Asia PR News

HAMILTON, July 28 /PRNewswire-AsiaNet/ –

Diluted earnings per share of $0.27 and $0.55 for the second quarter
and first six months, respectively

W.P. Stewart & Co., Ltd. today reported net income of $12.3 million, or
$0.27 per share (diluted) and $0.27 per share (basic), for the second quarter
ended 30 June 2005. This compares with net income in the second quarter of the
prior year of $13.8 million or $0.30 per share (diluted) and $0.31 per share
(basic).

Second Quarter Highlights
For the second quarter of 2005 there were 45,833,007 common shares
outstanding on a weighted average diluted basis compared to 45,463,443 common
shares outstanding for the second quarter of 2004 on the same weighted average
diluted basis.

Cash earnings for the quarter ended 30 June 2005 were $15.2 million (net
income of $12.3 million adjusted to include $2.9 million representing non-cash
expenses of depreciation, amortization and other non-cash charges on a tax
effected basis), or $0.33 per share (diluted). In the same quarter of the
prior year, cash earnings were $15.7 million (net income of $13.8 million
adjusted for the inclusion of $1.9 million representing non-cash expenses of
depreciation, amortization and other non-cash charges on a tax-effected
basis), or $0.34 per share (diluted).

Assets under management (AUM) at quarter-end were approximately $8.8
billion, compared to approximately $8.9 billion at the end of the prior
quarter, a decrease of approximately 1.1% and an increase of approximately
2.3% from $8.6 billion at 30 June 2004.

Six Month Results
For the six months ended 30 June 2005, net income was down 9.4%, compared
to the first six months of 2004, to $25.1 million or $0.55 per share (diluted)
and $0.55 per share (basic), on revenues of $68.7 million. Net income for
the six months ended 30 June 2004 was $27.7 million or $0.61 per share
(diluted) and $0.62 per share (basic), on revenues of $69.8 million.

Cash earnings for the six months ended 30 June 2005 were $30.5 million
(net income of $25.1 million adjusted to include $5.4 million, representing
non-cash expenses of depreciation, amortization and other non-cash charges on
a tax-effected basis), or $0.67 per share (diluted). In the same period of
the prior year, cash earnings were $31.5 million (net income of $27.7 million
adjusted for the inclusion of $3.8 million representing non-cash expenses of
depreciation, amortization and other non-cash charges on a tax-effected
basis), or $0.69 per share (diluted).

For the six months ended 30 June 2005, there were 45,847,058 common shares
outstanding on a weighted average diluted basis compared to 45,442,807 common
shares outstanding for the same period in 2004 on the same weighted average
diluted basis.

Performance
Performance in the W.P. Stewart & Co., Ltd. U.S. Equity Composite (the
"Composite") for the second quarter of 2005 was 1.2% pre-fee and 0.9% post-
fee.

For the six months ended 30 June 2005, performance in the Composite was
-3.3%, pre-fee and -3.9%, post-fee.

For the twelve month period ending 30 June 2005, performance in the
Composite was 11.3%, pre-fee and 10.2%, post-fee.

W.P. Stewart’s five-year performance record for the period ended 30 June
2005 averaged 1.1% pre-fee (-0.1% post-fee), compounded annually, compared to
an average of -2.4% for the S&P 500 in the five-year period.

In each of the one, five and ten-year periods, ended 30 June 2005,
performance of the Composite has exceeded the performance of the S&P 500, on a
pre-fee and a post-fee basis. For the three-year period ending 30 June 2005,
performance exceeded the S&P 500 on a pre-fee basis but not on a post-fee
basis.

Portfolio returns in July have been strong with preliminary indications
that year-to-date performance is now approximately 300 basis points ahead of
the S&P 500, on a pre-fee basis.

Assets Under Management
Assets under management (AUM) for the quarter ended 30 June 2005 were
approximately $8.8 billion, compared with approximately $8.9 billion for the
quarter ended 31 March 2005 and $8.6 billion reported at the quarter ended 30
June 2004.

Total net flows of AUM for the quarter ended 30 June 2005 were
-$115 million, compared with -$66 million in the comparable quarter of 2004
and -$43 million in the first quarter of 2005.

Total net flows of AUM for the six months ended 30 June 2005 and 2004 were
-$158 million and -$205 million, respectively.

In the second quarter of 2005, net cash flows of existing accounts were
approximately -$119 million compared with net cash flows of approximately
+$7 million in the second quarter of 2004. Net cash flows of existing accounts
for the six months ended 30 June 2005 were -$88 million compared to
-$3 million for the six months ended 30 June 2004.

Net new flows (net contributions to our publicly-available funds and flows
from new accounts minus closed accounts) were approximately +$4 million for
the quarter compared to approximately -$73 million for the same quarter of the
prior year. Net new flows were approximately -$70 million and approximately -
$202 million for the six months ended 30 June 2005 and 2004, respectively.

Look-Through Earning Power
W.P. Stewart & Co., Ltd. concentrates its investments in large, generally
less cyclical, growing businesses. Throughout most of the Company’s 30-year
history, the growth in earning power behind clients’ portfolios has ranged
from approximately 11% to 22%, annually.

Currently, portfolio earnings growth remains solidly positive and the
Company’s research analysts expect portfolio earnings growth to be within the
historical range over the next few years.

Revenues and Profitability
Revenues were $33.9 million for the quarter ended 30 June 2005, compared
to $34.3 million for the same quarter 2004. Revenues for the six months ended
30 June 2005 and 2004 were $68.7 million and $69.8 million, respectively.

The average gross management fee was 1.18%, annualized, for the quarter
ended 30 June 2005 and 1.17% for the six months ended 30 June 2005, compared
to 1.19% and 1.20% in each of the comparable periods of the prior year.

Total operating expenses for the second quarter 2005 increased 6.3% to
$20.3 million from $19.0 million in the same quarter of the prior year. Total
operating expenses were $40.9 million and $39.1 million for the six months
ended 30 June 2005 and 2004, respectively.

During 2004 and through the first half of 2005, the Company issued
restricted stock to various employees. The non-cash compensation expense
related to these restricted stock grants was approximately $880,000 for the
second quarter of 2005 and approximately $1,480,000 for the six months ended
30 June 2005. This non-cash compensation expense is included in "employee
compensation and benefits". We expect non-cash compensation expense related to
these restricted stock grants to be at least $3.0 million for 2005.

Pre-tax income at $13.6 million was 40.2% of gross revenues for the
quarter ended 30 June 2005 compared to $15.3 million or 44.5% of gross
revenues in the comparable quarter of the prior year. Pre-tax income was
$27.9 million (40.5% of gross revenues) for the six months ended 30 June 2005
and $30.7 million (44.0% of gross revenues) for the six months ended 30 June
2004.

The Company’s provision for taxes for the quarter ended 30 June 2005 was
$1.4 million versus $1.5 million in the comparable quarter of the prior year,
and was $2.8 million versus $3.1 million for the six months ended 30 June 2005
and 2004, respectively. The tax rate was approximately 10% of income before
taxes for both periods.

Other Events
The Company paid a dividend of $0.30 per common share on 29 April 2005 to
shareholders of record as of 15 April 2005, and will pay a dividend of $0.30
per common share on 29 July 2005 to shareholders of record as of 15 July 2005.

Conference Call
In conjunction with this second quarter 2005 earnings release, W.P.
Stewart & Co., Ltd. will host a conference call on Thursday, 28 July 2005.
The conference call will commence promptly at 9:15am (EDT). Those who are
interested in participating in the teleconference should dial 1-800-370-0898
(within the United States) or +973-409-9260 (outside the United States). The
conference ID is "W.P. Stewart". To listen to the live broadcast of the
conference over the Internet, simply visit our website at
http://www.wpstewart.com and click on the Investor Relations tab for a link to
the webcast.

The teleconference will be available for replay from Thursday, 28 July
2005 at 12:00 noon (EDT) through Friday, 29 July 2005 at 5:00 p.m. (EDT). To
access the replay, please dial 1-877-519-4471 (within the United States) or
+973-341-3080 (outside the United States). The PIN number for accessing this
replay is 6257996.

You will be able to access a replay of the Internet broadcast through
Thursday, 4 August 2005, on the Company’s website at
http://www.wpstewart.com . The Company will respond to questions submitted by
e-mail, following the conference.

W.P. Stewart & Co., Ltd. is an asset management company that has provided
research-intensive equity management services to clients throughout the world
since 1975. The Company is headquartered in Hamilton, Bermuda and has
additional operations or affiliates in the United States, Europe and Asia.

The Company’s shares are listed for trading on the New York Stock Exchange
(symbol: WPL) and on the Bermuda Stock Exchange (symbol: WPS).

For more information, please visit the Company’s website at
http://www.wpstewart.com , or call W.P. Stewart Investor Relations (Fred M.
Ryan) at 1-888-695-4092 (toll-free within the United States) or + 441-295-8585
(outside the United States) or e-mail to IRINFO@wpstewart.com.

Statements made in this release concerning our assumptions, expectations,
beliefs, intentions, plans or strategies are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve risks and uncertainties that may cause actual results to
differ from those expressed or implied in these statements. Such risks and
uncertainties include, without limitation, the adverse effect from a decline
or volatility in the securities markets, a general downturn in the economy,
the effects of economic, financial or political events, a loss of client
accounts, inability of the Company to attract or retain qualified personnel, a
challenge to our U.S. tax status, competition from other companies, changes in
government policy or regulation, a decline in the Company’s products’
performance, inability of the Company to implement its operating strategy,
inability of the Company to manage unforeseen costs and other effects related
to legal proceedings or investigations of governmental and self-regulatory
organizations, industry capacity and trends, changes in demand for the
Company’s services, changes in the Company’s business strategy or development
plans and contingent liabilities. The information in this release is as of the
date of this release, and will not be updated as a result of new information
or future events or developments.

W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations

For the Three Months Ended
June 30, Mar. 31, June 30,
2005 2005 2004
Revenue:
Fees $25,905,543 $27,235,901 $25,601,138
Commissions 7,334,973 7,189,398 8,421,456
Interest and other 632,934 408,497 326,763

33,873,450 34,833,796 34,349,357

Expenses:
Employee compensation and
benefits 7,231,107 7,227,596 6,263,513
Fees paid out 2,140,864 1,887,350 1,728,946
Commissions, clearance and
trading 1,623,246 1,486,802 1,866,977
Research and administration 3,557,819 3,736,034 3,694,866
Marketing 1,183,848 1,539,959 1,279,263
Depreciation and amortization 2,052,745 2,043,389 2,002,720
Other operating 2,465,856 2,678,969 2,212,547
20,255,485 20,600,099 19,048,832

Income before taxes 13,617,965 14,233,697 15,300,525

Provision for taxes 1,361,796 1,423,370 1,530,101

Net income $12,256,169 $12,810,327 $13,770,424

Earnings per share:

Basic earnings per share $0.27 $0.28 $0.31

Diluted earnings per share $0.27 $0.28 $0.30

W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations

% Change From
Mar. 31, 2005 June 30, 2004
Revenue:
Fees -4.88% 1.19%
Commissions 2.02% -12.90%
Interest and other 54.94% 93.70%

-2.76% -1.39%

Expenses:
Employee compensation and
benefits 0.05% 15.45%
Fees paid out 13.43% 23.82%
Commissions, clearance and
trading 9.18% -13.05%
Research and administration -4.77% -3.71%
Marketing -23.12% -7.46%
Depreciation and amortization 0.46% 2.50%
Other operating -7.96% 11.45%
-1.67% 6.33%

Income before taxes -4.33% -11.00%

Provision for taxes -4.33% -11.00%

Net income -4.33% -11.00%

Earnings per share:

Basic earnings per share -3.57% -12.90%

Diluted earnings per share -3.57% -10.00%

W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations

For the Six Months Ended June 30,
2005 2004 %
Revenue:
Fees $53,141,444 $51,370,532 3.45%
Commissions 14,524,371 17,832,749 -18.55%
Interest and other 1,041,431 604,827 72.19%

68,707,246 69,808,108 -1.58%

Expenses:
Employee compensation and benefits 14,458,703 13,017,802 11.07%
Fees paid out 4,028,214 3,459,470 16.44%
Commissions, clearance and trading 3,110,048 3,841,817 -19.05%
Research and administration 7,293,853 7,431,263 -1.85%
Marketing 2,723,807 2,725,746 -0.07%
Depreciation and amortization 4,096,134 4,008,172 2.19%
Other operating 5,144,825 4,581,912 12.29%
40,855,584 39,066,182 4.58%

Income before taxes 27,851,662 30,741,926 -9.40%

Provision for taxes 2,785,166 3,074,193 -9.40%

Net income $25,066,496 $27,667,733 -9.40%

Earnings per share:

Basic earnings per share $0.55 $0.62 -11.29%

Diluted earnings per share $0.55 $0.61 -9.84%

W.P. Stewart & Co., Ltd.
Net Flows of Assets Under Management*

(in millions)

For the Three Months For the Six
Ended Months Ended
Jun. Mar. Jun. Jun. Jun.
30, 31, 30, 30, 30,
2005 2005 2004 2005 2004

Existing Accounts:
Contributions $171 $312 $185 $483 $380
Withdrawals (290) (281) (178) (571) (383)
Net Flows of Existing Accounts (119) 31 7 (88) (3)
Publicly Available Funds:
Contributions 62 54 48 116 99
Withdrawals (18) (75) (26) (93) (60)
Direct Accounts Opened 104 71 49 175 118
Direct Accounts Closed (144) (124) (144) (268) (359)
Net New Flows 4 (74) (73) (70) (202)

Net Flows of Assets Under
Management $(115) $(43) $(66) $(158) $(205)

* The table above sets forth the total net flows of assets under
management for the three months ended June 30, 2005, March 31, 2005
and June 30, 2004, respectively, and for the six months ended June 30,
2005 and 2004, respectively, which include changes in net flows of
existing accounts and net new flows (net contributions to our publicly
available funds and flows from new accounts minus closed accounts).
The table excludes total capital appreciation or depreciation in
assets under management with the exception of the amount attributable
to withdrawals and closed accounts.

SOURCE: W.P. Stewart & Co., Ltd.

CONTACT: Fred M. Ryan of W.P. Stewart & Co., Ltd.
+1-441-295-8585

FCMN Contact:
denise@wpstewart.com

Web site: http://www.wpstewart.com

(WPL)