Brewin Dolphin profits fall 42 per cent

brewin-dolphinInvestment manager Brewin Dolphin, which has more than 100 staff, including 47 ­investment managers and ­financial planners based in Edinburgh, has reported a 42 per cent drop in its profits, as it completes restructuring to a discretionary wealth management focus.

The firm’s latest half-year results, published today, reveal that profits before tax fell to £21.5m from £37.2m in the six months ending 31 March 2016.

Adjusted profit before tax also fell by 12.3 per cent compared to the same period last year, down to £28.4m from £32.4m.

The drop was mainly attributed to lower “other income”, which dropped 39.7 per cent due to outflows from the firm’s advisory business as the company shifts its focus to discretionary wealth management services.

Discretionary fund inflows were £400m representing a growth rate of 3.2 per cent, but lower than the 4.2 per cent growth the year before.

David Nicol
David Nicol

Brewin Dolphin chief executive David Nicol said: “The underlying ability of the business to sustain organic growth, despite the poor market environment, is a reminder of the sound footings on which we are building our growth ambitions.”

“The group is in hiring mode and focused on a balance of direct and intermediary-led growth to increase discretionary funds by a third over the next five years.”

Nicol said the firm has begun to “actively expand” its client-facing resources by hiring investment managers and financial planners.

For the first half of 2016, total funds at the wealth manager increased to £32.8bn, up 2.5 per cent from £32bn in the same period a year ago. Discretionary funds rose 4.4 per cent to £26bn.

Mr Nicol added: “The first half saw further growth in our core business as well as continued progress towards achieving our long-term strategic goals.

“Despite challenging market conditions, we maintained recent growth rates in our discretionary business, while also moving firmly to execution stage on many of the growth initiatives we outlined in 2015.

“In the current market context, and given the short-term outflows resulting from business restructuring, the first half reflects a creditable performance.”

Main points from the results

  • Total funds £32.8bn, up 2.5% (FY 2015: £32.0bn)
  • Discretionary funds at £25.9bn, up 4.4% (FY 2015: £24.8bn). This compares to an increase of 1.9% in the FTSE 100 Index and a 3.9% increase in the FTSE WMA Private Investor Series Balanced Portfolio Index
  • Total net discretionary funds inflows, excluding transfers, were £0.4bn representing an annualised growth rate of 3.2% (H1 2015: 4.2%)
  • Core income £126.1m (H1 2015: £125.0m), an increase of 0.9%, mostly due to net organic discretionary funds growth and higher financial planning income offset by lower average market levels compared to H1 2015
  • Other income declined by 39.7% to £11.1m (H1 2015: £18.4m)
  • Adjusted2profit before tax of £28.4m (H1 2015: £32.4m), 12.3% lower
  • Profit before tax of £21.5m, 42.2% lower than H1 2015 (£37.2m) which included a one-off gain of £9.7m
  • Adjusted2earnings per share:
  • - Basic earnings per share of 8.4p (H1 2015: 9.6p)
  • - Diluted earnings per share3 of 7.9p (H1 2015: 9.0p)
  • Statutory earnings per share:
  • - Basic earnings per share of 6.3p (H1 2015: 11.0p)
  • - Diluted earnings per share of 6.1p (H1 2015: 10.5p)
  • Interim dividend of 3.85p per share (H1 2015: 3.75p per share)
  • Share icon
    Share this article: