Final Results

CHARLES STANLEY GROUP PLC

RESULTS FOR THE YEAR ENDED 31 MARCH 2013

Charles Stanley is one of the UK's leading independently owned, full service stockbroking and investment management groups. Today it announces its preliminary results for the year ended 31 March 2013.

Highlights:

§ Funds under management and administration £17.7 billion (2012: £15.4 billion) 14.9% increase

§ Discretionary funds under management £6.4 billion (2012: £5.0 billion) 28.0% increase

§ Revenue for the year £127.6 million (2012: £119.6 million) 6.7% increase

§ Fee revenue for the year £76.9 million (2012: £67.4 million) 14.1% increase

§ Reported profit before tax £9.1 million (2012: £8.5 million) 7.0% increase

§ Adjusted profit before tax £13.5 million (2012: £12.5 million) 8.0% increase

§ Reported earnings per share 14.93p (2012: 13.12p) 13.8% increase

§ Adjusted earnings per share 22.38p (2012: 19.84p) 12.8% increase

§ Total dividend 11.75p (2012: 11.25p) 4.4% increase

§ Direct-to-client investment platform, Charles Stanley Direct, launched in January 2013

Commenting on the results for the latest year, Sir David Howard, Chairman, said:

"Charles Stanley has performed resiliently in the last three years, we have an outstanding team of people and we are well funded. We have achieved a further significant improvement in funds under management and in investment management fees, and we have successfully launched our new "clean-priced" share trading and funds service Charles Stanley Direct. While economic conditions remain challenging there are hints of recovery, and I therefore look to the year ahead with a touch more optimism than a year ago."

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CHAIRMAN'S STATEMENT

Charles Stanley Group is pleased to announce that its revenue for the year ended 31 March 2013 was £127.6 million compared to £119.6 million for the previous year, with funds under management reaching a record high of £17.7 billion. The deterioration in economic and market conditions from the second half of 2011-12 continued through most of 2012-13, but markets began to rally from January of this year. Profit before tax was £9.1 million (2011-12: £8.5 million), an increase of 7.0%. The adjusted profit before tax was £13.5 million (2011-12: £12.5 million), an increase of 8.0%. This figure for adjusted pre-tax profit excludes the effect of amortisation, the initial cost of setting up our new Charles Stanley Direct service, and a further substantial payment to the Financial Services Compensation Scheme.

Last year I reported on the sudden down-turn in economic sentiment and in our trading environment in the autumn of 2011. With recessionary conditions at home, intense uncertainty in Europe, and looming debt issues in the USA, we saw a substantial reduction in share trading activity, which represents a significant part of our income. Throughout the latest year this downward trend continued until December 2012, with activity starting to pick up again in January 2013.

However the long decline in trading volumes and commission income has been more than made up for by a continuing increase in investment management fees - some 17.3% higher compared with 2011-12 - and in the income arising from investment, financial and corporate services, which was 11.1% higher. For the previous year these figures were 11.5% and 5.7% respectively. This continuing shift in our business mix means that, consistent with our objective to re-balance our income, commission income in the latest year has for the first time fallen below 40% of total revenue.

It is particularly pleasing to be able to report another significant increase in funds under management and administration. These rose by 14.9% from £15.4 billion to £17.7 billion. Within this figure the funds under discretionary and advisory management rose by 19.2% from £7.8 billion to £9.3 billion, and the funds under discretionary management alone have risen by 28.0% from £5.0 billion to £6.4 billion. The increase in funds under management is made up of market performance averaging 10.0% across clients' portfolios, and 9.2% in net incoming funds. This compares with an increase in the FTSE 100 Share Index over the same period of 11.1% and an increase in the APCIMS Balanced Portfolio Index - our principal benchmark - of 10.0%. Clients' discretionary funds now represent 71.0% of total managed funds, compared to 64.7% at 31 March 2012 and 64.0% at 31 March 2011.

During the year we were joined by a number of brokers with significant business in our London office and at several of our branch offices around the UK. Very shortly we are opening a new branch office in the centre of Leicester, with a team of more than 20 brokers and experienced staff. This will bring our total number of offices around the UK to 33.

A particular highlight of the year was the launch of our new direct-to-client internet-based share-trading and funds service Charles Stanley Direct. This division is a complete re-launch of our existing Fastrade business and it will eventually absorb the Garrison direct-to-client funds business which we purchased in 2007. Charles Stanley Direct is one of the first "clean priced" models to be launched to the retail market. The pricing will enable clients to understand in a clear manner how much they are paying for the administration of their assets, whether funds, equities or bonds. The proposition has been received well by the market with over 1,000 new accounts opened since launch. The division has over £500 million of assets on its platform.

Attention should also be drawn to the strong growth of our Matterley Fund Management business of OEICs. The five funds have grown in total value by 34.7% from £150.9 million at 31 March 2012 to £203.2 million at the latest year end.

The Directors are recommending an increase in the final dividend of 5.9%, from 8.50p to 9.00p net per share. Taken together with the unchanged interim dividend this will represent an increase of 4.4% in the total dividend for the year, at 11.75p (2011-12: 11.25p). The final dividend will be paid on 2 August 2013 to shareholders registered on 28 June 2013.

Corporate Governance

Last year I reported that the Directors were close to making some important appointments to the parent Company Board and also to the Board of its major subsidiary, Charles Stanley & Co. Limited. This is in the context of a major exercise that we have been undertaking to re-shape the corporate governance of the Company, as a basis for building our next stage of growth. I said last year that, after a lengthy and testing search, and with the help of leading consultants, we had identified two non-executive Directors for appointment to the Board of Charles Stanley Group PLC, subject to the approval of the Financial Services Authority.

Consent was duly granted and in September last year we were delighted to announce the appointment of Bridget Guerin and David Pusinelli as Directors of Charles Stanley Group PLC. In October we formed two new committees to oversee remuneration, and Board nominations and effectiveness. Bridget Guerin has been appointed chairman of the Remuneration Committee. David Pusinelli has been appointed Senior Independent Director and chairman of the Audit Committee, replacing Gordon Montgomery FCA, our independent financially-qualified Audit Committee chairman.

I should like to thank Bridget and David for the very substantial and constructive contribution which they have made already to our deliberations as a Board. I should also like to place on record the appreciation of the Board for the very valuable role which Gordon Montgomery has played for the past five years as chairman of our Audit Committee.

In July last year we were also delighted to welcome Gary Teper to the parent Company Board. Gary is the head of Legal Services and HR and has served for several years with distinction on the Charles Stanley & Co. Limited Board. In August 2011 he assumed additional responsibility as Director in charge of our branch network, which he has been carrying out with conspicuous success.

Also in July last year we made four appointments of top managers to the Board of Charles Stanley & Co. Limited, our principal trading subsidiary, Hugo Akerman, Chris Harris-Deans, Anthony Scott and James Stewart-Smith. They bring their substantial experience and knowledge to the Board and have already contributed strongly.

We have decided to go further than the recommendations in the Corporate Governance Code as they apply to the parent Company - and beyond the requirements of its articles of association - and submit the names of all Directors for re-election by shareholders at the Annual General Meeting.

Financial Services Compensation Scheme

There is little more that I can add to previous complaints about the unfairness of the Financial Services Compensation Scheme. This requires your Company to fund compensation to clients of failed investment firms in unrelated areas of business. We have no control over the size or the timing of demands, nor any say in weeding out the rogue firms who give rise to these expensive claims. In 2011-12 our bill was £1.6 million, and in the latest year the figure is £1.9 million. This knocks nearly 20% off our reported profit.

Collectively, across the industry, this is a huge burden for firms and ultimately therefore for the investing public. It cannot be right that failed businesses take a great bite out of the rest of us.

The Charles Stanley team

Once again I ask our shareholders to join me in thanking everyone within the Charles Stanley group for their hard work and dedication in bringing us so successfully through another challenging year. These results represent a huge amount of skill and effort by so many talented people. The Directors are very grateful indeed.

Outlook

At home the long drifting economic stagnation continues, and abroad we stagger from one euro crisis to the next. The scenery looks very familiar from last year and indeed the year before that. The last round of euro crises, most recently in Cyprus, has been stilled temporarily by the strength of the German Chancellor in her campaign to support the euro at all costs. But gravity can't be defied for ever. This continues to overhang the markets, with a continuous flow of worsening news about black holes in the banks, near to nil growth, and public deficits which stubbornly refuse to come down.

But here and there we can see some small improvements. Figures from the US economy look brighter. Corporate profitability continues to improve, and dividends continue upwards. Unemployment in the UK remains surprisingly low - the argument that labour rates have been falling, and people have been pricing themselves into work, looks convincing, and would also explain the improvement in corporate profits. But a severe knock could undermine all of this - an implosion in a major euro economy, perhaps, or the emergence of severe banking problems in China. We aren't out of the woods yet.

The relatively healthy picture of corporate UK, together with the presses printing money, has been driving the stock market upwards, and this has had a significant effect on the Company's results. In 2011-12 the London market drifted sideways, but 2012-13 has been altogether more buoyant. But there is still a high degree of nervousness, and trading volumes remain muted.

The first two or three months of our financial year, from the first of April, nearly always show an uptick, before things settle back for the summer. But so far the uptick is rather stronger than one might expect. It is early days to build our hopes on this for a more sustained recovery, after these long years of stagnation, but there seems to be a sense of things moving forward again.

Your Company has performed resiliently in the poor conditions of the past two or three years, we have an outstanding team of people, we are well funded and full of enthusiasm. So while I express my usual caution, given the continuing adverse economic news, my optimism for the year ahead is a touch higher than it was this time last year.

Sir David Howard

Chairman

11 June 2013

BUSINESS REVIEW

Over the past two years we have embarked upon a thorough review of our online, direct-to-client propositions and decided to implement some significant upgrades and alterations to our business. Our direct-to-client investment platform, Charles Stanley Direct, was launched in January 2013 and henceforward will be recognised as a distinct division within Charles Stanley. The division was created by transferring two existing departments to the new division:

our on-line business, Fastrade, from the Investment Management Services division and

the business of our discount financial intermediary, Garrison Investment Analysis Limited, from the Financial Services division.

All comparatives within the following tables have been amended to reflect this change to provide meaningful comparisons between periods.

The Group is now organised into four operating divisions: Investment Management Services, Charles Stanley Direct, Financial Services and Charles Stanley Securities.

The split of funds and revenue over the divisions is shown in the following tables:

Investment Management Services

The core of our business is our Investment Management Services division. This division provides investment services to private investors, charities, and trusts from 32 locations.

The services provide our clients with a choice of:

Managed:

·; discretionary portfolio management

·; advisory portfolio management

Administered:

·; advisory share dealing

·; execution only share dealing (excluding on-line services)

We charge for these services in three main ways:

·; investment management fees based on a percentage of funds;

·; administration fees based on a combination of fixed fees and percentage of funds and

·; commissionon transactions undertaken on behalf of clients.

Funds managed and administered for our Investment Management Service clients are analysed below:

The strong performance of Discretionary Funds under Management and Execution only services has been influenced by the continuing migration by many clients from Advisory services to either Discretionary or Execution only services.

Included in this increase in funds were additional ISA subscriptions during the year of £172million (2012: £151 million) of which £111 million (2012: £94 million) were under Management and £61 million (2012: £57 million) under Administration.

Funds under Management and Administration also include funds held on behalf of charities which have continued to grow. At 31 March 2013 we held £908 million, an increase of £132 million, or 17.0%, from last year. The significant progress made in this area is a testament to the dedication of our investment managers, who are attracting new business and meeting the needs of a wide range of charities.

Revenues generated from Managed and Administered funds are analysed below:

In 2013 fee income has continued its long term upward trend and has increased this year by 15.1% from £51.6 million to £59.4 million.

Commission income has decreased only slightly this year from £46.7 million to £45.6 million (2.4%) indicating that this has now stabilised, following a sharp fall in transaction volumes between 2011 and 2012.

The trends in fee and commission income have resulted in our Managed business, with its greater reliance on fees, continuing to grow by 11.6%, while the Administered business has reduced by 2.0%.

Managed clients

Funds under management have increased by 19.4% as shown in the table below.

Around 40% of our managed funds are held for in accounts with portfolios greater than £1 million as shown in the following table.

The increase in funds under management has resulted in an increase of 18.1% in fees.

Administered clients

Administered funds have increased by 10.8% as shown in the table below.

Fee income increased by 6.7% but this was offset by the continuing downward trend in commission income resulting in a drop in total revenue of 2.0%.

Michael Clark

Director of Investment Management Services

Charles Stanley Direct

For a significant period Charles Stanley maintained a foothold in the online, direct-to-client market place through our Fastrade share dealing service and Garrison, our discount financial intermediary service. Significant demographic and commercial developments coupled with certain consequences of the Retail Distribution Review, prompted us to extend and improve our positioning within the self-directed, non-advised online market place and culminated in the re-launch and rebrand of our activities in this area as Charles Stanley Direct in January 2013.

The proposition has been received well by the market with over 1,000 new accounts opened since launch. Our Fastrade client base has already been migrated onto the Charles Stanley Direct platform which will be made available to Garrison clients in the coming year. Over £500 million of assets are now on the Charles Stanley Direct on-line site.

The historical revenues of these two components of the client base are shown below.

Financial Services

This division provided services as set out below.

*In May 2013 the business of Jobson James was transferred to Charles Stanley & Co. Limited and Jobson James Financial Services Limited ceased trading.

Total income for the division grew by 14.7% to £11.7 million from £10.2 million. The profitability of the division was somewhat adversely affected by additional recruitment of personnel in the Financial Planning area in order to further expand our holistic Wealth Management proposition.

Financial planning and wealth management

Our financial planning and wealth management service is offered from our offices in London, Southampton, Leeds, Birmingham, Ipswich and Edinburgh and from our subsidiaries in Liverpool and Plymouth. This business has material growth potential as we continue to develop the holistic nature of our services. 1 January 2013 saw the implementation of key elements of the Financial Services Authority's Retail Distribution Review ("RDR"). Our business completed a thorough review of its practices to ensure compliance with the RDR regime and consequently issued new terms of business in relation to the provision of its services.

The financial planning and wealth management business recorded another solid year of growth with gross revenue increasing to £2.7 million from £2.5 million, representing a year on year increase of 8.0%.

This year represented the first full year of contribution from Jobson James Financial Services Limited following our acquisition of the business in May 2011. Performance was creditable against an uncertain economic background, with revenue post acquisition increasing from £1.6 million to £1.8 million. Funds under advice remained fairly static at £259 million (2012: £245 million) but significant progress was made in integrating a significant number of such funds within the Charles Stanley platform.

The process of fully amalgamating the Jobson James offering was largely completed during the year and forms a solid base from which to develop an integrated investment management and financial planning proposition, well positioned to capitalise on the changes to the market place brought about by the RDR. We look forward to the further development of this business in the coming months.

EBS Management PLC

Revenue increased 15.0% year on year to reach £2.3 million from the figure of £2.0 million reported last year. We now have 5,894 SIPPs under administration compared with 4,195 reported at the end of last year. We have seen significant take up in SIPPs administered further to the third party administration agreement entered into in May 2011. A total of 2,253 SIPPs are now under our control pursuant to this arrangement. SIPPs are and will continue to be an important part of the Financial Planning offering for the whole of the Charles Stanley group.

Charles Stanley Financial Solutions Limited

Charles Stanley Financial Solutions Limited produced a pleasing performance with revenue increasing 12.5% from £3.2 million to £3.6 million.

The business began to benefit from the enhanced focus produced by the amalgamation of substantially all of the Group's benefit consultancy business within Charles Stanley Financial Solutions. We expect progress in the business to continue as regulatory changes in areas such as pension auto-enrolment offer additional opportunities.

Matterley

Our fund management business has enjoyed a strong performance with funds under management rising 34.6% from £150.9 million to £203.2 million.

Four out of our five funds are rated A or better by Citywire.

We are exceptionally pleased with the performance of our Matterley Undervalued Asset Fund which has a top decile performance over three years when ranked against its peer group and recorded a 76.7% growth in Funds under Management to reach £63.8 million at the year end. We expect momentum generated by this performance and the newly acquired critical mass in the fund will drive both it and the department to new heights in the coming year.

* Source: Financial Express Analytics at 31 March 2013. Total return, Sterling, net income re-invested. Sector and Quartile performance is based on the A share class since launch on 13 March 2006. The figures refer to the past and relate to the relevant IMA sector.

Charles Stanley Securities

Charles Stanley Securities, the Group's equity capital markets business is focussed on providing advisory, broking and research services to the small and mid-cap sector, together with WG Partners, a specialist team within the division advising companies in the Healthcare and Technology Sectors. It also conducts agency bond trading. These businesses continued to experience challenging market conditions during the year.

Revenues for the year increased slightly to £7.7 million with commission income broadly flat at £4.2 million and modest growth in fee income to £3.5 million.

Charles Stanley Securities added 14 new retained clients since 1 April 2012 and together with WG Partners now acts for 58 corporate clients on a retained basis. Since 1 April 2013, the division has acted for clients on six transactions including public and private equity fundraisings and M&A transactions.

Michael Lilwall

Director

OPERATING AND FINANCIAL REVIEW

During 2013 total revenue for the Group increased by 6.7% to £127.6 million from £119.6 million. Reported profit for the year of £9.1 million is stated after one-off costs of £0.8 million relating to the creation of our new Charles Stanley Direct service, amortisation of £2.1 million (2012: £2.4 million) and FSCS levy of £1.9 million (2012: £1.6 million).

The financial impact of the FSCS levy, which arises from other industry failures, is wholly outside our control.

Revenue by division for the year is summarised below:

The Group seeks, over time, to alter the balance between commission and fee income increasingly in favour of fees. In 2013 the proportion of fee income (excluding corporate finance fees) to total revenue was 57.6% compared to 54.0% in 2012 and 47.2% in 2011.

Administrative expenses

Administrative expenses are summarised below:

Total underlying costs increased by 6.5% over the year. Staff costs increased by 4.4% to £56.8 million from £54.4 million and now represent 47.8% of our total costs (2012: 48.7%). Average employee numbers have risen by 3.9% to 827 from 796. Other costs include costs of moving all London based brokers into one building at 131 Finsbury Pavement, London.

For management purposes costs are allocated to divisions where possible and this is shown in note 3. During the year an exercise was carried out to in increase the proportion of costs allocated across divisions and the comparatives have been amended to reflect this change.

Salary costs of client facing staff have risen and the ratio of the number of times these salaries are covered by revenue has slightly changed.

Non-salary fixed costs have changed slightly relative to revenue as shown in the following table. Overhead costs as a % of revenue has improved due to an exercise carried out during the year to improve the allocating of costs to divisions.

Interest receivable of £0.4 million (2012: £0.4 million) includes interest on bank deposits and interest earned from interest-bearing available for sale investments. The Group's cash balances stood at £40.4 million as at 31 March 2013 (2012: £41.9 million). Interest rates have again been held by the Bank of England at 0.5% for the year.

The tax charge of £2.3 million is analysed in note 8. This represents 25.5% of the Group's profit before tax of £9.1 million (2012: 30.6% of £8.5 million). The effective rate is higher than the UK standard rate of 24.0% due to differences between accounting and taxation treatment of certain items, and the effects of prior year taxation adjustments.

Earnings per share were 14.93p (2012: 13.12p). There was a slight dilution at 31 March 2013 of earnings giving diluted earnings per share of 14.87p. Further details on earnings per share are explained in note 9.

As indicated in the Chairman's Statement the final dividend for the year is recommended to be 9.0p in addition to the interim dividend of 2.75p giving a total dividend for the year of 11.75p.

At 31 March 2013 the Group had net assets of £82.0 million (2012: £81.6 million) equivalent to £1.81 per share (2012: £1.80 per share).

We monitor our performance against our objectives by using the following key performance indicators:

James Rawlingson

Finance Director

11 June 2013

Charles Stanley Group PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

YEAR ENDED 31 MARCH 2013

Earnings per share

Charles Stanley Group PLC

YEAR ENDED 31 MARCH 2013

Charles Stanley Group PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 MARCH 2013

Charles Stanley Group PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

AT 31 MARCH 2013

Charles Stanley Group PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 31 MARCH 2013