Rensburg Sheppards plc Rensburg Sheppards plc

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Rensburg Sheppards plc Rensburg Sheppards plc

  1. 1. Rensburg Sheppards plc
  2. 2. “ The Group is committed to the enhancement of shareholder value through the provision of high quality professional advice and services to clients.” Rensburg Sheppards plc Investment Management Group Preliminary Results to 31 st March 2007 Steve Elliott Chief Executive
  3. 3. <ul><li>Steve Elliott Chief Executive </li></ul><ul><li>Jonathan Wragg Finance Director </li></ul>The Team
  4. 4. The Year in Short <ul><ul><li>Good revenue, EPS and asset growth aided by favourable market conditions </li></ul></ul><ul><ul><li>Successful completion of integration within budget </li></ul></ul><ul><ul><li>Achievement of the originally targeted cost synergies </li></ul></ul><ul><ul><li>Investment into infrastructure </li></ul></ul><ul><ul><li>Second half focused on growth </li></ul></ul>2006/2007 Year in Short
  5. 5. Current Business Strategy <ul><ul><li>To grow the business organically – new and existing clients </li></ul></ul><ul><ul><li>To acquire businesses or teams that meet our criteria </li></ul></ul><ul><ul><li>Cohesive group with two business streams - RSIM integrated model - RFM outsourced model </li></ul></ul><ul><ul><li>Centrally controlled: compliance, risk, internal audit, financial control, I.T. and H.R. </li></ul></ul><ul><ul><li>Think nationally – act regionally - focus is client/employee/stakeholders </li></ul></ul>Current Business Strategy
  6. 6. Objectives Going Forward <ul><ul><li>Continuing review of current business strategy </li></ul></ul><ul><ul><li>Meet regulatory challenges – TCF, CRD and MiFID </li></ul></ul><ul><ul><li>Maintain cost control against the difficult backdrop </li></ul></ul><ul><ul><li>Continue investment into infrastructure </li></ul></ul><ul><ul><li>Deliver growth in AUM and from this revenue and EPS </li></ul></ul>Objectives Going Forward
  7. 7. <ul><ul><li>2006/2007 was a challenging but successful year </li></ul></ul><ul><ul><li>National footprint - offices located in high growth areas </li></ul></ul><ul><ul><li>Continued improvements to the quality of client documentation </li></ul></ul><ul><ul><li>Looking forward to a year of asset growth </li></ul></ul><ul><ul><li>Scalability of operations areas </li></ul></ul><ul><ul><li>Upgrading of premises – Liverpool (Jan. 2007) & Leeds (2007/2008) </li></ul></ul><ul><ul><li>Drive brand awareness </li></ul></ul>RSIM Investment Management Division
  8. 8. RFM Fund Management Division <ul><ul><li>Excellent asset growth and performance continued through 2006/07 </li></ul></ul><ul><ul><li>Successful fund launch September 2006 </li></ul></ul><ul><ul><li>Niche and focus player </li></ul></ul><ul><ul><li>Awards received from - S&P - UK Funds Awards 2007 Rensburg UK Select Growth (1 st Place) - What Investment - Unit Trust Group of the Year 2006 </li></ul></ul><ul><ul><li>Capacity to grow business organically on the back of good investment performance and expansion of target business </li></ul></ul>RFM Fund Management Division
  9. 9. Financial Headlines * = The figures for the 16 months to 31 March 2006 have been pro-rated to 12 months for comparison purposes. Throughout this presentation any reference to ‘underlying’ figures means that, where applicable, the effect of the following items has been excluded: (1) amortisation of client relationships intangible asset (2) share based payments relating to the Employee Benefit Trust (3) reorganisation costs relating to the integration of Carr Sheppards Crosthwaite and (4) profit on disposal of available-for-sale investments. Financial Headlines 3.1% 2,887.4 2,977.6 FTSE/APCIMS Private Investors Balanced index at the period end 9.7% £13.13 bn £14.40 bn Funds under management at the period end 22.3% 27.3% 33.4% Underlying operating margin 13.6%* 26.4p 22.5p Dividend (ordinary) 38.2%* 55.1p 57.1p Underlying basic earnings per share 29.1 35.9 Underlying profit before tax (0.8) (1.8) Interest (net) 29.9 37.7 Underlying operating profit (79.5) (75.2) Underlying operating expenses 109.4 112.9 Revenue (net) Increase 2007 over 2006 16 months to 31 March 2006 £ million 12 months to 31 March 2007 £ million
  10. 10. Underlying Basic Earnings Per Share (pence) Underlying Basic Earnings Per Share (pence) The 2006 and 2007 figures are reported under IFRS. All other figures are reported under UK GAAP. The 2006 reported figure was for a 16 month period and has been pro-rated to 12 months for comparison purposes. Underlying Basic Earnings Per Share (pence)
  11. 11. <ul><li>Synergy Savings </li></ul><ul><li>1 st half year - approx. £1 million } Total synergies in 2006/07 2 nd half year - approx. £2.2 million } of approx. £3.2 million </li></ul><ul><li>Future years - approx. £5.5 million as originally targeted </li></ul><ul><li>Reorganisation costs </li></ul><ul><ul><ul><li>Final total costs of £9.9 million against £10 million originally targeted </li></ul></ul></ul>All of the above are at the pre-tax level Integration of Carr Sheppards Crosthwaite
  12. 12. Results Analysed by Half Year Results Analysed by Half Year 4.6% 2,914.2 2,786.3 Average of FTSE/APCIMS Balanced index over the two key billing points in the half year 36.0% 32.9p 24.2p 57.1p Underlying basic EPS 18.8% 36.1% 30.4% 33.4% Underlying operating margin 34.6% 20.6 15.3 35.9 Underlying profit before tax (20%) (0.8) (1.0) (1.8) Interest (net) 31.3% 21.4 16.3 37.7 Underlying operating profit 1.6% (37.9) (37.3) (75.2) Underlying operating expenses 10.6% 59.3 53.6 112.9 Revenue (net) Increase H2 over H1 1 October 2006 to 31 March 2007 £ million (H2) 1 April 2006 to 30 September 2006 £ million (H1) 12 months to 31 March 2007 £ million
  13. 13. Segmental Analysis Segmental Analysis 11.9% 88.1% Underlying operating profit as a percentage of group total 10.2% 89.8% Revenue (net) as a percentage of group total 42.6% 4.9 30.6% 31.0 Underlying profit before tax 3.5% 0.4 (2.1%) (2.2) Interest (net) 39.1% 4.5 32.7% 33.2 Underlying operating profit (60.9%) (7.0) (67.3%) (68.2) Underlying operating expenses 100% 11.5 100% 101.4 Revenue (net) Fund Management £ million Investment Management £ million Year to 31 March 2007
  14. 14. Analysis of Net Revenue Analysis of Net Revenue 100% 112.9 100% 11.5 100% 101.4 Total 27.7% 31.3 14.8% 1.7 29.2% 29.6 Non-recurring income 72.3% 81.6 85.2% 9.8 70.8% 71.8 Recurring income Total £ million Fund Management £ million Investment Management £ million
  15. 15. Analysis of Underlying Operating Expenses 66.6% 17.2% 49.4% 19.5% 29.9% As a % of net revenue 75.2 Total underlying operating expenses 19.4 Other operating expenses 55.8 Total staff costs 22.0 Bonus / Incentive costs 33.8 Fixed staff costs 31 March 2007 £ million
  16. 16. <ul><li>Effective tax rate </li></ul><ul><li>Capital expenditure </li></ul><ul><li>Subordinated loan </li></ul><ul><li>Capital Requirements Directive (‘CRD’) </li></ul>Other Financial Matters
  17. 17. Investment Management Division FUM Investment Management Division FUM 100% 11.96 100% 12.64 Total 34.1% 4.08 32.5% 4.11 Non Discretionary 65.9% 7.88 67.5% 8.53 Discretionary 31 March 2006 £ billion 31 March 2007 £ billion
  18. 18. * Calculated by applying the FTSE/APCIMS Balanced index which rose 3.12% over the year ended 31 March 2007 to the opening funds under management. ** Balancing figure. ***Calculated by taking the net of inflows less outflows and expressing this as a percentage of the opening funds under management. Investment Management Division Analysis of Movement in FUM 1.9% Implied rate of organic growth*** 12.64 As at 31 March 2007 0.08 Performance** 12.56 (0.68) Outflows 0.91 Inflows 12.33 0.37 Market movement* 11.96 As at 1 April 2006 £ bn
  19. 19. * Calculated by applying the FTSE All-Share index which rose 7.72% over the year ended 31 March 2007 to the opening funds under management. ** Balancing figure. *** Calculated by taking the net of inflows less outflows and expressing this as a percentage of opening funds under management. Fund Management Division – Analysis of Movement in FUM 35.9% 91.3% 22.3% Implied rate of organic growth*** 1.76 0.47 1.29 As at 31 March 2007 0.08 0.01 0.07 Performance** 1.68 0.46 1.22 (0.22) 0 (0.22) Outflows 0.64 0.21 0.43 Inflows 1.26 0.25 1.01 0.09 0.02 0.07 Market movement* 1.17 0.23 0.94 As at 1 April 2006 Total £ billion Segregated mandates £ billion Retail unit trusts £ billion
  20. 20. <ul><li>To remain focussed on our defined target market </li></ul><ul><li>Grow assets with the emphasis on quality and returns </li></ul><ul><li>Seek opportunities in fragmented markets and from organic growth </li></ul><ul><li>Raise the brand awareness </li></ul>Future Prospects

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