14th Nov 2007 07:01
Rensburg Sheppards plc14 November 2007 14 November 2007 Rensburg Sheppards plc ('Rensburg Sheppards' or 'the company') Half-Yearly Financial Report Rensburg Sheppards, the investment management group, today announces itshalf-yearly results for the six months ended 30 September 2007 Key points: • Profit before tax of £15.0 million (2006: £10.2 million). • Adjusted* profit before tax of £20.1 million (2006: £15.3 million). • Basic earnings per share of 23.9p (2006: 14.4p). • Adjusted* basic earnings per share of 31.7p (2006: 24.2p). • Interim dividend of 8.5p per ordinary share (2006: 7.5p) • Group funds under management at 30 September 2007 of £14.41 billion (2006: £13.28 billion). * Before amortisation of the client relationships intangible asset and share- based charges relating to the Employee Benefit Trust ('EBT'). These items amount to a net charge before tax of £5.1 million (2006: £5.1 million) and a net charge after tax of £3.4 million (2006: £4.3 million). Steve Elliott, Chief Executive of Rensburg Sheppards, commented: "I am pleased to report significant progress across the business. Our strongposition in the growing wealth management market means that despite the currentmarket volatility, I believe the group is well positioned for the future" An analysts meeting will be held today at 9.30 am at the offices of HudsonSandler, 29 Cloth Fair, London, EC1A 7NN. For further information, please contact: Steve Elliott, Chief Executive Tel: 020 7597 1234Rensburg Sheppards plc Nick Lyon / James WhiteHudson Sandler Tel: 020 7796 4133 Interim Management Report Financial results and dividend Over the six months ended 30 September 2007 the UK financial markets experiencedquite varying conditions. During the first three months, the markets continuedto rise. There then followed a period of quite challenging conditions, withmarked volatility in the markets brought about by the 'sub-prime' crisis, whichoriginated in the United States. Given such an operating environment, it ispleasing to be able to report a significant improvement in the group's financialperformance for the six months ended 30 September 2007. From revenue (net of fees and commissions payable) of £61.4 million (2006: £53.6million), the group's profit before tax was £15.0 million (2006: £10.2 million).After removing charges totalling £5.1 million (2006: £5.1 million) in respectof the amortisation of the client relationships intangible asset and share-basedcharges relating to the Employee Benefit Trust associated with the acquisitionof Carr Sheppards Crosthwaite ('CSC'), the resulting adjusted profit before taxincreased to £20.1 million (2006: £15.3 million). It is the directors' opinionthat this adjusted measure of profit before tax and that of earnings given belowrepresent better measures of the group's underlying financial performance. Basic earnings per share were 23.9p (2006: 14.4p) and on the basis of adjustingfor the items detailed in the above paragraph, together with the associated taxconsequences of these adjustments, the adjusted basic earnings per share were31.7p (2006: 24.2p). The positive effect on basic (unadjusted) earnings pershare resulting from the reduction in the rate of corporation tax, effectivefrom 1 April 2008, is set out in note 7 of the condensed financial statements. The directors have declared an interim dividend of 8.5p (2006: 7.5p) perordinary share payable on 1 February 2008 to all shareholders on the register atthe close of business on 4 January 2008. As previously reported, on 8 May 2007, £10 million of the group's totalsubordinated debt of £60 million was repaid ahead of schedule. Of the group'stotal debt now outstanding of £50 million, £45 million is at a fixed rate ofinterest of 7.155% per annum. Rensburg Sheppards Investment Management ('RSIM') Discretionary funds under management were £8.79 billion (2006: £7.92 billion) anincrease of 11.0% over the year; non-discretionary funds under management were£3.85 billion (2006: £3.98 billion) a decrease of 3.3%. This gave total fundsunder management at 30 September 2007 of £12.64 billion (2006: £11.90 billion),an increase over the year of 6.2% compared with the increase of 5.7% over thecorresponding period in the FTSE/APCIMS Private Investors Balanced Index. Ofthese total funds, 69.5% are operated on a discretionary basis, a welcomeincrease over the prior year comparative of 66.6%. For the half-year 73.4% of RSIM's net revenue was recurring in nature, thiscompares favourably with the 70.7% achieved for the six months ended 30September 2006. Rensburg Fund Management ('RFM') RFM increased the value of its retail unit trust based funds under management by30.1% to £1.34 billion (2006: £1.03 billion). The total value of the twosegregated mandates that are investment managed by RFM have increased to £432million (2006: £348 million), bringing RFM's total funds under management at 30September 2007 to £1.77 billion (2006: £1.38 billion). Group funds under management The group's total funds under management at 30 September 2007 were £14.41billion (30 September 2006: £13.28 billion) representing an increase of 8.5%over the year compared with the increase of 5.7% in the FTSE/APCIMS PrivateInvestors Balanced Index over this time. People On 16 October 2007, shortly following the end of the financial period now beingreported on, the board announced a number of changes to its membership, alltaking immediate effect. David Bulteel and Jon Seal were appointed as executivedirectors. David and Jon are both well established divisional investmentdirectors within RSIM and are in day to day charge of the London and Liverpooloffices respectively. Ian Maxwell Scott, who was originally due to retire fromthe board on reaching 62 years of age in December 2007, has agreed to continueas an executive director. Finally, Nick Lane Fox who joined the board in May2002 resigned from the board to pursue business and other personal interests. Most importantly, we would like to record the board's appreciation to all of thegroup's staff for their considerable efforts over the first half of thisfinancial year, not only in delivering the increased revenues and profits nowbeing reported, but also for ensuring that the group is ready to meet itsobligations arising from the significant regulatory changes that are takingplace. Outlook Since 30 September 2007, the UK financial markets have remained volatile andsuch a backdrop is the principal risk and uncertainty faced by the group in thesecond half of the financial year. Whilst recognising that this uncertainty doesnot assist us in the short-term, we believe our efforts in establishing thestrong platforms now in place from which the development of the group'sbusinesses can be led, combined with the growing longer-term demand for theservices and products that the group offers, leave us well positioned for thefuture. C.G. Clarke S.M. ElliottChairman Chief Executive 13 November 2007 Consolidated income statementfor the six months ended 30 September 2007 2007 2006 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March Note £'000 £'000 £'000 Revenue 67,415 58,050 122,297Fees and commissions payable (5,970) (4,456) (9,360)Net revenue 2 61,445 53,594 112,937Share-based payments - EBT 3 (2,328) (2,328) (4,653)Amortisation of intangible assets - client relationships (2,802) (2,802) (5,603)Other operating expenses (40,873) (37,348) (75,225)Operating expenses (46,003) (42,478) (85,481)Operating profit 15,442 11,116 27,456Finance income 1,466 1,285 2,694Finance expenses 4 (1,903) (2,236) (4,483)Profit before tax 15,005 10,165 25,667Taxation 5 (4,556) (3,897) (9,289)Profit for the period attributable to the equity holders of 10,449 6,268 16,378the company Earnings per share 7 Basic 23.9p 14.4p 37.5pDiluted 23.8p 14.3p 37.4p Consolidated balance sheetat 30 September 2007 2007 2006 2007 30 September 30 September 31 March Note £'000 £'000 £'000 AssetsNon-current assetsIntangible assets 8 184,767 190,668 187,601Property, plant and equipment 9 5,365 4,569 5,422Available-for-sale investments 2,896 2,349 2,562Deferred tax assets 1,339 1,977 1,280 194,367 199,563 196,865Current assetsTrade and other receivables 124,349 123,200 130,452Cash and cash equivalents 51,684 42,047 49,775 176,033 165,247 180,227 Total assets 370,400 364,810 377,092 LiabilitiesCurrent liabilitiesTrade and other payables (120,619) (118,745) (124,359)Loan notes - (379) (72)Provisions 10 (115) - (641)Current tax liabilities (6,434) (3,388) (4,672) (127,168) (122,512) (129,744) Non-current liabilitiesAccruals and deferred income (1,477) - (798)Subordinated loan 11 (50,000) (60,000) (60,000)Provisions 10 (508) (3,281) (517)Deferred tax liabilities (14,566) (17,125) (16,341) (66,551) (80,406) (77,656) Total liabilities (193,719) (202,918) (207,400) Net assets 176,681 161,892 169,692 Equity attributable to the equity holders of the company Share capital 12,13 4,822 4,822 4,822Share premium 13 10,610 10,603 10,603Capital redemption reserve 13 100 100 100Available-for-sale reserve 13 1,509 1,085 1,234Revaluation reserve 13 980 966 959Other reserves 13 130,601 130,601 130,601Retained earnings 13 28,059 13,715 21,373Total equity 176,681 161,892 169,692 Consolidated cash flow statementfor the six months ended 30 September 2007 2007 2006 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March £'000 £'000 £'000 Cash flows from operating activitiesProfit before taxation 15,005 10,165 25,667Adjustments for:- Amortisation of intangible assets 3,107 3,103 6,219- Finance expenses 1,903 2,236 4,483- Finance income (1,466) (1,285) (2,694)- Depreciation 433 325 672Share-based payments 2,788 2,359 4,815Loss on disposal of property, plant & equipment and - - 102intangible assetsDecrease in trade and other receivables 6,167 44,050 36,901Decrease in trade payables and provisions (3,327) (59,435) (55,116)Cash generated from operations 24,610 1,518 21,049Interest received 1,346 1,292 2,318Dividends received 56 - 280Interest paid (12) (98) (221)Taxation paid (4,669) (3,378) (7,446)Net cash inflow/(outflow) from operating activities 21,331 (666) 15,980 Cash flows from investing activitiesPurchase of property, plant and equipment (376) (119) (1,407)Purchase of intangible assets - software (273) (160) (223)Net cash outflow from investing activities (649) (279) (1,630) Cash flows from financing activitiesDividends paid to shareholders (6,548) (5,783) (9,073)Proceeds from issue of ordinary share capital 7 1,389 1,390Costs associated with issue of shares - - (1)Purchase of own shares - - (1,815)Redemption of loan notes (72) (461) (768)Repayment of subordinated loan (10,000) - -Interest paid on subordinated loan (2,160) (2,111) (4,266)Net cash outflow from financing activities (18,773) (6,966) (14,533) Net increase/(decrease) in cash and cash equivalents 1,909 (7,911) (183)Cash and cash equivalents at start of period 49,775 49,958 49,958Cash and cash equivalents at end of period 51,684 42,047 49,775 Consolidated statement of recognised income and expensefor the six months ended 30 September 2007 2007 2006 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March £'000 £'000 £'000Revaluation of available-for-sale investments-gain arising from changes in fair value 334 161 374Deferred tax on revaluation of available-for-sale investments-on gain arising from changes in fair value (100) (48) (112)-movement in deferred tax arising from change of tax rate 41 - -Deferred tax on revalued property-movement in deferred tax arising from change of tax rate 27 - -Net income recognised directly in equity 302 113 262Profit for the period 10,449 6,268 16,378Total recognised income and expense for the period 10,751 6,381 16,640 Notes to the condensed financial statements 1. Basis of preparation and statement of compliance Rensburg Sheppards plc ('the company') is a public company incorporated in theUnited Kingdom. The shares of the company are listed on the London StockExchange. The consolidated income statement, consolidated balance sheet,consolidated statement of recognised income and expense, consolidated cash flowstatement and the related notes represent condensed consolidated interimfinancial statements of the company and comprise those of the company and itssubsidiaries (together referred to as 'the group'). The condensed consolidatedinterim financial statements have been prepared in accordance with InternationalFinancial Reporting Standard IAS 34 Interim Financial Reporting as adopted bythe EU. They do not include all of the information required for full annualfinancial statements and should be read in conjunction with the consolidatedfinancial statements of the group for the year ended 31 March 2007. Theaccounting policies applied by the group in these condensed consolidated interimfinancial statements are the same as those applied by the group in itsconsolidated financial statements for the year ended 31 March 2007. The financial information contained in these condensed consolidated interimfinancial statements is unaudited and does not constitute statutory accountswithin the meaning of section 240 of the Companies Act 1985. The comparativefigures for the year ended 31 March 2007 are not the company's statutoryaccounts for that year. Those accounts have been reported on by the auditor ofthe company and delivered to the Registrar of Companies. The report of theauditor was (i) unqualified, (ii) did not include a reference to any matters towhich the auditor drew attention by way of emphasis without qualifying itsreport and (iii) did not contain a statement under section 237 (2) or (3) of theCompanies Act 1985. 2. Revenue and segmental information For management purposes, the group is organised into two business segments,being Investment Management and Fund Management. These segments represent theprimary reporting segments of the group. Six months ended 30 September 2007 Investment Fund Management Management Eliminations Group £'000 £'000 £'000 £'000RevenueExternal 55,870 11,545 - 67,415Inter-segment 336 - (336) - 56,206 11,545 (336) 67,415Fees and commissions payable (2,132) (4,174) 336 (5,970)Segmental net revenue 54,074 7,371 - 61,445 Share-based payments - EBT (2,328) - - (2,328)Amortisation of intangible assets - client (2,802) - - (2,802)relationshipsOther operating expenses (36,394) (4,479) - (40,873)Segmental expenses (41,524) (4,479) - (46,003) Segmental operating profit 12,550 2,892 - 15,442Finance income 1,177 289 - 1,466Finance expenses (1,903) - - (1,903)Profit before tax 11,824 3,181 - 15,005 Segmental net revenue is derived from:Investment Management services 54,074 - - 54,074Fund Management services - 6,277 - 6,277Profit on sale of units of unit trusts - 1,094 - 1,094 54,074 7,371 - 61,445 Six months ended 30 September 2006 Investment Fund Management Management Eliminations Group £'000 £'000 £'000 £'000RevenueExternal 49,831 8,219 - 58,050Inter-segment 272 - (272) - 50,103 8,219 (272) 58,050Fees and commissions payable (1,907) (2,821) 272 (4,456)Segmental net revenue 48,196 5,398 - 53,594 Share-based payments - EBT (2,328) - - (2,328)Amortisation of intangible assets - client (2,802) - - (2,802)relationshipsOther operating expenses (33,971) (3,377) - (37,348)Segmental expenses (39,101) (3,377) - (42,478) Segmental operating profit 9,095 2,021 - 11,116Finance income 1,102 183 - 1,285Finance expenses (2,236) - - (2,236)Profit before tax 7,961 2,204 - 10,165 Segmental net revenue is derived from:Investment Management services 48,196 - - 48,196Fund Management services - 4,518 - 4,518Profit on sale of units of unit trusts - 880 - 880 48,196 5,398 - 53,594 Year ended 31 March 2007 Investment Fund Management Management Eliminations Group £'000 £'000 £'000 £'000RevenueExternal 104,602 17,695 - 122,297Inter-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 relationships (5,603) - - (5,603)Other 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 3. Share-based payments The movements during the period in the number of shares in respect of whichawards are outstanding are set out below: Employee SAYE 2007 Employee Benefit 2006 Share Plan Trust Outstanding at 1 April 2007 457,629 202,350 2,548,000Forfeited (14,614) - -Exercised (1,021) - -Outstanding at 30 September 2007 441,994 202,350 2,548,000 4. Finance expenses Finance expenses include interest payable of £1,892,000 relating to thesubordinated loan (September 2006: £2,142,000; March 2007: £4,305,000). 5. Taxation The tax expense for the six months ended 30 September 2007 has been calculatedusing the estimated annual effective rate of tax for the year ending 31 March2008. The tax charge recognised in the income statement comprises: 2007 2006 2007 Six months Six months Year ended ended ended 30 September 30 September 31 March £'000 £'000 £'000 United Kingdom corporation tax 6,431 4,574 10,038Deferred tax (1,875) (677) (749) 4,556 3,897 9,289 The movement on deferred tax for the six months ended 30 September 2007 includesa credit of £852,000 (September 2006: nil; March 2007: nil) which has arisen asa result of the change in the rate of corporation tax from 30% to 28%, effectivefrom 1 April 2008. 6. Dividend The interim dividend declared for the six months ended 30 September 2007 of 8.5pence per share is payable on 1 February 2008 to shareholders on the register asat the close of business on 4 January 2008. In accordance with the group'saccounting policies and the requirements of IAS 10 Events after the balancesheet date this dividend has not been recognised as a liability at 30 September2007. 7. Earnings per share Basic earnings per share is calculated with reference to earnings forshareholders of £10,449,000 (September 2006: £6,268,000; March 2007:£16,378,000) and the weighted average number of shares in issue during theperiod of 43,650,486 (September 2006: 43,632,112; March 2007: 43,723,007).Adjusted earnings per share before amortisation of the client relationshipsintangible asset and share-based payments relating to the EBT is calculated withreference to earnings for shareholders of £13,841,000 (September 2006:£10,557,000; March 2007: £24,953,000). 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 267,686 shares (September2006: 181,929; March 2007: 112,337). The directors believe that the provision of additional earnings per sharefigures, in particular before amortisation of the client relationshipsintangible asset and share-based payments relating to the EBT better representunderlying business performance. The effect of these adjustments on earnings andbasic earnings per share is as follows: Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 Earnings Earnings Earnings Earnings Earnings Earnings per per per share share share £'000 Pence £'000 Pence £'000 Pence Unadjusted earnings and EPS 10,449 23.9 6,268 14.4 16,378 37.5Share-based payments - EBT 2,328 5.3 2,328 5.3 4,653 10.6Amortisation of intangible assets 2,802 6.4 2,802 6.4 5,603 12.8- client relationshipsTax arising on adjusted items at (841) (1.9) (841) (1.9) (1,681) (3.8)30%Effect on tax arising on adjusted (897) (2.0) - - - -items following change of rate oftaxationAdjusted earnings and EPS 13,841 31.7 10,557 24.2 24,953 57.1 As set out in note 5 above, the tax expense for the six months ended 30September 2007 has reduced by £852,000 as a result the movement in deferred taxrelating to the forthcoming change in the rate of corporation tax from 30% to28%. This has contributed 2.0 pence per share to the unadjusted basic earningsper share of 23.9 pence per share for the six months ended 30 September 2007. 8. Intangible assets The carrying values of intangible assets are as follows: 2007 2006 2007 30 September 30 September 31 March £'000 £'000 £'000 Goodwill 136,385 136,385 136,385Client relationships 47,667 53,270 50,469Software 715 1,013 747 184,767 190,668 187,601 9. Property, plant and equipment During the six months ended 30 September 2007, the group acquired assets with acost of £376,000 (September 2006: £119,000; March 2007: £1,407,000). No assetswere disposed of during the six months ended 30 September 2007 (September 2006:nil; March 2007: assets with a carrying value of £88,000 were disposed of,giving rise to a loss on disposal of £88,000, which was recognised within otheroperating expenses). 10. Provisions Reorganisation Onerous Property costs leases dilapidations Total £'000 £'000 £'000 £'000At 1 April 2007Current liabilities 584 57 - 641Non-current liabilities - 292 225 517 584 349 225 1,158 Charged to the income statement - - 38 38Utilised during the period (552) (21) - (573)At 30 September 2007 32 328 263 623 The balances at 30 September 2007 are categorised as follows: Reorganisation Onerous Property costs Leases dilapidations Total £'000 £'000 £'000 £'000 Current liabilities 32 80 3 115Non-current liabilities - 248 260 508 32 328 263 623 11. Subordinated loan On 8 May 2007, £10 million of the subordinated loan was repaid ahead ofschedule. This repayment is in respect of the £15 million floating rate elementof the loan and was originally scheduled for repayment in equal annualinstalments commencing on 6 May 2008. No penalty arose from the making of thisprepayment. Under the terms of the loan agreement, this prepayment is to beapplied in chronological order against the future scheduled repaymentobligations of the floating rate portion of the loan. Interest payable on theloan is calculated on a daily basis, based on the balance of the loanoutstanding; therefore, no further interest expense will be incurred in respectof the £10 million that has been repaid after the repayment date of 8 May 2007.The carrying value of the loan of £50 million at 30 September 2007 comprises £45million on which a fixed rate of interest is payable of 7.155% per annum and £5million on which a floating rate of interest is payable of 2.25% above LIBOR perannum. 12. Share capital During the period, the company issued 1,021 ordinary shares of 10 90/91 penceeach following the exercise of options relating to the group's Savings-RelatedShare Option Scheme ('SAYE'). The nominal value of the shares issued was £112and the total consideration received was £6,739. 13. 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 31 March 2006 4,760 9,276 100 972 972 130,601 11,103 157,784Profit after taxation - - - - - - 6,268 6,268Dividends - - - - - - (5,783) (5,783)Issue of shares 62 1,328 - - - - - 1,390Share issue costs - (1) - - - - - (1)Share-based payments - - - - - - 2,359 2,359Deferred tax on share-based - - - - - - (238) (238)paymentsGain arising on - - - 161 - - - 161available-for-saleinvestmentsDeferred tax on - - - (48) - - - (48)available-for-saleinvestmentsDepreciation on revalued - - - - (6) - 6 -property At 30 September 2006 4,822 10,603 100 1,085 966 130,601 13,715 161,892Profit after taxation - - - - - - 10,110 10,110Dividends - - - - - - (3,290) (3,290)Purchase of own shares by - - - - - - (1,815) (1,815)Employee Share OwnershipTrustShare-based payments - - - - - - 2,456 2,456Tax relief on share-based - - - - - - 714 714paymentsDeferred tax on share-based - - - - - - (524) (524)paymentsGain arising on - - - 213 - - - 213available-for-saleinvestmentsDeferred tax on - - - (64) - - - (64)available-for-saleinvestmentsDepreciation on revalued - - - - (7) - 7 -property At 31 March 2007 4,822 10,603 100 1,234 959 130,601 21,373 169,692Profit after taxation - - - - - - 10,449 10,449Dividends - - - - - - (6,548) (6,548)Issue of shares - 7 - - - - - 7Share-based payments - - - - - - 2,788 2,788Deferred tax on share-based - - - - - - (13) (13)paymentsGain arising on - - - 334 - - - 334available-for-saleinvestmentsDeferred tax on - - - (100) - - - (100)available-for-saleinvestmentsMovement in deferred tax - - - 41 27 - 4 72arising from change of taxrateDepreciation on revalued - - - - (6) - 6 -propertyAt 30 September 2007 4,822 10,610 100 1,509 980 130,601 28,059 176,681 14. Related party transactions The directors of the company represent the key management of both the group andthe company and the amounts paid in respect of their services for the latestfull financial year were set out in the Report & Financial Statements for theyear ended 31 March 2007. The directors of the company include B. Kantor and S.Koseff, both of whom are also directors of Investec plc. Investec 1 Limited is an associated company of the group. The parent company ofInvestec 1 Limited is Investec plc. The transactions set out below have takenplace with Investec plc or its subsidiary companies ('the Investec group')during the period. The group has a subordinated loan facility with the Investec group. Thefacility was entered into on 6 May 2005 and had an original value of £60million. £10 million of the loan was repaid during the period and details ofthis repayment are set out in note 11 above. The interest charged on the loanduring the period amounted to £1,892,000 (September 2006: £2,142,000; March2007: £4,305,000) and interest of £1,450,000 was payable at 30 September 2007(September 2006: £1,710,000; March 2007: £1,718,000). The group leases premises at 2 Gresham Street London from the Investec group.The amount payable during the period under the terms of the lease in respect ofrent and service charges amounted to £558,000 (September 2006: £668,000; March2007: £1,253,000) and no amounts were outstanding at 30 September 2007(September 2006: nil; March 2007: £321,000). The Investec group provides thegroup with certain infrastructure services under the terms of a three yearagreement, which expires on 6 May 2008. The amount payable during the periodunder the terms of the agreement amounted to £394,000 (September 2006: £338,000;March 2007: £656,000) and no amounts were outstanding at 30 September 2007(September 2006: £64,000; March 2007: £127,000). The Investec group has provided internal audit services to the group during theperiod. The amount payable by the group during the period in respect of theseservices amounted to £148,000 (September 2006: £51,000; March 2007: £138,000)and no amounts were outstanding at 30 September 2007 (September 2006: nil; March2007: nil). The group contributes to defined contribution pension schemes on behalf of itsemployees and operates a number of share-based payment arrangements for thepurposes of employee remuneration; details of these schemes were set out in thelatest full financial statements for the year ended 31 March 2007. Directors, and all employees of the group, are eligible to receive investmentmanagement services from the group at discounted staff rates. Responsibility statement of the directors in respect of the half-yearlyfinancial report We confirm that to the best of our knowledge: • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; • the interim management report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. By order of the board P.M. WattsCompany Secretary13 November 2007 Independent Review Report by KPMG Audit Plc to Rensburg Sheppards plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30September 2007 which comprises the consolidated income statement, consolidatedbalance sheet, consolidated statement of recognised income and expense,consolidated cash flow statement and the related explanatory notes. We haveread the other information contained in the half-yearly financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the Disclosureand Transparency Rules ('the DTR') of the UK's Financial Services Authority ('the UK FSA'). Our review has been undertaken so that we might state to thecompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company for our review work, forthis report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the DTR of the UK FSA. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the EU. The condensed set offinancial statements included in this half-yearly financial report have beenprepared in accordance with IAS 34 Interim Financial Reporting as adopted by theEU. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing (UK and Ireland) and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with IAS 34 as adopted by the EU and the DTR ofthe UK FSA. KPMG Audit PlcChartered AccountantsLeeds13 November 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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