13th Jun 2007 07:01
Rensburg Sheppards plc13 June 2007 13 June 2007 Rensburg Sheppards plc ('Rensburg Sheppards' or 'the Company') Preliminary Results Rensburg Sheppards, the investment management group, today announces itspreliminary results for the year ended 31 March 2007, its first full yearresults under International Financial Reporting Standards Key Points: • Profit before tax of £25.7 million (16 months ended 31 March 2006: £13.0 million) • Adjusted* profit before tax of £35.9 million (16 months ended 31 March 2006: £29.1 million) • Basic earnings per share of 37.5p (16 months ended 31 March 2006: 20.9p) • Adjusted* basic earnings per share of 57.1p (16 months ended 31 March 2006: 55.1p) • Proposed final dividend of 15p per ordinary share, giving a total dividend for the year of 22.5p • In respect of the acquisition of Carr Sheppards Crosthwaite, the achievement by 31 March 2007 of future annualised pre-tax cost synergies of approximately £5.5 million per annum • Group funds under management at 31 March 2007 of £14.40 billion (31 March 2006: £ 13.13 billion), an increase of 9.7% * Before amortisation of the client relationships intangible asset, share-basedpayments relating to the Employee Benefit Trust ('EBT'), reorganisation costsand profit on disposal of available-for-sale investments. These items amount toa net charge before tax of £10.2 million (16 months ended 31 March 2006: £16.1million) and a net charge after tax of £8.6 million (16 months ended 31 March2006: £12.5 million). Steve Elliott, Chief Executive of Rensburg Sheppards, commented: "These strong figures are the culmination of an important year for RensburgSheppards. Whilst we have benefited from favourable market conditions, it isimportant to recognise the contribution from the successfully completedintegration of Carr Sheppards Crosthwaite, the capital investments we have madein strengthening our infrastructure and the hard work from all of our employees. The combination of the current macro-economic backdrop, the strength of theenlarged Rensburg Sheppards group and the potential sustainable growthopportunities which we have identified leads me to look to the future withconfidence." An analysts meeting will be held today at 10.00am at the offices of HudsonSandler, 29 Cloth Fair, London, EC1A 7NN. For further information, please contact: Steve Elliott, Chief Executive Tel: 020 7597 1234 Rensburg Sheppards plc Nick Lyon / James White Tel: 020 7796 4133 Hudson Sandler Chairman's statement I am delighted that we are reporting on an excellent set of results at the endof our first full year of trading following the acquisition of Carr SheppardsCrosthwaite ('CSC'). We knew that an acquisition of such significance would be aconsiderable challenge, but there was great confidence throughout the Companythat a successful integration would be achieved. It has been, and the result isthat the group has achieved record levels of profits and earnings. We have of course had the benefit of a following wind in that world stockmarkets have moved higher, but pleasingly our funds under management have grownfaster than the comparable indices. It is therefore entirely appropriate that Idraw attention early in this report to the sheer hard work and continuedcommitment shown by every employee. They have generated the profits now beingreported upon, and I believe all shareholders will share my appreciation oftheir efforts. Results and dividend For the year ended 31 March 2007, reported profit before tax was £25.7 millionand basic earnings per share were 37.5p. Adjusting for amortisation of theclient relationships intangible asset and share-based payments relating to theEmployee Benefit Trust ('EBT'), together with their associated tax consequences,gives underlying profit before tax of £35.9 million and underlying basicearnings per share of 57.1p. Unfortunately, for this year, it is difficult to make meaningful comparisonswith the figures for the prior reporting period. In part this is because wepreviously had an extended period of 16 months following the change in theCompany's financial year end and furthermore those results only included thosederived from CSC subsequent to its acquisition by Rensburg Sheppards part-waythrough that period. I can however make the general observation that we havemade considerable progress and all parts of the business have shown satisfactorygrowth. The directors are now recommending a final dividend of 15p per ordinary sharepayable on 10 August 2007 to all shareholders on the register at the close ofbusiness on 20 July 2007. When added to the interim dividend of 7.5p perordinary share, this brings the total dividends in respect of the year to 22.5pper ordinary share. Board Right at the end of the year under review we saw significant change to theboard. Two executive directors, Mike Burns and Nick Bagshawe, retired on 31March 2007 and I should like to pay tribute to them both for their great effortson the group's behalf. Mike Burns was chief executive for the past ten years and it would be verydifficult to exaggerate the contribution he made during this time. Under Mike'sleadership what is now Rensburg Sheppards has been created from what wasinitially a stockbroking and investment management business of quite modestsize. Whilst this period of exciting growth has always been a team effort, it isclear who was the chief architect and I thank him warmly for all that he hasdone. Nick Bagshawe also contributed greatly as an executive director following themerger with CSC. We will miss his wise counsel around the boardroom table and Iknow his clients recognise the same wisdom he has used to good effect on theirbehalf during a long and successful City career. We wish him and Mike well intheir retirements. We are very fortunate that in Steve Elliott, the managing director of the groupsince the CSC acquisition and previously chief executive of CSC, we have anideal replacement for Mike Burns and he therefore took up the position of chiefexecutive on 1 April 2007. I wish Steve every success in his new role. Outlook With the major task of integrating CSC completed, the group is now well placedto concentrate on growing its revenue and earnings, aided, I hope, by acontinuation of the favourable operating environment that we have enjoyed duringthe past few years. C.G. ClarkeChairman12 June 2007 Chief executive's report I would like to open this, my first report since taking over as chief executiveon 1 April 2007, by acknowledging the tremendous contribution made by mypredecessor Mike Burns, who led the transformation of the business over the lastten years into one of the UK's leading private client investment managementbusinesses. The year to 31 March 2007 was, apart from the small dip in the first quarter,one in which the UK financial markets in which we operate continued tostrengthen. This backdrop has undoubtedly assisted us in delivering the strongfinancial results reported, however it is essential to acknowledge that suchresults would simply not have been achievable, were it not for the absoluteprofessionalism and commitment of all of the group's employees. The market for private client investment and fund management and financialplanning services that the group provides to its clients is generally recognisedto be a market which will see greater demand, given in particular, theincreasing recognition by individuals of the need for specialist advice toinvest for their own futures and the increased availability of personal wealthfor possible investment. The current pressures from both a regulatory and operational efficiencyperspective will, I believe, drive further consolidation within the industry forwhich we as a group will ensure that we are prepared. Rensburg Sheppards Investment Management ('RSIM') As a business, RSIM seeks to grow the proportion of total funds under managementoperated on a discretionary basis and consequently the proportion of its revenuewhich is recurring in nature. Our current target is to achieve 75% of totalfunds under management managed on a discretionary basis. We consider that, onbalance, retaining a meaningful proportion of the business run on anon-discretionary basis results in a higher level of interaction with suchclients, satisfying the requirements of certain clients and also being desirablefor the business. Discretionary funds under management at 31 March 2007 were £8.53 billion (31March 2006: £7.88 billion) a pleasing increase of 8.2% over the year;non-discretionary funds increased by 0.7% to £4.11 billion over the same period.This gave total funds under management at 31 March 2007 of £12.64 billioncompared with £11.96 billion at 31 March 2006 of which the proportion managed ona discretionary basis had increased to 67.5% from 65.9%. The increase in RSIM's total funds under management of 5.7% compared favourablywith the increase in the FTSE/APCIMS Private Investors Balanced index of 3.1%over this period; this index being the one which we believe most closelyreflects the composition of RSIM client portfolios. At the four principal quarterly fee billing points during the year, the FTSE/APCIMS Private Investors Balanced index was as follows: 31 May 2006 2,758.7 31 August 2006 2,813.8 30 November 2006 2,892.9 28 February 2007 2,935.4 Average of above 2,850.2 31 March 2007 2,977.6 Of RSIM's total net revenue for the year, 70.8% was recurring in nature. During the year a significant capital investment has been made to improve thecompany's infrastructure. These investments include the relocation of theLiverpool based employees to a new office that offers a significantly moreefficient working environment and much improved facilities for receivingclients. In November 2006, the existing ex-Rensburg London team was smoothlyrelocated to the London Gresham Street office and we are now in the process ofplanning a refurbishment of our Leeds office. Capital investment into our IT andtelephony systems commenced during the latter half of the financial year andthis will continue through 2007 and beyond, ensuring we retain the necessarytools to serve our clients. The provision of improved formal reporting to our clients commenced during thesecond half of 2006 and is now continuing with the delivery of much clearer,more user friendly year-end packs. We will seek to develop these and othermediums of communication with our clients, as their needs and requirementschange. The harmonisation of employee remuneration across the historic businesses ofRensburg Investment Management ('RIM') and Carr Sheppards Crosthwaite ('CSC')was agreed during the year, with these new arrangements becoming effective from1 April 2007. While we believe our client-facing personnel are incentivisedappropriately, on both annual and longer-term bases, we keep our remunerationarrangements for all of our employees under regular review. Looking forward, RSIM management has recently embarked on a comprehensiveexercise to review and refresh the company's strategy. This is a logical stepfollowing the successful completion of the major task of integrating thehistoric RIM and CSC businesses. One area where we have already identifiedopportunities for improvement is with regard to RSIM's brand awareness. We willlook to significantly increase the levels of marketing and business developmentactivity undertaken in this area and the first steps to address this arecurrently underway. Rensburg Fund Management ('RFM') RFM has once again delivered an excellent performance both in terms of growth offunds under management and in terms of investment performance. Unit trust sales in the year of £434 million and a net inflow into trusts of£205 million (16 months ended 31 March 2006: sales of £429 million and a netinflow of £225 million) have, together with the rising financial markets,continued solid investment performance and the launch of a new Managers' Focusfund increased the value of RFM's retail unit trust funds under management by36.9% to £1.29 billion as at 31 March 2007 (31 March 2006: £942 million). By 31March 2007, the Managers' Focus fund had grown to £88 million since its launchseven months earlier. The total funds under the two segregated mandates managed by RFM have more thandoubled over the year to £472 million at 31 March 2007 (31 March 2006: £223million) with the bulk of this growth being derived from new inflows forinvestment. This brings the total assets managed by RFM to £1.76 billion (31March 2006: £1.17 billion) an increase of 50.4%, compared with a rise in theFTSE All-Share index (which we consider most closely reflects the investmentsmanaged by RFM) of 7.7%. Of RFM's total net revenue for the year, 85% was recurring in nature. Thisrepresented a marginal increase over that achieved for the 16 months ended 31March 2006. Group funds under management Combining RSIM and RFM brings the group's total funds under management as at 31March 2007 to £14.40 billion (31 March 2006: £13.13 billion) an increase of9.7%. Regulation During the year more resources than ever have been directed towards ensuring wemeet our regulatory and legal obligations, both as a UK listed company and as agroup whose trading businesses are authorised and regulated by the FinancialServices Authority. Issues either addressed or being addressed include theintroduction of International Financial Reporting Standards as adopted by theEuropean Union ('IFRS'), the Markets in Financial Instruments Directive ('MiFID'), the Capital Requirements Directive ('CRD'), the Transparency Directiveand the new Companies Act. The simultaneous introduction of such itemsinevitably places a burden on internal resources and incurs both direct andindirect costs. I hope, as we reach the end of 2007, that the future level andpace of such change will start to slow for the benefit of all. Outlook Ten weeks into the new financial year I am pleased to report that trading hasstarted satisfactorily, assisted by the further marked rise in the level of theUK financial markets since 31 March 2007. The combination of the currentmacro-economic backdrop, the strength of the fully-integrated enlarged RensburgSheppards group and the potential sustainable growth opportunities which we haveidentified leads me to look to the future with confidence. S.M. ElliottChief Executive12 June 2007 Financial review Financial results From revenue (net of fees and commissions payable to introducers) of £112.9million (16 months ended 31 March 2006: £109.4 million), the group's reportedprofit before tax for the year ended 31 March 2007 was £25.7 million (16 monthsended 31 March 2006: £13.0 million). After removing a net charge totalling £10.2million (16 months ended 31 March 2006: £16.1 million) in respect of theamortisation of the client relationships intangible asset, the share-basedpayments relating to the Employee Benefit Trust ('EBT'), the reorganisationcosts associated with the integration of Carr Sheppards Crosthwaite ('CSC') andprofit on disposal of available-for-sale investments, the resulting adjustedprofit before tax increased to £35.9 million (16 months ended 31 March 2006:£29.1 million). It is the directors' opinion that this adjusted measure ofprofit before tax and that of earnings given below represent better measures ofthe group's underlying financial performance. Reported basic earnings per share were 37.5p (16 months ended 31 March 2006:20.9p) and on the basis of adjusting for the items detailed in the aboveparagraph, together with the associated tax consequences of these adjustments,the adjusted basic earnings per share were 57.1p (16 months ended 31 March 2006:55.1p). The financial results reported for the year ended 31 March 2007, including therestated comparative figures for the 16 months ended 31 March 2006, are thefirst set of full year results that the group has prepared under InternationalFinancial Reporting Standards as adopted by the European Union ('IFRS'). Theeffect of the transition to IFRS on the group's previously reported figures forthe 16 months ended 31 March 2006 was announced on 13 October 2006 and a summaryof the effects is set out in note 18. Synergies and associated reorganisation costs With the integration of CSC having been completed some nine months ago, it ispleasing to be able to report that by 31 March 2007 we had achieved a positionwhere the future annualised pre-tax cost synergies from the acquisition of CSChad reached the target originally stated of approximately £5.5 million perannum, with the final total of the pre-tax reorganisation costs necessarilyincurred to achieve these synergies being £9.9 million, compared with theoriginally stated estimate of £10 million. During the year to 31 March 2007, thegroup benefited from approximately £3.2 million of such synergies, which wasweighted approximately one third / two thirds between the first and second halfyears. Tax The effective tax rate for the year is 36.2% (16 months ended 31 March 2006:41.5%) calculated as the total tax charge of £9.3 million (16 months ended 31March 2006: £5.4 million) divided by the profit before tax of £25.7 million (16months ended 31 March 2006: £13.0 million). A full reconciliation of the taxcharge which explains why the effective rate of tax is higher than the UKstandard rate of 30%, is set out in note 4. Dividend An interim dividend of 7.5p per share was paid to shareholders on 2 February2007 and the board is recommending a final dividend of 15p, resulting in a totalpayment of 22.5p. In determining the dividend, the directors specificallyconsidered the requirement for the group to ensure it retains adequate levels ofworking capital and regulatory capital for the foreseeable future, the group'scommitment to repay the £60 million subordinated loan and the need to retainadequate reserves for re-investment towards the future growth of the business.In accordance with current accounting standards the final dividend of 15p hasnot been recognised in these financial results, but has been disclosed as a postbalance sheet event in note 17. Cash flow During the year the business enjoyed a net cash inflow from its operatingactivities, after corporation tax payments, of £16.0 million. The group'sinvesting and financing cash flows for the year, which principally includeddividend payments of £9.1 million, loan interest of £4.3 million and capitalexpenditure of £1.6 million, amounted to a net cash payment of £16.2 million,resulting in a slight overall decrease in the group's cash balances during theyear of £0.2 million. Key performance indicators ('KPIs') The principal KPIs used by management for the group as a whole, and also foreach of the two individual business segments that make up the group, are statedbelow. The comparison between the two reporting periods is, for certain KPIs,not particularly meaningful. This is a consequence of the differing lengths ofthe reporting periods and the fundamental changes taking place within bothreporting periods arising from the acquisition of CSC on 6 May 2005. Wherefigures are described in the tables below as 'underlying', then this is afteradjusting, where appropriate, for the items referred to in the opening paragraphof this financial review for the reason stated. The group: Year ended 16 months ended 31 March 31 March 2007 2006 % change Total funds under management* £14.40 billion £13.13 billion +9.7%FTSE/APCIMS Balanced Index* 2,977.6 2,887.4 +3.1%Underlying operating profit £37.7 million £29.9 million +26.1%Underlying operating profit as a % of net revenue 33.4% 27.3% +22.3%Underlying basic earnings per share 57.1 pence 55.1 pence +3.6% * As at the period end Investment management: Year ended 16 months ended 31 March 31 March 2007 2006 % change Total funds under management* £12.64 billion £11.96 billion +5.7%FTSE/APCIMS Balanced Index* 2,977.6 2,887.4 +3.1%% of total funds managed on a discretionary basis* 67.5% 65.9% +2.4%Underlying operating profit £33.2 million £27.0 million +23.0%Underlying operating profit as a % of net revenue 32.7% 27.2% +20.2% * As at the period end Fund management: Year ended 16 months ended 31 March 31 March 2007 2006 % change Total funds under management* £1.76 billion £1.17 billion +50.4%FTSE All-Share Index* 3,283.2 3,048.0 +7.7%Underlying operating profit £4.5 million £2.9 million +55.2%Underlying operating profit as a % of net revenue 39.1% 28.5% +37.2% * As at the period end Capital structure and treasury management At 31 March 2007 the group had net assets of £169.7 million, which included£187.6 million of intangible assets principally comprising goodwill of £136.4million and client relationships of £50.5 million. Throughout the year, the group was financed by equity shareholders funds whichat 31 March 2007 were £169.7 million, together with debt which comprised asubordinated loan of £60 million. The loan is repayable in equal annualinstalments of £7.5 million commencing May 2008 and ending May 2015. The groupmaintained the bulk of its cash balances, which at 31 March 2007 totalled £49.8million, within its regulated trading subsidiaries in order to provide them withcomfortable levels of regulatory capital. Cash was placed on deposit with highlyrated banks and was available on instant or near instant access, thus minimisingcredit and liquidity risk. The nature of the group's business has been such thatcurrency risk was insignificant. Repayments of capital in relation to the subordinated loan that was entered intoas a part of the consideration for the acquisition of CSC, were due to commenceon 6 May 2008. However given the subsequent stronger financial performance ofthe group than was anticipated at the point of acquiring CSC in May 2005, theboard announced that on 8 May 2007 an early repayment of £10 million of thisdebt had been made. Full details of this are provided in note 17 to thispreliminary statement. Regulatory capital The group's two principal trading subsidiaries are both FSA regulated and henceare required at all times to hold certain minimum levels of regulatory capital.These businesses are both well capitalised and have throughout the year heldregulatory capital comfortably above the minimum levels required. The CapitalRequirements Directive ('CRD'), which is a European Directive, came into effecton 1 January 2007 although due to a staged implementation, the full impact ofthis will not be felt until 1 January 2008 and beyond. The introduction of CRDhas led to a modest increase in the minimum amount of regulatory capitalrequired since 1 January 2007 and we fully expect this may increase further on 1January 2008. This further increase is not anticipated at this point in time tobe major and we are confident that we will continue to have sufficient capitalto meet the future requirements. Risks and uncertainties The significant risks faced by the group and the controls operating over suchrisks are kept under regular review by the group's risk committee and, acting onbehalf of the board, by the audit committee. These risks have been faced by thegroup throughout the reporting period and are expected to continue to be facedgoing forward. Hence, the appropriate management of these risks is key to thesuccessful future development, performance and position of the group. The principal risks and uncertainties, together with the associated controlsare: 1. Reputational risk which may arise from poor investment advice or service to clients, or from a public censure by the regulator. This risk is mitigated by the group's strong service ethic demonstrated by its professionally qualified and experienced staff who operate in an environment where compliance is given a high priority and are supported by a strong internal research function and appropriate investment committees. 2. Market risk from the group's exposure to downturns in the UK and world financial markets in which it operates. We continue to reduce this risk by seeking to further increase the proportion of the group's income which is recurring in nature and also by keeping a significant proportion of the total remuneration of client facing staff in the form of incentives dependent upon the level of income they produce. 3. Competition risk which manifests itself in a reduction in clients due to inappropriate and/or poorly priced service/product offerings or insufficient professional staff to properly serve clients. To mitigate this risk we keep developments in the market in which we operate under careful review and we invest heavily in our staff, not only in terms of their remuneration packages, but also in the office environments from which they operate and in ensuring we meet their ongoing training and development needs. 4. Operational risk which principally arises from inadequate business continuity /disaster recovery planning or a significant business process failure in one of our key support functions. Business continuity/disaster recovery is an area we continue to recognise the increasing importance of and we are currently investing significant management time and financial resources to mitigate this risk further. With regard to our support functions, operational risk in this area was sharply heightened during 2005 and 2006 as we undertook the major integration of Rensburg and CSC. This risk has now subsided following the completion of the integration last autumn and we now consider that through proper resourcing we are appropriately mitigating the risk in this area. 5. Fraud risk that follows from holding significant cash and securities both on our own behalf and on behalf of our clients. This risk is mitigated by: • regular reconciliations of both firm and client assets; • the detailed personal knowledge of clients that their investment management team possesses which, in particular, assists greatly in protecting against the growing risk of identity theft; • the significant level of fidelity insurance carried by the group. J.P. WraggFinance Director12 June 2007 Consolidated income statementfor the year ended 31 March 2007 2007 2006 Year 16 months ended ended 31 March 31 March Note £'000 £'000 Revenue 122,297 117,389Fees and commissions payable (9,360) (8,004)Net revenue 2 112,937 109,385 Reorganisation costs - (9,907)Share-based payments - EBT (4,653) (4,226)Amortisation of intangible assets - client relationships (5,603) (5,066)Other operating expenses (75,225) (79,468)Operating expenses (85,481) (98,667) Operating profit 27,456 10,718Profit on disposal of available-for-sale investments - 3,129Finance income 3 2,694 3,365Finance expenses 3 (4,483) (4,205)Profit before tax 25,667 13,007Taxation 4 (9,289) (5,374)Profit for the period attributable to the equity holders of 16,378 7,633the company Earnings per share 6 Basic 37.5p 20.9pDiluted 37.4p 20.6p Consolidated balance sheetat 31 March 2007 2007 2006 Note £'000 £'000 Assets Non-current assets Intangible assets 7 187,601 193,611 Property, plant and equipment 8 5,422 4,775Available-for-sale investments 9 2,562 2,188Deferred tax assets 10 1,280 2,984 196,865 203,558 Current assetsTrade and other receivables 130,452 167,257Cash and cash equivalents 11 49,775 49,958 180,227 217,215 Total assets 377,092 420,773 LiabilitiesCurrent liabilitiesTrade and other payables (124,359) (174,276)Loan notes (72) (840)Provisions 13 (641) (6,284)Current tax liabilities (4,672) (2,794) (129,744) (184,194) Non-current liabilitiesAccruals and deferred income (798) -Subordinated loan 12 (60,000) (60,000)Provisions 13 (517) (875)Deferred tax liabilities 10 (16,341) (17,920) (77,656) (78,795) Total liabilities (207,400) (262,989) Net assets 169,692 157,784 Equity attributable to the equity holders of the company Share capital 14,16 4,822 4,760Share premium 16 10,603 9,276Capital redemption reserve 16 100 100Available-for-sale reserve 16 1,234 972Revaluation reserve 16 959 972Other reserves 16 130,601 130,601Retained earnings 16 21,373 11,103Total equity 169,692 157,784 Consolidated cash flow statementfor the year ended 31 March 2007 2007 2006 Year 16 months ended ended Note 31 March 31 March £'000 £'000 Cash flows from operating activitiesProfit before taxation 25,667 13,007Adjustments for:- Amortisation of intangible assets 6,219 5,617- Finance expenses 4,483 4,205- Finance income (2,694) (3,365)- Depreciation 672 747Share-based payments 4,815 4,472Profit on disposal of available-for-sale investments - (3,129)Loss on disposal of tangible and intangible assets 102 58Non-cash reorganisation costs - 669Decrease/(increase) in trade and other receivables 36,901 (52,992)(Decrease)/increase in trade payables and provisions (55,116) 55,095Cash generated from operations 21,049 24,384Interest received 2,318 3,762Dividends received 280 61Interest paid (221) (317)Taxation paid (7,446) (5,595)Net cash inflow from operating activities 15,980 22,295 Cash flows from investing activitiesPurchase of property, plant and equipment (1,407) (810)Purchase of intangible software (223) (1,024)Proceeds from disposal of available-for-sale investments - 3,129Acquisition of subsidiaries, net of cash acquired - 16,830Deferred consideration paid - (52)Net cash (outflow)/inflow from in investing activities (1,630) 18,073 Cash flows from financing activitiesDividends paid to shareholders (9,073) (26,939)Proceeds from issue of ordinary share capital 1,390 25Costs associated with issue of shares (1) (180)Purchase of own shares (1,815) -Redemption of loan notes (768) (1,755)Interest paid on subordinated loan (4,266) (2,179)Net cash outflow from financing activities (14,533) (31,028) Net (decrease)/increase in cash and cash equivalents (183) 9,340Cash and cash equivalents at start of period 49,958 40,618Cash and cash equivalents at end of period 11 49,775 49,958 Consolidated statement of recognised income and expensefor the year ended 31 March 2007 2007 2006 Year 16 months ended ended 31 March 31 March £'000 £'000 Revaluation of available-for-sale investments-gain arising from changes in fair value 374 738-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 (112) (221)-on gain on disposal transferred to the income statement - 813Net income/(expense) recognised directly in equity 262 (1,379)Profit for the period 16,378 7,633Total recognised income and expense for the period 16,640 6,254 Notes to the financial statements 1. Basis of preparation The group financial statements consolidate those of the company and itssubsidiaries (together referred to as 'the group'). The financial statementshave been prepared and approved by the directors in accordance withInternational Financial Reporting Standards as adopted by the European Union('IFRS'). The group has presented its financial statements in accordance withIFRS for the first time for the year ended 31 March 2007 and has applied therequirements of IFRS 1 First-time adoption of IFRS. The effect of the transitionto IFRS on the group's previously reported figures for the 16 months ended 31March 2006 was announced on 13 October 2006 and a summary is set out in note 18below. In applying the requirements of IFRS 1, the group has taken advantage ofthe following exemptions: • IFRS 3 Business combinations has not been applied retrospectively to business combinations that took place prior to the date of transition to IFRS, being 1 December 2004. • IFRS 2 Share-based payment has not been applied to equity instruments that were granted before 7 November 2002 or to those that were granted after 7 November 2002 that vested before 1 January 2005. A summary of the group's significant accounting policies will be included in the2007 Report & Financial Statements. The financial information contained in this announcement does not constitute thecompany's statutory accounts for the year ended 31 March 2007 or the 16 monthperiod ended 31 March 2006 but is derived from those accounts. Statutoryaccounts for 2006 have been delivered to the Registrar of Companies, and thosefor 2007 will be delivered following the company's annual general meeting. Theindependent auditor has reported on those accounts; its reports were unqualifiedand did not contain statements under section 237(2) or (3) of the Companies Act1985. 2. Revenue and segmental information For management purposes, the group is organised into two business segments,being Investment Management and Fund Management. This organisation reflects thediffering nature of each segment's services, client base and risk profile. Theprincipal activity of the investment management segment is the provision ofinvestment management services to private clients, pension funds and charities.The fund management segment manages unit trusts and segregated mandates.Transactions between the two business segments are undertaken on an arm's lengthbasis on normal commercial terms. All of the group's activities are undertakenin the United Kingdom and hence relate to a single geographical segment. Year ended 31 March 2007 Investment Fund Management Management Eliminations Group £'000 £'000 £'000 £'000Revenue External 104,602 17,695 - 122,297 Inter-segment 598 - (598) - 105,200 17,695 (598) 122,297Fees and commissions payable (3,783) (6,175) 598 (9,360)Segmental net revenue 101,417 11,520 - 112,937 Share-based payments - EBT (4,653) - - (4,653)Amortisation of intangible assets - client (5,603) - - (5,603)relationshipsOther operating expenses (68,206) (7,019) - (75,225)Segmental expenses (78,462) (7,019) - (85,481) Segmental operating profit 22,955 4,501 - 27,456Finance income 2,284 410 - 2,694Finance expenses (4,483) - - (4,483)Profit before tax 20,756 4,911 - 25,667 Segmental net revenue is derived from:Investment Management services 101,417 - - 101,417Fund Management services - 9,822 - 9,822Profit on sale of units of unit trusts - 1,698 - 1,698 101,417 11,520 - 112,937 Other segmental items:Total assets 355,962 21,130 - 377,092Total liabilities (191,213) (16,187) - (207,400)Capital expenditure 1,404 3 - 1,407Acquisition of intangible assets 223 - - 223Depreciation and amortisation 6,888 3 - 6,891 16 months ended 31 March 2006 Investment Fund Management Management Eliminations Group £'000 £'000 £'000 £'000 Revenue External 101,885 15,504 - 117,389Inter-segment 788 - (788) - 102,673 15,504 (788) 117,389Fees 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 payments - EBT (4,226) - - (4,226)Amortisation of intangible assets - client (5,066) - - (5,066)relationshipsOther operating expenses (72,176) (7,292) - (79,468)Segmental expenses (91,375) (7,292) - (98,667) Segmental operating profit 7,806 2,912 - 10,718Profit on disposal of available-for-sale 3,129 - - 3,129investmentsFinance income 2,992 373 - 3,365Finance expenses (4,205) - - (4,205)Profit before tax 9,722 3,285 - 13,007 Segmental net revenue is derived from:Investment Management services 99,181 - - 99,181Fund Management services - 8,658 - 8,658Profit on sale of units of unit trusts - 1,546 - 1,546 99,181 10,204 - 109,385 Other segmental items:Total assets 403,815 16,958 - 420,773Total liabilities (250,542) (12,447) - (262,989)Capital expenditure 808 2 - 810Acquisition of intangible assets 185,771 - - 185,771Depreciation and amortisation 6,360 4 - 6,364 3. Finance income and expenses 2007 2006 Year 16 months ended ended 31 March 31 March £'000 £'000 Interest receivable on bank deposits 2,414 3,304Dividends receivable 280 61Finance income 2,694 3,365 Interest payable on bank overdrafts and loan notes 178 347Interest payable on subordinated loan 4,305 3,858Finance expenses 4,483 4,205 4. Taxation 2007 2006 Year 16 months ended ended 31 March 31 March £'000 £'000 Current tax expense:United Kingdom corporation tax at 30% (2006: 30%) 9,950 6,327Adjustments in respect of prior periods 88 (3) 10,038 6,324Deferred tax expense:Origination and reversal of timing differences (560) (962)Adjustments in respect of prior periods (189) 12Total tax expense in the income statement 9,289 5,374 The tax charge for the year and the amount calculated by applying the standardUnited Kingdom corporation tax rate of 30% (16 months ended 31 March 2006: 30%)to the profit before tax per the income statement can be reconciled as follows: 2007 2006 Year 16 months ended ended 31 March 31 March £'000 £'000 Profit before tax 25,667 13,007Tax expense using the United Kingdom corporation tax rate of 30% 7,700 3,902Effects of:Share-based payments not tax deductible 1,396 1,268Other expenses not tax deductible 378 197Income not chargeable to tax (84) (2)Adjustments to current tax in respect of prior periods 88 (3)Adjustments to deferred tax in respect of prior periods (189) 12 9,289 5,374 The following amounts of deferred tax have been recognised directly in equity: 2007 2006 Year 16 months ended ended 31 March 31 March £'000 £'000 Available-for-sale investments (112) 592Share-based payments (762) 598 (874) 1,190 5. Dividends The final dividend proposed for the year ended 31 March 2007 of 15.0 pence pershare is payable on 10 August 2007 to shareholders on the register as at theclose of business on 20 July 2007. In accordance with the group's accountingpolicies and the requirements of IAS 10 Events after the balance sheet date thisdividend has not been recognised as a liability at 31 March 2007. Dividendshave been recognised in the periods set out below: 2007 2006 Year 16 months ended ended 31 March 31 March £'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 - 2,629First interim dividend for the six months ended 31 May 2005 of 6.6p per share - 1,319Second interim dividend for the four months ended 30 September 2005 of 6.6p per share - 2,854Special dividend of 45.0p per share - 9,871Final dividend for the sixteen months ended 31 March 2006 of 13.2p per share 5,783 -Interim dividend for the six months ended 30 September 2006 of 7.5p per share 3,290 - 9,073 16,673 The amount recognised as distributions to equity holders shown above for the 16months ended 31 March 2006 excludes the dividend of £10,266,000 paid by CarrSheppards Crosthwaite Limited ('CSC') to Investec following the group'sacquisition of CSC on 6 May 2005, as the liability for this dividend formed partof the net assets of CSC at the date of acquisition. However, this payment doesrepresent a cash outflow from the group during the 16 months ended 31 March 2006and is included in the cash flow statement in that period. 6. Earnings per share Basic earnings per share is calculated with reference to earnings forshareholders of £16,378,000 (16 months ended 31 March 2006: £7,633,000) and theweighted average number of shares in issue during the period of 43,723,007 (16months ended 31 March 2006: 36,595,582). Adjusted earnings per share beforeamortisation of the client relationships intangible asset, share-based paymentsrelating to the EBT, reorganisation costs and profit on disposal ofavailable-for-sale investments is calculated with reference to earnings forshareholders of £24,953,000 (16 months ended 31 March 2006: £20,150,000). Diluted earnings per share is the basic earnings per share, adjusted for theeffect of the conversion into fully paid shares of the weighted average numberof all employee share options outstanding during the period. The number ofadditional shares used for the diluted calculation is 112,337 shares (16 monthsended 31 March 2006: 491,190). Details of contingently issuable shares, that arenot included in the calculation of basic or diluted earnings per share, aregiven in note 12. The directors believe that the provision of additional earnings per sharefigures, in particular before amortisation of the client relationshipsintangible asset, share-based payments relating to the EBT, reorganisation costsand profit on disposal of available-for-sale investments, better representunderlying business performance. The effect of these adjustments on earnings andbasic earnings per share is as follows: Year ended 16 months ended 31 March 2007 31 March 2006 Earnings Earnings Earnings Earnings per per share share £'000 Pence £'000 Pence Unadjusted earnings and EPS 16,378 37.5 7,633 20.9Share-based payments - EBT 4,653 10.6 4,226 11.5Amortisation of intangible assets - client 5,603 12.8 5,066 13.9relationshipsReorganisation costs - - 9,907 27.1Profit on disposal of available-for-sale investments - - (3,129) (8.6)Tax arising on adjusted items (1,681) (3.8) (3,553) (9.7) Adjusted earnings and EPS 24,953 57.1 20,150 55.1 7. Intangible assets The carrying values of intangible assets at 31 March are as follows: 2007 2006 £'000 £'000 Goodwill 136,385 136,385Client relationships 50,469 56,072Software 747 1,154 187,601 193,611 The client relationships intangible asset comprises amounts at cost of£58,087,000 relating to private client business and £3,051,000 relating tocharities business. These amounts are being amortised on a straight line basisover the estimate of their useful economic lives of 12 and four yearsrespectively. Amortisation of software is recognised in the income statement within otheroperating expenses. Goodwill is allocated to the cash generating unit ('CGU') to which it relatesand the goodwill shown above has been allocated to the group's London,Cheltenham, Farnham and Reigate offices (collectively referred to as the 'Londonand Southern offices') and the group's Sheffield office. The London andSouthern offices and the Sheffield office each represent separate CGUs. Theallocation of all intangible assets to CGUs is summarised below: Client Goodwill relationships Software Total £'000 £'000 £'000 £'000Cash generating unitLondon and Southern offices 129,637 50,469 273 180,379Sheffield office 6,748 - 86 6,834Other - - 388 388 136,385 50,469 747 187,601 The recoverable amounts of the group's CGUs are determined from value-in-usecalculations. The key assumptions for the value-in-use calculations are thoseregarding discount rates, future income growth rates, changes in the cost baseof the business and future market conditions. The basis of the value-in-usecalculations is the budget for the forthcoming financial year ending 31 March2008, which has been approved by the board. This budget has been establishedbased on management's experience and future expectations of the business and themarket in which it operates. Projections beyond 31 March 2008 are extrapolatedusing a growth rate of 2.25%, which represents the historic long-term UKeconomic growth rate. The future cash flows are discounted using the group'sweighted average cost of capital, which has been calculated at 12% per annum. To establish whether any impairment exists, the value-in-use of each CGU towhich goodwill and intangible assets have been allocated has been compared withthe present carrying value of the CGUs' assets. In each case, the value-in-useexceeds the carrying value of the assets and it has therefore been concludedthat no impairment exists. 8. Property, plant and equipment Included within property, plant and equipment is the group's freehold property.The carrying value of the property at 31 March 2007 amounted to £3,160,000(2006: £3,208,000). The property was revalued at 1 December 2004 by independentqualified valuers. The valuation was undertaken in accordance with the Appraisaland Valuation standards issued by the Royal Institution of Chartered Surveyors.The valuation was on a market value basis. The valuation has been incorporatedinto the financial statements and the resulting revaluation adjustment has beentaken to the revaluation reserve. The revaluation surplus at 31 March 2007amounted to £959,000 (31 March 2006: £972,000). This revaluation surplus is notdistributable. At 31 March 2007, had the freehold property been carried at historic cost lessaccumulated depreciation, the carrying amount would have been £1,789,000 (31March 2006: £1,819,000). 9. Available-for-sale investments Available-for-sale financial assets at 31 March comprise: 2007 2006 £'000 £'000Equity securities:Listed 1,588 1,588Unlisted 974 600 2,562 2,188 Unlisted available-for-sale investments represent ordinary equity shares ofEuroclear plc. The fair value attributed to these shares represents thedirectors' estimate of the value that could be obtained in an arm's lengthdisposal of the shares, taking into account recently published markettransaction information. 10. Deferred tax assets and liabilities Deferred tax is calculated in full on temporary differences under the liabilitymethod using a tax rate of 30% (2006: 30%). Deferred tax assets have beenrecognised in respect of all tax losses and other temporary timing differencesgiving rise to deferred tax assets, as it is considered to be probable thatthese assets are recoverable in full. Deferred tax assets and liabilities are attributed to the following: Assets Liabilities Net 2007 2006 2007 2006 2007 2006 £'000 £'000 £'000 £'000 £'000 £'000 Intangible assets - - (15,141) (16,822) (15,141) (16,822)Property, plant and equipment 566 589 (484) (432) 82 157Available-for-sale investments - - (609) (497) (609) (497)Trade and other receivables - - (107) (169) (107) (169)Share-based payments 91 1,069 - - 91 1,069Provisions, accruals and other payables 623 1,326 - - 623 1,326Net deferred tax assets/(liabilities) 1,280 2,984 (16,341) (17,920) (15,061) (14,936) 11. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprisecash in hand, deposits with banks and financial institutions with a maturity ofup to three months and bank overdrafts repayable on demand. 2007 2006 £'000 £'000 Cash at bank and in hand 49,775 44,958Fixed term deposits - 5,000 49,775 49,958 12. Subordinated loan The company entered into a £60 million subordinated loan agreement with Investec1 Limited on 6 May 2005. The loan formed part of the consideration for theacquisition of Carr Sheppards Crosthwaite Limited. A fixed rate of interest of7.155% 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. Interest on thesubordinated loan is payable every six months in May and November. The totalamount of the loan is repayable in equal instalments over eight years, with thefirst instalment becoming payable in May 2008. The company has the option to redeem part or all of the floating rate debt atany point during the term of the loan. Early redemption of part or all of thefixed rate debt is not permitted for five years from the date of commencement ofthe loan, until May 2010. Early redemption after this period is at the option ofthe company. As set out in note 17, the company redeemed £10 million of thefloating rate debt on 8 May 2007. The loan is subordinated to all other creditors of the company. For the purposesof the regulatory capital requirements of the Financial Services Authority ('FSA'), the loan is required to be treated as part of the consolidated capitalrequirement of the Investec group. If for any reason the Investec group isunable to provide the consolidated regulatory capital required in respect of theloan, the relevant amount of the loan will, at the request of the company, beconverted into ordinary shares of the company. The rate of conversion would bebased on the company's average mid-market share price during the three monthsprior to a conversion. However, where a conversion is required as a consequence of a disposal of sharesby Investec 1 Limited, or a conversion would otherwise require a member of theInvestec group to make a general offer for the company, an alternativeinstrument, that would enable the company to satisfy the FSA's regulatorycapital requirements, would be issued in place of ordinary shares. 13. Provisions Reorganisation Onerous Restructuring Property costs leases costs dilapidations Total £'000 £'000 £'000 £'000 £'000At 1 April 2006Current liabilities 6,212 18 54 - 6,284Non-current liabilities 584 130 11 150 875 6,796 148 65 150 7,159 Charged to the income statement - 219 - 75 294Utilised during the year (6,212) (18) (54) - (6,284)Released to the income statement - - (11) - (11)At 31 March 2007 584 349 - 225 1,158 The balances at 31 March 2007 are categorised as follows: Reorganisation Onerous Restructuring Property costs leases costs dilapidations Total £'000 £'000 £'000 £'000 £'000 Current liabilities 584 57 - - 641Non-current liabilities - 292 - 225 517 584 349 - 225 1,158 Reorganisation costs relate to the integration of the business of CSC into thegroup. The onerous leases provision represents future rentals and running costs ofunoccupied leasehold premises to the end of the lease term. All such leases aredue to expire during or before 2017. The provision for restructuring costs represents the residue of amountspreviously provided within Carr Sheppards Crosthwaite Limited prior to itsacquisition by the company, in respect of the cost of restructuring certainbusiness activities. The provision for property dilapidation costs reflects the obligations that thegroup has to reinstate leasehold properties to their original condition prior tothe expiry of the relevant lease. The leases held on these properties expire inthe period up to 2017. 14. Share capital Nominal Number value of shares £'000 Authorised ordinary shares of 10 90/91 pence eachAt 31 March 2006 and 31 March 2007 54,600,000 6,000 Allotted, called up and fully paid ordinary sharesAt 1 December 2004: ordinary shares of 10 pence each 22,087,078 2,209Exercise of share options 3,220 -Issued on acquisition of CSC 25,500,000 2,550 47,590,298 4,759Effect of share consolidation (4,283,127) -Exercise of share options 6,897 1At 31 March 2006: ordinary shares of 10 90/91 pence each 43,314,068 4,760Exercise of share options 567,314 62At 31 March 2007: ordinary shares of 10 90/91 pence each 43,881,382 4,822 The authorised share capital at 1 December 2004 comprised 30,000,000 ordinaryshares of 10 pence each. The authorised share capital was increased to£6,000,000, comprising 60,000,000 ordinary shares of 10 pence each, on 20 April2005. On 20 May 2005, the company's share capital was consolidated by the issueof 91 new ordinary shares of 10 90/91 pence each for every 100 existing ordinaryshares of 10 pence each. Following the share consolidation, the authorised sharecapital became 54,600,000 ordinary shares of 10 90/91 pence each. During the year, 567,314 ordinary shares of 10 90/91 pence each were issued tocertain employees of the group at £2.45 per share following the exercise ofshare options on 1 June 2006 under the terms of the group's Savings-RelatedShare Option ('SAYE') Scheme. The aggregate nominal value of these shares was£62,342 and the total consideration received was £1,389,919. The market price ofthe shares on 1 June 2006 was £6.93 per share. On 2 March 2007, the Employee Share Ownership Trust ('the Trust') purchased180,700 ordinary shares of 10 90/91 pence each of Rensburg Sheppards plc at aprice of 900 pence per share; a further 21,650 shares of the same class werepurchased by the Trust on 8 March 2007 at 870 pence per share. The shares werepurchased to satisfy awards granted by Rensburg Sheppards plc under the 2007Employee Share Plan. At 31 March 2007, 233,600 ordinary shares of 10 90/91 pence each (2006: 76,660shares) were held by the Trust. The trustee of the trust is R S TrusteesLimited, a wholly owned subsidiary of Rensburg Sheppards plc. These shares areheld in order to satisfy outstanding awards under the group's Employee ShareOwnership Plan and the 2007 Employee Share Plan, details of which are set out innote 15 below. At 31 March 2007, Investec 1 Limited ('Investec'), an associated company of thegroup, held 20,657,000 ordinary shares of 10 90/91 pence each (2006: 20,657,000shares). These shares were issued to Investec under the terms of the acquisitionof Carr Sheppards Crosthwaite Limited ('CSC'), which occurred on 6 May 2005. Atotal of 25,500,000 shares were issued to Investec under the terms of theacquisition, prior to the effect of the share consolidation noted above. Of the25,500,000 shares issued, 2,800,000 of these shares were immediately transferredby Investec to an Employee Benefit Trust ('EBT'). The 2,800,000 shares weresubject to the share consolidation which took place on 20 May 2005 and hence at31 March 2007 the EBT held 2,548,000 ordinary shares of 10 90/91 pence each(2006: 2,548,000 shares). At 31 March 2007, 457,629 new ordinary shares of 10 90/91 pence each areissuable in respect of outstanding options under the group's current SAYEscheme. 15. Share-based payments The total charge for the year relating to employee share-based payment schemeswas £4,815,000 (16 months ended 31 March 2006: £4,472,000), all of which relatedto equity-settled share-based payment transactions. The equity-settled share andshare option schemes relevant to the group are as follows: Save As You Earn The group operates a Savings-Related Share Option ('SAYE') scheme in which allemployees of the group are eligible to participate. Options have been grantedunder the SAYE scheme in April 2003 and December 2006. Options are granted witha fixed exercise price determined in accordance with the scheme rules. Theoptions can be exercised at any time during the six month period following thevesting date. Exercise of the options is subject to continued employment withthe group; however, options may be exercised prior to the vesting date whereemployment ceases as a result of redundancy, ill health or on reaching normalretirement age. The vesting of options is not subject to any performanceconditions. 2007 Employee Share Plan Awards were made under the 2007 Employee Share Plan over a fixed number ofshares to certain of the group's employees during March 2007. The future awardis conditional on the participant remaining in the employment of the group, andnot having been given or received notice, by 31 March 2010. The future provisionof these shares is not subject to any performance criteria or consideration andno amounts were payable at the time the potential entitlements were conferred. Employee Benefit Trust The Employee Benefit Trust ('EBT') was established by Investec under the termsof the acquisition of Carr Sheppards Crosthwaite Limited ('CSC') by RensburgSheppards plc on 6 May 2005. Under the terms of the EBT, the number of sharesconferred on each participating employee, or other equivalent benefit, will betransferred to the participants on 6 May 2008 providing that they remainemployees of the group at that date. The future provision of these shares is notsubject to any performance criteria or consideration and no amounts were payableat the time the potential entitlements were conferred. Employee Share Ownership Plan At 31 March 2007, options in respect of 31,250 shares (2006: 76,660) which weregranted to certain of the group's employees under the Employee Share OwnershipPlan remain outstanding. All of these options were granted before 7 November2002 and as such, do not fall within the scope of IFRS 2 Share-based payment.The group has therefore not attributed a fair value to these options. Theremaining options are exercisable at any time and are not subject to anyperformance criteria or consideration. The fair value of all share-based payments arising from share awards grantedpost 7 November 2002 have been estimated using the Black-Scholes option pricingmodel. The assumptions used in the calculations are as follows: SAYE SAYE 2007 Employee Employee 2003 2006 Share Plan Benefit Trust Nature of scheme Share options Share options Potential future Potential future entitlement to entitlement to shares sharesGrant date 16 Apr 2003 18 Dec 2006 9 Mar 2007 6 May 2005 Share price at grant date £3.19 £8.45 £8.92 £4.99*Exercise price £2.45 £6.60 Nil NilShares under option or potential 665,501 461,635 202,350 2,548,000**future entitlement at date ofgrantExpected volatility 29.3% 24.0% N/A N/AExpected life (years) 3.12 3.12 3.30 3.00Risk free rate 3.9% 4.8% N/A N/AExpected dividends expressed as a 2.6% 2.9% 2.8% N/Adividend yieldExpected forfeiture rate 6% 6% 0% N/AFair value at date of grant £0.99 £2.42 £8.15 £4.99 * After deduction of the special dividend of 45p paid on 1 June 2005 and thefirst interim dividend in respect of the six month period ended 31 May 2005 of 6.6p, for which the shares issued to Investec under the terms ofthe acquisition did not rank. ** After taking account of the share consolidation which took place on 20 May2005. The expected volatility is based on historic volatility over an appropriateperiod, consistent with the expected life of the option during the periodimmediately preceding the date of grant. The risk free rate of return representsthe yield on UK Gilt Strip at the date of grant of a term consistent with thelife of the option. A reconciliation of the number of shares in respect of which awards have beenmade is set out below. SAYE SAYE 2007 Employee Employee 2003 2006 Share Plan Benefit Trust Outstanding at 1 December 2004 595,235 - - - Granted - - - 2,800,000Effect of share consolidation - - - (252,000)Forfeited (17,804) - - -Exercised (10,117) - - -Outstanding at 31 March 2006 567,314 - - 2,548,000Granted - 461,635 202,250 -Forfeited - (4,006) - -Exercised (567,314) - - -Outstanding at 31 March 2007 - 457,629 202,350 2,548,000 16. Reconciliation of changes in shareholders' equity Capital Available Reval- Share Share redemption -for-sale uation Other Retained Total capital premium reserve reserve reserve reserves earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 December 2004 2,209 9,252 100 2,351 989 6,086 29,028 50,015Profit after taxation - - - - - - 7,633 7,633Dividends - - - - - - (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- share issue costs - - - - - (180) - (180)Share-based payments - - - - - - 4,472 4,472Deferred tax on share-based - - - - - - 598 598paymentsGain on available-for-saleinvestments:- changes in fair value - - - 738 - - - 738- transferred to income - - - (2,709) - - - (2,709)statement on disposalDeferred tax onavailable-for-saleinvestments:- on changes in fair value - - - (221) - - - (221)- transferred to income - - - 813 - - - 813statement on disposalDepreciation on revalued - - - - (17) - 17 -propertyAt 31 March 2006 4,760 9,276 100 972 972 130,601 11,103 157,784Profit after taxation - - - - - - 16,378 16,378Dividends - - - - - - (9,073) (9,073)Issue of shares 62 1,328 - - - - - 1,390Share issue costs - (1) - - - - - (1)Purchase of own shares by - - - - - - (1,815) (1,815)Employee Share OwnershipTrustShare-based payments - - - - - - 4,815 4,815Tax relief on share-based - - - - - - 714 714paymentsDeferred tax on share-based - - - - - - (762) (762)paymentsGain arising on - - - 374 - - - 374available-for-saleinvestmentsDeferred tax on - - - (112) - - - (112)available-for-saleinvestmentsDepreciation on revalued - - - - (13) - 13 -propertyAt 31 March 2007 4,822 10,603 100 1,234 959 130,601 21,373 169,692 17. Events after the balance sheet date On 8 May 2007, £10 million of the £60 million subordinated loan, the details ofwhich are set out in note 12, was repaid ahead of schedule. This repayment is inrespect of the £15 million floating rate element of the loan and was originallyscheduled for repayment in equal annual instalments commencing on 6 May 2008. Nopenalty arose from the making of this prepayment. Under the terms of the loanagreement, this prepayment is to be applied in chronological order against thefuture scheduled repayment obligations of the floating rate portion of the loan.Interest payable on the loan is calculated on a daily basis, based on thebalance of the loan outstanding; therefore, no further interest expense will beincurred in respect of the £10 million that has been repaid after the repaymentdate of 8 May 2007. On 12 June 2007, the directors proposed a final dividend in respect of the yearended 31 March 2007 of 15.0 pence per share. Subject to the approval ofshareholders at the forthcoming annual general meeting, which is to be held on31 July 2007, the dividend will be payable on 10 August 2007 to shareholders onthe register at the close of business on 20 July 2007. 18. Transition to IFRS On 13 October 2006 the group announced the effect of the transition toInternational Financial Reporting Standards as adopted by the European Union ('IFRS') on its results previously reported under UK GAAP. This transitionalstatement 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 March2006 and its profit after tax for the 16 months ended 31 March 2006, which isexplained fully in the transitional statement, is summarised below. Summary reconciliation of changes in equity At 31 March 2006 £'000 Total equity as previously reported under UK GAAP 153,675Revaluation of available-for-sale investments 1,388Deferred tax on revaluation of available-for-sale investments (416)Deferred tax on share-based payments 1,069Dividends 5,783Revaluation of property, plant and equipment 1,389Deferred tax on revaluation of property, plant and equipment (417)Business combinations 5,059EBT prepayment taken to equity (9,746)Total value of IFRS adjustments 4,109Total 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 2,763Business combinations 3,539Revaluation of property, plant and equipment (24)Share-based payments (246)Tax effect of above adjustments 1,601Total value of IFRS adjustments 4,870Profit after tax as restated under IFRS 7,633 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Revel Collect