The previous year's profits were depressed by a number of one-off items, but even after adjusting for these, asset manager Brewin Dolphin (BRW) pushed half-year profits ahead by 25 per cent to £29.7m. Much of the increase reflected a sharp rise in discretionary funds under management, from £20.4bn a year ago to £22.7bn. That boosted fee and commission income by 13 per cent to £134m.
The new management team has set itself some ambitious targets. It expects to achieve a 75 basis-point core revenue yield on advisory funds by the end of the year, and is also targeting a 95 basis-point yield on discretionary funds.
However, a new software system employed for execution-only business has thrown up a number of problems. Plans to use it for discretionary wealth management have now been shelved, which will lead to a £32m non-cash impairment charge in the second half. Management also has to address payments of around £15m over the next 10 years. These may be payable under the terms of the original contract, which anticipated the roll-out into discretionary wealth management.
Analysts at broker Numis Securities are forecasting full-year EPS of 16.1p (from 14.8p in 2013).
BREWIN DOLPHIN (BRW) | ||||
---|---|---|---|---|
ORD PRICE: | 312p | MARKET VALUE: | £857m | |
TOUCH: | 311-312p | 12-MONTH HIGH: | 358p | LOW: 214p |
DIVIDEND YIELD: | 2.8% | PE RATIO: | 24 | |
NET ASSET VALUE: | 84p* | NET CASH: | £136m** |
Half-year to 30 Mar | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|
2013 | 6.8 | 2.2 | 3.55 |
2014 | 21.4 | 6.7 | 3.65 |
% change | +215 | +205 | +3 |
Ex-div: 4 Jun Payment: 4 Jul *Including intangible assets of £126m, or 46p a share **Includes £27.2m of client settlement cash |