Brewin's fee focus pays off

Profit margins have improved on the back of a more focused and efficient business model. Volatile markets weighed on transaction volumes in the first quarter, but conditions for investment were broadly favourable over the period, enabling the group to increase funds under management to £26.2bn, against £24bn at the September year-end. This means that discretionary funds have risen by about two-thirds over the past three-and-a-half years.

Brewin's continued success in managing money underpinned a double-digit increase in fee income, which now accounts for 83 per cent of Brewin's core revenue. However, at £136m, that revenue was only marginally in advance of the 2014 half-year figure, largely due to a 17 per cent fall in commission receipts. Commissions came under pressure from reduced transaction volumes, while a growing number of clients also signed up to fee-only rates.

The group booked a one-off gain on the sale of its holding in Euroclear and received a £1.2m Financial Services Compensation rebate. Earlier this month, Brewin also agreed to sell execution-only platform Stocktrade to Alliance Trust Savings for £14m.

Analysts at broker Numis Securities are forecasting EPS of 18p for the full year to September 2015, against 16.6p in 2013-14.