to the income
statement

Deferred tax on revaluation
of available-for-sale
investments:

  - on gain arising from            -        -           -        (221)           -          -          -       (221)
changes in fair value

  - on gain on disposal             -        -           -         813            -          -          -        813
transferred to the income
statement

Depreciation on revalued            -        -           -           -          (17)         -          17         -
property

At 31 March 2006                4,760    9,276         100         972          972    130,601     11,103    157,784

Profit after taxation               -        -           -           -            -          -      6,268      6,268

Dividends                           -        -           -           -            -          -     (5,783)    (5,783)

Issue of shares                    62    1,327           -           -            -          -          -      1,389

Share-based payments                -        -           -           -            -          -      2,359      2,359

Deferred tax on share-based         -        -           -           -            -          -       (238)      (238)
payments

Gain arising on                     -        -           -         161            -          -          -        161
available-for-sale
investments

Deferred tax on                     -        -           -         (48)           -          -          -        (48)
available-for-sale
investments

Depreciation on revalued            -        -           -           -           (6)         -          6          -
property

At 30 September 2006            4,822   10,603         100       1,085          966    130,601     13,715    161,892





Six months ended 30 September 2005


                                 Share    Share     Capital  Available-  Revaluation      Other   Retained      Total
                               capital  premium  redemption    for-sale      reserve   reserves   earnings     equity
                                                    reserve     reserve
                                 £'000    £'000       £'000       £'000        £'000      £'000      £'000      £'000


At 31 March 2005                2,209    9,257         100         496          985      6,086     34,151     53,284

Loss after taxation                 -        -           -           -            -          -     (2,134)    (2,134)

Dividends                           -        -           -           -            -          -    (12,500)   (12,500)

Issue of shares:

  - ordinary shares issued      2,550        3           -           -            -    124,695          -    127,248

  - EBT shares issued for nil       -        -           -           -            -          -    (13,972)   (13,972)
consideration

  - costs associated with           -        -           -           -            -       (180)         -       (180)
issue of shares

Share-based payments                -        -           -           -            -          -      1,990      1,990

Deferred tax on share-based         -        -           -           -            -          -        106        106
payments

Gain arising on                     -        -           -         156            -          -          -        156
available-for-sale
investments

Deferred tax on                     -        -           -         (47)           -          -          -        (47)
available-for-sale
investments

Depreciation on revalued            -        -           -           -           (6)         -          6          -
property

At 30 September 2005            4,759    9,260         100         605          979    130,601      7,647    153,951


12. Transition to International Financial Reporting Standards

On 13 October 2006 the group announced the effect of the transition to
International Financial Reporting Standards ('IFRS') on its results previously
reported under UK GAAP.  This transitional statement is available on the group's
website at www.rensburgsheppards.co.uk.  The effect of the transition to IFRS on
the group's total equity at 31 March 2006 and profit after tax for the 16 months
ended 31 March 2006, which is explained fully in the transitional statement, is
summarised below.  In addition, the effect of the transition on the balance
sheet at 30 September 2005 is also set out below.


Summary reconciliation of changes in equity                                                               At 31 March
                                                                                                                 2006
                                                                                                                £'000

Total equity as previously reported under UK GAAP                                                             153,675

Revaluation of available-for-sale investments                                                                   1,388

Deferred tax on revaluation of available-for-sale investments                                                    (416)

Deferred tax on share-based payments                                                                            1,069

Dividends                                                                                                       5,783

Revaluation of property, plant and equipment                                                                    1,389

Deferred tax on revaluation of property, plant and equipment                                                     (417)

Business combinations                                                                                           5,059

EBT prepayment taken to equity                                                                                 (9,746)

Total value of IFRS adjustments                                                                                 4,109

Total equity as restated under IFRS                                                                           157,784





Summary reconciliation of changes in profit after tax                                                            2006
                                                                                                            16 months
                                                                                                                ended
                                                                                                             31 March
                                                                                                                £'000

Profit after tax as previously reported under UK GAAP                                                           2,763

Business combinations                                                                                           3,539

Revaluation of property, plant and equipment                                                                      (24)

Share-based payments                                                                                             (246)

Tax effect of above adjustments                                                                                 1,601

Total value of IFRS adjustments                                                                                 4,870

Profit after tax as restated under IFRS                                                                        7,633




Consolidated balance sheet
at 30 September 2005

Presentation effects of IAS 1 'Presentation of Financial Statements' on UK GAAP
balances


                             As reported             IFRS             IFRS        UK GAAP
                                   under     adjustments:     adjustments:    balances in
                                 UK GAAP           Assets      Liabilities    IFRS format
                                   £'000            £'000            £'000          £'000

                                                                                          Assets

Fixed assets                                                                              Non-current assets

Intangible assets               174,885                -                -        174,885  Intangible assets

Tangible assets                   3,920                -                -          3,920  Property, plant and
                                                                                          equipment

Investments                         800                -                -            800  Available-for-sale
                                                                                          investments

                                      -            1,708                -          1,708  Deferred tax assets

                                179,605            1,708                -        181,313

Current assets                                                                            Current assets

Debtors - due within one        112,442           (6,365)               -        106,077  Trade and other receivables
year

Debtors - due after one year      7,418            4,657                -         12,075  EBT prepayment

Cash at bank and in hand         43,589                -                -         43,589  Cash and cash equivalents

                                163,449           (1,708)               -        161,741

Total assets                    343,054                -                -        343,054  Total assets

Creditors                                                                                 Current liabilities

Amounts falling due within     (117,968)               -            2,458       (115,510) Trade and other payables
one year

                                      -                -             (840)         (840)  Financial liabilities

                                      -                -           (1,618)       (1,618)  Current tax liabilities

                               (117,968)               -                -       (117,968)

Creditors                                                                                 Non-current liabilities

Amounts falling due after       (60,000)               -                -        (60,000) Subordinated loan
more than one year

Provisions for liabilities       (8,028)               -            8,028              -
and charges

                                      -                -              (24)          (24)  Deferred tax liabilities

                                      -                -           (8,004)       (8,004)  Provisions

                                (68,028)               -                -        (68,028)

Total liabilities              (185,996)               -                -       (185,996) Total liabilities

Net assets                      157,058                -                -        157,058  Net assets

Capital and reserves                                                                      Equity attributable to the
                                                                                          equity holders of the
                                                                                          parent

Called up share capital           4,759                -                -          4,759  Share capital

Share premium account             9,260                -                -          9,260  Share premium

Capital redemption reserve          100                -                -            100  Capital redemption reserve

Other reserves                  130,601                -                -        130,601  Other reserves

Profit and loss account          12,338                -                -         12,338  Retained earnings

Equity shareholders' funds      157,058                -                -        157,058  Total equity



Consolidated balance sheet
at 30 September 2005
Measurement effects of IFRS on UK GAAP balances

                          UK GAAP                            Property                 Events
                                                                                       after
                         balances      Business Intangible  plant and   Financial    balance Share-based
                          in IFRS  combinations     assets  equipment instruments sheet date    payments
                           format        IFRS 3     IAS 38     IAS 16      IAS 39     IAS 10      IFRS 2           IFRS
                            £'000         £'000      £'000      £'000       £'000      £'000       £'000          £'000

Assets

Non-current assets

Intangible assets         174,885        20,366        723          -           -          -           -        195,974

Property, plant and         3,920             -       (723)     1,398           -          -           -          4,595
equipment

Available-for-sale            800             -          -          -         864          -           -          1,664
investments

Deferred tax assets         1,708             -          -          -           -          -         759          2,467

                          181,313        20,366          -      1,398         864          -         759        204,700

Current assets

Trade and other           106,077             -          -          -           -          -           -        106,077
receivables

EBT prepayment             12,075             -          -          -           -          -     (12,075)             -

Cash and cash equivalents  43,589             -          -          -           -      1,318           -         44,907

                          161,741             -          -          -           -      1,318     (12,075)       150,984

Total assets              343,054        20,366          -      1,398         864      1,318     (11,316)       355,684

Current liabilities

Trade and other payables (115,510)            -          -          -           -      2,851           -       (112,659)

Financial liabilities       (840)             -          -          -           -          -           -           (840)

Current tax liabilities   (1,618)             -          -          -           -          -           -         (1,618)

                         (117,968)            -          -          -           -      2,851           -       (115,117)

Non-current liabilities

Subordinated loan         (60,000)            -          -          -           -          -           -        (60,000)

Deferred tax liabilities      (24)      (17,910)         -       (419)       (259)         -           -        (18,612)

Provisions                 (8,004)            -          -          -           -          -           -         (8,004)

                          (68,028)      (17,910)         -       (419)       (259)         -           -        (86,616)

Total liabilities        (185,996)      (17,910)         -       (419)       (259)     2,851           -       (201,733)

Net assets                157,058         2,456          -        979         605      4,169     (11,316)       153,951

Equity attributable to the
equity holders of the
parent

Share capital               4,759             -          -          -           -          -           -          4,759

Share premium               9,260             -          -          -           -          -           -          9,260

Capital redemption reserve    100             -          -          -           -          -           -            100

Available-for-sale reserve      -             -          -          -         605          -           -            605

Revaluation reserve             -             -          -        979           -          -           -            979

Other reserves            130,601             -          -          -           -          -           -        130,601

Retained earnings          12,338         2,456          -          -           -      4,169     (11,316)         7,647

Total equity              157,058         2,456          -        979         605      4,169     (11,316)       153,951




Independent review report by KPMG Audit Plc to Rensburg Sheppards plc

Introduction

We have been engaged by the company to review the financial information
contained in the interim report for the six months ended 30 September 2006,
which comprises the consolidated income statement, the consolidated balance
sheet, the consolidated statement of recognised income and expense, the
consolidated cash flow statement and the related notes.  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 financial statements except where any changes, and the reasons
for them, are disclosed.

As disclosed in note 1 to the financial information, the next annual financial
statements of the group will be prepared in accordance with IFRSs as adopted by
the European Union.

The accounting policies that have been adopted in preparing the financial
information are consistent with those that the directors currently intend to use
in the next annual financial statements. There is, however, a possibility that
the directors may determine that some changes to these policies are necessary
when preparing the full annual financial statements for the first time in
accordance with those IFRSs as adopted by the European Union.

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 International Standards of Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.

KPMG Audit Plc
Chartered Accountants
Leeds
13 November 2006


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