W.P. Stewart & Co., Ltd. Reports Net Income for First Quarter 2005 of $12.8 Million

HAMILTON, Bermuda: April 28 - W.P. Stewart & Co., Ltd. today reported net income of $12.8 million, or $0.28 per share (diluted) and $0.28 per share (basic), for the first quarter ended 31 March 2005.  This compares with net income in the first quarter of the prior year of $13.9 million or $0.31 per share (diluted) and $0.31 per share (basic).
    Net income for the quarter ended 31 March 2005 of $12.8 million, adjusted for the add-back of $2.5 million, representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis ("cash earnings"), was $15.3 million, or $0.33 per share (diluted).  In the same quarter of the prior year, cash earnings were $15.8 million (net income of $13.9 million adjusted for the add-back of $1.9 million representing non-cash expenses of depreciation, amortization and other non-cash charges on a tax-effected basis), or $0.35 per share (diluted).
    For the first quarter of 2005 there were 45,861,264 common shares outstanding on a weighted average diluted basis compared to 45,422,171 common shares outstanding for the first quarter of 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 first quarter of 2005 was -4.5% pre-fee and -4.8% post-fee.
    For the twelve month period ending 31 March 2005, performance in the Composite was 12.6%, pre-fee and 11.5%, post-fee.
    In each of the one, three, five and ten-year periods ended 31 March 2005, performance of the W.P. Stewart U.S. Equity Composite has exceeded the performance of the S&P 500.

    Assets Under Management
    Assets under management (AUM) at quarter-end were approximately $8.9 billion, compared with approximately $9.3 billion at 31 December 2004, and approximately $8.5 billion at 31 March 2004.
    Total net flows of AUM for the quarter ended 31 March 2005 were approximately -$43 million, compared with total net flows of approximately -$346 million and approximately -$139 million in the fourth quarter and in the first quarter of 2004, respectively.
    In the quarter, net cash flows of existing accounts were approximately +$31 million, compared with approximately +$94 million and approximately -$10 million in the fourth quarter and in the first quarter of 2004,
respectively.
    Net new flows (net contributions to our publicly-available funds and flows from new accounts minus closed accounts) were approximately -$74 million for the quarter compared to approximately -$440 million and approximately -$129 million in the fourth quarter and in the first quarter of 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 $34.8 million for the quarter ended 31 March 2005, compared to $35.5 million for the same quarter 2004.
    The average gross management fee was 1.17%, annualized, for the quarter ended 31 March 2005, compared to 1.21%, annualized, in the same quarter of the prior year.
    Total operating expenses increased approximately $600,000 to $20.6 million, for the first quarter 2005, from $20.0 million in the same quarter of the prior year. 
    Included in total of operating expenses for the first quarter of 2005 was an amount of $540,000 which previously had been capitalized and which related
to due diligence work in connection with a corporate acquisition.  Work on this prospective acquisition has been terminated.
    During 2004 and through the first quarter of 2005, the Company has issued restricted stock to various employees.  The non-cash compensation expense related to these restricted stock grants for the first quarter of 2005 was approximately $600,000 which is included in "employee compensation and benefits".  We expect non-cash compensation expense related to these restricted stock grants to be at least $2.5 million for 2005.
    Pre-tax income of $14.2 million was 40.9% of gross revenues for the quarter ended 31 March 2005 compared to $15.4 million or 43.5% of gross revenues in the comparable quarter of the prior year.
    The Company's provision for taxes for the quarter ended 31 March 2005 was $1.4 million versus $1.5 million in the comparable quarter of the prior year. 
The tax rate is 10% of income before taxes for both periods.

    Other Events
    The Company paid a dividend of $0.30 per common share on 28 January 2005 to shareholders of record as of 14 January 2005, and will pay a dividend of$0.30 per common share on 29 April 2005 to shareholders of record as of 15
April 2005.

    Conference Call
    In conjunction with this first quarter 2005 earnings release, W.P. Stewart& Co., Ltd. will host a conference call on Thursday, 28 April 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 April 2005 at 12:00 noon (EDT) through Friday, 29 April 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 5952045.
    You will be able to access a replay of the Internet broadcast through Thursday, 5 May 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.

 
SOURCE  W.P. Stewart & Co., Ltd.
    -0-                             04/28/2005
    /CONTACT:  Fred M. Ryan of W.P. Stewart & Co., Ltd., +1-441-295-8585/
    /First Call Analyst: /
    /FCMN Contact: denise@wpstewart.com /
    /Web site:  http://www.wpstewart.com /
    (WPL)