10th Aug 2005 07:01
Rensburg Sheppards plc10 August 2005 10 August 2005 Rensburg Sheppards plc ("Rensburg Sheppards" or "the Company") Interim Results for the Six Months Ended 31 May 2005 Rensburg Sheppards, (formerly Rensburg plc), the Investment Management Group - Key Points: • Profit before tax, amortisation of goodwill and Employee Benefit Trust ("EBT") prepayment and exceptional items* of £6.3 million (2004: £4.2 million), an increase of 50%. • Basic earnings per share before amortisation of goodwill and EBT prepayment and exceptional items* of 17.1p (2004: 13.3p), an increase of 28.6%. • Share capital consolidation effected of 91 new ordinary shares for every 100 old ordinary shares. • Interim dividend of 6.6p per new ordinary share (2004: 6.0p per old ordinary share) following a special dividend of 45p per old ordinary share already having been declared in the six months ended 31 May 2005. • Results include 26 days contribution from Carr Sheppards Crosthwaite (' CSC'), the integration of which is well underway. • Investment management based fee and other recurring income (excluding contribution from CSC) at £14.7 million (2004: £11.7 million) an increase of 25.6 %. • Group funds under management at £10.7 billion (2004: £3.9 billion). * Amortisation of goodwill and EBT prepayment and exceptional items beforetaxation amount to net income of £1.6m (2004: net cost of £0.4m). Mike Burns, Chief Executive of Rensburg Sheppards, commented: "These results reflect the continued improvement in trading conditions. Thetransformational acquisition of Carr Sheppards Crosthwaite provides an excitingopportunity to consolidate Rensburg Sheppards' position as a leading investmentmanagement group " For further information, please contact: Michael Burns, Chief Executive Tel: 0151 227 2030Rensburg Sheppards plc Nick Lyongcg hudson sandler Tel: 020 7796 4133 INTERIM STATEMENT Financial results It is pleasing to be able to report results which reflect a continuedimprovement in the level both of financial markets and of the confidence shownby private investors towards equity based investment. The Group's profit before tax, amortisation of goodwill and Employee BenefitTrust ('EBT') prepayment and exceptional items for the six months ended 31 May2005 was £6.3 million (2004: £4.2 million) from a turnover of £24.9 million(2004: £18.2 million); the basic earnings per share on this basis were 17.1p(2004: 13.3p): an increase of 28.6%. Profit before tax for the six months ended31 May 2005 was £7.9 million (2004: £3.8 million) and basic earnings per shareon this basis were 19.9p (2004: 11.3p). At 31 May 2005 the Group's total fundsunder management stood at £10.7 billion (2004: £3.9 billion). The results as presented in this interim statement include a contribution fromCarr Sheppards Crosthwaite Limited ('CSC') from 6 May 2005, being the date CSCwas acquired, up until 31 May 2005; the results of CSC for this short period areseparately analysed within the profit and loss account. Exceptionalreorganisation costs relating to the integration of CSC incurred in the 26 dayperiod to 31 May 2005 have and will continue to be separately identified in theprofit and loss account. Excluding the contribution from CSC, total income of£21.7 million represents an underlying increase of 19.2% over the priorcorresponding period; more importantly, on this basis, fee and other recurringincome of £14.7 million represents an increase of 25.6%. During December 2004, the Group disposed of 662,857 shares in London StockExchange plc ('LSE'); these disposals, which are accounted for as an exceptionalitem, gave rise to a taxable gain of £3,129,000 upon which tax of £939,000 isexpected to be paid. The Group retains a holding of 100,000 shares in LSE. Share capital consolidation and dividends On 1 June 2005 a special dividend of 45p per ordinary share was paid, except inrespect of those ordinary shares issued to finance the acquisition of CSC ('Consideration Shares'); immediately following the ordinary shares going ex thisspecial dividend on 20 May 2005, all existing ordinary shareholdings (includingthe Consideration Shares) were consolidated on the basis of 91 new ordinaryshares for every 100 old ordinary shares. The Directors have declared an interim dividend of 6.6p per new ordinary share(2004: 6.0p per old ordinary share) payable on 3 October 2005 to shareholders onthe register as at the close of business on 2 September 2005; as with thespecial dividend, holders of Consideration Shares are not entitled to thisinterim dividend, however holders of all ordinary shares (includingConsideration Shares) will be entitled pari passu to future dividends. Name change and change of accounting reference date Following shareholder approval given at the Company's Extraordinary GeneralMeeting on 20 April 2005 and the subsequent formal completion of the acquisitionof CSC, the name of the Company was changed to Rensburg Sheppards plc on 6 May2005. The accounting reference date of the Company and the Group wassubsequently changed to 31 March and the current accounting period willtherefore extend to 16 months from 1 December 2004 until 31 March 2006. Giventhis, a second set of interim results will be prepared for the ten month periodto 30 September 2005; these results are expected to be announced in mid November2005. Adoption of International Financial Reporting Standards ('IFRS') For the 16 month accounting period to 31 March 2006, the Group is required toreport its results under UK GAAP. Thereafter, we are required to report allinterim and full-year results under IFRS. The impact of adopting IFRS on theGroup's results continues to be evaluated and it is intended that the resultsreported for the period to 31 March 2006 will include full guidance as to thisimpact. An update on this is, however, intended to be provided in our second setof interim results as referred to above. Acquisition of CSC Following shareholder and regulatory approvals, the acquisition of CSC wascompleted on 6 May 2005. This transformational acquisition took almost fivemonths to complete since the making of an initial announcement on 10 December2004, during which time the Company carefully evaluated and ultimately rejectedthe approaches to acquire the Company that were made by Rathbone Brothers Plc. The task of integrating CSC with the existing businesses is now well underway.This will be a key focus of management over the coming 18 months or so aseveryone works towards ensuring that the integration is achieved within the keyparameters for one off reorganisation costs and synergies, as set out in thecircular relating to the acquisition. At this relatively early stage there areno indications to suggest that this will not be achieved; moving forward moredetailed reports on the progress of this integration will be given in oursubsequent interim and full-year results. Operations Rensburg Investment Management ('RIM') increased fee-paying clients' funds by24% to £2.34 billion (2004: £1.88 billion). Other managed funds marginallydecreased to £1.55 billion (2004: £1.58 billion), principally reflecting thecontinued conversion of existing clients onto a fee-paying basis. This overallrise in RIM's managed funds of 12.4% compares with an increase in the FTSE /APCIMS Private Investors Balanced index of 10.4% over the year. The review ofRIM's charging structure, which was implemented in the final quarter of 2004,has resulted in an increase in the average yields achieved on funds undermanagement. Carr Sheppards Crosthwaite ('CSC') had audited profit before exceptional itemsand taxation of £8.8 million for the year ended 31 March 2005; this comparesfavourably with the profit forecast of £8.3 million included within the circularsent to Rensburg shareholders on 23 March 2005, proposing the acquisition ofCSC. At 31 May 2005, CSC had managed funds of £5.88 billion of which £3.91 billionwere managed on a discretionary basis; in addition, CSC managed, through itssubsidiary Mayflower Management Company Limited, three OEICs with a total of £11million under management and a charity property fund with £244 million undermanagement. Rensburg Fund Management ('RFM') increased the value of unit trust based fundsunder management by 36% to £611 million (2004: £448 million); this growth wasachieved through a combination of net sales of £64 million with the balancecoming from robust investment performance. Additionally, the value of thesegregated mandate that has been investment managed by the company since October2004, has increased to £45 million from £27 million at 30 November 2004. As theprofile and reputation of this business rises, the spread of investors continuesto widen. Board and employees The transformational acquisition of CSC has led to an unprecedented level ofsimultaneous change on the board. We would first like to acknowledge thesignificant contribution made to the board since the Company floated by BarryAnysz and Nicko Williams, who after 17 years service each, both stood down asexecutive directors upon completion of the acquisition of CSC. Additionally, wewould also like to thank Robert Allen and Katrina Michel who also stood down on6 May 2005, after each providing in an executive / non-executive capacityrespectively, three years valuable service to the board. We are delighted thatBarry and Robert are remaining in senior management roles within the Group andwish Nicko well as he enters retirement. We are pleased to welcome five new members to the board. First, as regardsexecutive appointments, Steve Elliott who headed up CSC has joined the Group asmanaging director, together with Nick Bagshawe and Ian Maxwell Scott, who haveboth served CSC in a senior front office capacity for many years; collectivelythese individuals bring a wealth of experience in the arena of financialservices and, in particular, private client management. As regardsnon-executive appointments, Stephen Koseff and Bernard Kantor have joined theboard and bring with them experience from successfully leading the build up ofInvestec over the past twenty five years. As previously indicated, we areseeking to recruit a further independent non-executive director and the searchfor this individual is underway. The first four months of the year were a period of considerable uncertainty foremployees of the Group and CSC, as the approach from Rathbone Brothers emergedand then developed. During this unsettling period, both the Group's and CSC'semployees demonstrated absolute professionalism and a clear commitment tomaintaining client service and for this we would like to offer our sincerethanks. Outlook Since 31 May 2005, the FTSE All-Share Index has risen by a further 8.1%; thiscontinuing gradual recovery in the equity markets, combined with the incomegrowth and rationalisation benefits afforded to us as a much enlarged group,leads us to look forward with confidence. C.G. Clarke M.H.Burns Chairman Chief Executive 9 August 2005 Consolidated profit and loss accountfor the six months ended 31 May 2005 2005 2004 2004 Six months ended 31 May Six months Twelve months Continuing operations ended ended Existing Acquisitions Total 31 May 30 Nov Note £'000 £'000 £'000 £'000 £'000 Turnover 21,700 3,249 24,949 18,203 36,936 Operating expenses (17,070) (2,334) (19,404) (14,692) (29,866)Reorganisation costs 1 - (176) (176) - -Amortisation of EBT prepayment 2 - (345) (345) - -Goodwill amortisation 8 (414) (588) (1,002) (434) (868) Total administrative expenses (17,484) (3,443) (20,927) (15,126) (30,734) Operating profit/(loss) 4,216 (194) 4,022 3,077 6,202 Profit on disposal of fixed asset 3 3,129 - -investments Profit on ordinary activities before 7,151 3,077 6,202interest and investment income Income from fixed asset investments - - - 490exceptional Interest receivable and similar 1,124 801 1,824income Interest payable 4 (340) (91) (72) Profit on ordinary activities before 7,935 3,787 8,444taxation Tax on profit on ordinary activities 5 (2,848) (1,309) (2,725) Profit on ordinary activities after 5,087 2,478 5,719taxation Dividends 6 (11,189) (1,313) (3,943) Retained (loss)/profit for the period (6,102) 1,165 1,776 Earnings per share before 7amortisation of goodwill and EBTprepayment and exceptional items -Basic 17.1p 13.3p 27.9p -Diluted 16.8p 13.0p 27.3p Earnings per share 7 -Basic 19.9p 11.3p 26.1p -Diluted 19.5p 11.1p 25.6p Dividend per share 6 - Ordinary dividend 6.6p 6.0p 18.0p - Special dividend 45.0p - - The Group has no recognised gains and losses other than those included in theprofits above and therefore no separate statement of total recognised gains andlosses is presented. Consolidated balance sheet at 31 May 2005 2005 2004 2004 31 May 31 May 30 Nov Note £'000 £'000 £'000 Fixed assets Intangible assets 8 177,929 14,121 13,000 Tangible assets 4,682 3,552 4,132 Investments 800 500 500 183,411 18,173 17,632 Current assets Debtors - due within one year 103,757 25,705 26,226 Debtors - due after one year 9 8,970 - - Cash at bank and in hand 16 45,944 36,444 40,618 158,671 62,149 66,844 Creditors Amounts falling due within one year (117,032) (34,546) (40,389) Net current assets 41,639 27,603 26,455 Total assets less current liabilities 225,050 45,776 44,087 Creditors Amounts falling due after more than one (60,000) (2,660) (232)year Provisions for liabilities and 11 (443) (83) (206)charges Net assets 164,607 43,033 43,649 Capital and reserves Called up share capital 4,759 2,208 2,209 Profit and loss account 19,900 25,391 26,002 Other reserves 139,948 15,434 15,438 Equity shareholders' funds 164,607 43,033 43,649 Consolidated cash flow statementfor the six months ended 31 May 2005 2005 2004 2004 Six Six Twelve months months months ended ended ended 31 May 31 May 30 Nov Note £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities 15 (2,539) 4,268 11,850 Returns on investments and servicing of finance Interest received 1,178 1,106 1,565 Interest paid (15) (34) (69) Income from fixed asset investments - exceptional - - 490 Taxation paid (1,627) (1,204) (2,513) Capital expenditure and financial investment Purchase of tangible fixed assets (398) (496) (1,354) Proceeds from sale of tangible fixed assets - 2 - Proceeds from sale of fixed asset 3,129 - -investments Acquisitions and disposals Costs associated with purchase of subsidiary (4,469) - -undertakings Cash acquired with subsidiary undertakings 13 17,611 - - Payment of deferred consideration (52) - - Equity dividends paid (12,500) (2,622) (3,936) Cash inflow before financing 318 1,020 6,033 Financing Issue of ordinary share capital 8 4 9 Redemption of loan notes - - (844) Increase in cash in the period 16 326 1,024 5,198 Notes to the interim report 1. Reorganisation costs Reorganisation costs relate to the integration of Carr Sheppards CrosthwaiteLimited, which was acquired on 6 May 2005. Details of this acquisition are setout in note 13. As set out in the listing particulars dated 23 March 2005, itis expected that the total pre-tax reorganisation costs that will be incurred toachieve the integration plan will amount to £10 million, including £1 million ofnon-cash items and excluding professional costs associated with the acquisition,which have been capitalised. The charge of £176,000 represents the element ofthese costs that have been committed to during the 26 days from the date ofacquisition to 31 May 2005. 2. Amortisation of EBT prepayment As set out in note 13 below, Investec 1 Limited ("Investec") established anEmployee Benefit Trust ("EBT") under the terms of the acquisition of CarrSheppards Crosthwaite Limited on 6 May 2005. Of the total of 25,500,000ordinary shares that were issued by the Company to Investec on 6 May 2005 underthe terms of the acquisition, 2,800,000 shares were immediately transferred byInvestec to the EBT. The fair value of these shares at the time of transfer tothe EBT was £13,972,000. The EBT does not fall within the control of theRensburg Sheppards Group and, as a result, the fair value of £13,972,000 hasbeen accounted for as a prepayment by Rensburg Sheppards plc of certain of theGroup's future employment costs; this amount will be amortised evenly throughthe consolidated profit and loss account over the three years from 6 May 2005,being the period to which the prepayment relates. The charge of £345,000represents the amortisation for the period from the date of acquisition of 6 May2005 to 31 May 2005. This amortisation will not result in any cash flows andthere will be no affect on the Company's distributable reserves. It is notanticipated that any tax relief will be available in respect of this charge. 3. Profit on disposal of fixed asset investments During the period, the Group disposed of 662,857 shares in London Stock Exchangeplc, giving rise to a taxable gain of £3,129,000. The amount of tax payable onthe gain is expected to be £939,000. Following this disposal, the Group retainsa holding of 100,000 shares in London Stock Exchange plc, which are included infixed asset investments at their historic cost of nil. 4. Interest payable Interest payable includes amounts due relating to subordinated debt of £306,000(May 2004: nil; Nov 2004: nil). Details of subordinated debt are set out innote 10. 5. Tax on profit on ordinary activities United Kingdom corporation tax at 30% (May 2004: 30%; Nov 2004: 30%). No taxrelief is available in respect of the amortisation of goodwill nor is tax reliefanticipated to be available in respect of the amortisation of the EBTprepayment. 6. Dividends 2005 2004 2004 Six Six Twelve months months months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Interim dividend: 6.6p per share (May 2004: 6.0p; Nov 2004: 6.0p) 1,318 1,313 1,314 Final dividend for the year ended 30 November 2004: 12.0p per share - - 2,629 Special dividend: 45.0p per share (May 2004: nil; Nov 2004: nil) 9,871 - - 11,189 1,313 3,943 The interim dividend of 6.6p per share is payable in respect of 19,976,441ordinary shares; this excludes 126,250 shares held by the Employee ShareOwnership Trust, in respect of which all dividends have been waived. Theordinary shares issued on 6 May 2005 as part of the consideration for theacquisition of Carr Sheppards Crosthwaite Limited do not rank for the interimdividend payable in respect of the six month period ended 31 May 2005, nor didthey rank for the special dividend of 45p per share paid on 1 June 2005, inaccordance with the terms of the acquisition. However, these shares do rankpari passu for all future dividends. The special dividend was paid on 1 June2005 in respect of 21,935,609 ordinary shares to shareholders on the register at6.00pm on 20 May 2005. 7. Earnings per share Basic earnings per share before amortisation of goodwill and EBT prepayment andexceptional items is calculated with reference to earnings for shareholders of£4,367,000 (May 2004: £2,912,000; November 2004: £6,097,000) and the weightedaverage number of shares in issue during the period of 25,557,966 (May 2004:21,856,987; November 2004: 21,876,641). The weighted average number of sharesincludes the 2,800,000 shares relating to the EBT from their date of issue on 6May 2005. Basic earnings per share is calculated with reference to earnings forshareholders of £5,087,000 (May 2004: £2,478,000; November 2004: £5,719,000). 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 490,491 shares (May 2004:534,030; November 2004: 495,756). The Directors believe that the provision of additional earnings per sharefigures, in particular before goodwill amortisation, amortisation of the EBTprepayment and exceptional items, is beneficial to the users of the financialstatements to understand the performance of the Group. The effect of theseadjustments on earnings and basic earnings per share is as follows: Six months ended Six months ended Twelve months ended 31 May 2005 31 May 2004 30 November 2004 Earnings Earnings Earnings Earnings Earnings Earnings per per per share share share £'000 Pence £'000 Pence £'000 Pence Unadjusted earnings and EPS 5,087 19.9 2,478 11.3 5,719 26.1 Goodwill amortisation 1,002 3.9 434 2.0 868 4.0 Income from fixed asset - - - - (490) (2.2)investments - exceptional Profit on disposal of fixed (3,129) (12.2) - - - -asset investments Reorganisation costs 176 0.7 - - - - Amortisation of EBT prepayment 345 1.3 - - - - Tax arising on exceptional items 886 3.5 - - - - Earnings and EPS excludingamortisation of goodwill andEBT prepayment andexceptional items 4,367 17.1 2,912 13.3 6,097 27.9 8. Intangible fixed assets Note Goodwill £'000Cost:At 1 December 2004 16,689Additions 13 165,931 At 31 May 2005 182,620 Amortisation:At 1 December 2004 3,689Provided during the period 1,002 At 31 May 2005 4,691 Net book value: At 31 May 2005 177,929 At 30 November 2004 13,000 9. Debtors - due after one year Amounts falling due after more than one year relate entirely to the prepaymentof employment costs arising from the Employee Benefit Trust, as set out in note2 above. 10. 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, as set out in note 13 below.A fixed rate of interest of 7.155% per annum is payable on £45 million of theloan and a floating rate, being 2.25% above LIBOR, is payable on £15 million ofthe loan. The total amount of the loan is repayable in equal instalments overeight years, with the first instalment becoming payable in 2008. 11. Provisions for liabilities and charges Deferred Lease Other Total tax rentals £'000 £'000 £'000 £'000 At 1 December 2004 24 182 - 206Acquired with subsidiary - - 252 252Utilised in the period - (15) - (15) At 31 May 2005 24 167 252 443 Lease rentals represent future rentals on unoccupied leasehold premises to theend of the lease term, up to 2013. Other amounts represent the residue ofamounts previously provided within Carr Sheppards Crosthwaite Limited, prior toits acquisition by the Company, in respect of the cost of restructuring certainbusiness activities. 12. Called up share capital The Company's authorised share capital was increased to £6,000,000, comprising60,000,000 ordinary shares of 10 pence each, at an extraordinary general meetingheld on 20 April 2005. On 20 May 2005, the Company's share capital wasconsolidated by the issue of 91 new ordinary shares of 10 90/91 pence each forevery 100 existing ordinary shares of 10 pence each. As a result of the shareconsolidation, the Company's authorised share capital was reduced to 54,600,000ordinary shares of 10 90/91 pence each. 2005 2004 2004 31 May 31 May 30 Nov Authorised:54,600,000 ordinary shares of 10 90/91p each £6,000,000 £3,000,000 £3,000,000(May 2004 and Nov 2004: 30,000,000 ordinary shares of 10p each) Allotted and fully paid:43,307,171 ordinary shares of 10 90/91p each £4,759,030 £2,208,574 £2,208,708(May 2004: 22,085,739 ordinary shares of 10p each;Nov 2004: 22,087,078 ordinary shares of 10p each) As a result of the share consolidation on 20 May 2005, the shares held by theEmployee Share Ownership Trust ("the Trust") reduced such that the Trust nolonger held sufficient shares to satisfy all options outstanding under theGroup's Employee Share Ownership Plan. The Trust therefore purchased 13,703ordinary shares of 10 90/91 pence each on 25 May 2005, representing 0.03% of theissued share capital on that date. The amount paid for these shares of £72,626has been charged to the profit and loss account during the period. 13. Acquisition On 6 May 2005, the Group acquired the entire share capital of Carr SheppardsCrosthwaite Limited from Investec 1 Limited ("Investec"). Carr SheppardsCrosthwaite Limited is a private client investment management business withoffices in London, Reigate, Farnham and Cheltenham. The consideration paid andthe fair value of the net assets acquired was as follows: Book Fair value Fair value adjustments value £'000 £'000 £'000 Tangible fixed assets 517 - 517 Fixed asset investments 30 270 300 Debtors 90,508 565 91,073 Cash at bank - amounts repayable on demand 17,611 - 17,611 Cash at bank - short term deposits 5,000 - 5,000 Proposed dividend (10,266) - (10,266) Other creditors (90,860) - (90,860) Provisions for liabilities and (252) - (252)charges Net assets acquired 12,288 835 13,123 Goodwill 165,931 Consideration 179,054 The purchase consideration comprised: £'000 22,700,000 ordinary shares 113,273 Subordinated loan 60,000 Direct costs of acquisition 5,781 179,054 Cash at bank - short term deposits of £5 million represent bank deposits with amaturity of up to one month. The proposed dividend represents the dividend payable to Investec in accordancewith the terms of the acquisition of Carr Sheppards Crosthwaite Limited. Thisdividend has been paid to Investec since the balance sheet date. The adjustment to fixed asset investments represents a revaluation of certainequity investments to their market value at the date of acquisition. Theadjustment to debtors represents the fair value of future amounts receivable inrespect of the sale of certain business assets. A total of 25,500,000 ordinary shares were issued to Investec on 6 May 2005under the terms of the acquisition of Carr Sheppards Crosthwaite Limited. Asset out in note 2 above, 2,800,000 of these shares were immediately transferredby Investec to an Employee Benefit Trust ("EBT"). The fair value of theseshares at the time they were transferred by Investec to the EBT was £13,972,000. This amount has been accounted for as a prepayment by Rensburg Sheppards plcof certain of the Group's future employment costs and, as such, does not formpart of the fair value of the purchase consideration in accordance with FRS 7. The fair values set out above are based on the results of a provisional reviewof the net assets acquired and a full review is continuing. In accordance withFRS 6, should any adjustments to fair values be required upon completion of thisreview, these will be accounted for in the period up to the end of the nextfinancial year. The goodwill of £165,931,000 arising upon the acquisition of Carr SheppardsCrosthwaite Limited is being amortised over the Directors' estimate of itsuseful economic life of 20 years. 14. Reconciliation of movements in shareholders' funds 2005 2004 2004 Six Six Twelve months months months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Profit for the year after taxation 5,087 2,478 5,719 Dividends (11,189) (1,313) (3,943) (6,102) 1,165 1,776 Share capital issued 127,253 4 9 Issue costs (193) - - Net addition to shareholders' funds 120,958 1,169 1,785 Shareholders' funds at beginning of period 43,649 41,864 41,864 Shareholders' funds at end of period 164,607 43,033 43,649 15. Reconciliation of operating profit to operating cash flows 2005 2004 2004 Six Six Twelve months months months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Operating profit 4,022 3,077 6,202 Amortisation of goodwill 1,002 434 868 Depreciation 365 211 489 Amortisation of EBT prepayment 345 - - Profit on disposal of tangible fixed assets - (2) - Decrease/(increase) in debtors 18,176 (2,332) (2,356) (Decrease)/increase in creditors and provisions (26,449) 2,880 6,647 Net cash (outflow)/inflow from operating activities (2,539) 4,268 11,850 Net cash (outflow)/inflow from operating activities comprises: Continuing operations - acquisitions (2,150) - - Continuing operations - existing (389) 4,268 11,850 (2,539) 4,268 11,850 16. Analysis and reconciliation of net funds At 1 Dec Cash Other 31 May 2004 flows changes 2005 £'000 £'000 £'000 £'000 Cash at bank repayable on demand and in hand 40,618 326 - 40,944 Short term bank deposits - - 5,000 5,000 Cash at bank and in hand 40,618 326 5,000 45,944 Debt due after one year (232) - (59,768) (60,000) Debt due within one year (750) - (1,845) (2,595) Net funds/(debt) 39,636 326 (56,613) (16,651) 2005 2004 2004 Six Six Twelve months months months ended ended ended 31 May 31 May 30 Nov £'000 £'000 £'000 Increase in cash in the period 326 1,024 5,198 Increase in short term bank deposits 5,000 - - Repayment of debt - - 844 Issue of loan notes (1,613) - - Increase in debt - subordinated loan (60,000) - - Movement in net funds in the period (56,287) 1,024 6,042 Net funds at beginning of period 39,636 33,594 33,594 Net (debt)/funds at end of period (16,651) 34,618 39,636 17. Material non-cash transaction The consideration for the acquisition of Carr Sheppards Crosthwaite Limited on 6May 2005 comprised shares and subordinated debt. Details of this transactionare set out in note 13 above. 18. Post balance sheet events The listing particulars dated 23 March 2005 set out the financial effects of theacquisition of Carr Sheppards Crosthwaite Limited, which include the cost ofintegrating the business of Carr Sheppards Crosthwaite Limited into the Group.Upon completion of the integration, the one-off reorganisation costs areexpected to amount to approximately £10 million, including £1 million ofnon-cash costs relating to the write-down of certain fixed assets. Theimplementation of the integration plan has continued since 31 May 2005 and thereare currently no indications to suggest that the plan will not ultimately beachieved within the expected total cost of approximately £10 million. 19. Basis of preparation In preparing this financial information there have been no material changes tothe accounting policies previously applied by the Company in preparing itsAnnual Accounts for the year ended 30 November 2004. The financial information included in this announcement is unaudited and doesnot constitute statutory accounts within the meaning of section 240 of theCompanies Act 1985. The statutory accounts of Rensburg Sheppards plc for theyear ended 30 November 2004 have been filed with the Registrar of Companies forEngland & Wales. The Auditors have reported on those accounts; their report wasunqualified and did not contain a statement under section 237 (2) or (3) of theCompanies Act 1985. Independent review report by KPMG Audit Plc to Rensburg Sheppards plc Introduction We have been engaged by the company to review the financial information set outon pages 5 to 15** and we have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. 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 ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted bylaw, we do not accept or assume responsibility to anyone other than the companyfor our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules which require that the accounting policies and presentation applied to theinterim figures should be consistent with those applied in preparing thepreceding annual accounts except where they are to be changed in the next annualaccounts in which case any changes, and the reasons for them, are to bedisclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review is substantially lessin scope than an audit performed in accordance with Auditing Standards andtherefore provides a lower level of assurance than an audit. Accordingly we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 May 2005. KPMG Audit PlcChartered AccountantsLeeds9 August 2005 ** The page numbers shown above refer to those that will appear in the publishedInterim Report for the six months ended 31 May 2005, which will be sent toshareholders shortly. The information contained on these pages comprises theconsolidated profit and loss account, consolidated statement of total recognisedgains and losses, consolidated balance sheet, consolidated cash flow statementand related notes. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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