Brewin Dolphin Holdings PLC, Group Preliminary Results for the year ended 28 September 2014

Financial highlights

• Strong growth in discretionary funds up 13% to £24.0 billion (29 September 2013: £21.3 billion).
• Total income of £290.5 million (29 September 2013: £283.7 million), an increase of 2%.
• Fee income increased by 17% to £177.3m (29 September 2013: £152.0 million).
• Commission income declined by 5% to £88.6 million (29 September 2013: £93.5 million) in line with reduced transaction volumes resulting from market volatility in the second half.
• Statutory profit before tax of £8.6 million (29 September 2013¹: £28.4 million) a decrease of 70%, due to previously announced exceptional write off.
• Substantial increase in exceptional costs² to £38.0 million, including previously announced write off of major technology project (29 September 2013: £12.1 million).
• Adjusted³ profit before tax £60.2 million (29 September 2013¹: £52.1 million), an increase of 16%.
• Adjusted³ profit before tax margin increased to 20.7% (29 September 2013¹: 18.4%).
• Strong balance sheet underpinned by growing cash generation with net cash of £135.1 million (29 September 2013: £113.5 million).
• Diluted adjusted earnings per share 16.5p (29 September 2013¹: 14.8p) an increase of 11%.
• Diluted earnings per share of 2.4p (29 September 2013: 8.0p) a decrease of 70%.
• Final dividend increased by 24% to 6.25p, full year dividend up by 15% to 9.9p.

Business Highlights

• Overall good progress on improving underlying business performance and profitability.
• Decision taken to limit implementation of new operating software under development to execution only business.
• Discretionary funds grew by 7%, excluding investment performance, largely driven by growing financial intermediary sources of new client funds.
• Discretionary funds represent 82% of total managed funds, ahead of 80% target.
• Good progress on achieving the stated margin target for adjusted profit before tax of 25% by end of 2016.
• Further restructuring and reinvestment in the business as part of transformation strategy:
  • Operational savings being achieved through focus on core discretionary business.
  • Investment in client service – design and implementation of enhanced client advice process begun during the year.
  • Strengthening the business – investment in operational processes and key management resources.

Declaration of dividend

The Board proposes a final dividend of 6.25p per share, to be approved at the 2015 AGM and payable on 23 March 2015 to shareholders on the register at close of business on 6 March 2015, with an ex-dividend date of 4 March 2015.

David Nicol, Chief Executive said

“2014 was a year in which good financial and operational progress was made as reflected in both the adjusted profit before tax margin of 20.7% and in improved cash generation. Improving revenue and efficiency are our strategic goals and we have made good progress towards our stated targets. In the process, we reassessed a significant software project and this has resulted in a material impairment charge, as previously announced. Nevertheless, we are well positioned for success and I remain confident that we have the right people to deliver our plans for growth throughout the business.”

¹ Prior year comparatives have been restated following the adoption of IAS 19 – Employee Benefits (revised 2011), refer to note 2(a) of the financial statements.
² Exceptional costs include redundancy costs, FSCS levy, onerous contracts provision, licence provision and impairment of intangible – software.
³ These figures have been adjusted to exclude redundancy costs, additional FSCS levy, onerous contracts provision, amortisation of client relationships, impairment of intangible assets-software, licence provision and disposal of available–for–sale investments, see reconciliation in results for the year.

Notes to the Editors

1. The Group is made up of Brewin Dolphin Holdings PLC and its subsidiaries (the “Group”).

2. The Group is one of the UK’s leading providers of discretionary wealth management services, offering investment management and financial planning services to meet the needs of investors and intermediaries.

For further information

David Nicol, Chief Executive Andrew Westenberger, Finance Director Matthew Sims, Director of Investor Relations	Brewin Dolphin Holdings PLC: Tel: 020 7248 4400
Andrew Hayes/ Wendy Baker	Hudson Sandler: Tel: 020 7796 4133

Download the full Group Preliminary Results press release in Adobe Acrobat PDF File Format. (Size: 262KB)