Brewin Dolphin warns market volatility limiting top-line growth

Fund manager Brewin Dolphin reported a 3% increase in funds under management (FuM) during its first quarter but saw a sharp decline in commission income on the back of tough market conditions.

The company also warned that continued global market volatility and political uncertainty in the UK and Europe is “likely to persist in the short term”, which could lead to lower transaction volumes and associated commission income.

FuM totalled £37.9bn by 31 December 2014, up from £36.8bn three months before and 5% ahead of the same time the previous year.

Core income came to £64.4m in the quarter, up just 1% year-on-year as 14% growth in fee income to £47.4m was partly offset by a 23% plunge in commission income to £17m.

While FuM was in line with City forecasts, analysts at Numis Securities said they were expecting core income to come in at £67.1m.

“Strong growth in fee income was driven by organic fund inflows and positive investment performance,” said Brewin's chief executive David Nicol.

“However total income growth in the quarter was impacted by a material decline in commission income as a result of lower transaction volumes due to volatile market conditions.”

Nevertheless, he said the group's outlook remained positive and its financial position strong.

The stock was down 1% at 296.6p by 10:18, with a downgrade by Panmure Gordon to ‘hold’ also weighing on the stock.