Brewin Dolphin profits, total funds rise amid positive net inflows

Wealth manager Brewin Dolphin posted a rise in full-year profit on Wednesday as total funds increased amid positive net inflows.

In the year to 30 September, adjusted pre-tax profit jumped 10.7% to £77.5m as total funds grew 6.7% to £42.8bn, driven by net new funds growth of £1.5bn and investment performance of £1.2bn.

Analysts had pencilled in adjusted pre-tax profit of £77.3m and total funds under management of £43.1bn.

Discretionary funds were up 11.2% to £37.6bn thanks to continuing strong gross inflows of £3.2bn and stable outflows of £1.3bn.

Basic earnings per share rose to 19.5p from 16.5p the year before and Brewin lifted its full-year dividend by 9.3% to 16.4p a share, taking the final dividend to 12p, up 11.6%.

Chief executive David Nicol said: "2018 was another successful year for the group, proving the continued value of our personalised advice-led model. Above target organic fund inflows have led to strong earnings and dividend growth.

"The investment in our services, people and technology are delivering results and we have broadened our range of services so we can capture future growth opportunities. At a time of uncertainty we remain confident in our growth prospects."

As far as Brexit is concerned, the company said it was prepared to take "all necessary and appropriate measures" to address any eventualities that emerge, for its employees, clients and the business as a whole.

"We are well positioned to withstand market-wide stresses triggered by Brexit," it said.

RBC Capital Markets said: "While all UK financials including Brewin have suffered due to the uncertainty surrounding the UK leaving the European Union, we note that this uncertainty should increase client demand for a personalised advice-led business like Brewin (as opposed to a business where clients receive no advice).

"Brewin is mostly a UK business, but it does own a small Irish subsidiary which may be of some benefit."

RBC rates the stock at 'outperform', highlighting an attractive valuation and a high dividend yield.