Brewin Dolphin Holdings PLC
25 May 2005
25 May 2005
BREWIN DOLPHIN HOLDINGS PLC
INTERIM RESULTS FOR THE 26 WEEKS TO 25 MARCH 2005
Highlights
• Total income £68 million (2004: £59 million) an increase of 15%
• Profit £12.4 million before tax and goodwill amortisation and exceptional
item (2004: £8.9 million) an increase of 39%. Profit before tax
£5.6 million (2004: £6.5 million)
• Diluted earnings per share excluding goodwill amortisation and exceptional
item 4.2p (2004: 3.0p) an increase of 40%. Basic and diluted earnings per
share 1.7p (2004: 2.0p)
• First interim dividend of 2.0p per share (2004: 1.5p) a 33% increase
• £6 billion funds under discretionary management
Sir Fred Holliday, Chairman said:
'I am delighted to report to shareholders an increase of 39% in the profit
before tax, goodwill and an exceptional item for the first half of the current
year. We have now doubled the amount under discretionary management in five
years after adjusting for market movements and this has served to improve the
quality of our earnings. Whilst the short term outlook is always difficult to
forecast, the second half of the year has started well. '
For further information
John Hall, Chief Executive
Brewin Dolphin 020 7248 4400
Toby Mountford/Anthony Kennaway
Citigate Dewe Rogerson 020 7638 9571
CHAIRMAN'S STATEMENT
It is with pleasure that I report to shareholders an increase of 39% in the
profit before tax, goodwill and an exceptional item for the first half of the
current year. This has been achieved during a period of relatively stable
markets, which are a good background for the investment industry. The value of
the funds under our discretionary management has risen to £6bn. We have now
doubled the amount under discretionary management in five years after adjusting
for market movements. The results reflect the hard work that has been undertaken
over the past five years to improve the quality of your Company's earnings.
The first interim dividend of 2p per share (2004: 1.5p) was declared at our AGM
in February and paid on 6th April 2005. As last year, the Board will consider
the payment of a second interim dividend in September 2005 which would be paid
towards the end of October 2005.
As announced in December 2004 we made an ex gratia contribution of £5m to the
fund that was established for the benefit of investors in certain Zero Dividend
Preference Shares of the split capital investment trusts. After deducting this
exceptional item and goodwill amortisation, the profit before tax was
£5.6million (2004 £6.5million).
An encouraging feature of the last few months has been the number of individual
investment managers and teams who have approached us, attracted by our
investment philosophy and the truly individual service we give our clients. I
would like to welcome those new executives who have either just joined us or are
in the process of doing so, particularly those in Belfast, where we have
recently established a new branch, also teams in London, Birmingham and
Leicester.
It is with this positive record that I would like to inform you of my decision
to stand down as your Chairman from today in favour of my co-Director Jamie
Matheson (51) who will be Executive Chairman. He currently heads our corporate
broking and institutional division, an area in which he will retain an active
involvement. Jamie joined the company in 1996 and the Board in 2002. He has
been in broking all his working life, is thoroughly imbued with the ethos of the
company and carries the unanimous support and confidence of the Board and all
his colleagues. Jamie and his fellow Directors make a strong team.
For myself, I joined the company in the heady days of the dot-com boom and have
since seen many changes. I took over the chairmanship following the market
crash and the trauma of 11th September 2001. Your Company successfully
weathered that period and is in a strong financial position and I am delighted
that I am now able to pass over the Chairmanship with the Company in good heart.
I will remain a Director until the end of the current financial year.
Whilst the short term outlook is always difficult to forecast, the second half
of the year has started well. Our discretionary portfolio management enables us
to look after clients requirements so much more efficiently whilst still
providing a highly personalised service. This together with the expansion of our
Wealth Management Service and the development of our financial planning arm,
will I am sure take the group from strength to strength.
INDEPENDENT REVIEW REPORT TO BREWIN DOLPHIN HOLDINGS PLC
Introduction
We have been instructed by the company to review the financial information for
the 26 weeks ended 25 March 2005, which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement and related notes 1 to 6. We have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 26 weeks ended
25 March 2005.
Deloitte & Touche LLP
Chartered Accountants
London
25 May 2005
Interim Consolidated Profit Statement
for the 26 weeks to 25 March 2005 (2004 26 weeks)
Notes 26 weeks 26 weeks 52 weeks
to to to
25 March 26 March 24 September
2005 2004 2004
£000's £000's £000's
Turnover 64,496 54,773 113,007
Other operating income 3,828 4,146 8,397
Total Income 1 68,324 58,919 121,404
Staff costs (35,235) (29,034) (62,252)
Other operating costs (29,525) (24,593) (50,984)
(64,760) (53,627) (113,236)
OPERATING PROFIT 3,564 5,292 8,168
Other interest receivable and similar income 1,998 1,264 3,148
Interest payable and similar charges (6) (22) (42)
PROFIT ON ORDINARY ACTIVITIES BEFORE GOODWILL
AMORTISATION AND EXCEPTIONAL ITEM 12,361 8,879 16,113
Exceptional item 2 (4,838) - -
Goodwill amortisation (1,967) (2,345) (4,839)
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 5,556 6,534 11,274
Tax on profit on ordinary activities (2,210) (2,588) (4,510)
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 3 3,346 3,946 6,764
Dividends 4 (3,927) (2,932) (6,843)
(581) 1,014 (79)
EARNINGS PER SHARE
Basic 1.7p 2.0p 3.5p
Diluted 1.7p 2.0p 3.4p
Excluding goodwill amortisation and exceptional item
Basic 4.3p 3.1p 5.7p
Diluted 4.2p 3.0p 5.6p
000's 000's 000's
Average number of shares in issue 196,027 193,292 194,418
Average number of shares in issue - fully diluted 202,290 198,923 199,958
CONSOLIDATED BALANCE SHEET AS AT 25 MARCH 2005
Notes as at as at as at
25 March 26 March 24 September
2005 2004 2004
£000's £000's £000's
Fixed Assets
Intangible assets 37,107 38,315 38,589
Tangible assets 7,216 7,961 7,208
Investments 7,500 431 7,500
51,823 46,707 53,297
Current Assets
Investments 1,057 263 298
Debtors 295,377 201,891 200,374
Cash at bank and in hand 40,117 36,547 50,701
336,551 238,701 251,373
Creditors: amounts falling due within one year (303,638) (206,410) (219,424)
Net Current Assets 32,913 32,291 31,949
Total assets less current liabilities 84,736 78,998 85,246
Provision for liabilities and charges - (2,355) -
Shareholders' funds 5 84,736 76,643 85,246
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 26 WEEKS TO 25 MARCH 2005 (2004 26 WEEKS)
26 weeks 26 weeks 52 weeks
to 25 to 26 March to 24 September
March
2005 2004 2004
£000's £000's £000's
Cash (outflow)/inflow from operating activities (4,086) 13,311 32,207
Return on investment and servicing of finance 1,992 1,242 3,106
Taxation (3,040) (1,286) (4,402)
Capital expenditure (2,205) (1,127) (2,600)
Acquisitions (707) (298) (445)
Equity dividends paid (3,910) (1,913) (4,846)
CASH(OUTFLOW)/ INFLOW BEFORE THE MANAGEMENT
OF LIQUID RESOURCES AND FINANCING (11,956) 9,929 23,020
Financing 137 941 949
(DECREASE)/INCREASE IN CASH IN THE PERIOD (11,819) 10,870 23,969
Notes to the cash flow statement
RECONCILIATION OF OPERATING PROFIT TO
OPERATING CASH FLOW
Operating profit 3,564 5,292 8,168
Depreciation and amortisation 4,320 4,561 9,281
Increase/(decrease) in provisions - 80 (1,819)
Movement on other current assets (11,970) 3,378 16,577
Net cash (outflow)/inflow from operating activities (4,086) 13,311 32,207
ANALYSIS OF NET FUNDS
25 March 24 September
2005
Cash flow 2004
£000's £000's £000's
Group's cash 28,634 (10,348) 38,982
Group's overdraft (2,293) (1,235) (1,058)
Group's net funds 26,341 (11,583) 37,924
Client settlement cash 11,483 (236) 11,719
Net funds 37,824 (11,819) 49,643
Notes
1.Total income and operating profit before goodwill
amortisation and exceptional item
26 weeks 26 weeks 52 weeks
to to to
25 March 26 March 24 September
2005 2004 2004
£000's £000's £000's
Total income
Discretionary portfolio management 29,641 24,514 52,593
Advisory portfolio management 29,482 26,471 49,523
Stocktrade (execution only) 3,067 3,331 6,373
Corporate finance and institutional 6,134 4,603 12,915
68,324 58,919 121,404
Operating profit before goodwill amortisation and
exceptional item
Discretionary portfolio management 4,349 3,200 5,477
Advisory portfolio management 4,326 3,230 5,090
Stocktrade (execution only) 205 329 414
Corporate finance and institutional 1,489 878 2,026
10,369 7,637 13,007
2. Exceptional item - Split capital trusts
In December 2004 the Group made a £5m ex gratia contribution to a fund managed by Fund Distribution Limited, set up
under the auspices of the Financial Services Authority for certain investors who have lost money in certain Zero
Dividend Preference Shares. The charge for the period represents this payment, less recoveries, plus directly
attributable costs.
The Directors believe that, having carefully examined all claims received to date, no further provision for split
capital liabilities is required. If there prove to be further liabilities, the Directors believe that these will be
fully covered by insurance.
The Directors are currently in discussion with the Group's insurers in respect of claims for costs already incurred
and expensed regarding split capital trusts. An estimate of the potential favourable financial effect is not given
as the Directors consider that any such disclosure would seriously prejudice their negotiations with insurers.
26 weeks 26 weeks 52 weeks
to to to
25 March 26 March 24 September
2005 2004 2004
£000's £000's £000's
3. Attributable earnings
Basic profit for the period and attributable earnings 3,346 3,946 6,764
Goodwill amortisation 1,967 2,345 4839
less taxation (266) (251) (498)
Exceptional item 4,838 - -
less taxation (1,451) - -
Adjusted attributable earnings 8,434 6,040 11,105
4. Dividend
First interim dividend, paid 6 April 2005, 2.0p per
share (2004: 1.5p).
3,927 2,932 6843
5. Movement in shareholders' funds
Other Share Total
capital
reserves and premium
including
shares to be
issued
£000's £000's £000's
Balance at 24 September 2004 810 84,436 85,246
Reduction in shares to be issued - (66) (66)
Issue of shares - 137 137
Profit for the period 3,346 - 3,346
Dividend (3,927) - (3,927)
Balance at 25 March 2005 229 84,507 84,736
6. The interim accounts, which are unaudited, have been prepared on the basis of the accounting policies set out in
the Annual Report 2004. The figures shown for the full year ended 24 September 2004 represent an abridged version of
the audited financial statements of Brewin Dolphin Holdings PLC for that year, which have been filed with the
Register of Companies and on which the auditors have given an unqualified report which did not contain statements
under section 237(2) or (3) of the Companies Act 1985. The financial information contained in this interim report
does not constitute the Group's statutory accounts within the meaning of section 240 of the Companies Act 1985. A
copy of this statement is available at the Company's registered office at 5 Giltspur Street, London EC1A 9BD and a
copy will be posted to all shareholders.
Funds at 25 at 24
March September
2005 2004
£ Billion £ Billion
In Group's nominee or sponsored member 5.8 5.2
stock not held in Group's nominee 0.2 0.4
Discretionary funds under management 6.0 5.6
In Group's nominee or sponsored member 6.1 5.8
stock not held in Group's nominee 3.1 3.5
Advisory funds under management 9.2 9.3
MANAGED FUNDS 15.2 14.9
stock not held in Group's nominee 2.0 1.3
Advisory funds under management 0.3 0.7
Execution only 2.3 2.0
Total 17.5 16.9
This information is provided by RNS
The company news service from the London Stock Exchange