Rathbone Brothers PlcRathbone Brothers Plc

Preliminary Announcement ofPreliminary Announcement of

ResultsResults

31st December 200331st December 2003

Introduction

Mark PowellMark Powell

ChairmanChairman

Andy PomfretAndy Pomfret

Finance DirectorFinance Director

Richard LanyonRichard Lanyon

Director - Investment ManagementDirector - Investment Management

The Executive Team

Mark PowellMark PowellChairmanChairman

Roy MorrisRoy MorrisChief ExecutiveChief Executive

Andy PomfretAndy PomfretFinance DirectorFinance Director

Richard LanyonRichard LanyonDirector - Director - Investment ManagementInvestment Management

James LiffordJames LiffordDirector - Director - Regional OfficesRegional Offices

Paul Egerton-VernonPaul Egerton-VernonDirector - Trust DivisionDirector - Trust Division

Paul ChavassePaul ChavasseDirector - IT & OperationsDirector - IT & Operations

Ian BuckleyIan BuckleyDirector - Trust DivisionDirector - Trust Division

Results Highlights

£81.8 million

£19.7 million

Operating Income

Pre-Tax Profits(pre-goodwill and exceptional gains)

+ 2.4%

+ 7.5%

38.11p24.07p

Earnings Per Share(pre-goodwill)(post-goodwill)

+ 12.4%+ 0.7%

26pDividends Maintained

£6.8 billionFunds Under Management + 28.2%

4477FTSE 100 Index + 13.6%

4103Average FTSE 100 Index on Charging Dates - 6.5%

Strategy

To be the leading provider of discretionary investment management services to the Private Client in the UK and to provide trust services internationally

Primary focus will remain on private clients

Encourage and reward organic growth

Further acquisitions of businesses and people if demonstrably earnings enhancing in the medium-term, or add to service offered to clients

Investment Management to account for 80% of activity

Continuing development of the Investment Process

Key Issues and Developments

Growth in Funds under Management

Investment performance

Back office productivity improvement

Potential for corporate acquisitions

Trust Division:- New management structure Savings made Business rationalisation Timescale for improvement

Updates on:- Stock Exchange shares Pension fund deficit ‘Splits’ Basel II IFRS

Investment ManagementInvestment Management

Growth in Funds Under Management

Organic growth in 2003

Rathbone Unit Trust Management success

Growth of Bespoke Funds

Charities

Demonstration of Investment Process

Performance

Market Movements & Funds Under Management

-35.4%

-23.9%

35.1%

13.6%

12.1%

28.2%

11.1%

7.8%

15.1%

FTSE 100 Index

APCIMS Balanced Index

Funds under Management

5 Years5 Years 1 Year1 Year 6 months6 months

Growth in Funds Under Management

Opening FUM

Market Movement (FTSE 100)

Effect of Performance Relative to Market

Closing FUM

Inflow of New Money - Acquired

Outflow of Money

5.3

0.7

5.8

(1.4)

0.1 0.2

6.8 5.3

0.3 0.4

(0.2) (0.2)

Year to Year to 31/12/0331/12/03

£bn£bn

Year to Year to 31/12/0231/12/02

£bn£bn

Inflow of New Money - Organic 0.6 0.5

Net New Money 0.7 0.7

Unit Trust Sales (£m)Net of Discounts and Redemptions

23.716.2

28.4

45.736.2

145.5

0

20

40

60

80

100

120

140

160

2002 2003 2002 2003 2002 2003

Internal Bespoke External (including direct)

Unit Trust Performance

Source: Standard & Poor’s Micropal Bid to Bid, net reinvestment. Data to 01.03.04

The value of investments and the income from them may go down as well as up and you may not get back your originalinvestment. Past performance is not necessarily a guide to future performance.

Rathbone Income Fund

Rathbone Income and Growth Fund

Rathbone Smaller Companies Fund

Rathbone Special Situations Fund

Rathbone Capital Growth Fund 1

1

2

1

1

2

1

1

3

1

1

1

2

**

*****

*****

**

*****11

Rathbone Unit Trust Management LtdQuartile Performance

1 yr 3 yrs 5 yrs S&P FundStars

1

2

2

1

1

6m

Rathbone Technology Fund 2 4 N/A *3

Rathbone Global Companies Fund(launched April 2001)

1 N/A N/A1

Rathbone Ethical Bond Fund(launched May 2002)

4 N/A N/A3

Standard & Poor’s awarded the Rathbone Income Fund 1st place over 5 years for UK-Marketed funds in the ‘Equity UK Income’ sector.Standard & Poor’s awarded the Rathbone Income Fund 1st place over 5 years for UK-Marketed funds in the ‘Equity UK Income’ sector.

The Rathbone Special Situations Fund won Best UK General Equity Fund (Money Observer magazine) 2004 to follow up winning the The Rathbone Special Situations Fund won Best UK General Equity Fund (Money Observer magazine) 2004 to follow up winning the award in 2002 and 2003 and the fund retained its Standard & Poor’s Fund Rating of ‘A’. The fund was awarded 1st place in the Standard award in 2002 and 2003 and the fund retained its Standard & Poor’s Fund Rating of ‘A’. The fund was awarded 1st place in the Standard & Poor’s UK-Marketed ‘Equity UK’ funds sector over 5 years. & Poor’s UK-Marketed ‘Equity UK’ funds sector over 5 years.

The Rathbone Smaller Companies Fund won 1st place in the Standard & Poor’s UK-Marketed ‘UK Smaller Companies’ funds sector The Rathbone Smaller Companies Fund won 1st place in the Standard & Poor’s UK-Marketed ‘UK Smaller Companies’ funds sector over 10 years.over 10 years.

Bespoke Fund Performance

25.7%

18.0%

16.0%

10.1%

21.4%

15.8%

19.8%

15.8%

13.4%14.2%

25.4%

21.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Esk Hamilton QuercusGrowth

Quercus Mixed Longroad Sherwood (fromlaunch -20/02/03)

Fund Benchmark

Performance vs Benchmark 2003Performance vs Benchmark 2003

Investment Process

Combination of sector and stock selection

Growing ability to manage larger portfolios

Use of collectives (over £1 billion), hedge funds and private equity

Small clients less than £100,000

Investment Management - Conclusion

A consolidator - management team with track record of integration

Respected name with strong client retention

Robust systems infrastructure

Improving markets and demographics

TrustTrust

Trust Division Results

0.4UK

0.4Exceptional Gains

1.6Segmental Analysis (per accounts)

1.5Jersey

(0.7)International

1.2

0.0

0.1

1.1

1.4

(0.4)

1.0

0.4

0.5

2.7

2.9

(1.1)

2.2

0.6

0.3

3.9

3.2

(0.2)

3.6

H1H120032003£m£m

H2H220032003£m£m

TotalTotal20032003£m£m

TotalTotal20022002£m£m

Pre-GoodwillPre-Goodwill

Trust Division

Strategic Challenges

The changing client base

Offshore jurisdictions

Regulatory changes

Strategic fit with Investment Management

Implementation

New management in place

£1.2m of cost savings in International Business (ex Jersey) but £2.2m drop in income

Strengthened review processes

Conclusion & Current TradingConclusion & Current Trading

Conclusion and Current Trading

Demographic potential

Strong Investment Performance

National presence

Improved markets

AppendicesAppendices

Investment Management - Our Market

Domestic private individuals and trusts £100,000 - £10 million +£100,000 - £10 million +

International private individuals and trusts £100,000 - £10 million +£100,000 - £10 million +

UK Unit Trusts (including ‘Bespokes’)

Charities £500,000 - £50 million£500,000 - £50 million

Pension Funds - mainly in SIPP form

Competitors GAM Cazenove Kleinworts NM Rothschild HSBC

Market Movements & Funds Under Management

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

31.12.99 31.12.00 31.12.01 31.12.02 31.12.03

Funds under Management FTSE-100 APCIMS

Productivity

90

100

110

120

130

De

c-0

1

Fe

b-0

2

Ap

r-02

Ju

n-0

2

Au

g-0

2

Oc

t-02

De

c-0

2

Fe

b-0

3

Ap

r-03

Ju

n-0

3

Au

g-0

3

Oc

t-03

De

c-0

3Based on Number of Core Discretionary Clients (Rebased to 100)Based on Number of Core Discretionary Clients (Rebased to 100)

Quarter by Quarter AnalysisPre-Tax, Pre-Goodwill Profit (£m)

3.4

0.4

3.8

5.1

1.2

6.3

5.5

0.7

6.2

Investment Management

Trust

Total

Q1Q1 Q2Q2 Q3Q3

4.1

0.4

4.5

Q4Q4

FTSE 100 Index 3814 4031 4091 4477

18.1

2.7

20.8

TotalTotal

4103*

* Average

Location of Funds Under Management & Profitability

4.1

1.1

1.6

2.3

0.8

0.3

3.3

1.2

0.6

London

Liverpool

Regional Offices

Q1Q1 Q2Q2

3.4

1.2

0.9

Q3Q3

6.8

2.8

0.8

0.5

Q4Q4

11.8

4.0

2.3

TotalTotal

18.1

Funds underFunds underManagement atManagement at

31st December 200331st December 2003£bn£bn

Pre-TaxPre-TaxPre-Goodwill ProfitPre-Goodwill Profit

by Quarter 2003by Quarter 2003£m£m

Quarter by Quarter AnalysisPre-Tax, Pre-Goodwill Profit (£m) (As per segmental analysis)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

Investment Management Trust FTSE 100 Index (rebased)

Pre-Tax Profits(before goodwill and exceptional items) (£ million)

11.6 11.6

23.2

14.2

12.3

26.5

11.2

9.4

20.6

11.4

7.0

18.4

9.410.4

19.7

0

5

10

15

20

25

30

1999 2000 2001 2002 2003

1st Half 2nd Half Full Year

Analysis of Expenditure (excluding Goodwill)for 12 months to 31st December 2003

£38.1m£38.1m

£4.0m£4.0m

£4.7m£4.7m

£3.1m£3.1m

£3.0m£3.0m

£2.9m£2.9m

£2.6m£2.6m

£3.6m£3.6m

Staff - Payroll

Staff - Other

Premises

Depreciation

Professional

Settlements

IT

Other

Analysis of Gross Incomefor 12 months to 31st December 2003

Investment Management

Trust

Unit Trusts

£66.0m£66.0m

£20.2m£20.2m

£5.8m£5.8m

Analysis of Investment Management Incomefor 12 months to 31st December 2003

Investment Management Fees

Investment ManagementCommission

Net Interest

£27.0m£27.0m

£20.7m£20.7m

£10.0m£10.0m

Consolidated Balance Sheetas at 31st December 2003

31/12/03£'000

31/12/02£'000

31/12/03£'000

31/12/02£'000

Assets Liabilities

Cash and balances at central banks 3,205 19,019 Deposits by banks 5,335 62

Settlement balances 13,523 6,837 Settlement balances 11,376 5,865

Loans and advances to banks 43,207 33,025 Customer accounts 366,715 408,039

Loans and advances to customers 36,353 36,828 Debt securities in issue 898 5,768

Debt securities 333,002 363,426 Other liabilities 11,190 10,899

Equity shares 35 70 Accruals and deferred income 8,560 7,671

Intangible fixed assets 57,702 56,232 Provision for liabilities and charges 5,188 3,940

Tangible fixed assets 6,226 7,454 Called up share capital 2,033 1,969

Other assets 4,245 3,651 Shares to be issued including premium - 1,927

Prepayments and accrued income 17,666 16,132 Share premium account 13,791 9,639

Other reserves 49,428 45,674

Profit and loss account 40,650 41,221

Equity shareholders' funds 105,902 100,430

Total Assets 515,164 542,674 Total Liabilities 515,164 542,674