Brewin Dolphin profits flow downstream
Profits for wealth manager Brewin Dolphin have almost halved in the six months to the end of March, as less-than-ideal market conditions and a business restructuring took their toll.
Profits before tax dropped to £21.5m, down 42.2 per cent from £37.2m for the same period the year before, although the earlier period included a one-off exceptional gain of £9.7m.
However, adjusted profits before tax, which excluded elements like redundancy costs and amortisation of client relationships, were more positive, down only 12.3 per cent at £28.4m, compared with £32.4m last year.
Meanwhile, core income inched up to £126.1m, an increase of 0.9 per cent compared with the prior year's £125m.
Read more: Alliance Trust unit pays £14m for Brewin Dolphin platform
Total funds at the end of the period were £32.8bn, up 2.5 per cent compared with £32bn six months ago, and discretionary funds were £25.9bn, up 4.4 per cent from £24.8bn.
At time of writing, shares in the FTSE 250 company were down 5.7 per cent at 260p.
Andrew Westenberger, finance director at Brewin Dolphin, told Morning Wire that he saw the reaction in the share price to be indicative of overall market conditions, remarking "our peers are off a similar-ish amount….but both we and they are obviously looking to develop the business with an eye on the longer term".
Read more: Brewin Dolphin shift to bespoke pays off after income rises
David Nicol, chief executive of Brewin Dolphin, added:
We're not going to be stupid about reducing costs or anything like that. These are long-term businesses. You can't go through a sort of stop-start approach to the bottom line, so if you meet some headwinds, which we have – which this whole industry has – then it obviously has a short-term effect but longer term, the client base is with us for the long term.
The firm is also looking to expand following its restructure, having recently opened an office in Cambridgeshire and now looking to hire across the company.
In addition, the company has recently launched a new service aimed at lawyers and accountants, which Nicol described as "going down very well".