Rathbone Brothers Plc

1
Rathbone Brothers Plc

• Announcement of Preliminary Results
• to 31 December 2005
• 8 March 2006

2
The executive team
Mark Powell Chairman Andy Pomfret Chief Executive
Sue Desborough Finance Director Andrew Morris Director

3
Rathbone Brothers Plc

• 2005 has proved to be a year of considerable
  growth in UK and overseas stock markets. This
  has provided the backdrop for an increase in the
  rates of organic growth within Rathbones and has
  helped us to make real progress.Mark Powell,
  Chairman

4
Highlights

• Funds under management as at 2 March 2006 are 10
  billion
• Profits before tax, aborted acquisition costs and
  LSE-related profits increased 28.4 to 34.4
  million (2004 26.8million)
• Profits before tax increased 23.9 to 35.3
  million (2004 28.5 million)
• Unit trust profits increased 182.4 to 3.8
  million (2004 1.3 million)
• Basic earnings per share rose by 22.7 to 60.13p
  (2004 48.99p)
• Recommended final dividend is 18.5p, making a
  total of 30.0p (2004 27.5p) for the year an
  overall increase of 9.1
• New non-executive appointments and Paul
  Egerton-Vernon steps down from the Plc Board
• Court hearing in relation to the approval of the
  acquisition of Dexia UK private banking business

5
Results highlights
2005 income statement (m) LSE-related profits (m) Rensburg-related costs (m) 2005 Adjusted (m) 2004 Adjusted (m) increase
Operating income 113.2 (2.3) 110.9 93.8 18.2
Operating expenses 77.9 (1.4) 76.5 67.0 14.2
Profit before tax 35.3 34.4 26.8 28.4

Earnings per share (p) 60.13 3.36 (3.99) 59.50 45.44 30.9

Dividend (p) 30.0 27.5 9.1
1
Restated for IFRS
6
Operating income (adjusted)
2005 (m) 2004 (m) increase
Investment management income 75.0 63.3 18.5
Unit trust income 10.5 6.8 54.4
Trust income 21.5 20.5 4.9
Other income 3.9 3.2 21.9
Operating income 110.9 93.8 18.2
Restated for IFRS
7
Operating expenses (adjusted)
2005 (m) 2004 (m) increase
Fixed staff costs 36.9 35.4 4.2
Variable (include profit-related) staff costs 13.3 9.3 43.0
Total staff costs 50.2 44.7 12.3
Other operating expenses 26.3 22.3 17.9
Operating expenses 76.5 67.0 14.2

Adjusted cost/income ratio 69 71
Restated for IFRS
8
Profits by segment
2005 (m) 2004 (m) change
Investment management 27.4 22.2 23.4
Unit trusts 3.8 1.3 182.4
Trust 3.2 3.3 -2.7
34.4 26.8 28.1
Restated for IFRS
9
Trust

• Jersey business profits increased by 5.2
• Three Jersey sites will combine into a single,
  purpose-built site on the Esplanade in St. Helier
• Geneva returned to operating profitability during
  2005
• Our operations in the UK continue to perform in
  line with expectations
• Trust division helps to secure and retain
  investment management mandates and works closely
  with some key investment management clients

Operating profit (m) H1 H2 Total
2005 1.5 1.7 3.2
2004 1.9 1.4 3.3
10
Unit trusts

• Continued growth in funds under management since
  the year end to over 1.3 billion as at 2 March
  2006
• Rathbone Income Fund top quartile over one, two,
  three and five year periods
• Recent awards from Citywire, What Investment and
  Standard Poors
• Growing level of support from over 2,000 IFAs
• New sources of business from life companies,
  further fund supermarket links and fund of fund
  managers
• Internal sales now account for only 5 of total
  gross sales

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Unit trusts

• Operating Income

2005 (m) 2004 (m)
Initial charges net of discounts 1.1 0.9
Annual management charges 13.7 8.8
Net dealing profits 1.4 0.9
Interest other income 0.5 0.1
16.7 10.7
Commission payable (0.6) (0.5)
Rebates and trail commission (5.6) (3.4)
Unit trust operating income 10.5 6.8
Restated for IFRS
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Unit trusts

• Growth in funds under management

2005 bn 2004 bn
Opening funds under management 0.8 0.5
Market movement (FTSE 100) 0.1 -
Inflow of new money 0.4 0.3
Outflow of money (0.1) (0.1)
Effect of performance relative to market - 0.1
Closing funds under management 1.2 0.8
Net new money 0.3 0.2
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Investment management

• Operating income

2005 (m) 2004 (m) increase
Fees 39.6 31.0 27.7
Commission 26.4 24.8 6.5
Interest 9.0 7.5 20.0
75.0 63.3 18.5

Average FTSE/APCIMS Balanced Index on charging dates 2597 2313 12.3
Basis point return 99 97
Restated for IFRS
14
Investment management

• Growth in segregated funds under management

2005 bn 2004 bn
Opening funds under management 6.9 6.3
Market movement (FTSE/APCIMS Balanced) 1.0 0.4
Inflow of new money organic 0.9 0.5
Outflow of money (0.5) (0.2)
Effect of performance relative to market - (0.1)
Closing funds under management 8.3 6.9
Net new money 0.4 0.3

Average funds under management 7.6 6.5
15
Investment management

• New investment managers joining
• The value of segregated portfolios under
  management rose by 20.6 to 8.3 billion (31
  December 2005)
• 700 million of charity funds
• 300 million of SIPP funds
• The Rathbone SIPP
• SEC registration
• Fees and commission unbundling
• Further development of the Rathbones Investment
  Process

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Investment management Dexia

• Dexias UK private banking operations
• What we are buying
• Investment management
• Banking book
• Timetable
• Court approval
• Date of transfer
• Accommodation
• Financial impact

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Investment management client base (1)

• Funds under management by type of account

Source Internal data.
18
Investment management client base (2)

• Funds under management by type of account

Source Internal data.
19
Investment management client base (3)

• Profile of client numbers by location Profile of
  client FUM by location

Internal data. Private clients only.
20
Investment management client base (4)

• Profile of client numbers by age Profile of
  client FUM by age

Internal data. Private clients only.
21
Investment management client base (5)

• Profile of client numbers by gender

Breakdown by funds under management almost the
same
Internal data. Private clients only.
22
Investment management client base

• Change in value of clients December 2001
  December 2005

change
FTSE All Share 12.8
FTSE APCIMS Balanced 11.0
Value of total funds under management (ex-RUTM) 34.3
Number of clients banded by value
Total number of clients 4.3
lt100,000 -18.9
100,000 - 249,999 16.2
250,000 - 499,999 35.9
500,000 - 999,999 45.2
1million 66.5
23
Investment management client base

• Private client focus
• Bias towards discretionary
• Well-diversified client base
• Growth potential

24
Issues for 2006

• Market levels and momentum
• Organic growth
• Dexia acquisition
• Pension deficit
• Pensions A-day
• Further consolidation in sector
• LSE shares

25
Conclusion and current trading

• These are record results for Rathbones. We are
  busy and facing the future in all three of our
  activities with enthusiasm and confidence.Mark
  Powell, Chairman

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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

27
Appendices
28
Analysis of investment management operating
income

• 12 months to 31 December 2005

29
Analysis of operating expenses (excl
Rensburg-related)

• 12 months to 31 December 2005

30
Operating profit (m)
After IFRS restatement

• 2000 - 2005

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Market movements and growth

• Group funds under management

FTSE 100 and FTSE APCIMS Balanced rebased at 5574
as at 31 December 2000
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Consolidated balance sheetas at 31 December 2005
Assets 31/12/05 000 31/12/04 000 Liabilities 31/12/05 000 31/12/04 000
Cash and balances at central banks 511 15,840 Deposits by banks 1,853 3,243
Settlement balances 14,017 11,199 Settlements balances 16,133 15,238
Loans and advances to banks 144,975 57,881 Derivative financial instruments 7 19
Loans and advances to customers 37,520 41,226 Due to customers 493,612 425,078
Investment securities available-for-sale 5,157 7,219 Debt securities in issue 141 286
Investment securities held-to-maturity 396,000 381,119 Accruals, deferred income, provisions 27,526 23,003
Intangible assets 60,101 59,860 Current tax liabilities 7,869 6,067
Property, plant and equipment 4,295 4,480 Retirement benefit obligations 18,710 14,983
Deferred tax asset 8,599 4,379 Called up share capital 2,063 2,043
Prepayments, accrued income, other assets 25,093 22,154 Share premium/other reserves 70,500 69,223
Retained earnings 57,854 46,174
Equity shareholders funds 130,417 117,440
Total assets 696,268 605,357 Total liabilities 696,268 605,357
Restated for IFRS
33

• 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