TIDMRAT
RNS Number : 1262L
Rathbone Brothers PLC
27 July 2011
Rathbone Brothers Plc
30% growth in profits at Rathbones
This statement is a half-yearly financial report in accordance
with the UK Listing Authority's Disclosure and Transparency Rules.
It covers the six-month period ended 30 June 2011.
Andy Pomfret, Chief Executive of Rathbone Brothers Plc,
said:
"The first half of 2011 has been positive for Rathbones as
investment markets have remained resilient and we have seen the
full benefit of recent acquisitions and continuing net organic
growth. Organic and acquired growth in our investment management
business was an annualised 8.4% in the six months to 30 June 2011
(2010: 9.9%).
"Uncertainties surrounding financial markets are continuing, in
particular the increased potential for future adverse events
impacting the European banking sector. Notwithstanding this
uncertainty, we look to the future with confidence as Rathbones
remains well positioned to take advantage of growth
opportunities."
Highlights:
-- Profit before tax was GBP20.6 million for the six months
ended 30 June 2011, an increase of 30.4% compared to GBP15.8
million in 2010. Underlying profit before tax (excluding
amortisation of client relationship intangible assets, exceptional
Financial Services Compensation Scheme levies and head office
relocation expenses) increased 33.7% from GBP18.1 million to
GBP24.2 million.
-- Total funds under management were GBP16.36 billion at 30 June
2011, up 4.7% from GBP15.63 billion at 31 December 2010. This
compares to an increase of 0.8% in the FTSE 100 Index and an
increase of 0.9% in the FTSE APCIMS Balanced Index over the same
period.
-- Total net organic and acquired growth in the funds managed by
Rathbone Investment Management was GBP616 million in the first six
months of 2011, representing a net annual growth rate of 8.4%
(2010: 9.9%). Net organic growth of GBP504 million for the first
half represents an underlying annualised rate of net organic growth
of 6.9% (2010: 4.0%).
-- Net operating income in Investment Management of GBP69.5
million in the first six months of 2011 (2010: GBP58.3 million) was
up 19.2%. The average FTSE 100 Index was 5976 on our quarterly
billing dates, compared to 5331 in 2010, an increase of 12.1%. New
charges applied to client accounts from the second quarter are
expected to add approximately 3-4 basis points to the net operating
income margin on an annualised basis.
-- Net interest and other income of GBP6.0 million in the first
six months of 2011 is 11.1% higher than the GBP5.4 million earned
in the corresponding period in 2010 largely reflecting a marginal
improvement in yields on treasury assets.
-- Funds under management in Rathbone Unit Trust Management were
GBP1,088 million at 30 June 2011 (31 December 2010: GBP1,043
million) with net inflows of GBP38 million in the first half (2010:
net redemptions of GBP41 million). Net operating income in Unit
Trusts of GBP4.1 million in the six months ended 30 June 2011
increased 10.8% from GBP3.7 million in the first half of 2010.
Issued on 27 July 2011 For further information contact:
Rathbone Brothers Plc Quill PR
Tel: 020 7399 0000 Tel: 020 7758 2234
email: marketing@rathbones.com Hugo Mortimer-Harvey
Mark Nicholls, Chairman
Andy Pomfret, Chief Executive
Paul Stockton, Finance Director
Rathbone Brothers Plc
Rathbone Brothers Plc is a leading independent provider of
high-quality, personalised investment and wealth management
services for private investors, charities and trustees. This
includes discretionary investment management, tax and financial
planning and unit trusts.
Rathbones has over 700 staff in 11 UK locations and Jersey, and
has its headquarters in New Bond Street, London.
www.rathbones.com
Interim Management Report
Results and dividends
Profit before tax for the first half of 2011 was GBP20.6
million, up 30.4% on the GBP15.8 million reported in the same
period last year with earnings per share of 34.28p (2010 : 25.48p)
up 34.5%. Underlying profit before tax of GBP24.2 million (stated
before exceptional Financial Services Compensation Scheme (FSCS)
levies, amortisation of client relationship intangibles and
dilapidation provisions made in respect of our 2012 head office
relocation) is up 33.7% on GBP18.1 million for 2010.
Our interim dividend has been increased by 1.0p per share to
17.0p per share (2010: 16.0p). The interim dividend will be paid on
5 October 2011.
Market and environment
In the first half of 2011 we witnessed a generally positive
investment climate as markets remained resilient in spite of
continued economic uncertainties, particularly in the Eurozone. The
FTSE 100 index remained broadly within a 5700 to 6100 range ending
the first half at 5946, up 0.8% since the beginning of the year,
and the FTSE APCIMS Balanced Index was 0.9% higher at 3006. Over
the same period funds under management increased 4.7% to GBP16.36
billion.
Interest rates have remained resolutely low for the first half
of 2011. Credit conditions remain uncertain particularly in respect
of the European banks, with recent developments reminding us once
again of the dangers of instability in the financial system. We
continue to be cautious as to where we place cash in order to
manage any associated risks.
Business performance
The first half of 2011 has been positive from a growth
perspective, and we were very pleased to receive the 2011
Citywealth 'Magic Circle Investment Management House of the Year'
award in May 2011 and the 'Discretionary Company of the Year' award
at the Investment Week Fund Manager of the Year Awards in July
2011.
Total net organic and acquired growth in the funds managed by
our investment management business was GBP616 million, representing
an annualised growth rate of 8.4% (2010: 9.9%). Net organic growth
benefited from a number of larger clients who joined us in the
first half and we continue to attract new investment managers to
the business with 15 investment professionals joining us over the
last twelve months. Amortisation charges in respect of client
relationship intangibles rose to GBP2.5 million from GBP2.1 million
in the first half of 2010 which evidences this continued growth in
acquired funds.
Rathbone Unit Trust Management attracted GBP38 million of net
inflows in the first half of 2011 (2010: net outflows of GBP41
million in the corresponding period), and has now seen positive net
fund inflows for each of the last three quarters.
Net investment management fee income of GBP43.7 million (2010:
GBP34.4 million) was 27.0% higher than the first half of 2010
reflecting the continued growth in the business and an average FTSE
100 Index of 5976 on our key quarterly billing dates, up 12.1% from
an average of 5331 in the corresponding period last year. Net
commission income of GBP20.0 million (2010: GBP18.7 million) was up
7.0% year on year with the investment climate continuing to drive
strong trading volumes. New charges were applied to client accounts
from the second quarter and we continue to expect that these will
add approximately 3-4 basis points to our overall revenue margin
(measured against funds under management) on an annualised
basis.
Net interest and other income of GBP6.0 million (2010: GBP5.4
million) remains low but reflects a marginal improvement in yields.
We are not anticipating any material interest rate rises in the
short term.
Underlying operating expenses (which exclude amortisation of
client relationship intangibles, exceptional FSCS levies and
dilapidation provisions made in respect of our 2012 head office
relocation) of GBP49.3 million (2010: GBP43.9 million) are 12.3%
higher than last year. This primarily reflects the growth in the
business (full time equivalent headcount has increased 7.7% to 744
from 691 in June 2010), higher profit-based and growth-based
variable staff awards and a busy project agenda as we continue to
invest in the business. Like many businesses, we continue to see
persistent inflationary pressure on supplier costs and a heavy
regulatory workload and we continue to monitor costs carefully to
reduce the impact of expense inflation.
We have thankfully not seen a repeat of the most unwelcome
exceptional FSCS charges of GBP3.6 million for the 2010 financial
year, however the eventual outcomes from the failure of Keydata and
the various levy resubmission exercises remain uncertain. Levies
that are normal in size or nature are included in other operating
expenses in our consolidated interim statement of comprehensive
income. We announced on 16 May 2011 that we expect to relocate our
London head office to Curzon Street in 2012 and we have recognised
associated costs of GBP1.2 million to 30 June 2011. We continue to
expect total full year 2011 operating expense charges of up to GBP5
million in relation to the move.
Our statement of financial position at 30 June 2011 has changed
little from the end of 2010 with Total equity growing 3.0% from
GBP185.4 million at 31 December 2010 to GBP191.0 million at 30 June
2011. We have reported a net pension deficit of GBP0.3 million at
30 June 2011 which is significantly lower than the deficit of
GBP6.6 million at 31 December 2010, largely as a result of an
increase in corporate bond yields. All external loans have now been
repaid so the Group is now entirely ungeared (external borrowings
31 December 2010: GBP3.1 million).
Related party transactions and balances for the half year ended
30 June 2011 are set out in note 15 to the condensed consolidated
interim financial statements.
Investing in the business
We continue to invest in the business to make efficiencies and
ensure we maintain our flexibility to grow. We migrated our London
data centre successfully to a third party location in April 2011
and as mentioned above, will move our London head office to 1
Curzon Street in 2012. We have also taken the opportunity to secure
10,300 sq ft of additional space in our Liverpool office which now
houses 330 employees.
We have recently been working hard to enhance our client
communications. Updated brochures, client documentation and
investment literature were all launched in the period and have been
welcomed both by clients and investment managers.
In July 2011 we finalised the consideration payable to Lloyds
Banking Group in respect of the transaction we completed in October
2009. This transaction has introduced some 3,100 clients and just
over GBP800 million of funds to Rathbones, resulting in total
consideration of GBP20.0 million, which was paid in 2010 and
represents approximately 2.5% of acquired funds.
The completion of the Lloyds Banking Group transaction makes
Edinburgh our second largest office by funds under management with
funds of GBP1.83 billion at 30 June 2011.
Regulation
The first half of 2011 has been a busy time responding to
changing regulation. In June 2011 the Financial Services Authority
(FSA) wrote publicly to firms in the wealth management industry
regarding portfolio suitability, stressing its importance and
indicating that some firms were the subject of ongoing regulatory
action. We are not one of these and have always considered
portfolio suitability to be central to what we do. We remain
committed to ensuring that clients receive an excellent
service.
We plan to publish the information required by the Remuneration
Code alongside our normal Pillar III disclosures in the third
quarter of 2011. Rathbone Investment Management will be treated as
a Tier 3 entity and Rathbone Unit Trust Management as Tier 4.
We expect that, as an investment group with a banking licence,
we will be regulated both by the Prudential Regulatory Authority
and Financial Conduct Authority. We look forward to building
effective relationships with these bodies as they take on
regulation of the industry in 2012 and beyond.
Principal risks
The principal risks that face Rathbones in 2011 are described on
pages 36 and 37 of our 2010 annual report and accounts and little
has changed in the first half of 2011. The potential for future
adverse events impacting the European banking sector may result in
increased financial risk for Rathbones in the second half. We
continue to mitigate this risk by our adherence to conservative
policies on the liquidity and diversity of treasury investments.
The size of future Financial Services Compensation Scheme levies
remains difficult to predict as Keydata investigation work is
ongoing and any impact of moves by the European Union or FSA
towards a pre-funded compensation scheme may also change the way in
which future levies are collected.
Board changes
At our Annual General Meeting in May 2011, Mark Powell retired
as Chairman of Rathbones to be succeeded by Mark Nicholls. We would
like to take this opportunity to thank Mark Powell sincerely for
his exceptional contribution to Rathbones over a period of more
than 20 years.
On 1 July 2011 we announced that, after 10 years in the role,
Richard Lanyon has decided that he will step down from the Board
and his managerial responsibilities as Head of Investment
Management during the course of 2012. He will however continue as
an Investment Director managing his clients' portfolios.
Following a thorough succession planning exercise, Paul
Chavasse, currently Chief Operating Officer, will succeed Richard
as Head of Investment Management and a process is now underway to
appoint a new Chief Operating Officer.
Looking ahead
The first half of 2011 has been a positive one for Rathbones as
investment markets have remained resilient and we have seen the
full benefit of recent acquisitions and continuing net organic
growth.
Uncertainties surrounding financial markets are continuing.
Nevertheless we look to the future with confidence as Rathbones
remains well positioned to take advantage of growth
opportunities.
Mark Nicholls
Chairman
Andy Pomfret
Chief Executive
26 July 2011
Forward looking statements
This Interim statement contains certain forward looking
statements which are made by the Directors in good faith based on
the information available to them at the time of their approval of
this Interim statement. Forward looking statements contained within
the Interim statement should be treated with some caution due to
the inherent uncertainties, including economic, regulatory and
business risk factors, underlying any such forward looking
statements.
We undertake no obligation to update any forward looking
statements whether as a result of new information, future events or
otherwise. The Interim statement has been prepared by Rathbone
Brothers Plc to provide information to its shareholders and should
not be relied upon by any other party or for any other purpose.
Directors' responsibilities
The directors confirm that:
- the condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union;
- the Interim management report includes a fair view of the
information required by the Disclosure and Transparency Rules of
the UK Financial Services Authority (DTR) 4.2.7R (indication of
important events during the first six months and description of
principal risks for the remaining six months of the year); and
- the Interim management report includes a fair view of the
information required by DTR 4.2.8R (disclosures of related parties'
transactions and changes therein).
By order of the Board
Andy Pomfret
Chief Executive
26 July 2011
Consolidated interim statement of comprehensive income
for the six months ended 30 June 2011
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
---------------------------- ----- ------------ ------------ -------------
Interest and similar income 5,774 5,329 10,274
Interest expense and
similar charges (593) (772) (1,445)
---------------------------- ----- ------------ ------------ -------------
Net interest income 5,181 4,557 8,829
---------------------------- ----- ------------ ------------ -------------
Fee and commission income 72,490 60,448 124,432
Fee and commission expense (4,983) (3,817) (7,762)
---------------------------- ----- ------------ ------------ -------------
Net fee and commission
income 67,507 56,631 116,670
---------------------------- ----- ------------ ------------ -------------
Dividend income 26 36 90
Net trading income 259 121 226
Other operating income 565 682 1,369
---------------------------- ----- ------------ ------------ -------------
Operating income 73,538 62,027 127,184
Exceptional levies for the
Financial Services
Compensation Scheme - (262) (3,575)
Amortisation of acquired
client relationships 8 (2,515) (2,071) (4,845)
Head office relocation
costs 3 (1,170) - -
Other operating expenses (49,302) (43,937) (88,681)
---------------------------- ----- ------------ ------------ -------------
Operating expenses (52,987) (46,270) (97,101)
---------------------------- ----- ------------ ------------ -------------
Profit before tax 20,551 15,757 30,083
Taxation 4 (5,803) (4,727) (8,531)
---------------------------- ----- ------------ ------------ -------------
Profit for the period
attributable to
equity holders of the
Company 14,748 11,030 21,552
---------------------------- ----- ------------ ------------ -------------
Other comprehensive income:
Exchange translation
differences - 53 9
Net actuarial gain/(loss)
on retirement benefit
obligation 3,057 (9,665) (3,005)
Revaluation of available
for sale investment
securities:
- net gain/(loss) from
changes in fair value 686 (497) 155
Deferred tax relating to
components of other
comprehensive income:
- available for sale
investment securities (111) 139 (13)
- actuarial gains and
losses (883) 2,706 782
Other comprehensive income
for the period, net of
tax 2,749 (7,264) (2,072)
---------------------------- ----- ------------ ------------ -------------
Total comprehensive income
for the period, net of tax
attributable to equity
holders of the Company 17,497 3,766 19,480
---------------------------- ----- ------------ ------------ -------------
Dividends paid and proposed
for the period per ordinary
share 5 17.0p 16.0p 44.0p
Dividends paid and proposed
for the period (GBP'000) 7,394 6,927 19,067
Earnings per share for the
period attributable to
equity
holders of the Company: 6
- basic 34.28p 25.48p 49.76p
- diluted 33.76p 25.35p 49.35p
---------------------------- ----- ------------ ------------ -------------
The accompanying notes form an integral part of the condensed
consolidated interim financial statements.
Consolidated interim statement of changes in equity
for the six months ended 30 June 2011
Available
for
Share Share Merger sale Translation Treasury Retained Total
capital premium reserve reserve reserve shares earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------- -------- -------- ---------- ------------ --------- --------- ---------
At 1 January 2010 2,165 31,756 31,835 2,077 245 (4,032) 118,443 182,489
Profit for the
period 11,030 11,030
Exchange
translation
differences 53 53
Net actuarial
loss on
retirement
benefit
obligation (9,665) (9,665)
Revaluation of
available for
sale investment
securities (497) (497)
Deferred tax
relating to
components of
other
comprehensive
income 139 2,706 2,845
Dividends paid (11,246) (11,246)
Share-based
payments:
- value of
employee
services 624 624
- costs of shares
issued/purchased (286) (286)
- transfer of
shares to
employees 1,497 (1,497) -
- tax on
share-based
payments 135 135
------------------ -------- -------- -------- ---------- ------------ --------- --------- ---------
At 30 June 2010
(unaudited) 2,165 31,756 31,835 1,719 298 (2,821) 110,530 175,482
Profit for the
period 10,522 10,522
Exchange
translation
differences (44) (44)
Net actuarial
gain on
retirement
benefit
obligation 6,660 6,660
Revaluation of
available for
sale investment
securities 652 652
Deferred tax
relating to
components of
other
comprehensive
income (152) (1,924) (2,076)
Dividends paid (6,921) (6,921)
Issue of share
capital (note
12) 4 732 736
Reclassification
of translation
reserve on
disposal of
subsidiaries (254) 254 -
Share-based
payments:
- value of
employee
services 430 430
- costs of shares
issued/purchased (283) (283)
- transfer of
shares to
employees 205 (205) -
- tax on
share-based
payments 216 216
---------
At 31 December
2010 (audited) 2,169 32,488 31,835 2,219 - (2,899) 119,562 185,374
Profit for the
period 14,748 14,748
Net actuarial
gain on
retirement
benefit
obligation 3,057 3,057
Revaluation of
available for
sale investment
securities 686 686
Deferred tax
relating to
components of
other
comprehensive
income (111) (883) (994)
Dividends paid (12,123) (12,123)
Issue of share
capital (note
12) 6 1,002 1,008
Share-based
payments:
- value of
employee
services 1,360 1,360
- costs of shares
issued/purchased (2,307) (2,307)
- transfer of
shares to
employees 872 (872) -
- tax on
share-based
payments 220 220
At 30 June 2011
(unaudited) 2,175 33,490 31,835 2,794 - (4,334) 125,069 191,029
------------------ -------- -------- -------- ---------- ------------ --------- --------- ---------
The accompanying notes form an integral part of the condensed
consolidated interim financial statements.
Consolidated interim statement of financial position
as at 30 June 2011
Unaudited Unaudited Audited
30 June 30 June 31 December
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
-------------------------------- ----- ---------- ---------- -------------
Assets
Cash and balances at central
banks 3 336 4
Settlement balances 30,376 34,743 18,169
Loans and advances to banks 69,590 42,169 39,565
Loans and advances to customers 45,473 30,020 40,025
Investment securities
- available for sale 18,882 123,487 42,587
- held to maturity 766,416 853,992 751,085
Prepayments, accrued income
and other assets 36,891 32,970 36,368
Property, plant and equipment 7 5,806 5,679 6,143
Deferred tax asset 681 1,551 2,474
Intangible assets 8 91,743 92,056 91,702
Surplus on retirement benefit
schemes 11 533 - -
Total assets 1,066,394 1,217,003 1,028,122
-------------------------------- ----- ---------- ---------- -------------
Liabilities
Deposits by banks 9 4,068 6,075 3,304
Settlement balances 53,598 40,500 23,712
Due to customers 772,109 947,592 762,026
Accruals, deferred income
and other liabilities 31,155 23,794 36,265
Current tax liabilities 4,822 1,622 4,608
Provisions for liabilities
and charges 10 8,745 6,189 6,190
Retirement benefit obligations 11 868 15,749 6,643
Total liabilities 875,365 1,041,521 842,748
-------------------------------- ----- ---------- ---------- -------------
Equity
Share capital 12 2,175 2,165 2,169
Share premium 12 33,490 31,756 32,488
Merger reserve 31,835 31,835 31,835
Available for sale reserve 2,794 1,719 2,219
Translation reserve - 298 -
Treasury shares (4,334) (2,821) (2,899)
Retained earnings 125,069 110,530 119,562
Total equity 191,029 175,482 185,374
---------- ---------- -------------
Total liabilities and equity 1,066,394 1,217,003 1,028,122
-------------------------------- ----- ---------- ---------- -------------
The condensed consolidated interim financial statements were
approved by the Board of Directors and authorised for issue on 26
July 2011 and were signed on their behalf by:
A D Pomfret R P Stockton
Chief Executive Finance Director
Company registered number: 01000403.
The accompanying notes form an integral part of the condensed
consolidated interim financial statements.
Consolidated interim statement of cash flows
for the six months ended 30 June 2011
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ -------------
Cash flows from operating
activities
Profit before tax 20,551 15,757 30,083
Net interest income (5,181) (4,557) (8,829)
Impairment losses on loans and
advances 18 3 95
Net charge for provisions (note
10) 1,490 704 572
Profit on disposal of property,
plant and equipment (4) (36) (37)
Depreciation and amortisation 4,448 3,772 8,405
Defined benefit pension scheme
charges 721 800 1,510
Share-based payment charges 1,672 753 1,729
Interest paid (658) (784) (1,413)
Interest received 5,498 7,277 11,754
----------------------------------- ------------ ------------ -------------
28,555 23,689 43,869
Changes in operating assets and
liabilities:
- net (increase)/decrease in loans
and advances to banks and
customers (5,480) 33,774 24,572
- net increase in settlement
balance debtors (12,207) (17,438) (864)
- net increase in prepayments,
accrued income and other assets (234) (5,039) (7,980)
- net increase/(decrease) in
amounts due to customers and
deposits by banks 10,848 179,926 (8,410)
- net increase in settlement
balance creditors 29,886 18,343 1,555
- net (decrease)/increase in
accruals, deferred income,
provisions and other liabilities (5,604) (5,550) 6,026
----------------------------------- ------------ ------------ -------------
Cash generated from operations 45,764 227,705 58,768
Defined benefit pension
contributions paid (3,972) (4,129) (7,285)
Tax paid (4,570) (2,487) (6,089)
Net cash inflow from operating
activities 37,222 221,089 45,394
----------------------------------- ------------ ------------ -------------
Cash flows from investing
activities
Purchase of property, equipment
and intangible assets (2,844) (26,048) (30,417)
Proceeds from sale of property,
plant and equipment 10 63 128
Purchase of investment securities (777,426) (969,995) (1,679,090)
Proceeds from sale and redemption
of investment securities 762,095 810,002 1,622,005
Net cash used in investing
activities (18,165) (185,978) (87,374)
----------------------------------- ------------ ------------ -------------
Cash flows from financing
activities
Purchase of shares for share-based
schemes (1,948) (286) (286)
Issue of ordinary shares (note 14) 649 - 453
Dividends paid (12,123) (11,246) (18,167)
Net cash used in financing
activities (13,422) (11,532) (18,000)
----------------------------------- ------------ ------------ -------------
Net increase/(decrease) in cash
and cash equivalents 5,635 23,579 (59,980)
Cash and cash equivalents at the
beginning of the period 79,069 139,044 139,044
Effect of exchange rate changes on
cash and cash equivalents - 29 5
Cash and cash equivalents at the
end of the period (note 14) 84,704 162,652 79,069
----------------------------------- ------------ ------------ -------------
The accompanying notes form an integral part of the condensed
consolidated interim financial statements.
Notes to the consolidated interim financial statements
1 Basis of preparation
Rathbone Brothers Plc (the "Company") is the parent company of a
group of companies (the "Group") which offers a range of investment
management services and related professional advice to private
individuals, trustees, charities, pension funds and the
professional advisers of these clients. The Group also provides
financial planning, private banking, offshore fund management and
trust administration services. The Group's primary activities are
set out in its annual report and accounts for the year ended 31
December 2010.
The Group's condensed consolidated interim financial statements
are prepared on a going concern basis and in accordance with
International Financial Reporting Standards as adopted by the EU
(IFRS). These condensed consolidated interim financial statements
are presented in accordance with IAS 34 Interim Financial
Reporting. The condensed consolidated interim financial statements
have been prepared on a going concern basis, using the accounting
policies, methods of computation and presentation set out in the
Group's condensed consolidated interim financial statements for the
year ended 31 December 2010 except as disclosed below. The
condensed consolidated interim financial statements should be read
in conjunction with the Group's audited financial statements for
the year ended 31 December 2010.
The information in this announcement does not comprise statutory
financial statements within the meaning of section 434 of the
Companies Act 2006. The Group's financial statements for the year
ended 31 December 2010 have been reported on by its auditors and
delivered to the Registrar of Companies. The report of the auditors
was unqualified and did not draw attention to any matters by way of
emphasis. They also did not contain a statement under section 498
of the Companies Act 2006.
Changes in accounting policies and disclosures
The presentation of segmental information (note 2) has changed
to reflect the changes in the segmental information provided to the
Group Executive Committee, which is the Group's chief operating
decision maker. The results of the business areas previously
reported as Trust and Tax Services are now included within the
Investment Management segment. Fee income from trust, tax and
pensions advisory activities are reported separately as fees from
advisory services. Total net fee and commission income included in
the consolidated interim statement of comprehensive income now
comprises of net investment management fee income, net commission
and fees from advisory services. Comparative balances for the six
months to 30 June 2010 and the full year to 31 December 2010 have
been reclassified to be consistent with the revised presentation in
line with the requirements set out in IFRS 8 Operating
Segments.
Two changes have been made to the presentation of the primary
statements in this Interim Statement compared to the Group's latest
annual report and accounts. The Consolidated income statement and
Consolidated statement of comprehensive income have been
re-presented as a combined Consolidated statement of comprehensive
income. In addition, other reserves are now shown individually on
the face of the Statement of financial position rather than in
aggregate. Both changes reflect the presentation that will be
adopted in the Group's forthcoming annual report and accounts.
Developments in reporting standards and interpretations
Standards affecting the financial statements
In the current period, there have been no new or revised
Standards and Interpretations that have been adopted and have
affected the amounts reported in these financial statements.
Standards not affecting the reported results or the financial
position
The following new and revised Standards and Interpretations have
been adopted in the current year. Their adoption has not had any
significant impact on the amounts reported in these financial
statements but may impact the accounting for future transactions
and arrangements:
-- IAS 24, 'Related Party Disclosures (revised 2009)'
-- Amendments to IFRS 7 'Financial Instruments: Disclosures' as
part of 'Improvements to IFRS (2010)'
-- Amendments to IAS 1 'Presentation of Financial Statements' as
part of 'Improvements to IFRS (2010)'
-- Amendments to IAS 34 'Interim Financial Reporting' as part of
'Improvements to IFRS (2010)'
New Standards and interpretations
A number of new standards, amendments to standards and
interpretations are effective for annual and interim periods
beginning after 1 January 2012, and therefore have not been applied
in preparing these condensed consolidated interim financial
statements. None of these is expected to have a significant effect
on the condensed consolidated interim financial statements and the
consolidated financial statements of the Group, except for
amendments to IAS 19 Employee Benefits, which is not yet endorsed
by the EU but is expected to become mandatory for the Group's
consolidated financial statements for the year ending 31 December
2013. The amendments to IAS 19, if applied for the year ended 31
December 2011, would reduce profit after tax by approximately
GBP800,000 and increase actuarial gains in other comprehensive
income by the same amount. There would be no effect on total
equity. The Group does not plan to adopt this standard early and
the extent of the impact has not been determined.
2 Segmental information
(a) Operating segments
For management purposes, the Group is currently organised into
two operating divisions: Investment Management and Unit Trusts. The
information presented in this note follows the presentation for
internal reporting to the Group Executive Committee.
Following the completion of the disposal of the Group's overseas
trust businesses, the presentation of segmental information has
been amended to include the remaining trust and tax operations
within the Investment Management segment. This change reflects
management's view that the retained trust related activities
support the investment management business and are not sufficiently
material in their own right to constitute a separate segment of the
business.
Investment
Management Unit Trusts Total
30 June 2011 (unaudited) GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ ------------ ----------
Net investment management fee income 39,893 3,757 43,650
Net commission income 20,006 - 20,006
Fees from advisory services 3,851 - 3,851
Net interest and other income 5,700 331 6,031
Operating income 69,450 4,088 73,538
-------------------------------------- ------------ ------------ ----------
Staff costs - fixed (16,066) (1,227) (17,293)
Staff costs - variable (8,923) (549) (9,472)
-------------------------------------- ------------ ------------ ----------
Total staff costs (24,989) (1,776) (26,765)
Other direct expenses (6,737) (977) (7,714)
Allocation of indirect expenses (13,894) (929) (14,823)
--------------------------------------
Underlying operating expenses (45,620) (3,682) (49,302)
-------------------------------------- ------------ ------------ ----------
Underlying profit before tax 23,830 406 24,236
Exceptional levies for the Financial
Services Compensation Scheme - - -
Amortisation of client relationships (2,515) - (2,515)
------------ ------------ ----------
21,315 406 21,721
Head office relocation costs
(unallocated) (1,170)
----------
Profit before tax attributable to
equity holders of the Company 20,551
Taxation (5,803)
----------
Profit for the period attributable to
equity holders of the Company 14,748
-------------------------------------- ------------ ------------ ----------
Segment total assets 1,017,398 16,935 1,034,333
Unallocated assets 32,061
----------
Total assets 1,066,394
-------------------------------------- ------------ ------------ ----------
2 Segmental information continued
(a) Operating segments continued
Investment
30 June 2010 (unaudited) Management Unit Trusts Total
(restated - note 1) GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ ------------ ----------
Net investment management fee income 30,837 3,548 34,385
Net commission income 18,667 3 18,670
Fees from advisory services 3,576 - 3,576
Net interest and other income 5,241 155 5,396
Operating income 58,321 3,706 62,027
-------------------------------------- ------------ ------------ ----------
Staff costs - fixed (14,634) (1,093) (15,727)
Staff costs - variable (6,700) (644) (7,344)
-------------------------------------- ------------ ------------ ----------
Total staff costs (21,334) (1,737) (23,071)
Other direct expenses (6,319) (693) (7,012)
Allocation of indirect expenses (13,065) (789) (13,854)
-------------------------------------- ------------ ------------ ----------
Underlying operating expenses (40,718) (3,219) (43,937)
-------------------------------------- ------------ ------------ ----------
Underlying profit before tax 17,603 487 18,090
Exceptional levies for the Financial
Services Compensation Scheme (240) (22) (262)
Amortisation of client relationships (2,071) - (2,071)
Profit before tax attributable to
equity holders of the Company 15,292 465 15,757
-------------------------------------- ------------ ------------
Taxation (4,727)
----------
Profit for the period attributable to
equity holders of the Company 11,030
----------
Segment total assets 1,195,492 11,649 1,207,141
Unallocated assets 9,862
-------------------------------------- ------------ ------------ ----------
Total assets 1,217,003
-------------------------------------- ------------ ------------ ----------
Investment
31 December 2010 (unaudited) Management Unit Trusts Total
(restated - note 1) GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ ------------ ----------
Net investment management fee income 66,511 7,074 73,585
Net commission income 35,713 - 35,713
Fees from advisory services 7,372 - 7,372
Net interest and other income 10,171 343 10,514
Operating income 119,767 7,417 127,184
-------------------------------------- ------------ ------------ ----------
Staff costs - fixed (28,912) (2,161) (31,073)
Staff costs - variable (13,988) (1,233) (15,221)
-------------------------------------- ------------ ------------ ----------
Total staff costs (42,900) (3,394) (46,294)
Other direct expenses (12,524) (1,545) (14,069)
Allocation of indirect expenses (26,632) (1,686) (28,318)
-------------------------------------- ------------ ------------ ----------
Operating expenses (82,056) (6,625) (88,681)
-------------------------------------- ------------ ------------ ----------
Underlying profit before tax 37,711 792 38,503
Exceptional levies for the Financial
Services Compensation Scheme (3,332) (243) (3,575)
Amortisation of client relationships (4,845) - (4,845)
Profit before tax attributable to
equity holders of the Company 29,534 549 30,083
-------------------------------------- ------------ ------------
Taxation (8,531)
----------
Profit for the year attributable to
equity holders of the Company 21,552
----------
Segment total assets 1,004,917 12,923 1,017,840
Unallocated assets 10,282
-------------------------------------- ------------ ------------ ----------
Total assets 1,028,122
-------------------------------------- ------------ ------------ ----------
Included within Investment Management net commission income is
GBP408,000 (30 June 2010: GBP557,000; 31 December 2010:
GBP1,225,000) of commission receivable from Unit Trusts.
Intersegment sales are charged at prevailing market prices.
Centrally incurred indirect expenses are allocated to operating
segments on the basis of the cost drivers that generate the
expenditure.
2 Segmental information continued
(b) Geographic analysis
The following is an analysis of operating income analysed by the
geographical location of the Group entity providing the
service:
Operating income by geographical market
Unaudited
Unaudited Six Audited
Six months Year
months to to
to 30 31
30 June June December
2011 2010 2010
GBP'000 GBP'000 GBP'000
---------- ---------- ----------
United Kingdom 71,366 60,023 123,119
Jersey 2,172 2,004 4,065
73,538 62,027 127,184
---------------- ---------- ---------- ----------
The Group's non-current assets are all substantially located in
the United Kingdom.
(c) Major clients
The Group is not reliant on any one client or group of connected
clients for generation of revenues. The Group provided investment
management services to approximately 38,000 clients at 30 June
2011.
3 Operating expenses
Rathbones announced on 16 May 2011 that it had exchanged
contracts for a 12 year lease of 42,200 sq ft of office space on
the 3rd and 4th floors of 1 Curzon Street, London W1. It is
expected that the move from the current head office premises in New
Bond Street, London will be completed by the end of February 2012.
Charges of GBP1,170,000 relating to the move have been recognised
in the six months ended 30 June 2011 (30 June 2010: GBPnil; 31
December 2010: GBPnil) primarily in relation to the cost of
dilapidations in the two existing London properties.
4 Taxation
The current tax expense for the six months ended 30 June 2011
was calculated based on the estimated average annual effective tax
rate. The overall effective tax rate for this period was 28.2% (30
June 2010: 30.0%; 31 December 2010: 28.4%).
Unaudited
Unaudited Six Audited
Six months Year
months to to
to 30 31
30 June June December
2011 2010 2010
GBP'000 GBP'000 GBP'000
------------------------- ---------- ---------- ----------
United Kingdom taxation 4,745 1,675 8,247
Overseas taxation 39 21 35
Deferred taxation 1,019 3,031 249
5,803 4,727 8,531
------------------------- ---------- ---------- ----------
The UK Government has proposed that the UK corporation tax rate
be reduced to 23.0% over the four years from 2011. At 30 June 2011
the first step of this reduction, to 26.0%, had been substantively
enacted. The second step, to 25.0%, was substantially enacted on 5
July 2011. The underlying UK corporation tax rate for the year
ending 31 December 2011 is 26.5% (2010: 28.0%). Deferred tax assets
and liabilities are calculated at the rate that is expected to be
in force when the temporary differences unwind, but limited to the
extent that such rates have been substantively enacted.
5 Dividends
An interim dividend of 17.0p per share is payable on 5 October
2011 to shareholders on the register at the close of business on 16
September 2011 (30 June 2010: 16.0p). In accordance with
International Accounting Standards, the interim dividend has not
been included as a liability in this interim statement. A final
dividend for 2010 of 28.0p per share was paid on 18 May 2011.
6 Earnings per share
Details of the share-based remuneration schemes operated by the
Group can be found in the 2010 Report and accounts on pages 93 to
95.
Earnings used to calculate earnings per share on the bases
reported in these financial statements were:
Unaudited
Six
Unaudited months Audited
Six to 30 Year to
months to June 31
30 June 2010 December
2011 Post Post 2010
Pre tax tax Pre tax tax Pre tax Post tax
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- -------- ---------- -------- ---------- -------- ---------
Underlying
profit
attributable
to
shareholders 24,236 17,457 18,090 12,710 38,503 27,614
Exceptional
levies for
the Financial
Services
Compensation
Scheme - - (262) (189) (3,575) (2,574)
Amortisation
of client
relationships
(note 8) (2,515) (1,849) (2,071) (1,491) (4,845) (3,488)
Head office
relocation
costs (note
3) (1,170) (860) - - - -
Profit
attributable
to
shareholders 20,551 14,748 15,757 11,030 30,083 21,552
--------------- -------- ---------- -------- ---------- -------- ---------
Basic earnings per share has been calculated by dividing
earnings by the weighted average number of shares in issue
throughout the period, excluding treasury shares, of 43,022,073 (30
June 2010: 43,296,330; 31 December 2010: 43,307,423).
Diluted earnings per share is calculated as basic earnings per
share, adjusted for the effect of contingently issuable shares
under the Long Term Incentive Plan, employee share options
remaining capable of exercise and any dilutive shares to be issued
under the Share Incentive Plan, weighted for the relevant period
(see table below).
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
----------------------------------- ------------ ------------ -------------
Weighted average number of
ordinary shares in issue during
the period - basic 43,022,073 43,296,330 43,307,423
Effect of ordinary share options 220,308 53,886 76,153
Effect of dilutive shares issuable
under the Share Incentive Plan 186,857 63,220 116,364
Effect of contingently issuable
ordinary shares under the Long
Term Incentive Plan 252,337 91,565 169,580
-------------
Diluted ordinary shares 43,681,575 43,505,001 43,669,520
----------------------------------- ------------ ------------ -------------
Underlying earnings per share were as follows:
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June 2010
2011 2010
----------------------------------- ------------ ------------ -------------
Underlying earnings per share for
the period attributable to equity
holders of the Company:
- basic 40.58p 29.36p 63.76p
- diluted 39.96p 29.22p 63.23p
7 Property, plant and equipment
During the six months ended 30 June 2011, the Group acquired
assets with a cost of GBP863,000 (six months ended 30 June 2010:
GBP1,097,000; year ended 31 December 2010: GBP2,765,000).
Assets with a net book value of GBP6,000 were disposed of in the
six months ended 30 June 2011 (30 June 2010: GBP27,000; 31 December
2010: GBP91,000), resulting in a gain on disposal of GBP4,000 (30
June 2010: GBP36,000; 31 December 2010: GBP37,000).
8 Intangible assets
Acquired Software
client development Purchased
Goodwill relationships costs software Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- -------------- ------------ ---------- ---------
Cost
At 1 January
2011 47,241 49,713 2,520 12,468 111,942
Internally
developed in
the period - - 135 - 135
Purchased in
the period - 2,725 - 435 3,160
Disposed of
in the
period - (573) - - (573)
At 30 June
2011 47,241 51,865 2,655 12,903 114,664
-------------- --------- -------------- ------------ ---------- ---------
Amortisation
At 1 January
2011 - 8,725 1,780 9,735 20,240
Charge in the
period - 2,515 175 564 3,254
Disposals in
the period - (573) - - (573)
At 30 June
2011 - 10,667 1,955 10,299 22,921
-------------- --------- -------------- ------------ ---------- ---------
Carrying
value at 30
June 2011 47,241 41,198 700 2,604 91,743
-------------- --------- -------------- ------------ ---------- ---------
Carrying
value at 30
June 2010 47,241 41,348 821 2,646 92,056
-------------- --------- -------------- ------------ ---------- ---------
Carrying
value at 31
December
2010 47,241 40,988 740 2,733 91,702
-------------- --------- -------------- ------------ ---------- ---------
Purchases of acquired client relationships relate to payments
made to investment managers and third parties for the introduction
of client relationships, net of adjustments to consideration
payments of GBP334,000 (30 June 2010: GBPnil; 31 December 2010:
GBPnil). The amortisation charge for acquired client relationships
has been reduced by GBP33,000 (30 June 2010: GBPnil; 31 December
2010: GBPnil) as a result of the adjustments to consideration
payments.
9 Deposits by banks
Included within deposits by banks is an unsecured term loan of
GBPnil (30 June 2010: GBP4,622,000; 31 December 2010:
GBP3,089,000). The final instalment of this loan was paid in April
2011. On 30 June 2011, deposits by banks included overnight
overdraft balances of GBP4,068,000 (30 June 2010: GBP1,453,000; 31
December 2010: GBP215,000).
10 Provisions for liabilities and charges
Litigation
Deferred related
contingent Client and
consideration compensation other Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------------- -------------- ----------- ---------
At 1 January 2010 16,817 801 131 17,749
Charged to profit or
loss - 434 290 724
Unused amount
credited to profit
or loss - (20) - (20)
--------------------- --------------- -------------- ----------- ---------
Net charge to profit
or loss - 414 290 704
Other movements (i) 7,581 - - 7,581
Utilised/paid during
the period (19,744) (8) (93) (19,845)
As at 30 June 2010 4,654 1,207 328 6,189
--------------------- --------------- -------------- ----------- ---------
Charged to profit or
loss - 96 218 314
Unused amount
credited to profit
or loss - (446) - (446)
--------------------- --------------- -------------- ----------- ---------
Net credit to profit
or loss - (350) 218 (132)
Other movements (i) 6,713 - - 6,713
Utilised/paid during
the period (6,275) (235) (70) (6,580)
At 1 January 2011 5,092 622 476 6,190
--------------------- --------------- -------------- ----------- ---------
Charged to profit or
loss - 370 1,230 1,600
Unused amount
credited to profit
or loss (74) (10) (26) (110)
--------------------- --------------- -------------- ----------- ---------
Net charge to profit
or loss (74) 360 1,204 1,490
Other movements (i) 3,059 - - 3,059
Utilised/paid during
the period (1,745) (167) (82) (1,994)
As at 30 June 2011 6,332 815 1,598 8,745
--------------------- --------------- -------------- ----------- ---------
(i) Other movements in provisions relate to deferred payments to
investment managers and third parties for the introduction of
client relationships, which have been capitalised in the
period.
The non-current element of provisions (expected to be paid after
more than one year) totals GBP4,355,000 as at 30 June 2011 (30 June
2010: GBP2,205,000; 31 December 2010: GBP3,158,000). Litigation
related and other provisions include a provision of GBP1,170,000
for the cost of dilapidations following the decision to relocate
the head office (note 3).
11 Long term employee benefits
The Group operates two defined benefit pension schemes providing
benefits based on pensionable salary for executive directors and
staff employed by the Company. For the purposes of calculating the
pension benefit obligation, the following assumptions have been
used:
Unaudited Unaudited Audited
30 June 30 June 31 December
2011 2010 2010
% p.a. % p.a. % p.a.
--------------------------------------- ---------- ---------- -------------
Rate of increase in salaries 4.95 4.55 4.85
Rate of increase of pensions in
payment:
- Laurence Keen Scheme 3.70 3.50 3.70
- Rathbones 1987 Scheme 3.50 3.20 3.50
Rate of increase of deferred pensions 3.70 3.30 3.60
Discount rate 5.50 5.30 5.40
Inflation assumption 3.70 3.30 3.60
--------------------------------------- ---------- ---------- -------------
The assumed life expectations of members retiring, aged 65
were:
Audited Audited
Unaudited Unaudited Unaudited Unaudited 31 31
30 June 30 June 30 June 30 June December December
2011 2011 2010 2010 2010 2010
Males Females Males Females Males Females
---------- ---------- ---------- ---------- ---------- --------- ---------
Retiring
today 22.2 24.3 22.1 24.3 22.1 24.3
Retiring
in 20
years 23.7 25.5 23.7 25.4 23.7 25.4
---------- ---------- ---------- ---------- ---------- --------- ---------
The amount included in the balance sheet arising from the
Group's obligations in respect of the schemes is as follows:
Audited Audited
Unaudited Unaudited Unaudited Unaudited Rathbone Laurence
Rathbone Laurence Rathbone Laurence 1987 Keen
1987 Keen 1987 Keen Scheme Scheme
Scheme Scheme Scheme Scheme 31 31
30 June 30 June 30 June 30 June December December
2011 2011 2010 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ---------- ---------- ---------- ---------- --------- ---------
Present value of
defined benefit
obligations (89,882) (12,073) (82,713) (11,799) (89,312) (12,041)
Fair value of
scheme assets 89,014 12,606 69,252 10,631 82,759 11,951
(Deficit)/surplus
in schemes (868) 533 (13,461) (1,168) (6,553) (90)
Death in service
benefit reserve
(unfunded) - - (1,120) - - -
Total
(deficit)/surplus (868) 533 (14,581) (1,168) (6,553) (90)
------------------- ---------- ---------- ---------- ---------- --------- ---------
The Group made special contributions of GBP2,128,000 during the
period (30 June 2010: GBP2,336,000; 31 December 2010: GBP3,714,000)
into its pension schemes.
12 Share capital
The following movements in share capital occurred during the
period:
Number Exercise Share Share
of price capital premium Total
shares Pence GBP'000 GBP'000 GBP'000
--------------------- ----------- --------- --------- --------- ---------
At 1 January 2010
and 30 June 2010 43,296,330 2,165 31,756 33,921
Shares issued:
- to Share Incentive
Plan 68,851 926.5 3 635 638
- to Save as You
Earn scheme 359 696.0 - 2 2
- on exercise of
options 11,250 852.0 1 95 96
--------------------- ----------- --------- --------- --------- ---------
At 31 December 2010 43,376,790 2,169 32,488 34,657
--------------------- ----------- --------- --------- --------- ---------
Shares issued:
- to Share Incentive
Plan 82,194 890.0 4 727 731
- to Save as You
Earn scheme 971 696.0 - 7 7
- on exercise of 415.0
options 35,833 - 852.0 2 268 270
--------------------- ----------- --------- --------- ---------
At 30 June 2011 43,495,788 2,175 33,490 35,665
--------------------- ----------- --------- --------- --------- ---------
13 Contingent liabilities and commitments
(a) Indemnities are provided to a number of directors and
employees who provide trust and tax services in connection with
them acting as directors of client related companies in the normal
course of business. No indemnities were called on during the period
end 30 June 2011 (30 June 2010 and 31 December 2010: no indemnities
called on).
(b) Capital expenditure authorised and contracted for at 30 June
2011 but not provided in the financial statements amounted to
GBP934,000 (30 June 2010: GBP301,000 and 31 December 2010:
GBP594,000).
(c) The contractual amounts of the Group's commitments to extend
credit to its clients are as follows:
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ -------------
Guarantees 583 5 583
Undrawn commitments to lend of 1
year or less 4,617 11,524 7,724
----------------------------------- ------------ -------------
5,200 11,529 8,307
----------------------------------- ------------ ------------ -------------
The fair value of the guarantees is GBPnil (30 June 2010 and 31
December 2010: GBPnil).
(d) The Group leases various offices and other assets under
non-cancellable operating lease agreements. The leases have varying
terms and renewal rights. During 2011 the Group committed to take
on a 12 year lease at 1 Curzon Street London and extended the lease
on the Port of Liverpool Building. The Group's agreement to lease
space at 1 Curzon Street, London provides for a reset to market
rents in 2018.
The future minimum lease payments under non-cancellable
operating leases were as follows:
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ -------------
No later than 1 year 3,964 5,127 5,215
Later than 1 year and no later
than 5 years 19,817 11,781 11,206
Later than 5 years 37,475 6,999 7,749
----------------------------------- ------------ -------------
61,256 23,907 24,170
----------------------------------- ------------ ------------ -------------
(e) In addition to Financial Services Compensation Scheme levies
accrued in the year, further levy charges may be incurred in future
years although the ultimate cost remains uncertain.
14 Consolidated statement of cash flows
For the purposes of the statement of cash flows, cash and cash
equivalents comprise the following balances with less than three
months until maturity from the date of acquisition:
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ -------------
Cash and balances at central banks 3 2 4
Loans and advances to banks 69,590 41,601 39,565
Available for sale investment
securities 15,111 121,049 39,500
84,704 162,652 79,069
----------------------------------- ------------ ------------ -------------
Available for sale investment securities are amounts invested in
money market funds which are realisable on demand.
Cash flows arising from issue of ordinary shares comprise:
Unaudited Unaudited
Six months Six months Audited
to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ -------------
Share capital issued (note 12) 6 - 4
Share premium on shares issued
(note 12) 1,002 - 732
Shares issued in relation to
share-based schemes for which no
cash consideration was received (359) - (283)
----------------------------------- ------------ ------------ -------------
649 - 453
----------------------------------- ------------ ------------ -------------
15 Related party transactions
At 30 June 2011 key management, who are defined as the Company's
Directors, and their close family members had gross outstanding
deposits of GBP602,000 (30 June 2010: GBP625,000; 31 December 2010:
GBP490,000) and gross outstanding loans of GBP908,000 (30 June
2010: GBP203,000; 31 December 2010: GBP904,000) which were made on
normal business terms. A number of the Company's directors and
their close family members make use of the services provided by
companies within the Group. Charges for such services are made at
various staff rates.
One of the Group's non-executive directors is an executive
director of Novae Group Plc, a related entity of which underwrites
part of the Group's professional indemnity insurance policy.
All amounts outstanding with related parties are unsecured and
will be settled in cash. No guarantees have been given or received.
No provisions have been made for doubtful debts in respect of the
amounts owed by related parties.
16 Events after the consolidated interim statement of financial
position date
There have been no material events occurring between the
consolidated interim statement of financial position date and the
date of signing this interim statement.
Independent review report to Rathbone Brothers Plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half yearly financial report for the
six months ended 30 June 2011 which comprises the consolidated
interim statement of comprehensive income, consolidated interim
statement of changes in equity, consolidated interim statement of
financial position, consolidated interim statement of cash flows
and the related explanatory notes. We have read the other
information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
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 Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Services Authority ("the UK FSA"). 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 half yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half yearly financial report in accordance with
the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the EU.
The condensed set of financial statements included in this half
yearly financial report has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half yearly financial report for the six months ended 30
June 2011 is not prepared, in all material respects, in accordance
with IAS 34 as adopted by the EU and the DTR of the UK FSA.
I Cummings for and on behalf of KPMG Audit Plc
Chartered Accountants
15 Canada Square
London
E14 5GL
26 July 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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