Brewin Dolphin profit drops but FY results beat expectations

Wealth management company Brewin Dolphin reported a drop in pre-tax profit for the year to the end of September, but the results were better than expected.

Statutory profit before tax fell to £50.1m from £61m the year before, which included a one-off gain of £9.7m, as total income fell by 0.5% to £282.4m. Adjusted pre-tax profit fell 1.9% to £61m.

Still, this was better than expected. Shore Capital had pencilled in revenue of £276.4m and adjusted pre-tax tax profit of £59.6m. Meanwhile, RBC Capital Markets pointed out that revenue was 1% ahead of both its and consensus forecast.

The full-year dividend was lifted by 8.3% to 13p, taking the final dividend to 9.15p per share, up 10.9% on the previous year. The FY dividend was 7% above consensus forecasts.

Brewin said total assets under management rose 10.6% to £35.4bn, while discretionary funds were up 16.5% to £28.9bn.

Chief executive David Nicol said: “We have made encouraging progress in 2016. Financial performance has been resilient against the increasingly volatile and uncertain market backdrop. 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.”

Brewin said that while the near-term market outlook is marked by the heightened sense of political and economic uncertainty, both in the UK and elsewhere, the business is well placed to withstand any near-term downturns.

At 1000 GMT, the shares were up 4.8% to 275.60p.