Brewin Dolphin Holdings PLC
29 May 2003
29 May 2003
BREWIN DOLPHIN HOLDINGS PLC
INTERIM RESULTS FOR THE 26 WEEKS TO 28 MARCH 2003
Highlights
• Total income £46m (2002:£55m) a fall of 16%. The FTSE 100 averaged 3800 during
our first half against 5200 for the same period last year, a fall of 27%.
• Profit, before tax, goodwill amortisation and exceptional items of £1.8m
(2002: £7m)
• After goodwill amortisation and exceptional items there was a loss of £0.6m
(2002 profit £6m)
• First interim dividend of 1p per share (2002: 2p)
• Funds under our discretionary management grown by £300m to £4.5bn (September
2002: £4.2bn). Total funds under management of £13.5bn
Sir Fred Holliday, Chairman said:
'Despite the adverse market over the last six months, I am glad to be able to
report that funds under our discretionary management have grown by £300m to
£4.5bn. Advisory funds were £9bn giving total funds under management of
£13.5bn. The Group has shown its resilience through far worse conditions than
most of us can remember and is well placed to benefit from a stabilisation of
markets.'
For further information
John Hall
Brewin Dolphin 020 7248 4400
Sarah Gestetner/Anthony Kennaway
Citigate Dewe Rogerson 020 7638 9571
CHAIRMAN'S STATEMENT
During the first half of our current financial year, the FTSE 100 averaged 3800,
against 5200 for the same period last year, representing a fall of 27%. In
comparison our total income for the first half this year was £46m against £55m
last year, a reduction of 16%. Profits before tax, goodwill amortisation and
exceptional items were £1.8m (2002: £7m). After goodwill amortisation and
exceptional items there was a loss of £0.6m (2002 profit £6m).
The first interim dividend of 1p per share (2002: 2p) was paid on 7 April 2003.
The Board will consider in August 2003 the payment of the second interim
dividend.
Since reporting to you in November we have continued to monitor closely the
group's position in respect of split capital trusts. The number of claims, on a
month-by- month basis, received by the group has declined significantly. A small
extra provision of £190,000 for the costs of dealing with claims has been made.
Despite the adverse market over the last six months, I am glad to be able to
report that funds under our discretionary management have grown by £300m to
£4.5bn. Advisory funds were £9bn giving total funds under management of £13.5bn.
We continue to keep our costs under constant review. These are down £5m (9%) in
the first half and would have been lower were it not for the fact that the Group
is still attracting new teams that have joined us with their clients. Following
the end of the tax year we have taken further measures to reduce costs and as a
result it is hoped that annualised cost savings approaching £6m will be made.
These savings will have a beneficial effect next year rather than in the second
half of the current year as there are always costs associated with such
measures.
We have seen an encouraging rally in markets led by the USA and the UK in recent
weeks. We are hopeful that they will form a base around current levels from
which they can move forward. The Group has shown its resilience through far
worse conditions than most of us can remember and is well placed to benefit from
a stabilisation of markets.
Sir Fred Holliday
29 May 2003
INDEPENDENT REVIEW REPORT TO BREWIN DOLPHIN HOLDINGS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 28 March 2003 which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement and related notes 1 to 7. 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 should be 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 six months
ended 28 March 2003.
Deloitte & Touche
Chartered Accountants
London
29 May 2003
Unaudited interim consolidated profit statement
for the 26 weeks to 28 March 2003 (2002 26 weeks)
Notes 26 weeks 26 weeks 52 weeks
to to to
28 March 31 March 27 September
2003 2002 2002
£'000s £'000s £'000s
Turnover 41,917 51,472 99,056
Other operating income 4,052 3,527 6,439
45,969 54,999 105,495
Staff costs 1 (24,984) (27,516) (53,029)
Other operating costs
operating costs (19,987) (21,413) (43,792)
goodwill amortisation (2,196) (2,000) (3,864)
exceptional provisions (190) (1,118) (2,500)
(22,373) (24,531) (50,156)
(47,357) (52,047) (103,185)
OPERATING (LOSS)/PROFIT (1,388) 2,952 2,310
Profit on disposal of fixed assets 2 - 2,206 2,206
Other interest receivable and similar income 812 989 1,999
Interest payable and similar charges (20) (81) (124)
PROFIT ON ORDINARY ACTIVITIES BEFORE GOODWILL 1,790 6,978 10,549
AMORTISATION AND EXCEPTIONAL ITEMS
Goodwill amortisation (2,196) (2,000) (3,864)
Profit on disposal of fixed assets less (190) 1,088 (294)
exceptional provisions
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION (596) 6,066 6,391
Tax on (loss)/profit on ordinary activities (497) (2,404) (2,626)
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 3 (1,093) 3,662 3,765
Dividends 4 (1,911) (3,688) (6,544)
(3,004) (26) (2,779)
EARNINGS PER SHARE
Basic (0.6)p 2.0p 2.0p
Diluted (0.6)p 1.9p 1.9p
Excluding goodwill amortisation and
exceptional items net
Basic 3 0.6p 2.6p 4.0p
Diluted 3 0.6p 2.5p 3.8p
000's 000's 000's
Average number of shares in issue 191,008 184,367 187,500
Average number of shares in issue - fully 194,855 196,332 195,766
diluted
CONSOLIDATED BALANCE SHEET AS AT 28 MARCH 2003
Notes as at as at as at
28 March 31 March 27 September
2003 2002 2002
£'000s £'000s £'000s
FIXED ASSETS
Intangible assets 42,122 49,755 43,323
Tangible assets 11,548 14,194 14,017
Investments 431 431 431
54,101 64,380 57,771
CURRENT ASSETS
Investments 501 565 494
Debtors 169,160 230,298 159,169
Cash at bank and in hand 25,903 47,169 33,162
195,564 278,032 192,825
CREDITORS: amounts falling due within one year (171,154) (250,771) (167,682)
NET CURRENT ASSETS 24,410 27,261 25,143
TOTAL ASSETS LESS CURRENT LIABILITIES 78,511 91,641 82,914
PROVISIONS FOR LIABILITIES AND CHARGES 5 (2,533) (1,248) (3,985)
SHAREHOLDERS' FUNDS 6 75,978 90,393 78,929
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 26 WEEKS TO THE 28 MARCH 2003 (2002 26 WEEKS)
26 weeks 26 weeks 52 weeks
to to to
28 March 31 March 27 September
2003 2002 2002
£'000s £'000s £'000s
Cash (outflow)/inflow from operating activities (1,544) 18,657 19,929
Return on investment and servicing of finance 792 908 1,875
Taxation (1,438) (2,922) (6,657)
Capital expenditure (706) (2,972) (5,791)
Purchase of fixed asset investments - - (161)
Acquisitions (951) (7,245) (11,718)
Equity dividends paid (2,860) (2,756) (6,440)
CASH(OUTFLOW)/ INFLOW BEFORE THE MANAGEMENT OF LIQUID (6,707) 3,670 (8,963)
RESOURCES AND FINANCING
Financing 9 152 242
(DECREASE)/INCREASE IN CASH IN THE PERIOD (6,698) 3,822 (8,721)
Notes to the cash flow statement
RECONCILIATION OF OPERATING (LOSS)/PROFIT TO OPERATING CASH
FLOW
Operating (loss)/profit (1,388) 2,952 2,310
Depreciation and amortisation 5,371 4,776 9,635
Disposal of the Stock Exchange shares - 8,290 8,290
(Decrease)/increase in provisions (1,050) - 2,500
Movement on other current assets (4,477) 2,639 (2,806)
Net cash (outflow)/inflow from operating activities (1,544) 18,657 19,929
ANALYSIS OF NET FUNDS
2003 Cash flow 2002
£000's £000's £000's
Group's cash 8,848 (11,769) 20,617
Overdrafts (580) 561 (1,141)
Group's net funds 8,268 (11,208) 19,476
Client settlement cash 17,055 4,510 12,545
Net cash 25,323 (6,698) 32,021
Notes 26 weeks 26 weeks 52 weeks
to to to
28 March 31 March 27 September
2003 2002 2002
£000's £000's £000's
1. Included in staff costs is profit share of 2,437 4,871 7,738
2. Profit on disposal of fixed assets
Profit on sale of the London Stock Exchange shares - 2,206 2,206
3. Attributable earnings
Basic (loss)/profit for the period and attributable (1,093) 3,662 3,765
earnings
Goodwill amortisation 2,196 2,000 3,864
less tax on goodwill amortisation (163) (87) (346)
exceptional items 190 (1,088) 294
less tax on exceptional items (57) 326 (88)
Adjusted attributable earnings 1,073 4,813 7,489
4. Dividend
First interim dividend, paid 7 April 2003, 1p per share 1,911 3,688 6,544
(2002 2p).
5. Provisions for liabilities and charges
Provision for Deferred Total
split capital taxation
trust
liabilities
£'000s £'000s £'000s
Balance at 28 September 2002 2,500 1,485 3,985
Charge for the period 190 (402) (212)
Utilised during the period (1,240) (1,240)
-
Balance at 28 March 2003 1,450 1,083 2,533
6. Movement in shareholders' funds
Other reserves Share capital Shares to Total
and premium be issued
£000's £000's £000's £000's
Balance at 28 September 2002 (3,946) 79,875 3,000 78,929
Issue of shares - 53 - 53
Loss for the period (1,093) - - (1,093)
Dividend (1,911) - - (1,911)
Balance at 31 March 2002 (6,950) 79,928 3,000 75,978
7. The interim accounts, which are unaudited, have been prepared on the basis
of the accounting policies set out in the Annual Report 2002. The figures shown
for the full year ended 27 September 2002 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 the Company's registered office at 5 Giltspur Street, London EC1A
9BD and a copy will be posted to all shareholders.
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