Rathbone Brothers Plc

1
Rathbone Brothers Plc

• Announcement of Interim Results
• to 30 June 2005
• 1 September 2005

2
The Executive Team
Mark Powell Chairman Andy Pomfret Chief Executive
Sue Desborough Finance Director Paul Chavasse Chief Operating Officer

3
Rathbone Brothers Plc

• A more favourable environment in world stock
  markets has provided the backdrop for solid
  progress by Rathbones during the first half of
  2005.Mark Powell, Chairman

4
Results Highlights
H1 2005 increase
Operating income 53.9m 14.0
Operating profit (before Rensburg-related costs) 16.1m 21.1
Operating profit (after Rensburg-related costs) 14.7m 10.5
Earnings per share (after Rensburg-related costs) 25.46p 9.4
Dividend 11.5p 9.5
Funds under management 8.4bn 9.1
FTSE APCIMS Balanced Index 2524 5.0
FTSE 100 Index 5113 6.2
Average FTSE APCIMS Balanced Index on charging dates 2481 9.0
Average FTSE 100 Index on charging dates 5028 12.4
1
as at 30 June 2005 increase since 31 Dec 2004
5
Operating Income
H1 2005 (m) increase
Investment management fees 18.8 25.3
Investment management commissions 13.4 -
Bank interest and other income from investment management activity 4.4 15.8
Total investment management income 36.6 13.7
Unit trust income 4.7 51.6
Trust income 10.7 2.9
Bank interest from non-investment management activity 1.9 18.8
Operating income 53.9 14.0
6
Operating Expenses (excluding Rensburg-related
costs)
H1 2005 (m) increase
Fixed staff costs 19.2 4.9
Variable (including profit-related) staff costs 5.9 18.0
Total staff costs 25.1 7.7
Other costs 12.7 18.7
Operating expenses 37.8 11.2
7
Other Financial Issues

• International accounting standards
• 2004 restatement issued 4 August 2005
• Conversion costs around 0.5m
• Interpretations still developing
• Transitional effects
• Pension fund
• Capital Requirements Directive

8
Investment Management Highlights

• Segregated funds up 7.2 to 7.4bn (APCIMS
  Balanced up 5.1)
• Charity funds over 600 million
• Pension funds (predominantly SIPP funds) over
  400 million
• New head of pensions
• Continued increase in average size of account
• Collectives increased use demonstrates
  investment process

9
Investment Management

• Growth in segregated funds under management

Six months to 30/6/05 bn Year to 31/12/04 bn
Opening funds under management 6.9 6.3
Market movement (FTSE APCIMS Balanced) 0.3 0.4
Inflow of new money organic 0.4 0.5
Outflow of money (0.2) (0.2)
Effect of performance relative to market - (0.1)
Closing funds under management 7.4 6.9
Net new money 0.2 0.3
10
Operations Scaleability

• Rathbones existing operations and systems have
  proved efficient and robust and, the Rathbones
  Directors believe, have the capacity to cope with
  a significant increase in client numbers and
  funds under management.
• Press release 31 March 2005

11
Operations Scaleability

• Common/scaleable platform
• Investment in core fund management systems -
  Quasar 6 Rathbone Investment Desk (RID)
• Automation of basic processes - order flow, cash
  payments, corporate events
• Investment in service enhancements - performance
  measurement (GIPS), compliance with client
  mandate module
• Investment in regulatory compliance and tax
  reporting SEC, EUSD

12
Operations Flexibility and Client Service

• Common operational platform allows flexibility in
  client service
• Offshore investment
• US clients, EU requirements
• Differing client requirements - SIPPs, ethical
  investment, charities, loans
• Flexible range of asset classes - fixed interest,
  equities, alternatives, property vehicles
• Deliver individual service to families, trusts,
  entrepreneurs and intermediaries

13
Operational Scaleability

• Change in value of client cases1 December 2001
  June 2005

change
FTSE All Share 0.1
FTSE APCIMS Balanced 0.5
Value of total funds under management (ex-RUTM) 19.6
Number of Rathbones cases banded by value
Total number of Rathbones cases 4.7
lt100,000 -11.3
100,000 - 249,999 15.8
250,000 - 499,999 26.8
500,000 - 999,999 27.5
1million 37.5
Cases a case may be several accounts that are
effectively managed as one mandate. Commonly
this is husband and wife, one or two main
accounts and two PEP ISA accounts.
14
Trust Division

• Continuing progress on managing legacy issues
• Geneva improving with recent profitable
  underlying trading
• Continuing solid performance in Jersey
• Profit of 1.5m, being 7.7 above H2 2004 but
  24.8 below H1 2004
• Business development opportunities in Jersey and
  London

15
Unit Trusts

• Continued growth in funds under management to
  over 1 billion
• Good medium to long-term performance across the
  range of funds
• Maturing team - appointment of two investment
  managers to sole managership
• Developing distribution
• Fund supermarkets/life companies - proportion of
  gross sales increasing Zurich Intermediary
  Group, AMEX, Skandia, other institutional
  contacts
• Ratings and awards continue
• Increased sales in smaller funds

16
Conclusion and Current Trading

• World stock markets have maintained their
  comparative strength since 30 June, despite the
  political and economic uncertainties which exist.
  Levels of new business enquiries are encouraging
  and we look forward with confidence.Mark
  Powell, Chairman

17
Appendices
18
Rathbone Brothers Plc Strategy

• To be the leading, independent provider of
  discretionary investment management services to
  the private client in the UK and to provide trust
  services internationally
• Primary focus will remain on private clients
• Encourage and reward organic growth
• Further acquisitions of businesses and people if
  demonstrably earnings enhancing in the
  medium-term, or add to service offered to clients
• Investment management and unit trusts to account
  for over 80 of activity
• To grow our unit trust business
• Continuing development of the investment process

19
Analysis of Gross Operating Income

• 6 months to 30 June 2005

20
Analysis of Investment Management Operating
Income

• 6 months to 30 June 2005

21
Analysis of Expenditure (excluding
Rensburg-related costs)

• 6 months to 30 June 2005

22
Operating Profit (m) (before Rensburg-related
costs)
After IFRS restatement

• 2000 - H1 2005

23
Investment Management

• Market movements and growth in Group funds under
  management

1 Year 3 Years 5 Years
FTSE 100 Index 14.5 9.8 -19.1
FTSE APCIMS Balanced Index 11.3 10.8 -12.8
Funds Under Management 20.0 42.4 68.0
24
Investment Management (incl. unit trusts)

• Market movements and growth Group funds under
  management

FTSE 100 and FTSE APCIMS Balanced rebased at 5574
as at 31 December 2000
25
Trust Division

• Operating profit (m)

H1 H2 Total
2005 1.5
2004 1.9 1.4 3.3
26
Unit Trusts

• Growth of business

Source Rathbones. Mid price basis. All other
data offer price or mid price as applicable to
fund pricing structure.
27
Unit Trusts

• Internal and external FUM

Source Rathbones. Mid price basis. All other
data offer price or mid price as applicable to
fund pricing structure.
28
Awards

• 2005 Winner of-
• Specialist Unit Trust Group of the Year 2005
  Rathbone Unit Trust Management Ltd What
  Investment?²
• Most Consistent Unit Trust of the Year 2005
  Rathbone Special Situations Fund What
  Investment? ²
• Best Provider for Ethical Investing Rathbone
  Investment Management Euromoney Private Banking
  Awards 2005¹
• Rathbone Income Fund awarded 1st place in 5
  year UK Marketed Funds, UK Equity Income sector
  Standard Poors Investment Funds Performance
  Awards 2005²
• Rathbone Smaller Companies Fund awarded 1st
  place in 10 year UK Marketed Funds, Smaller
  Companies sector Standard Poors Investment
  Funds Performance Awards 2005²
• 2004 - Winner of-
• Winner UK Income awarded to the Rathbone
  Income Fund by Investment Week Fund Manager of
  the Year Awards 2004²
• Small Fund Manager of the Year 2004 awarded to
  Rathbone Unit Trust Management Ltd in the
  Financial Adviser Investment Awards 2004²
• Gold Rating - Fund Manager of the Year UK
  (Group) awarded to Rathbone Unit Trust
  Management Ltd in the Financial Adviser
  Investment Awards 2004²
• Best UK General Equity Fund 2004 awarded to the
  Rathbone Special Situations Fund in the UK All
  Companies sector by Money Observer²
• Equity UK - Standard Poors awarded the
  Rathbone Special Situations Fund 1st place over 5
  years in the UK Marketed Funds sector²
• UK Smaller Companies - Standard Poors
  awarded the Rathbone Smaller Companies Fund 1st
  place over 10 years in the UK Marketed Funds
  sector²

1 Awarded to Rathbone Investment Management
Limited 2 Awarded to Rathbone Unit Trust
Management Limited
29
Consolidated balance sheetas at 30 June 2005
Assets 30/6/05 000 31/12/04 000 Liabilities 30/06/05 000 31/12/04 000
Cash and balances at central banks 306 15,840 Deposits by banks 3,718 3,243
Settlement balances 32,939 11,199 Settlements balances 26,630 15,238
Loans and advances to banks 141,634 57,881 Derivative financial instruments - 19
Loans and advances to customers 38,465 41,226 Due to customers 525,302 425,078
Investment securities available-for-sale 6,203 7,219 Debt securities in issue 170 286
Investment securities held-to-maturity 403,297 381,119 Accruals, deferred income, provisions 23,360 23,003
Intangible assets 60,120 59,860 Current tax liabilities 4,867 6,067
Property, plant and equipment 4,185 4,480 Retirement benefit obligations 15,603 14,983
Deferred tax asset 5,042 4,379 Called up share capital 2,054 2,043
Prepayments, accrued income, other assets 28,044 22,154 Share premium/other reserves 69,966 69,223
Retained earnings 48,565 46,174
Equity shareholders funds 120,585 117,440
Total assets 720,235 605,357 Total liabilities 720,235 605,357
30

• Notes to Consolidated Balance Sheet
• Equity investments at market value with uplift in
  Other reserves
• Pre 1 Jan 2004 goodwill value frozen but must be
  reviewed for impairment
• Defined benefit pension scheme net liabilities
  included on balance sheet
• Rathbone Brothers Plc
• 159 New Bond Street
• London
• W1S 2UD
• Telephone [phone]
• Facsimile 44 (0) 20 7399 0011
• marketing_at_rathbones.com
• www.rathbones.com