H1 22: Interim results for six months ended 30 September 2021

Who we are

We provide holistic wealth management services to private clients, charities, trusts and institutions. The Company has a national presence, with 26 locations and over 800 professionals. Our wealth management services are provided direct to clients and

to intermediaries.

Our values

We have three core values. We aim to be Caring, Fair and Progressive. These values underpin the Company's strategy and the way it operates. We believe that we should work in the best interests of our clients and seek to offer a truly personal service.

Our purpose

Our purpose is to build on our long history, traditional values and strong reputation to help our clients prosper, by meeting their goals through the highest standards of holistic wealth and investment management services. We are passionate about building long-term relationships with both our clients and staff and in contributing to our local communities.

1. Independent review report to Charles Stanley Group PLC
2. Condensed consolidated income statement
3. Condensed consolidated
   statement of comprehensive income
4. Condensed consolidated statement of financial position
5. Condensed consolidated statement of changes in equity

1. Condensed consolidated statement of cash flows
2. Notes to the condensed consolidated financial statements

At a glance

Group highlights

Revenue growth

Revenues have increased 12.2% to £91.9 million compared to £81.9 million in H1 2021

financial Interim report management Interim

statements

(H1 2021: £10.5m)

Group revenue

£91.9m

(H1 2021: £81.9m)

First half review

The new financial year started strongly, with investor confidence greatly improved following the commencement of the rollout of the COVID-19 vaccination programme and the onset of global economic recovery.

The Group performed very well against this backdrop. Total revenues rose by 12.2% to £91.9 million (H1 2021: £81.9 million) and underlying profit before tax increased by 40.9% to £9.3 million (H1 2021: £6.6 million). The reported profit before tax declined marginally to £4.7 million (H1 2021: £4.8 million) but included exceptional items relating to the Offer by Raymond James.

Revenues and FuMA

Revenues grew significantly, continuing the progress made in the second half of the prior year as markets recovered from the immediate shock of the COVID-19 outbreak.

All three divisions delivered growth, and higher fee and administration income more than offset reduced commission and interest income, which respectively reflected less volatile markets and the Bank of England's cut in interest rates.

FuMA at £27.4 billion at the end of the first half of the financial year was 7.0% higher than at 31 March 2021 when it stood at £25.6 billion. Average FuMA for the first half was £27.0 billion, 22.2% higher than during the same period last year (H1 2021: £22.1 billion).

Expenditure

We have continued to keep a firm control of underlying expenditure. Overall it increased by £7.2 million to £82.4 million (H1 2021: £75.2 million), of which £5.9 million was attributable to increased variable remuneration.

Underlying costs excluding staff costs rose by £1.5 million. This rise principally reflected a full six months of outsourced IT costs, which amounted to £0.9 million. This followed the outsourcing of IT infrastructure maintenance, which outsourced part way through the first half of FY 2021, whereas we have had a full six months of such costs in the current period. We are also in the process of enhancing the digital proposition for clients, which has resulted in additional expenditure in the period.

Approximately £4.6 million of exceptional costs have been incurred during the period (H1 2021: £1.8 million). £4.0 million of these exceptional items are attributable to costs incurred and accrued in relation to the Offer by Raymond James. This includes a non-cash charge of £3.0 million accounted for under IFRS 2 Share-based payments, being the assessed cost for the period of options expected to vest as a result of the acquisition. In the event the transaction does not complete this charge will be reversed. The Group also incurred £0.7 million of exceptional costs arising from the completion of the business transformation projects that we have reported on previously. These projects were largely completed by the reporting date and future benefits will be reported within the Group's underlying results. The balance of £0.1 million is accounted for by the amortisation of client relationships (£0.6 million) offset by a £0.7 million gain on the sale of a freehold property.

statements financial Interim report management Interim

Balance sheet and regulatory capital

The Group's balance sheet remains strong, with total net assets at 30 September 2021 increased by 2.8% to £126.7 million (31 March 2021: £123.3 million), which includes £93.4 million of cash (31 March 2021: £105.4 million).

Following an injection of £4.1 million into the Group's Defined Benefits Pension Scheme in July 2021, the Scheme is now in surplus and its portfolio assets have been rebalanced to match the expected liabilities development.

At 30 September 2021, the Group had regulatory capital resources of £103.7 million (H1 2021: £92.8 million and FY 2021: £100.6 million). Our capital solvency ratio has increased to 199% (H1 2021: 174% and FY 2021: 185%).