• Text size      
  • Send this article to a friend
  • Print this article

Brewin Dolphin chief hails improvements after jump in profits

BREWIN Dolphin has hailed a 22% rise in adjusted pre-tax profits as a "robust" performance in a year which saw it usher in a new senior management team.

The firm, which appointed a new chief executive, finance director and head of investment management in March, has reported underlying pre-tax profits of £52.3 million for the year ended September 29. Taking factors such as redundancy costs, onerous contract provision, the disposal of investments and an additional FSCS (Financial Services Compensation Scheme) levy into account, pre-tax profits slipped to £28.6m, compared with £29.9m last year.

Total income grew by 5.3% to £283.7m as the funds held by the firm under discretionary management rose to £21.3bn, compared with £18.2bn in 2012.

David Nicol, who replaced the retiring Jamie Matheson as chief executive in March, highlighted the firm's scale and geographical spread of business in contributing to a "strong" set of results.

He noted that Brewin had seen margins improve to 18.5% from 16.5% and targets hitting "25%-plus" by the end of 2016.

He confirmed the company had introduced a new dividend policy, under which it will target a 60% to 80% of annual reported adjusted diluted earnings per share.

It announced a final dividend increase of 40% to 5.05p yesterday, meaning its full-year dividend will rise by 20% to 8.6%.

Mr Nicol said: "We have moved to a standardised pricing model in the last couple of years and we are starting to see the fruits of that.

"We have added discretionary assets and the yield - the average income we get from those assets - is up. We have also improved the yields on our advisory managed business - despite the fact the funds are down a little bit.

"Pricing overall has improved and also we are seeing net flows of business, particularly in discretionary, which is the direction in which we are going."

Mr Nicol said the last two years have seen clients invest more in risk assets like property and equity. Growth has come from clients consolidating more wealth with Brewin Dolphin and referrals from independent financial advisers.

Mr Nicol said: "People are living longer and they have retirement to deal with. They've got family wealth and tax issues to deal with. We can help them more broadly." Mr Nicol welcomed the transparency on pricing brought by the Retail Distribution Review (RDR), as well as the "focus on qualification, quality, professionalism of the workforce in the industry".

On the so-called advice gap the RDR is said to have created, he said: "There are people who are struggling to get advice. We think we have a part to play, certainly in helping IFAs who are dealing with some of those clients. We are seeing big inflows from IFAs because they like what we do."

Contextual targeting label: 
Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

198122