Rockier markets may have some impact on funds under management at Brewin Dolphin (BRW), says chief executive David Nicol, but the shift towards discretionary business should carry it through in the longer term. The wealth manager gained £2.3bn in discretionary net inflows last year, offsetting £1.4bn in net outflows from gradually declining advisory services. Market returns were also solid at £1.2bn, taking overall funds under management up by 6.7 per cent to £42.8bn – ahead of a 4.3 per cent rise in the MSCI WMA Private Investor Balanced Index.
Discretionary assets now account for 88 per cent of group assets, with the managed portfolio service generating the highest organic growth, with net inflows of £0.6bn, or 26 per cent of opening assets. However, a greater increase in discretionary funds via intermediaries and white-label products meant the blended yield across discretionary services dipped to 78.7 basis points, from 80.9 basis points the prior year.
However, keeping a handle on costs meant the adjusted pre-tax profit margin improved to 23.6 per cent, from 23 per cent last year, closer towards a medium-term target of 25 per cent. But operating costs will be elevated this year as management updates the core custodian and settlement services.
Analysts at Numis expect adjusted pre-tax profits of £90m for the March 2019 year-end, giving EPS of 24.9p (from £78.9m and 21.9p FY2018).
| BREWIN DOLPHIN (BRW) | ||||
| ORD PRICE: | 315p | MARKET VALUE: | £893m | |
| TOUCH: | 315-318p | 12-MONTH HIGH: | 399p | LOW: 305p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 97p* | NET CASH: | £186m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 281 | 6.8 | 2 | 9.9 |
| 2015 | 284 | 61.0 | 17.7 | 12 |
| 2016 | 280 | 50.1 | 14.4 | 13 |
| 2017 | 304 | 57.6 | 16.5 | 15 |
| 2018 | 326 | 68.5 | 19.5 | 16.4 |
| % change | +7 | +19 | +18 | +9 |
| Ex-div: | 10 Jan | |||
| Payment: | 6 Feb | |||
| *Includes intangible assets of £85.7m, or 30p a share | ||||
