Rathbone Brothers PLC : Final Results

    


This is a preliminary statement of annual results published in accordance with
FSA Listing Rule 9.7A.
It covers the year ended 31 December 2011.

Andy Pomfret, Chief Executive of Rathbone Brothers Plc, said:
"In spite of often difficult market conditions, our profit before tax for the
year to 31 December 2011 was up 30% to £39.2 million compared to £30.1 million
in 2010. Basic earnings per share of 66.72p, were up 34% on 49.76p in 2010.

"Rathbones is cautiously optimistic about the prospects for 2012 with the UK
equity market ending 2011 on a more positive note.  There is no doubt that the
uncertainties over Europe persist but these are balanced by indications that the
world economy continues to grow and some developed economies are showing small
signs of improvement, particularly the USA. We are seeing signs of underlying
cost inflation but we will continue to invest in and grow our business. We
continue to be well positioned to take advantage of opportunities to welcome
more investment managers and clients to Rathbones."

Highlights:

  * Profit before tax was £39.2 million for the year ended 31 December 2011, an
    increase of 30%, compared to £30.1 million in 2010.  Basic earnings per
    share increased by 34% to 66.72p (2010: 49.76p).

  * Underlying profit before tax (excluding gains on disposal of financial
    securities, amortisation of client relationship intangible assets, head
    office relocation costs and exceptional Financial Services Compensation
    Scheme levies) increased 20% to £46.2 million from £38.5 million. Basic
    underlying earnings per share increased by 24% to 78.79p (2010: 63.76p).

  * The Board recommends a 29p final dividend for 2011 (2010: 28p), making a
    total of 46p for the year (2010: 44p).

  * Total funds under management were £15.85 billion at 31 December 2011, up
    1.4% from £15.63 billion at 31 December 2010.  In comparison over the same
    period the FTSE 100 Index and FTSE APCIMS Balanced Index decreased by 6% and
    3% respectively.

  * The total net annual growth rate of funds under management for Rathbone
    Investment Management was 8% (2010: 10%). This comprised £0.31 billion of
    acquired inflows (2010: £0.60 billion) and £0.79 billion of net organic
    growth (2010: £0.64 billion).  The underlying annual net organic growth rate
    was 5% (2010: 5%).

  * Underlying net operating income in Rathbone Investment Management of £135.1
    million for the year ended 31 December 2011 (2010: £119.8 million)
    represents an increase of 13%. This excludes gains on disposal of financial
    securities of £1.1 million in 2011 (2010: £nil). The average FTSE 100 Index
    was 5663 on our quarterly billing dates (2010: 5528), an increase of 2.4%.

  * Net interest and other income in Rathbone Investment Management of £11.2
    million for the year rose by 10% compared to £10.2 million in 2010 largely
    as a result of higher yields on treasury assets offset by a 4% reduction in
    average liquidity to £904 million over 2011.

  * Rathbone Unit Trust Management saw positive net monthly sales throughout
    2011 helping its funds under management to increase by 5% to £1.09 billion
    at 31 December 2011 (2010: £1.04 billion). Profit before tax in Rathbone
    Unit Trust Management was £0.8 million for the year ended 31 December 2011
    (2010: £0.5 million).

Ends

21 February 2012

For further information contact:


 Rathbone Brothers Plc             Quill PR
 Tel: 020 7399 0000                Tel: 020 7466 5054
 email: marketing@rathbones.com

 Mark Nicholls, Chairman           Hugo Mortimer-Harvey
 Andy Pomfret, Chief Executive
 Paul Stockton, Finance Director





Rathbone Brothers Plc

Rathbone Brothers Plc is a leading independent provider of high-quality,
personalised investment and wealth management services for private investors,
charities and trustees. This includes discretionary investment management, tax
and financial planning and unit trusts.

Rathbones has some 750 staff in 11 UK locations and Jersey, and has its
headquarters in New Bond Street, London.

From 27 February 2012, Rathbones' head office will move to 1 Curzon Street,
London W1J 5FB.

www.rathbones.com


Chairman's statement

I became Chairman in May 2011 and feel privileged to be the first Chairman to be
appointed from outside the firm.  I would like to thank my predecessor Mark
Powell who has made the transition very easy for me. In this brief statement I
shall outline my areas of focus as a new Chairman in the context of Rathbones as
I see it today.

I have a background in financial services but not in private client investment
management. I have, therefore, spent a considerable amount of time learning
about the business.  I have found Rathbones to be a robust business which
depends on a number of factors: the high quality of our investment managers; the
strong relationship between those investment managers and their clients; the
value of our central investment process and systems; and finally our collegiate
culture and embedded compliance practices. All of these factors together
represent a solid platform which has enabled us to build an enviable reputation.
 It is this we strive to preserve.

Strategy review

Last October we held our annual strategy meeting involving the Board and senior
management where we focussed our discussion on three areas: growing our core
investment management business; developing our tax, trust and family office
business; and partnering with the IFA community.  The analysis and discussion at
the meeting will help us develop our plans further and enhance the value of what
we have built up over time.

Risk

We have had several detailed discussions on risk at the Board.  We regard the
greatest risks to Rathbones as threats to our reputation, regulatory
intervention in our sector and the counterparty risk inherent in being a bank.
We have added two non-executive directors to our risk management committee
(which also consists of the heads of all our major departments) and have
recently taken the decision to appoint a non-executive director as chairman. I
am delighted that Kathryn Matthews has agreed to take on this important role
from 1 March 2012. Her wide experience of the investment management industry
will be of great benefit to us.

Governance, board and senior management

As Chairman, I have to ensure that we have the best possible board to give
leadership to the business and that, through our non-executive directors, we can
provide appropriate challenge to management.  My main priorities here have been
to streamline the working of the Board and to prepare for the departure from an
executive role of Richard Lanyon, our longstanding and highly regarded head of
investment management.  I have been working closely with Andy Pomfret and my
other Board colleagues on all these areas.  The first decision we made was to
appoint Paul Chavasse as successor to Richard Lanyon, which was announced on 1
July 2011.  Our decision came after a rigorous review of our management within
the Group. This review has, in turn, laid the foundations for a more structured
development programme for our senior management which is essential for good
succession planning.

As a business in the financial sector in 2012 we must maintain high standards of
governance. The Board has recently undertaken an evaluation of its own
performance, of its committees and individual directors. Although the evaluation
was generally positive, a number of improvements have been suggested and these
will be implemented. I am delighted to say the discussions we have had as part
of this important process have been refreshingly open and constructive.

Our performance evaluation also concluded that we had an appropriate balance of
skills on the Board. The Board continues to believe that, whilst the best
qualified candidate should be appointed to any role, a range of backgrounds,
skills and experience is desirable. Gender diversity plays an important part in
this.

In accordance with best practice, all directors will be seeking re-election at
the AGM.

Shareholder engagement

We have a tradition at Rathbones of close engagement with our investors and,
although this is largely carried out by Andy Pomfret and Paul Stockton, I have
been delighted to meet some of our largest shareholders to discuss our mutual
aspirations.  I look forward to a continuing dialogue with shareholders on the
many issues that arise out of the challenges and opportunities we face.

As you will see from Andy Pomfret's report, we produced a solid performance in
2011 in difficult circumstances. I hope you will find this year's annual report
provides a clear account of how we run our business and what we have achieved
during the year.

Mark Nicholls
Chairman
20 February 2012

Chief executive's statement
Results and financial highlights

In spite of often difficult market conditions, our profit before tax for the
year to 31 December 2011 was up 30.2% to £39.2 million compared to £30.1 million
in 2010, and basic earnings per share of 66.72p, were up 34.1% on 49.76p in
2010.  These results include some £3.0 million of costs incurred in respect of
the planned relocation of our London head office in 2012. We thankfully did not
see a repeat of last year's £3.6 million exceptional Financial Services
Compensation Scheme levy largely caused by the failure of Keydata Investment
Services.

Underlying profit before tax (which excludes client relationship amortisation
charges and exceptional income and expense items) was £46.2 million, up 20.0%
compared to £38.5 million in 2010. Underlying earnings per share were 78.79p, up
23.6% on the 63.76p earned in 2010.  We increased the number of Rathbone
Investment Management clients to 38,380 at 31 December 2011 from 37,400 one year
ago, attracting net new funds of £1.10 billion in the year (2010: £1.24
billion).

Notwithstanding current economic uncertainties, the Board is recommending a
final dividend of 29p per share, making a total dividend per share of 46p for
the year; up 4.5% from the 44p in 2010.  The final dividend will be paid on 17
May 2012. In this economic climate it is important to report that our balance
sheet at 31 December 2011 is now ungeared as external borrowings of £3.1 million
at 31 December 2010 were repaid in the year. Our Group Tier 1 capital ratio was
26.9% at 31 December 2011 (2010: 28.3%) on a Basel III basis which gives an
indication of the strength of our capital base.

Financial markets

Investment markets
2011 was a difficult year overall although it divided into two distinct halves.
 In the first half, markets rose as investors concluded that there would not be
a double dip recession and that the problems in the eurozone could be resolved.
Our first half was therefore positive as markets presented investment managers
with some good opportunities for clients and this was evident in first half
commission levels of £20.0 million (2010: £18.7 million). Sentiment changed in
the second half though as the eurozone crisis lead to questions about whether
Greece would default which in turn increased speculation on the future of the
Euro and the position of other indebted countries such as Italy and Spain.  This
sentiment change unsettled markets and reduced trading volumes across the
industry.

We expect that asset allocation will continue to be difficult in 2012 as global
markets rebalance and, in many developed economies, we see a weak banking
sector, inflation uncertainties and continued low interest rates, compounding
fears of recession.

Loans and money markets
As Rathbones has a banking licence, the vast majority of cash in client
portfolios is held with us as a deposit. We invest this cash in the money
markets and therefore have exposure to a number of banks around Europe as part
of a well diversified treasury portfolio.  In light of developments in the
eurozone, the banking committee responded by reallocating monies held with
Spanish and Italian banks to UK treasury bills. These UK Government securities
represented 9.6% (2010: 0%) of the total treasury assets of £0.91 billion at 31
December 2011. At 31 December 2011, all (2010: all) treasury assets were rated
Fitch single A or above. Outstanding loans to clients were £47.8 million at 31
December 2011 (2010: £40.0 million) and continue to be an important part of our
relationship with clients.

Our approach

For many years our strategy has been to 'be a leading provider of high-quality,
personalised investment and wealth management services...' and in these
difficult times our consistency has served us well. We believe that this
stability is precisely what clients are looking for in difficult times and this,
combined with our independent ownership, has led to high client retention as
well as being one of the reasons why many investment managers have chosen to
join us with their clients over the last decade.

Key to the success of the firm is the quality of our staff, and we now employ
over 750 people in 12 locations.  Although the current economic climate means
that it has been difficult to increase levels of pay, profit share and reward to
match inflation, we continue to look at additional ways of incentivising staff.
For many years we have had in place a Share Incentive Plan and more recently
introduced a Save As You Earn scheme, both of which are government-approved ways
of encouraging employee share ownership.  Over 90% of employees participate in
one or both of these schemes.

A new head office

In 2011, considerable time was invested in finding, negotiating, and then
fitting out our new head office in London at 1 Curzon Street.  We will be moving
all London staff currently located in 159 and 161 New Bond Street into these
premises in February 2012.  This new space (about one and a third floors of a
six storey building) will enable us to put the majority of our staff onto a
single open plan floor with the other floor used for internal and external
meeting rooms.  It will be a significant improvement to get everybody in London
into one location and I am sure all will benefit from working in a more open
environment which will promote greater internal communication. The location of
the new office will also mean there is little change for either staff or clients
as Curzon Street is only some 400 yards from our existing offices.

Regulation

Suitability
During the year there has been a great deal of attention placed by the FSA on
the industry's approach to ensuring that investment portfolios are suitable for
clients. Although the FSA's 2011 thematic review reported serious concerns
around whether portfolios were suitable for clients among many of our peer
group, we are not - and have not been - subject to any regulatory action in this
regard. We continue to believe that our approach to managing suitability is
appropriate.

The Prudential Regulatory Authority (PRA) and the Financial Conduct Authority
(FCA)
During 2012 the FSA will be moving to parallel running the new "twin peaks"
regulatory structure which is expected to come into effect in 2013 following the
passing of the relevant legislation.  As Rathbones holds a banking licence, we
will be regulated by both the PRA and the FCA.  The PRA will be the lead
regulator for all banks in the UK and in many ways we see it as acting in a
similar way to how the Bank of England has done in the past. Our conduct of
business will be regulated and supervised by the FCA.  It will be interesting to
see how these two bodies interact and we believe that ensuring that these
organisations work well together is in our interests and the interests of the
financial services industry as a whole. We are doing all we can to continue to
develop and improve our regulatory relationships.

There has been much discussion in the press around resolution planning for banks
(living wills) and, given our banking licence, we will be developing plans
accordingly. We are supportive of this regulation and consider it a good
opportunity to test and improve our current procedures.

Board and management changes

It was with great sadness that we said goodbye to Mark Powell at the AGM in
2011. Mark was very much part of Rathbones for more than twenty years and we
thanked him at the AGM for his outstanding contribution, both to the Company and
to our industry.  At the AGM we were pleased to welcome Mark Nicholls as our new
non-executive chairman.  Mark had been on the Board since December 2010 when he
was appointed with the intention of succeeding Mark Powell.

We announced at the half year that Richard Lanyon would be standing down from
the Board and his managerial responsibilities as head of investment management
during 2012 and that he would be succeeded by Paul Chavasse.  Paul will take up
this role at the beginning of March 2012 when we have completed our London head
office move to 1 Curzon Street.

In December 2011 we announced the appointment of Andrew Butcher as our new chief
operating officer who will join us in March 2012 from Charles Stanley. We very
much look forward to working with him.

Outlook

Rathbones is cautiously optimistic about the prospects for 2012 with the UK
equity market ending 2011 on a more positive note.  There is no doubt that the
uncertainties over Europe persist but these are balanced by indications that the
world economy continues to grow and some developed economies are showing small
signs of improvement, particularly the USA. We are seeing signs of underlying
cost inflation but we will continue to invest in and grow our business. We
continue to be well positioned to take advantage of opportunities to welcome
more investment managers and clients to Rathbones.

Andy Pomfret
Chief Executive
20 February 2012

Business review

Investment Management

The Investment Management division principally provides discretionary investment
management services delivered by Rathbone Investment Management to private
investors and charities. Divisional results however also include those of
closely related pension advisory services and, from 2011, taxation, trust and
family office services which were previously reported as a separate segment.
 Comparative figures for 2010 have been restated to reflect this new
presentation.

Year to year changes in the division's key performance indicators are shown in
table 1 below.

Table 1. Investment Management - key performance indicators
--------------------------------------------------------------------------------
                                                                   2011     2010
--------------------------------------------------------------------------------
Funds under management at 31 December(1)                       £14.76bn £14.59bn
--------------------------------------------------------------------------------
Underlying rate of net organic growth in Investment Management     5.4%     5.3%
funds under management(1)
--------------------------------------------------------------------------------
Underlying rate of total net growth in Investment Management       7.5%    10.2%
funds under management(1)
--------------------------------------------------------------------------------
Average net operating basis point return(2)                       84bps    83bps
--------------------------------------------------------------------------------
1 See table 2
2 See table 5

Despite the difficult economic and investment conditions during 2011 Investment
Management has continued to attract funds at a healthy rate throughout the year,
both organically and from acquired growth.  Organic inflows of funds under
management represent the value of funds introduced during the year by new or
existing clients to existing investment managers.  Acquired growth represents
new funds either from acquisitions or introduced by investment managers who have
joined us recently.

Table 2. Investment Management - funds under management
------------------------------------------------------------
                                              2011     2010
                                               £bn      £bn
------------------------------------------------------------
 As at 1 January                             14.59    12.16

 Inflows(1)                                   1.97     2.06
------------------------------------------------------------
 - organic                                    1.66     1.46

 - acquired                                   0.31     0.60
------------------------------------------------------------
 Outflows(1)                                (0.87)   (0.82)

 Market adjustment(2)                       (0.93)     1.19
------------------------------------------------------------
 As at 31 December                           14.76    14.59
------------------------------------------------------------
 Net organic new business(3)                  0.79     0.64
------------------------------------------------------------
 Underlying rate of net organic growth(4)     5.4%     5.3%
------------------------------------------------------------
 Underlying rate of total net growth(5)       7.5%    10.2%
------------------------------------------------------------
1 Value at the date of transfer in/(out)
2 Represents the impact of market movements and the relative performance of
funds compared to the FTSE APCIMS Balanced Index
3 Organic inflows less outflows
4 Net organic new business as a % of opening funds under management
5 Net organic new business and acquired inflows as a % of opening funds under
management

Gross organic inflows of £1.66 billion in 2011 represent 11.4% of funds under
management at the start of the year (2010: 12.0%) and have remained at
consistently high levels throughout the year.  Net organic growth (stated after
outflows) was also stable at 5.4% of opening funds under management (2010:
5.3%). Outflows of funds principally arise as clients withdraw capital and/or
income from portfolios to meet other financial requirements or close their
accounts. Outflows have continued at historical rates.

We  continue to see growth across all parts of our business, largely as a result
of  referral  from  existing  clients  but  with an increasing contribution from
business referred to us by professional intermediaries.

  * Charity funds under management of £1.68 billion at 31 December 2011 are up
    3.1% from £1.63 billion at 31 December 2010;
  * The value of funds managed for clients introduced by provider panel
    relationships increased by 6.2% to £1.38 billion at 31 December 2011 from
    £1.30 billion at the start of the year; and
  * Rathbone SIPP funds were £343 million at 31 December 2011, an increase of
    2.7% from £334 million at the start of the year.


Acquired  funds  under  management  totalled  £305 million in 2011, representing
clients  introduced by investment  managers who have  recently joined Rathbones.
 Acquired  growth  in  2010 of  £600  million  included  £421  million  of funds
resulting from our transaction with Lloyds Banking Group plc in 2009.

Total  net organic and  acquired growth has  added £1.10 billion  of funds under
management in 2011 representing a growth rate of 7.5% (2010: 10.2%). Funds under
management  of £14.76 billion  at 31 December 2011 were  1.2% higher than at the
start  of  the  year.   The  FTSE  100 Index  and the FTSE APCIMS Balanced Index
dropped by 5.6% and 2.8% respectively over the same period.

Overall, 2011 was a difficult year across the market for performance as
benchmarks tended to smooth out what were volatile movements at stock and fund
level. Many Investment Management Association members underperformed benchmarks
in the UK, USA and Europe and we also saw these trends in our own composite
performance against the FTSE APCIMS Balanced Index, particularly in the fourth
quarter.

The financial performance in the division is driven to a large extent by the
total volume of funds under management and the net growth in new funds that the
business manages to attract. Income is derived from:

  * a sliding scale of investment management or advisory fees which are applied
    based on the value of clients' funds under management;
  * commissions which are levied on transactions undertaken on behalf of
    clients; and
  * an interest margin earned on the cash held in client portfolios.

Table 3. Investment Management - financial performance
-----------------------------------------------------
                                      2011   2010(1)
                                        £m        £m
-----------------------------------------------------
 Net fee income(2)                    80.1      66.5

 Commission                           36.2      35.7

 Interest and other income(3)         11.2      10.2

 Fees from advisory services(4)        7.6       7.4
-----------------------------------------------------
 Underlying net operating income     135.1     119.8

 Underlying operating expenses(5)   (89.7)    (82.1)
-----------------------------------------------------
 Underlying profit before tax         45.4      37.7
-----------------------------------------------------
 Underlying operating % margin(6)    33.6%     31.5%
-----------------------------------------------------
1 Comparatives restated due to re-presentation of segmental information (see
note 1)
2 Net fee income is stated after deducting fees and commission expenses paid to
introducers
3 Interest and other income is presented net of interest expense paid on client
accounts
4 Fees from advisory services includes income from trust, tax and pensions
advisory services
5 See table 6
6 Underlying profit before tax divided by underlying net operating income

Net fee income increased by 20.5% from £66.5 million in 2010 to £80.1 million in
2011 benefiting from continuing growth, increased charges (introduced from the
end of the first quarter of 2011) and market movements.

One change to our charges was the introduction of a new per account charge which
we believe better reflects the costs of maintaining individual accounts and goes
some way to paying for the increasing regulatory costs which we face. We believe
that our charges are reasonable overall taking into account our long held stance
on trail commission which passes to clients the benefit of Rathbones being able
to purchase collectives at institutional rates. Trail commission on collectives
where institutional units were not available was £2.4 million in the year ended
31 December 2011 (2010: £2.7 million) representing 1.8% of underlying net
operating income.

Net fee income is calculated based on the value of funds at our four quarterly
valuation dates and is therefore also influenced by market movements. Average
funds under management on these billing dates in 2011 were £14.76 billion, up
10.1% from 2010 (reflecting market movements, investment performance and net new
funds).  The average FTSE 100 Index (measured on the same dates) was 5663 in
2011 compared with an average of 5528 in 2010; an increase of 2.4% whilst the
average FTSE APCIMS Balanced Index increased 2.6%.

Table 4. Investment Management - average funds under management
---------------------------------------------
                                2011    2010
                                 £bn     £bn
---------------------------------------------
 Valuation dates for billing

 - 5 April                     14.98   13.02

 - 30 June                     15.27   12.41

 - 30 September                14.04   13.59

 - 31 December                 14.76   14.59
---------------------------------------------
 Average                       14.76   13.40
---------------------------------------------
 Average FTSE 100 level         5663    5528
---------------------------------------------


Whilst market conditions in the first half were favourable for commission
income, the change in market sentiment in the second half of 2011 reduced
transaction volumes. Full year commission income of £36.2 million was 1.4%
higher than in 2010.

Interest and other income of £11.2 million rose by 9.8% compared to £10.2
million in 2010 largely as a result of higher yields on treasury assets offset
by a 4.4% reduction in average liquidity to £904 million over 2011. All of the
above factors are reflected in the change to total revenue margin shown in table
5 which reports a return on average funds under management of 84 bps compared to
83 bps in 2010.

Table 5. Investment Management - revenue margins
---------------------------------------------------------------
                                                2011   2010(1)
                                                 bps       bps
---------------------------------------------------------------
 Basis point return(2) from

 - fee income                                     54        51

 - commission                                     25        26

 - interest(3)                                     5         6
---------------------------------------------------------------
 Basis point return on funds under management     84        83
---------------------------------------------------------------
1 Comparatives restated due to re-presentation of segmental information (see
note 1)
2 Underlying net operating income (see table 3) excluding interest on own
reserves divided by the average funds under management on the quarterly billing
dates (see table 4)
3 Excluding fees from advising services and interest on own reserves

Fees  from  advisory  services  of  £7.6  million were 2.7% higher than in 2010
reflecting both higher fund based charges and more chargeable hours worked.



Table 6. Investment Management - underlying operating expenses
---------------------------------------------------
                                    2011   2010(1)
                                      £m        £m
---------------------------------------------------
 Staff costs(2)

 - fixed                            31.6      28.9

 - variable                         15.8      14.0
---------------------------------------------------
 Total staff costs(2)               47.4      42.9

 Other operating expenses           42.3      39.2
---------------------------------------------------
 Underlying operating expenses      89.7      82.1
---------------------------------------------------
 Underlying cost/income ratio(3)   66.4%     68.5%
---------------------------------------------------
1 Comparatives restated due to re-presentation of segmental information (see
note 1)
2 Represents the costs of investment managers and teams directly involved in
client facing activities
3 Underlying operating expenses divided by underlying net operating income (see
table 3)

Underlying operating expenses in Investment Management for 2011 were £89.7
million, compared to £82.1 million in 2010, an increase of 9.3%.

Fixed staff costs of £31.6 million increased by 9.3% year on year principally
reflecting the addition of new revenue generating staff and salary inflation.
Higher profits resulted in higher variable staff costs year on year.

Average full time equivalent headcount of investment managers and teams involved
in client facing activities was 533 in 2011 compared to 496 in 2010.

Other operating expenses of £42.3 million include property, depreciation,
settlement, IT, finance and other central support services costs. The year to
year increase of £3.1 million (7.9%) largely reflects higher marketing spend, a
busy project agenda, and investment in IT. We have also invested in revising and
improving over 200 pieces of client documentation during the last year.  In
addition to our new brochures, account opening packs and updates to our terms of
business, we have improved the quality and content of our investment literature
and publications to charities and professional intermediaries, all of which have
received very positive feedback from both clients and investment managers.

Unit Trusts

This division manages a range of unit trusts and OEICs which are distributed
mainly through independent financial advisers (IFAs), fund supermarkets and
other platforms in the UK. IFAs have a strong focus on investment performance
and investors have a high propensity to switch funds if comparative investment
performance falls.

Our range of directly invested funds is well established and the specialist
focus creates a concentrated, active range of investment options which is highly
attractive to investors seeking to add component parts to their own portfolios.
 Unit Trusts also runs the Rathbone Managed Asset Portfolio Service, which aims
to provide an effective private client investment portfolio on a collective
basis for clients with fewer investable assets.  The managed portfolio service,
also distributed principally via IFAs, consists of three unitised funds with a
range of risk mandates.  It presents a solution to the trend of outsourcing by
IFAs in the lead up to the Retail Distribution Review, especially when combined
with Rathbone Investment Management's discretionary services, providing advisers
with solutions for investors from £1,000 to larger institutional and private
client accounts.

Table 7. Unit Trusts - key performance indicators
--------------------------------------------------------------------------------
                                                                 2011      2010
--------------------------------------------------------------------------------
 Funds under management at 31 December                        £1.09bn   £1.04bn
--------------------------------------------------------------------------------
 Underlying rate of net growth in funds under management(1)      9.6%    (3.2%)
--------------------------------------------------------------------------------
1 See table 8


The  retail asset management  sector continued to  recover in the  first half of
2011, although  net retail  sales of  £18.0 billion  in 2011 (as reported by the
Investment   Management   Association)   were  down  38.6% on  2010. The  global
uncertainty  during the  summer caused  industry sales  to drop significantly as
investors  sought safer havens for their  assets.  Despite this general aversion
to  risk assets, and in  contrast with some other  unit trust managers, Rathbone
Unit  Trust Management  saw positive  monthly net  sales of its funds throughout
2011.

Table 8. Unit Trusts - funds under management
----------------------------------------------------
                                      2011     2010
                                       £bn      £bn
----------------------------------------------------
 As at 1 January                      1.04     0.94

 Net inflows/(outflows)               0.10   (0.03)
----------------------------------------------------
 - inflows(1)                         0.24     0.15

 - outflows(1)                      (0.14)   (0.18)
----------------------------------------------------
 Market adjustments(2)              (0.05)     0.13
----------------------------------------------------
 As at 31 December                    1.09     1.04
----------------------------------------------------
 Underlying rate of net growth(3)     9.6%   (3.2%)
----------------------------------------------------
1 Valued at the date of transfer in/(out)
2 Impact of market movements and relative performance
3 Net inflows/(outflows) as a % of opening funds under management

Net inflows of funds under management in 2011 were £97 million, compared to a
net outflow of £30 million in 2010.  As a result, funds under management
increased 4.8% to £1.09 billion at 31 December 2011 from £1.04 billion at the
start of the year. At 31 December the value of assets managed in each fund was
as follows:



Table 9. Unit Trusts - fund assets
------------------------------------------------------
                                    2011 £m   2010 £m
------------------------------------------------------
 Income Fund                            453       483

 Global Opportunities Fund              136       105

 Blue Chip Income and Growth Fund        60        59

 Ethical Bond Fund                       79        54

 Recovery Fund                           62        69

 Multi Asset Portfolios                 100        74

 Other                                  195       199
------------------------------------------------------
                                      1,085     1,043
------------------------------------------------------

In contrast to recent years, Unit Trusts maintained net sales throughout the
year as the improvements in fund performance during 2010 were consolidated
during 2011 and this was reflected in the funds' three year track records (see
table 10).  In particular the Rathbone Income Fund moved from third quartile to
first, measured over three years, as its longer term investment strategy bore
fruit. The Rathbone Global Opportunities Fund remained first quartile over both
one and three years.  This is important as many major fund buyers and rating
agencies place specific focus on this time period. The Rathbone Ethical Bond
Fund underperformed in 2011 as its ethical mandate does not permit it to invest
in UK Gilts, which was the best performing asset class held by competing funds
in the sector.

Table 10. Unit Trusts - fund performance
---------------------------------------------------------------
 Quartile ranking over:             1 year   3 years   5 years
---------------------------------------------------------------
 Blue Chip Income and Growth Fund        3         2         3

 Ethical Bond Fund                       4         1         3

 Global Opportunities Fund               1         1         1

 Income Fund                             2         1         3

 Recovery Fund(1)                        3       n/a       n/a
---------------------------------------------------------------
1 Performance data for the Rathbone Recovery Fund is not yet available beyond 1
year as the fund was launched on 13 July 2009. Performance data for the Rathbone
Strategic Bond Fund is not yet available as the fund was launched on 3 October
2011.

In 2011 we extended our range of funds with the launch of two new products.  The
Rathbone Enhanced Growth Portfolio, which sits within the Rathbone Multi Asset
Portfolio Service, was launched on 1 August 2011. The fund completes our
offering in the multi-asset space as we are now able to tailor investments
across a range of investor risk profiles.  By the end of 2011, the Rathbone
Enhanced Growth Portfolio had added £7.0 million to the value of funds under
management. The Rathbone Strategic Bond Fund was soft-launched on 3 October
2011, seeded with £10.3 million of funds from the portfolios of existing private
clients who are looking for a more strategic exposure to fixed interest
securities.  By 31 December 2011, the fund managed £14.5 million of assets.

Table 11. Unit Trusts - financial performance
------------------------------------------------------
                                         2011    2010
                                           £m      £m
------------------------------------------------------
 Initial charges net of discounts         0.5     0.5

 Annual management charges               13.9    12.5

 Net dealing profits                      0.5     0.2

 Interest and other income                0.2     0.1
------------------------------------------------------
                                         15.1    13.3

 Rebates and trail commission payable   (6.9)   (5.9)
------------------------------------------------------
 Net operating income                     8.2     7.4

 Underlying operating expenses          (7.4)   (6.6)
------------------------------------------------------
 Underlying profit before tax             0.8     0.8
------------------------------------------------------
 Operating % margin(1)                   9.8%   10.8%
------------------------------------------------------
1 Unit Trusts underlying profit before tax divided by net operating income

Annual management charges (calculated based on the daily value of the funds
under management) increased 11.2% from £12.5 million in 2010 to £13.9 million in
2011, largely driven by a rise in average funds under management. Annual
management charges as a percentage of average funds under management remained
consistent at 1.3% (2010: 1.3%).  Rebates and trail commission payable as a
percentage of annual management charge income increased to 49.6% compared to
47.2% in 2010 as a consequence of the continued negotiating power of
distributors, in particular the national platforms and fund supermarkets.

Net dealing profits increased to £0.5 million in 2011 from £0.2 million in the
previous year as a consequence of the increase in sales.  Net operating income
as a percentage of average funds under management was 0.8% in 2011 compared to
0.7% in 2010.

As a consequence of the Retail Distribution Review, we are planning to issue
'institutional' share classes in all of our funds in 2012.  The institutional
units will carry lower annual management charges but will also not incur any
rebate.  Taking into account the current level of rebates paid, it is not
expected that these units will have a material impact on Unit Trusts'
performance.





Table 12. Unit Trusts - underlying operating expenses
-------------------------------------------------
                                    2011    2010
                                      £m      £m
-------------------------------------------------
 Staff costs

 - fixed                             2.5     2.2

 - variable                          1.1     1.2
-------------------------------------------------
 Total staff costs                   3.6     3.4

 Other operating expenses            3.8     3.2
-------------------------------------------------
 Underlying operating expenses       7.4     6.6
-------------------------------------------------
 Underlying cost/income ratio(1)   90.2%   89.2%
-------------------------------------------------
1 Underlying operating expenses as a % of net operating income (see table 11)

Fixed staff costs of £2.5 million for year ended 31 December 2011 were 13.6%
higher than the previous year due to salary inflation and an increase in the
average full time equivalent headcount over the year to 29.  The rise in
headcount was driven by the full year impact of recruitment in 2010 to
strengthen the sales team.

Variable staff costs of £1.1 million were down 8.3% on 2010 as the impact of
spreading higher profit share awards in 2007 and 2008 fell out of the division's
results in 2011. Table 13 demonstrates the impact of deferred profit share
awards on 2011 variable costs.

Table 13. Unit Trusts - variable staff costs
------------------------------------------------------------------
                                                     2011    2010
                                                       £m      £m
------------------------------------------------------------------
 Total variable staff costs                           1.1     1.2

 Deferred profit share adjustment                       -   (0.3)
------------------------------------------------------------------
 Variable awards for the financial year               1.1     0.9
------------------------------------------------------------------
 Share of profit allocated to variable rewards(1)   57.9%   45.0%
------------------------------------------------------------------
1 Variable staff costs excluding deferred profit share as a % of underlying
profit before tax and total variable staff costs

Other operating expenses have increased by 18.8% to £3.8 million, principally as
a result of the larger sales team increasing marketing and travel costs during
the year. The share of central overheads absorbed by the division has increased
in line with the growth in headcount compared to 2010.

Capital resources

The Group's balance sheet remains healthy with total equity of £190.7 million at
31 December 2011, up 2.9% from £185.4 million at the end of 2010.  Rathbones is
strongly capitalised and does not rely on wholesale markets to fund its
operations.  In April 2011 the Group's term loan was fully repaid and the only
debt remaining on the consolidated balance sheet is £0.5 million of overnight
cash-book overdraft balances.

Total assets at 31 December 2011 were £1,184 million (2010: £1,028 million), of
which £909 million (2010: £762 million) represents the cash held in banking-
client portfolios.

Regulatory capital

Rathbones is classified as a banking group under the Capital Requirements
Directive and is required to operate within a wide range of restrictions on
capital resources and banking exposures that are prescribed by the prudential
rules of the Financial Services Authority (FSA).  The Group's Pillar III
disclosures are published annually on our website (www.rathbones.com/investor-
relations/financial-analysis/pillar-3-disclosures) and provide further details
about regulatory capital resources and requirements.

As required under FSA rules we perform an Internal Capital Adequacy Assessment
Process annually, which includes performing a range of stress tests to determine
the appropriate level of regulatory capital that the Group needs to hold.  In
addition, we monitor a wide range of capital and liquidity statistics on a
daily, monthly or less frequent basis as required.  Capital levels are forecast
on a monthly basis, taking account of proposed dividends and investment
requirements, to ensure that appropriate buffers are maintained.  Investment of
proprietary funds is controlled by our treasury department.

The Group's Tier 1 capital ratio, calculated on a Basel III basis, of 26.9% is
much higher than the industry norm and reflects the low risk nature of the
Group's banking activity and the lack of debt financing.  The Tier 1 ratio has
fallen from 28.3% at the previous year end mainly due to the downgrading of
certain treasury counterparties' credit ratings by the rating agencies, which
has increased total risk weighted assets.

Capital expenditure
We have continued to invest for future growth during 2011, with capitalised
expenditure on our premises and systems totalling £9.0 million (2010: £4.4
million). We continue to work at improving the efficiency of our systems and our
back office and the investment in new systems continues at a steady pace.
 Although some of this is driven by regulatory change, much is driven by our
desire to serve our clients to the best of our ability and give our investment
managers the tools they need to manage portfolios more easily. We continue to
develop our investment process and during the year there have been significant
improvements to the information available to investment managers via the
internal network and also the publication on a quarterly basis of the Rathbones
research pack which highlights the preferred investments in a large number of
asset classes.

We are also implementing a system which will ultimately replace paper files and
facilitates more efficient management of email and written correspondence both
to and from clients.

As part of the continuing improvement of our IT infrastructure, we moved our
London data centre to a site in North London which not only secured us some cost
savings, but also gave us much greater flexibility and resilience around our IT
infrastructure.  This was a very significant effort as it relocated some
critical equipment from our London office into a dedicated and controlled site
provided by a third party.

Capital expenditure on property has increased significantly in 2011 as a result
of the relocation of our London head office in February 2012.  In total, £4.8
million of fit-out and related costs have been capitalised on the new property
and a further £3.0 million of related costs have been charged against profit in
2011.  Additional detail on the costs incurred in 2011 is given in note 3.

In 2012, we plan to continue to invest to improve our Rhymesight operating
platform to improve workflow and make more tools available to investment
managers. In addition we will seek to significantly upgrade our client and
advisor internet connectivity through the development of a web portal.




Consolidated statement of comprehensive income
for the year ended 31 December 2011
--------------------------------------------------------------------------------
                                                                2011       2010

                                                       Note    £'000      £'000
--------------------------------------------------------------------------------
Interest and similar income                                   11,259     10,274

Interest expense and similar charges                          (1,238)    (1,445)
--------------------------------------------------------------------------------
Net interest income                                           10,021      8,829
--------------------------------------------------------------------------------
Fee and commission income                                    141,484    124,432

Fee and commission expense                                   (10,029)    (7,762)
--------------------------------------------------------------------------------
Net fee and commission income                                131,455    116,670
--------------------------------------------------------------------------------
Dividend income                                                   98         90

Net trading income                                               480        226

Gains on disposal of financial securities                      1,095         -

Other operating income                                         1,303      1,369
--------------------------------------------------------------------------------
Operating income                                             144,452    127,184
--------------------------------------------------------------------------------
Exceptional levies to the Financial Services                      -      (3,575)
Compensation Scheme

Amortisation of acquired client relationships                 (5,134)    (4,845)

Head office relocation costs                            3     (3,028)        -

Other operating expenses                                     (97,138)   (88,681)
--------------------------------------------------------------------------------
Operating expenses                                          (105,300)   (97,101)
--------------------------------------------------------------------------------
Profit before tax                                             39,152     30,083

Taxation                                                4    (10,446)    (8,531)
--------------------------------------------------------------------------------
Profit after tax                                              28,706     21,552
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Profit for the period attributable to equity holders          28,706     21,552
of the Company
--------------------------------------------------------------------------------


Other comprehensive income:

Exchange translation differences                                  -           9

Net actuarial loss on retirement benefit obligations          (6,383)    (3,005)

Revaluation of available for sale investment
securities:

- net (loss)/gain from changes in fair value                    (134)       155

Deferred tax relating to components of other
comprehensive income:

- revaluation of available for sale investment                    94        (13)
securities

- actuarial loss on retirement benefit obligations             1,477        782
--------------------------------------------------------------------------------
Other comprehensive income net of tax                         (4,946)    (2,072)
--------------------------------------------------------------------------------
Total comprehensive income for the year net of tax

attributable to equity holders of the Company                 23,760     19,480
--------------------------------------------------------------------------------


Dividends paid and proposed for the year per ordinary   5      46.00p     44.00p
share

Dividends paid and proposed for the year                      20,001     19,067



Earnings per share for the period attributable to       6
equity holders of the Company:

- basic                                                        66.72p     49.76p

- diluted                                                      65.90p     49.35p



Consolidated statement of changes in equity
for the year ended 31 December 2011
-------------------------------------------------------------------------------------------
                                          Available

                    Share   Share  Merger  for sale Translation Treasury Retained    Total

                  capital premium reserve   reserve     reserve   shares earnings   equity

                    £'000   £'000   £'000     £'000       £'000    £'000    £'000    £'000
-------------------------------------------------------------------------------------------
 At 1 January       2,165  31,756  31,835    2,077         245   (4,032) 118,443  182,489
 2010

 Profit for the                                                           21,552   21,552
 year


+-----------------------------------------------------------------------------------------+
|Exchange                                                    9                          9 |
|translation                                                                              |
|differences                                                                              |
|                                                                                         |
|Net actuarial                                                            (3,005)  (3,005)|
|loss on                                                                                  |
|retirement                                                                               |
|benefit                                                                                  |
|obligations                                                                              |
|                                                                                         |
|Revaluation of                                155                                    155 |
|available for                                                                            |
|sale investment                                                                          |
|securities                                                                               |
|                                                                                         |
|Deferred tax                                  (13)                          782      769 |
|relating to                                                                              |
|components of                                                                            |
|other                                                                                    |
|comprehensive                                                                            |
|income                                                                                   |
+-----------------------------------------------------------------------------------------+
 Other                 -       -       -       142           9         -  (2,223)  (2,072)
 comprehensive
 income net of
 tax



 Dividends paid                                                          (18,167) (18,167)

 Issue of share         4     732                                                     736
 capital

 Reclassification                                         (254)              254       -
 of translation
 reserve on
 disposal of
 subsidiaries

 Share-based
 payments:

 - value of                                                                1,054    1,054
 employee
 services

 - cost of                                                         (569)             (569)
 treasury shares
 acquired

 - cost of                                                        1,702   (1,702)      -
 treasury shares
 vesting

 - tax on share-                                                             351      351
 based payments
-------------------------------------------------------------------------------------------
 At 1 January       2,169  32,488  31,835    2,219          -    (2,899) 119,562  185,374
 2011

 Profit for the                                                           28,706   28,706
 year


+-----------------------------------------------------------------------------------------+
|Net actuarial                                                            (6,383)  (6,383)|
|loss on                                                                                  |
|retirement                                                                               |
|benefit                                                                                  |
|obligations                                                                              |
|                                                                                         |
|Revaluation of                               (134)                                  (134)|
|available for                                                                            |
|sale investment                                                                          |
|securities                                                                               |
|                                                                                         |
|Deferred tax                                   94                         1,477    1,571 |
|relating to                                                                              |
|components of                                                                            |
|other                                                                                    |
|comprehensive                                                                            |
|income                                                                                   |
+-----------------------------------------------------------------------------------------+
 Other                 -       -       -       (40)         -        -    (4,906)  (4,946)
 comprehensive
 income net of
 tax



 Dividends paid                                                          (19,491) (19,491)

 Issue of share         9   1,728                                                   1,737
 capital

 Share-based
 payments:

 - value of                                                                1,989    1,989
 employee
 services

 - cost of                                                       (2,955)           (2,955)
 treasury shares
 acquired

 - cost of                                                        1,125   (1,125)      -
 treasury shares
 vesting

 - tax on share-                                                             239      239
 based payments
-------------------------------------------------------------------------------------------
 At 31 December     2,178  34,216  31,835    2,179          -    (4,729) 124,974  190,653
 2011
-------------------------------------------------------------------------------------------



Consolidated balance sheet
as at 31 December 2011
--------------------------------------------------------------------------------
                                                               2011         2010

                                                              £'000        £'000
--------------------------------------------------------------------------------
Assets

Cash                                                             4            4

Settlement balances                                         13,443       18,169

Loans and advances to banks                                 65,008       39,565

Loans and advances to customers                             47,787       40,025

Investment securities:

- available for sale                                        68,563       42,587

- held to maturity                                         843,983      751,085

Prepayments, accrued income and other assets                38,413       36,368

Property, plant and equipment                               10,660        6,143

Deferred tax asset                                           3,134        2,474

Intangible assets                                           92,844       91,702
--------------------------------------------------------------------------------
Total assets                                             1,183,839    1,028,122
--------------------------------------------------------------------------------
Liabilities

Deposits by banks                                              513        3,304

Settlement balances                                         22,196       23,712

Due to customers                                           908,656      762,026

Accruals, deferred income, provisions and other             50,924       42,455
liabilities

Current tax liabilities                                      3,557        4,608

Retirement benefit obligations                               7,340        6,643
--------------------------------------------------------------------------------
Total liabilities                                          993,186      842,748
--------------------------------------------------------------------------------
Equity

Share capital                                                2,178        2,169

Share premium                                               34,216       32,488

Merger reserve                                              31,835       31,835

Available for sale reserve                                   2,179        2,219

Treasury shares                                             (4,729)      (2,899)

Retained earnings                                          124,974      119,562
--------------------------------------------------------------------------------
Total equity                                               190,653      185,374
--------------------------------------------------------------------------------
Total liabilities and equity                             1,183,839    1,028,122
--------------------------------------------------------------------------------


The financial statements were approved by the Board of directors and authorised
for issue on 20 February 2012 and were signed
on its behalf by:


A D Pomfret   R P Stockton
Chief Executive   Finance Director

Company registered number: 01000403


Consolidated statement of cash flows
for the year ended 31 December 2011
--------------------------------------------------------------------------------
                                                                            2010

                                                        2011               £'000

                                                       £'000   restated (note 1)
--------------------------------------------------------------------------------
Cash flows from operating activities

Profit before tax                                    39,152              30,083

Net interest income                                 (10,021)             (8,829)

Net (recoveries)/impairment charges on impaired          (1)                 95
loans and advances

Net charge for provisions                             2,465                 572

Profit on disposal of property, plant and               (17)                (37)
equipment

Depreciation and amortisation                         8,997               8,405

Defined benefit pension scheme charges                1,484               1,510

Share-based payment charges                           2,604               1,729

Interest paid                                        (1,282)             (1,413)

Interest received                                    10,359              11,754
--------------------------------------------------------------------------------
                                                     53,740              43,869

Changes in operating assets and liabilities:

- net (increase)/decrease in loans and advances      (8,523)             24,572
to banks and customers

- net decrease/(increase) in settlement balance       4,726                (864)
debtors

- net increase in prepayments, accrued income        (1,133)             (7,980)
and other assets

- net increase/(decrease) in amounts due to         143,841              (8,410)
customers and deposits by banks

- net (decrease)/increase in settlement balance      (1,516)              1,555
creditors

- net increase in accruals, deferred income,          3,725               6,026
provisions and other liabilities
--------------------------------------------------------------------------------
Cash generated from operations                      194,860              58,768

Defined benefit pension contributions paid           (7,170)             (7,285)

Tax paid                                            (10,345)             (6,089)
--------------------------------------------------------------------------------
Net cash inflow from operating activities           177,345              45,394
--------------------------------------------------------------------------------
Cash flows from investing activities

Purchase of property, plant, equipment and          (12,976)            (30,417)
intangible assets

Proceeds from sale of property, plant and                41                 128
equipment

Purchase of investment securities                (1,565,418)         (1,679,090)

Proceeds from sale and redemption of investment    1,472,520          1,622,005
securities
--------------------------------------------------------------------------------
Net cash used in investing activities              (105,833)            (87,374)
--------------------------------------------------------------------------------
Cash flows from financing activities

Purchase of shares for share-based schemes           (2,259)               (286)

Issue of ordinary shares                              1,041                 453

Dividends paid                                      (19,491)            (18,167)
--------------------------------------------------------------------------------
Net cash used in financing activities               (20,709)            (18,000)
--------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash             50,803             (59,980)
equivalents

Cash and cash equivalents at the beginning of        79,069             139,044
the period

Effect of exchange rate changes on cash and cash         -                    5
equivalents
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the         129,872              79,069
period
--------------------------------------------------------------------------------



Notes to the preliminary statement
for the year ended 31 December 2011

1. Accounting policies
In preparing the financial information included in this statement the Group has
applied accounting policies which are in accordance with International Financial
Reporting Standards as adopted by the EU at 31 December 2011.  The accounting
policies have been applied consistently to all periods presented in the
consolidated accounts, except as noted below.

 a. Presentation of primary statements
Two changes have been made to the presentation of the primary statements in
these consolidated financial statements compared to the previous year. The
consolidated income statement and consolidated statement of comprehensive income
have been re-presented this year as a combined consolidated statement of
comprehensive income. In addition, other reserves are now shown individually on
the face of the balance sheet rather than in aggregate.

The consolidated statement of cash flows now separately discloses the net change
in provisions through profit or loss as a single line item in cash flows from
operating activities. There has been no change to the net cash inflow from
operating activities or the net increase/(decrease) in cash and cash
equivalents. The comparative balances have been reclassified to be consistent
with this presentation.

 b. Segmental information
Following the completion of the disposal of the Group's overseas trust
businesses, the presentation of segmental information has been amended to
include the remaining trust and tax operations within the Investment Management
segment.  This change reflects management's view that the retained trust related
activities support the investment management business and are not sufficiently
material in their own right to constitute a separate segment of the business.
The results of the business areas previously reported as Trust and Tax Services
are now included within the Investment Management segment for reporting
segmental results.

In addition, fee income from trust, tax and pensions advisory activities are now
reported separately as fees from advisory services. Total net fee and commission
income included in the consolidated statement of comprehensive income is now
comprised of net investment management fee income, net commission and fees from
advisory services.

Comparative balances in the segmental analysis for the full year to 31 December
2010 have been reclassified to be consistent with the revised presentation.

2. Segmental information
For management purposes, the Group is currently organised into two operating
divisions: Investment Management and Unit Trusts.  These segments are the basis
on which the Group reports its performance to the executive committee, which is
the Group's chief operating decision maker.  Certain items of income are
presented within different categories of operating income in the financial
statements compared to the presentation for internal reporting.

--------------------------------------------------------------------------------
                                               Investment

                                               Management  Unit Trusts    Total

31 December 2011                                    £'000        £'000    £'000
--------------------------------------------------------------------------------
Net investment management fee income               80,086        7,562   87,648

Net commission income                              36,170           -    36,170

Fees from advisory services                         7,637           -     7,637

Net interest and other income                      11,216          686   11,902
--------------------------------------------------------------------------------
Underlying operating income                       135,109        8,248  143,357
--------------------------------------------------------------------------------


Staff costs - fixed                               (31,649)      (2,503) (34,152)

Staff costs - variable                            (15,770)      (1,071) (16,841)
--------------------------------------------------------------------------------
Total staff costs                                 (47,419)      (3,574) (50,993)

Other direct expenses                             (13,284)      (1,828) (15,112)

Allocation of indirect expenses                   (29,013)      (2,020) (31,033)
--------------------------------------------------------------------------------
Underlying operating expenses                     (89,716)      (7,422) (97,138)
--------------------------------------------------------------------------------
Underlying profit before tax                       45,393          826   46,219

Gains on disposal of financial securities           1,095           -     1,095

Exceptional levies to the Financial Services           -            -        -
Compensation Scheme

Amortisation of client relationships               (5,134)          -    (5,134)
--------------------------------------------------------------------------------
Segment profit before tax                          41,354          826   42,180

Head office relocation costs (unallocated)                               (3,028)
(note 3)
                                                                       ---------
Profit before tax attributable to equity                                 39,152
holders of the Company

Taxation                                                                (10,446)
--------------------------------------------------------------------------------
Profit for the year attributable to equity                               28,706
holders of the Company
--------------------------------------------------------------------------------


                        Investment

                        Management    Unit Trusts        Total

 31 December 2011            £'000          £'000        £'000
----------------------------------------------------------------
 Segment total assets    1,154,085         16,428    1,170,513

 Unallocated assets                                     13,326
----------------------------------------------------------------
 Total assets                                        1,183,839
----------------------------------------------------------------

--------------------------------------------------------------------------------
                                               Investment

31 December 2010                               Management  Unit Trusts    Total

(restated - note 1)                                 £'000        £'000    £'000
--------------------------------------------------------------------------------
Net investment management fee income               66,511        7,074   73,585

Net commission income                              35,713           -    35,713

Fees from advisory services                         7,372           -     7,372

Net interest and other income                      10,171          343   10,514
--------------------------------------------------------------------------------
Underlying operating income                       119,767        7,417  127,184
--------------------------------------------------------------------------------


Staff costs - fixed                               (28,912)      (2,161) (31,073)

Staff costs - variable                            (13,988)      (1,233) (15,221)
--------------------------------------------------------------------------------
Total staff costs                                 (42,900)      (3,394) (46,294)

Other direct expenses                             (12,524)      (1,545) (14,069)

Allocation of indirect expenses                   (26,632)      (1,686) (28,318)
--------------------------------------------------------------------------------
Underlying operating expenses                     (82,056)      (6,625) (88,681)
--------------------------------------------------------------------------------
Underlying profit before tax                       37,711          792   38,503

Exceptional levies to the Financial Services       (3,332)        (243)  (3,575)
Compensation Scheme

Amortisation of client relationships               (4,845)          -    (4,845)
--------------------------------------------------------------------------------
Profit before tax attributable to equity           29,534          549   30,083
holders of the Company
------------------------------------------------------------------------
Taxation                                                                 (8,531)
--------------------------------------------------------------------------------
Profit for the year attributable to equity                               21,552
holders of the Company
--------------------------------------------------------------------------------

                        Investment

 31 December 2010       Management    Unit Trusts        Total

 (restated - note 1)         £'000          £'000        £'000
----------------------------------------------------------------
 Segment total assets    1,004,917         12,923    1,017,840

 Unallocated assets                                     10,282
----------------------------------------------------------------
 Total assets                                        1,028,122
----------------------------------------------------------------

Included within Investment Management net fee and commission income is
£1,547,000 (31 December 2010: £1,225,000) of fee and commission receivable from
Unit Trusts. Intersegment sales are charged at prevailing market prices.

Centrally incurred indirect expenses are allocated to operating segments on the
basis of the cost drivers that generate the expenditure.

Geographic analysis
The following table presents underlying operating income analysed by the
geographical location of the Group entity providing the service:

Underlying operating income by geographical market
------------------------------------------
                     2011           2010

                    £'000          £'000
------------------------------------------
 United Kingdom   139,128        123,119

 Jersey             4,229          4,065
------------------------------------------
                  143,357        127,184
------------------------------------------

The following is an analysis of the carrying amount of non-current assets
analysed by the geographical area in which the assets are located:
Non-current assets by geographical location
-----------------------------------------
                     2011          2010

                    £'000         £'000
-----------------------------------------
 United Kingdom   102,641        97,053

 Jersey               863           792
-----------------------------------------
                  103,504        97,845
-----------------------------------------


3. Head office relocation costs
Rathbones announced on 16 May 2011 that it had exchanged contracts for a 12 year
lease of 42,200 sq ft of office space on the 3rd and 4th floors of 1 Curzon
Street, London W1. It is expected that the move from the current head office
premises in New Bond Street, London will be completed by the end of February
2012. Charges of £3,028,000 relating to the move have been recognised during the
year (2010: £nil).

-----------------------------------------------------------------------------
                                                          2011         2010

                                                         £'000        £'000
-----------------------------------------------------------------------------
 Staff costs - wages and salaries                          146           -

 Provision for onerous lease                               276           -

 Provision for dilapidations                               920           -

 Rent, rates and service charge on unoccupied premises   1,463           -

 Depreciation of property, plant and equipment             148           -

 Other                                                      75           -
-----------------------------------------------------------------------------
 Total                                                   3,028           -
-----------------------------------------------------------------------------

In addition to the above costs charged to profit in the year, a further
£4,815,000 (2010: £nil) of costs for fitting-out the new London premises have
been capitalised as leasehold improvements.


4. Income tax expense
----------------------------------------------------------------
                                             2011         2010

                                            £'000        £'000
----------------------------------------------------------------
 Current tax:

 - charge for the year                      9,766        8,200

 - adjustments in respect of prior years     (470)          82

 Deferred tax:

 - charge for the year                      1,219          467

 - adjustments in respect of prior years      (69)        (218)
----------------------------------------------------------------
                                           10,446        8,531
----------------------------------------------------------------

The tax charge on profit for the year is higher (2010: higher) than the standard
rate of corporation tax in the UK of 26.5% (2010: 28.0%).  The differences are
explained below:
--------------------------------------------------------------------------------
                                                                  2011     2010

                                                                 £'000    £'000
--------------------------------------------------------------------------------
Tax on profit from ordinary activities at the standard rate of  10,373    8,423
26.5% (2010: 28.0%)

Effects of:

- disallowable expenses                                            513      340

- share-based payments                                             (15)     (30)

- tax on overseas earnings                                          81      (77)

- over provision for tax in previous years                        (539)    (136)

- other                                                            (24)     (35)

Effect of change in corporation tax rate                            57       46
--------------------------------------------------------------------------------
                                                                10,446    8,531
--------------------------------------------------------------------------------

The UK Government has proposed that the UK corporation tax rate is reduced to
23.0% over the four years from 2011. At 31 December 2011 only an element of this
reduction, taking the UK tax rate to 25.0% in 2012, had been substantively
enacted.  Consequently deferred tax assets and liabilities are calculated at
25.0%.

In addition to the amount charged to profit or loss, deferred tax relating to
actuarial gains and losses, share-based payments and gains and losses arising on
available for sale investment securities amounting to £1,810,000 has been
credited directly to equity
(2010: £1,120,000).


5. Dividends
--------------------------------------------------------------------------------
                                                                 2011      2010

                                                                £'000     £'000
--------------------------------------------------------------------------------
Amounts recognised as distributions to equity holders in the
year:

- second interim dividend for the year ended 31 December 2010  12,123    11,246
of 28.0p (final dividend for the year ended 31 December
2009: 26.0p) per share

- first interim dividend for the year ended 31 December 2011    7,368     6,921
of 17.0p (2010: 16.0p) per share
--------------------------------------------------------------------------------
Dividends paid in the year of 45.0p (2010: 42.0p) per share    19,491    18,167
--------------------------------------------------------------------------------
Proposed final dividend for the year ended 31 December

2011 of 29.0p (2010: second interim dividend of 28.0p per      12,633    12,146
share)
--------------------------------------------------------------------------------

An interim dividend of 17.0p per share was paid on 5 October 2011 to
shareholders on the register at the close of business on 16 September 2011
(2010: 16.0p).

A final dividend declared of 29.0p per share is payable on 17 May 2012 to
shareholders on the register at the close of business on 27 April 2012. The
final dividend is subject to approval by shareholders at the Annual General
Meeting on 10 May 2012 and has not been included as a liability in these
financial statements.


6. Earnings per share
Earnings used to calculate earnings per share on the bases reported in these
financial statements were:
--------------------------------------------------------------------------------
                          2011      2011      2011     2010      2010      2010

                       Pre-tax  Taxation  Post tax  Pre-tax  Taxation  Post tax

                         £'000     £'000     £'000    £'000     £'000     £'000
--------------------------------------------------------------------------------
Underlying profit       46,219   (12,318)   33,901   38,503   (10,889)   27,614
attributable to
shareholders

Gains on disposal of     1,095      (290)      805        -        -         -
financial securities

Exceptional levies to
the Financial Services

  Compensation Scheme       -         -         -    (3,575)    1,001    (2,574)

Amortisation of client  (5,134)    1,360    (3,774)  (4,845)    1,357    (3,488)
relationships

Head office relocation  (3,028)      802    (2,226)      -         -         -
costs
--------------------------------------------------------------------------------
Profit attributable to  39,152   (10,446)   28,706   30,083    (8,531)   21,552
shareholders
--------------------------------------------------------------------------------

Basic earnings per share has been calculated by dividing earnings by the
weighted average number of shares in issue throughout the period of 43,027,127
(2010: 43,307,423).

Diluted earnings per share is the basic earnings per share, adjusted for the
effect of contingently issuable shares under the Long Term Incentive Plan,
employee share options remaining capable of exercise and any dilutive shares to
be issued under the Share Incentive Plan, weighted for the relevant period (see
table below):
--------------------------------------------------------------------------------
                                                             2011          2010
--------------------------------------------------------------------------------
Weighted average number of ordinary shares in issue    43,027,127    43,307,423
during the period - basic

Effect of ordinary share options/Save As You Earn         201,651        76,153

Effect of dilutive shares issuable under the Share         98,654       116,364
Incentive Plan

Effect of contingently issuable ordinary shares under     235,027       169,580
the Long Term Incentive Plan
--------------------------------------------------------------------------------
Diluted ordinary shares                                43,562,459    43,669,520
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
                                                             2011          2010
--------------------------------------------------------------------------------
Underlying earnings per share for the year
attributable to equity holders of the Company:

- basic                                                     78.79p        63.76p

- diluted                                                   77.82p        63.23p
--------------------------------------------------------------------------------


7. Financial information
The financial information set out in this preliminary announcement has been
extracted from the Group's financial statements, which have been approved by the
Board of directors and agreed with the Company's auditor.

The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 31 December 2011 or 2010.
Statutory financial statements for 2010 have been delivered to the Registrar of
Companies. Statutory financial statements for 2011 will be delivered to the
Registrar of Companies following the Company's Annual General Meeting. The
auditor has reported on both the 2010 and 2011 financial statements. Their
reports were unqualified and did not draw attention to any matters by way of
emphasis. They also did not contain statements under Section 498 of the
Companies Act 2006.






This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
    
Source: Rathbone Brothers PLC via Thomson Reuters ONE

[HUG#1587624]