A thirst for financial advice is expected to underpin growth at wealth manager Brewin Dolphin (BRW), although volatile markets in the six months to March 2016 meant that transactional volumes remained subdued.
Even so, net discretionary fund inflows grew by an annualised 3.2 per cent to £25.9bn, while core income grew by 0.9 per cent to £126.1m thanks to net organic growth in discretionary funds and financial planning, where income grew by 11 per cent to £8.1m. The drop in headline profits reflected an expected continued decline in income from advisory funds, most of which have been successfully transferred to discretionary management, where commission rates are higher. In addition, the previous year's figure was boosted by a £9.7m one-off gain relating to the sale of its stake in Euroclear.
The group is also broadening its appeal to attract further business both through intermediaries and direct clients. It has already built a network of 28 offices in the UK, Channel Islands and Ireland, and opened a new office in Cambridge in February. Staff costs were broadly flat, although these are likely to rise a little as more investment managers and financial planners are brought on board.
Analysts at Panmure Gordon are forecasting full-year adjusted pre-tax profit of 62.4m and EPS of 17p for the September 2016 year-end, against £62.2m and 17.2p in 2015.
| BREWIN DOLPHIN (BRW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 258.6p | MARKET VALUE: | £732m | |
| TOUCH: | 258.4-259p | 12-MONTH HIGH: | 361p | LOW: 240p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 79p* | NET CASH: | £118m | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 143 | 37.3 | 11.0 | 3.75 |
| 2016 | 137 | 21.5 | 6.3 | 3.85 |
| % change | -4 | -42 | -43 | +3 |
Ex-div: 26 May Payment: 17 Jun *Includes intangible assets of £84m, or 30p a share | ||||
