Financial Results
Profits At Brewin Dolphin Rise Despite Outflows; Reiterates IT Project Cancellation

Brewin Dolphin reported stronger profits in the six months to the end of March but some outflows as well. It reiterated its £32 million cost incurred in scrapping an IT project for its discretionary wealth arm.
Brewin
Dolphin, the UK-listed wealth management group, said that its
profit before tax for the six months to the end of March soared
215 per cent to £21.4 million ($35.8 million), up from £6.8
million a year ago. However, the firm recorded outflows of £600
million from its discretionary service and £400 million from in
its advisory managed and dealings services.
The results come after the recent announcement that the firm has
decided to pull the plug on an IT project at its discretionary
wealth arm, which will cost the company around £32 million.
The firm, which provides discretionary wealth management,
advisory and execution-only services, said in a statement
that discretionary funds under management were £22.7 billion at
the end of March, up from £20.4 billion year-on-year.
Adjusted profit before tax was £29.7 million, an increase of
25.3 per cent from the same period last year.
Discretionary funds increased by 7 per cent in the period,
including £0.6 billion of net new funds, and discretionary funds
under management now represent 79 per cent of total
managed/advised funds, the firm said.
Core income rose 13 per cent to £134.4 million, while other
income fell to £11.9 million, down 42 per cent from last year as
a result of declining margins on cash deposits and a further £6.1
million reduction in trail income following the continued move
away from trail paying unit trusts post RDR.
The firm reiterated its decision made earlier this month to
terminate the roll out of its new technology system, Figaro,
across its discretionary wealth business, after hitting snags in
its execution-only arm. It said that it will take a pre-tax
impairment cost of around £32 million in the second half of 2014
as a result of this decision, based on the consequent
reassessment of the value in use of the software asset under
development.
Brewin Dolphin recently closed down its offices in Chester
and Truro as it continues to consolidate its branch network. The
Chester and Truro branches will now merge into the Manchester and
Plymouth offices.
Chief executive David Nicol said that it was encouraging that the
rationalisation of the business model had begun to “bear
fruit”.
"The process of streamlining the business is on track and this is
reflected in the significant progress made towards the adjusted
profit before tax margin target of 25 per cent,” said Nicol.
“We are committed to continued improvement and strengthening of
the business and will continue to make the difficult decisions
necessary to achieve this as evidenced by the refocused systems
priorities. The streamlining of the business through
improved operating processes and clearer focus on core services
should not only secure further shareholder returns, but also
substantially reduce risk,” he added.