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Rathbone Brothers Plc

Rathbone Brothers Plc. Announcement of Interim Results to 30 June 2005 1 September 2005. The Executive Team. Rathbone Brothers Plc.

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Rathbone Brothers Plc

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  1. Rathbone Brothers Plc Announcement of Interim Results to 30 June 2005 1 September 2005

  2. The Executive Team

  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 1 #as at 30 June 2005 *increase since 31 Dec 2004

  5. Operating Income

  6. Operating Expenses (excluding Rensburg-related costs)

  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

  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 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

  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)

  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 & Poor’s Investment Funds Performance Awards 2005² • ‘Rathbone Smaller Companies Fund’ awarded 1st place in 10 year UK Marketed Funds, Smaller Companies sector – Standard & Poor’s 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 & Poor’s awarded the Rathbone Special Situations Fund 1st place over 5 years in the UK Marketed Funds sector² • ‘UK Smaller Companies’ - Standard & Poor’s 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

  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 +44(0) 20 7399 0000 Facsimile +44 (0) 20 7399 0011 marketing@rathbones.com www.rathbones.com

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