Brewin Dolphin hit by 18% fall in pre-tax profits

By Sam Shaw

Added 30th November 2016

Brewin Dolphin has posted a 17.9% fall in pre-tax profits as it has published its preliminary annual results for 2016 in a year that included a “challenging” first half.

Brewin Dolphin hit by 18% fall in pre-tax profits

The wealth management firm saw its statutory profit before tax fall to £50.1m ($62.3bn, €58.7bn) for the year ended 30 September 2016, from £61m in the previous year which had included a one-off gain of £9.7m for the disposal of its stake in Euroclear.

Funds under management (FUM) grew by 10.6% to £35.4bn from £32bn at the same point in the last year, with discretionary funds up 16.5% to £28.9bn from £24.8bn. 

With net cash on the balance sheet rising from £149.8m to £170.8m, the group has grown its final dividend by 10.9% to 9.15 pence per share.

Brewin Dolphin said it had received £2.7bn of core gross inflows, including £900m of gross inflows from intermediaries and £500m into its model portfolios. Funds in its managed portfolio services finished the year with £1.25bn under management.

David Nicol, chief executive, said: “The first half of the financial year was particularly challenging with the FTSE 100 Index dropping to a low in February of 5,537 and then rallying to 6,899 at the end September.

Fund Flow progress

“We made progress against our revenue growth objectives with gross new discretionary funds inflows of £2.4bn and continued strong inflows into our model portfolio service. Net discretionary funds inflows of £1.1bn were broadly similar to 2015 as they were impacted by outflows linked to previous business restructuring.”

Assuring his stakeholders that “continuing [with] business as usual is not enough”, Nicol added that progress had been “encouraging”, with financial performance “resilient” against the challenging backdrop of the past year.

He said: “The strategic transition we have undergone over the last few years, focusing on our core services of discretionary investment management and financial advice, coupled with improving operational efficiency is further evident in 2016 in terms of the continued growth in the core business.

“Good progress has been made against the growth objectives we have set ourselves as part of this strategy, in particular in the development and innovation of existing and new services to meet different client needs.”

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