Half Yearly Report

CHARLES STANLEY GROUP PLC

RESULTS FOR THE HALF-YEAR ENDED 30 SEPTEMBER 2011

Charles Stanley is one of the UK's leading independently owned, full service stockbroking and investment management groups, advising on substantial funds. Today it announces its interim results for the half-year ended 30 September 2011.

Highlights:

§ Revenue for the half-year £60.2 million (2010/11: £59.7 million) 1% increase

§ Reported profit before tax £5.2 million (2010/11: £7.3 million) 29% decrease

§ Adjusted profit before tax £6.8 million (2010/11: £8.2 million) 17% decrease

§ Funds under management and administration £13.7 billion (30 September 2010: £13.5 billion) 2% increase

§ Net new inflows in managed funds of £770 million

§ Investment management and administration fees £31.9 million (2010/11: £28.4 million) 12% increase

§ Reported earnings per share 8.49p (2010/11: 11.53p) 26% decrease

§ Adjusted earnings per share 11.27p (2010/11: 12.92p) 13% decrease

§ Interim dividend per share 2.75p (2010/11: 2.50p) 10% increase

§ Acquisition of Jobson James Financial Services Limited in May 2011

Commenting on the outlook Sir David Howard, Chairman said:

"Charles Stanley Group is pleased to report a resilient performance during the half-year to 30 September 2011. Overall revenues remained steady with an increase of 1% from £59.7 million to £60.2 million. Our Private Client and Financial Services Divisions continue to demonstrate the strength of our core business with combined revenues nearly 4% higher than the equivalent period last year. However, this was offset by the impact of the market downturn on Charles Stanley Securities, our corporate finance and broking and institutional sales division, with revenues 30% lower.

Our reported profit before tax has fallen by 29% to £5.2 million from £7.3 million for the equivalent period last year.

Trading has improved as we enter the second half of our year. As a financial services business we cannot stand aside from the forces that drive the markets and the global economy. But our professionalism and our values give me confidence to look forward to the medium term with some degree of optimism."

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CHAIRMAN'S STATEMENT

Charles Stanley Group is pleased to report a resilient performance during the half-year to 30 September 2011. Despite the significant drop in market valuations during the period, overall revenues remained steady with an increase of 0.8% from £59.7 million (in the half-year to 30 September 2010) to £60.2 million at 30 September 2011. Reported profit before tax however is down to £5.2 million as against £7.3 million for the equivalent period last year. Excluding a number of one-off costs the adjusted profit before tax was £6.8 million, down from £8.2 million.

Our Private Client and Financial Services Divisions continue to demonstrate the strength of our core business with combined revenues nearly 4% higher than the equivalent period last year. However, this was offset by the impact of the market downturn on Charles Stanley Securities, our corporate finance and institutional sales division, with revenues 30.2% lower. This reflects a decline in the income generated in both equities and bonds and reduced corporate finance business.

At 30 September 2011 the total value of clients' funds under management and administration was £13.7 billion, down 5.5% compared with £14.5 billion at 31 March 2011 and up 1.5% compared with £13.5 billion at 30 September 2010. Over the six months to 30 September 2011 the FTSE-100 Share Index fell by 13.2%, the FTSE All-Share Index by 13.5% and the APCIMS Balanced Index by 8.3%. Within the overall figure of funds under management and administration the managed funds (including discretionary funds) decreased by 2.5% to £7.02 billion. Within these numbers it is pleasing to note a net inflow of new assets of £770 million over the period including £246 million from the acquisition of Jobson James Financial Services Limited.

The present low interest rate regime continues to impact on our income in relation to the very substantial cash balances that we maintain both for the Group and for our clients. The Group's own cash balances stood at £39.7 million at 30 September 2011, up from £35.1 million at 30 September 2010. As ever, and even more so in these unsettled times, we continue to pay particular emphasis to the strength of the Group's balance sheet and our levels of cash.

In the light of these results the Directors have decided to increase the interim dividend by 10% to 2.75p per share (2010/11: 2.50p). The dividend will be paid on 22 December 2011 to shareholders registered on 25 November 2011. This in part is to help equalise the disparity that has grown between the interim and final dividend.

Review of operations

The Group is organised into three operating divisions: Private Clients, Financial Services and Charles Stanley Securities.

Private Client division

The division has again demonstrated the strength of the core retail business. In very difficult conditions total income has risen slightly by 1.6% to £50.7 million from £49.9 million. It is pleasing to note that in a continuation of the process started some years ago fee income for the period exceeded commission income, with investment management and administration fees in this division rising 9.7% to £26.1 million (2010/11: £23.8 million). The Private Client ratio of commission to recurring income is 48.5/51.5 compared with 52.9/47.1 respectively for the financial year 2010-11. Transaction levels have fallen during the six months to 30 September 2011 leading to a decrease of 5.7% in commission income - £24.6 million compared with £26.1 million in 2010.

Total funds under management and administration are shown below:

Managed clients

Funds under management decreased by 2.5% - with the net positive flow of funds during the period offset by the decrease in market valuations towards the end of the period. Inflow of funds (clients of new investment managers) includes £246 million relating to the take on of clients following the acquisition of Jobson James Financial Services Limited in May 2011. The flow of funds is analysed in the table below.

Despite the drop in the market value of funds under management at the end of the period fee income increased as average funds under management over the six months to 30 September 2011 were 10% higher than for the equivalent period to 30 September 2010.

Non-managed clients

Funds under administration have decreased by 8.4%.

Net organic change represents an outflow of funds from existing clients. Despite the fall in market values administration fees remained steady but not enough to offset the drop in commission income.

Financial Services

Over the past three years we have been building our Financial Services offering. The Matterley Fund Management teams have made further progress in the half-year despite difficult markets, growing funds from £122 million to £129 million as at 30 September 2011. EBS has continued to make good progress with the number of SIPPs and SASSs under administration increasing to over 3,700 (March 2011: 3,343). This has been partly due to the success of our new white labelled partner. Overall the Financial Services division has enjoyed a good half-year with revenues increasing to £5.8 million compared with £4.5 million as analysed below:

Charles Stanley Securities

Against a backdrop of significantly lower activity in small and mid cap equity fundraisings and corporate activity the division has suffered a drop in corporate finance income from £1.8 million to £1.2 million. During this period commission income has also declined from £3.4 million to £2.4 million as both of our equity and bond trading arms suffered along with markets generally, a significant downturn in revenues. During the period some costs have been cut in this division. It is difficult to judge how long and how deep this downward trend in institutional trading will be.

The Charles Stanley team

We live in challenging times, and our team at Charles Stanley has re-doubled its efforts to produce these results. I would like to thank everyone, throughout the Group, for having worked so hard to achieve this outcome for the latest period.

Outlook

In June, when we published our results for our latest financial year, I expressed guarded optimism about the months ahead. The hope was that a more globally co-ordinated response to the economic crisis - for example with the G20 meetings - would avoid the disjointed collapse that tore through the world economy in the 1930s. Sadly the situation has been allowed to drift onwards and downwards in the past few months. Now we have the Governor of the Bank of England suggesting that this crisis may be even worse than the 1930s. Much of the focus in this part of the world has been on the disastrous structure of the euro-zone, which has proved unable to address the difficulties of one of its smallest and weakest members, pulling the others down with it. But the underlying problem is not dissimilar in the USA, with over-consumption and under-production generating ever-greater global imbalances. None of this is likely to be solved quickly, and the lack of impetus in Europe and in the US to find a solution will hang over the markets for a long time to come.

Against such widespread economic uncertainty then, it is perhaps unsurprising that our Securities business has been impacted by the market downturn. However it is a relatively small part of the wide range of services that make up the Charles Stanley family being 6% of turnover. I take substantial comfort that the Private Clients business, which is our core offering, has grown its revenues by 4% showing its quality and resilience in a difficult trading environment. Furthermore it is also pleasing that our underlying funds under management have grown by £770 million in a period when the FTSE 100 has dropped by 13%. It is in true Charles Stanley style that these funds have been grown partly organically and partly by acquisition, and I see opportunities for this to continue over the medium term.

Central though to our business model is our experienced and prudent management team, our dedication to the quality of service that we offer our clients, our emphasis on maintaining strong cash reserves and our focus on growth. I am satisfied that these proven strengths leave us well positioned for the markets ahead. Although we cannot stand aside from the forces that drive the markets and the global economy, our professionalism, our values and our resilience give me the confidence to look forward with some degree of optimism.

Sir David Howard

Chairman

10 November 2011

CHARLES STANLEY GROUP PLC

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

SIX MONTHS ENDED 30 SEPTEMBER 2011

Earnings per share

CHARLES STANLEY GROUP PLC

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

AT 30 SEPTEMBER 2011

CHARLES STANLEY GROUP PLC

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

SIX MONTHS ENDED 30 SEPTEMBER 2011

CHARLES STANLEY GROUP PLC

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

SIX MONTHS ENDED 30 SEPTEMBER 2011

CHARLES STANLEY GROUP PLC

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Charles Stanley Group PLC is the parent company of a group of companies ("the Group") which provides a range of investment and financial services within the United Kingdom. The Company is a public limited company which is listed on the London Stock Exchange and is incorporated and domiciled in the United Kingdom.

The annual consolidated financial statements of the Group at 31 March 2011 are available upon request from the Company's registered office at 25 Luke Street, London EC2A 4AR or at www.charlesstanleyplc.co.uk.

1.1 Basis of preparation

 The Group's consolidated financial statements are prepared on a going concern basis and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU. These condensed consolidated interim financial statements are prepared and presented in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements have been prepared on the basis of the accounting policies, methods of computation and presentation set out in the Group's consolidated financial statements for the year ended 31 March 2011. The condensed consolidated interim financial statements should be read in conjunction with the Group's audited financial statements for the year ended 31 March 2011.

The comparative figures for the financial year ended 31 March 2011 are not the Company's statutory accounts for the financial year. Those accounts have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These condensed consolidated interim financial statements were approved by the Board of Directors on 10 November 2011.

1.2 Principal risks and uncertainties

The Directors believe that the nature of the principal risks and uncertainties facing the Group during the six months to 30 September 2011 and during the remainder of its financial year remain unchanged from 31 March 2011. A full assessment of the risks and uncertainties, together with the controls and processes which are in place to monitor and mitigate the risks where possible, are set out on pages 17, 18 and 19 of the 2011 Annual Report and Financial Statements. The risks are summarised below.

1.3 Related party transactions

Related party transactions are described on page 82 of the 2011 Annual Report and Financial Statements. No transactions took place during the six months to 30 September 2011 that would materially affect the financial position or performance of the Group during the period.

1.4 Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2011. The following areas were reviewed by management and changes made as noted below:

Retirement benefit obligations

The Directors requested the Company's actuaries to up-date their valuation from 31 March 2011 to 30 September 2011. This resulted in an increase in the actuarial deficit of £3.4 million which has been reflected in these financial statements.

Intangible assets

During the period market valuations and volumes have decreased. Management have carried out an impairment review of intangible assets and have concluded that there is no impairment to the carrying value of intangible assets.

Available for sale financial assets

No new information has become available that would require a change in the valuation of unlisted investments.

1.5 Forward looking statements

These condensed consolidated interim financial statements contain 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 the accounts. Forward looking statements should be treated with 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 condensed consolidated interim financial statements have been prepared by Charles Stanley Group PLC to provide information to its shareholders and should not be relied upon by any other party or for any other purpose.

2 SEGMENT INFORMATION

For management purposes the Group is organised into three divisions - Private Clients, Financial Services and Charles Stanley Securities. The principal activity of the Private Client division is the provision of investment management services to individuals, trusts and charities. The Financial Services division includes a SIPP administrator, a discount financial intermediary, employee benefits providers together with financial planning and wealth management areas. Charles Stanley Securities is the Group's advisory, broking and corporate finance arm for smaller and mid cap UK listed companies. Sales between segments are carried out at arm's length. All of the Group's activities are undertaken in the United Kingdom.