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Brewin Dolphin Hldgs (BRW)

  Print          Annual reports

Tuesday 04 December, 2001

Brewin Dolphin Hldgs

Final Results

Brewin Dolphin Holdings PLC
4 December 2001

4TH DECEMBER 2001

              BREWIN DOLPHIN HOLDINGS PLC - PRELIMINARY RESULTS

                      FULL YEAR ENDED 30 SEPTEMBER 2001

Brewin Dolphin Holdings, the largest independent portfolio manager and
stockbroker in the UK, today announces preliminary results for the 52 weeks
ended 30 September 2001.

Highlights:

  * Total income £117 million (2000: £126 million)

  * Pre-tax profit before goodwill amortisation of £17.5 million (2000: £
    25.1 million)

  * Earnings per share 6.1p (2000: 10.0p)*

  * Increased total dividend to 3.5p (2000: 3.25p)

  * £16.5 billion total funds currently under management (2000: £17.0
    billion) of which £4.6 billion is on a discretionary basis (2000: £4.5
    billion)

  * Continuing to attract new clients and quality teams of portfolio
    managers



Sir David Rowe-Ham, Chairman said:

'Much has occurred during the past 12 months which has affected the progress
and prosperity of the financial sector and the savings industry. Against this
background I am pleased to report pre-tax profits of £17.5 million*, an
increased total dividend to 3.5p and sustained growth in our client base. We
have structured our business to continue to operate profitably in current
conditions. The strategy to grow discretionary and fee based business will
underpin the quality of our earnings whilst allowing us to take full benefit
of the market upturn when it occurs.'



* Figures quoted prior to goodwill amortisation

ENQUIRIES

Brewin Dolphin

John Hall                     Until 2pm 0207 638 9571

                               Post 2pm 0207 248 4400

Citigate Dewe Rogerson                  0207 638 9571

Patrick Donovan

Sarah Gestetner



CHAIRMAN'S STATEMENT

Much has occurred during the past 12 months which has affected the progress
and prosperity of the financial sector and the savings industry. Against this
background I am pleased to report pre-tax profits of £17.5 million, an
increase of 8% in total dividend to 3.5p and sustained growth in our client
base.

Our total income declined by 7% to £117 million, with profit before tax and
goodwill amortisation for the 52 weeks ended September 2001 declining by 30
per cent to £17.5 million. Fully diluted earnings per share on the same basis
were 6.1p, 39% lower. Total funds under management are currently £16.5
billion, of which £4.6 billion are on a discretionary basis. The 3% net fall
in funds under management from last year should be compared with a fall in the
FTSE All Share Index of 16%. Over the past 5 years total funds under
management have increased by 100%.

Organic growth within the Group continues with Brewin Dolphin operating from
32 offices across the United Kingdom. Brewin Dolphin has been built into a
major brand. During the year we have added 8,000 new clients and were joined
by 5 new investment management teams. We continue to develop our institutional
and corporate finance business and currently advise 153 smaller and medium
sized quoted companies and investment trusts in the UK.

I thank my colleagues most warmly for their efforts and achievements on behalf
of the firm and its clients in extremely testing market conditions.

The significantly expanded scope of the FSA's regulatory powers and its many
new and immediate requirements have represented a major challenge and cost to
the Savings Industry. These are added costs that will ultimately be borne by
the consumer, investing public and shareholding base alike. Costs of
regulation within our own business are running some 75% higher than twelve
months ago. These increases will have a disproportionate effect on the smaller
participants in our sector and must lead to further consolidation.

After a period of severe volatility, markets appear to have stabilised albeit
at lower levels than had been predicted a year ago. It is difficult to say
when full confidence will return but we have structured our business to
continue to operate profitably in current conditions. The strategy to grow
discretionary and fee based business will underpin the quality of our earnings
whilst allowing us to take full benefit of the market upturn when it occurs.
At this stage it is too early to predict on the year ahead, however Brewin
Dolphin with its many strengths views the future with confidence.

Sir David Rowe-Ham

4 December 2001



CHIEF EXECUTIVE'S REPORT

OVERVIEW

The last 12 months have been an extremely volatile period for markets with
prices tending downward for much of the time. After a good if brief start to
the year, forecasts of imminent recession in the United States and the
collapse of the TMT sector throughout the spring, were followed by a quiet
summer and ended with the tragic events on 11th September.

Against this background I am pleased to report to shareholders that the Group
traded profitably in each quarter. This was largely due to the quality of our
staff and breadth and depth of our services. In making a direct comparison
with the results for 2000, one must bear in mind the record and unsustainable
market volumes in that year.

As reported in the year ended 30 September 2001, total income was £117
million, a decrease of just 7%. However, included in this figure is a full
year's contribution from Hill Osborne together with other small acquisitions,
so on a like for like basis the reduction would be 16%. Profit before tax but
excluding goodwill amortisation, was £17.5 million, against £25.1 million last
year, a decrease of 30%. Earnings per share calculated on the same basis, were
6.1p against 10.0p, which represents a decrease of 39%. Goodwill amortisation
this year amounted to £2.8 million.

During the year we continued our practice of making two dividend payments, in
April and October, totalling 3.5p per share against the equivalent of 3.25p
the previous year. We intend to announce the proposed interim payment for
April 2002, at our AGM on the 27th February 2002.

Total income can be broken down as follows:


                                                                   2001    2000
                                                                     £m      £m

Portfolio management and stockbroking
   - Discretionary portfolio management                            34.5    35.2
   - Advisory portfolio management                                 59.9    59.1
Stocktrade                                                          9.5    12.2
Corporate finance and institutional broking                        13.2    19.5


Organic growth remains central to the Group's business development. In
addition we are continuing to hold discussions with a number of external
portfolio managers and their teams with a view to them joining the company and
do not discount the possibility of opening further branches. Hill Osborne, our
last significant acquisition which completed in August 2000, is now
successfully integrated within the Group, making a good contribution to
earnings over the past twelve months as did the new branch in Taunton which
only opened in October 2000. During the year, five new teams joined us with a
further team joining us in Glasgow since the year end.



PORTFOLIO MANAGEMENT AND STOCKBROKING

We have further developed the Brewin Dolphin brand, which is now becoming
widely known as the largest independent portfolio manager in the United
Kingdom both by number of clients and funds under management. During the year,
we gained approximately 8,000 new portfolio clients. Total funds under
management at the end of November 2001 were £16.5 billion, of which £4.6
billion were on a fully discretionary basis. Within these figures PEPs and
ISAs accounted for £1.3 billion.

We have an extremely loyal client base, which continues to grow at an average
of over 150 per week. We are broadening the scope of the financial services
division to provide further services to our clients. In the last fiscal year,
we attracted a record £115 million of new money in to ISAs.

New services have been introduced to enable clients and their financial
advisers to access portfolios online and development of our online capability
has made substantial progress during the year. The ability to provide online
services has become a key marketing strength especially to personal financial
advisers and solicitors who introduce new clients to us. Approximately one
third of our new business comes to us from referrals of this nature.

Brewin Dolphin continues to attract quality investment managers and advisers.
During the year we significantly expanded our Birmingham office where two new
teams joined us. We also acquired additional teams in London, Leeds and
Manchester. Since the year end a team has joined the Group in Glasgow. We are
delighted to welcome all our new colleagues and look forward to their
contribution in the coming years.

Having increased our resources to handle last year's exceptional market
volumes, we have implemented a number of cost reduction and rationalisation
measures. A number of system improvements have also been implemented. This has
enhanced overall operating efficiency and should result in annual cost savings
of £6 million. The drive to reduce costs and improve efficiency continues but
in no way will we impair our ability to capitalise upon the market recovery
whenever it may occur.

STOCKTRADE

Following the success of measures taken as early as January to counter the
downturn in on-line and execution only trading volumes, Stocktrade achieved
profitability at an operational level in the second half of the year which is
a remarkable achievement given the market conditions.

Stocktrade maintains its excellent reputation and ability to attract clients.
During the year Stocktrade provided employee share trading services (AESOPs)
to 21 FTSE 100 companies. Twelve leading fund managers have adopted Stocktrade
for share exchanges, including Henderson Global Investors, Scottish Widows and
JPMorgan Fleming Asset Management.

CORPORATE FINANCE AND INSTITUTIONAL BROKING

Our corporate finance and broking department has had a strong year raising
over £270 million total equity. We also sponsored several VCT flotations which
raised £94 million in total. This business operates from offices in
Birmingham, Edinburgh, Glasgow, Leeds and Manchester and provides a full
corporate broking service in conjunction with the institutional sales and
research teams based in Glasgow and Newcastle. Brewin Dolphin is one of the
leading smaller companies specialists in the United Kingdom and advises 153
quoted companies. By combining corporate finance, institutional sales and
research skills we are able to provide a seamless, comprehensive service to our 
clients.

Since its inception, we have accumulated considerable experience in the AIM
market, which was designed for young and smaller companies. We are actively
involved in the campaign against the proposed EU Prospectus Directive which we
believe would add significantly to costs for these smaller quoted companies if
implemented.

Overall it has been a difficult period during which to manage portfolios and
advise our clients. The rate at which new clients and indeed client executives
have been joining us is very heartening but most of all it is the great
loyalty and support of our existing clients that is most encouraging and I do
thank them. Also my thanks and appreciation goes all our staff for their hard
work over the year.

John Hall

4th December 2001

CONSOLIDATED PROFIT AND LOSS ACCOUNT

FOR THE 52 WEEKS ENDED 30 SEPTEMBER 2001 (2000 53 WEEKS TO 30 SEPTEMBER)
                             Note                  2001                    2000
                                               52 Weeks                53 Weeks
                                       Continuing operations         Continuing
                                           acquisitions      Total   operations
                                      £000's     £000's     £000's       £000's
Turnover                             109,652      1,939    111,591      122,083
Other operating income          1      5,551         25      5,576        3,893
TOTAL INCOME                    2    115,203      1,964    117,167      125,976
Staff costs                     3   (54,625)      (774)   (55,399)     (55,439)
Other operating costs               (49,274)      (739)   (50,013)     (49,609)
                                   (103,899)    (1,513)  (105,412)    (105,048)
OPERATING PROFIT                      11,304        451     11,755       20,928
Other interest receivable                                    3,269        3,888
and similar income
Interest payable and similar                                 (298)        (607)
charges
Profit on ordinary
activities before
Goodwill amortisation                                       17,501       25,137
Goodwill amortisation                                      (2,775)        (928)
PROFIT ON ORDINARY
ACTIVITIES
          BEFORE TAXATION       2                           14,726       24,209
Tax on profit on ordinary       4                          (5,599)      (7,411)
activities
PROFIT ON ORDINARY
ACTIVITIES
          AFTER TAXATION                                     9,127       16,798
Equity dividends                5                          (6,354)      (5,573)
RETAINED PROFIT FOR THE                                      2,773       11,225
PERIOD
EARNINGS PER SHARE
          Basic                 6                              5.0 p      10.0p
          Diluted               6                              4.7 p       9.5p
Excluding goodwill
amortisation
          Basic                 6                              6.6 p      10.6p
          Diluted               6                              6.1 p      10.0p



CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

For the 52 week period ended 30 September 2001 (2000 53 week period ended 30
September)
                                                               £000's    £000's
Profit for the period                                           9,127    16,798
Revaluation of Stock Exchange Shares                              209     5,875
 Deferred tax on revaluation                                     (63)   (1,763)
Total recognised gains for the period                           9,273    20,910



CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2001
                                    Note 30 September              30 September

                                                 2001                      2000
                                               £000's                    £000's
FIXED ASSETS
Intangible assets                              51,840                    49,864
Tangible assets                                13,998                    11,335
Investments                                     6,354                     6,145
                                               72,192                    67,344
CURRENT ASSETS
Investments                                       649                       645
Debtors                                       165,035                   308,532
Cash at bank and in hand                       41,545                    52,345
                                              207,229                   361,522
CREDITORS: amounts falling due              (180,380)                 (334,677)
within one year
NET CURRENT ASSETS                             26,849                    26,845
TOTAL ASSETS LESS CURRENT                      99,041                    94,189
LIABILITIES
CREDITORS: amounts falling due                      -                   (1,038)
after more than one year
PROVISION FOR LIABILITIES AND CHARGES         (1,485)                   (2,628)
                                               97,556                    90,523
CAPITAL AND RESERVES
Called up share capital                         1,837                     1,790
Shares to be issued including                  24,757                    25,621
premium
Share premium account                          71,462                    67,826
Merger reserve                                  1,504                         -
Revaluation reserve                             4,259                     4,113
Profit and loss account                       (6,263)                   (8,827)
Equity shareholders' funds          7          97,556                    90,523





CONSOLIDATED CASH FLOW STATEMENT

FOR THE FIFTY TWO WEEKS ENDED 30 SEPTEMBER 2001

(2000 FIFTY THREE WEEKS TO 30 SEPTEMBER)
                                                               2001      2000
                                                           52 weeks  53 weeks
                                                             £000's    £000's
Cash flow from operating activities (see below)               7,151    25,452
Return on investments and servicing of finance                2,971     3,281
Taxation                                                    (6,243)   (6,295)
Capital expenditure                                         (7,609)   (5,902)
Acquisitions and disposals net                              (1,586)   (2,959)
Equity dividends paid                                       (5,836)   (4,908)
CASH (OUTFLOW)/ INFLOW BEFORE FINANCING                    (11,152)     8,669
Financing (see below)                                           698     (685)
(DECREASES)/INCREASE IN CASH IN THE PERIOD                 (10,454)     7,984
NOTES TO THE CASH FLOW STATEMENT
RECONCILIATION OF OPERATING PROFIT
TO OPERATING CASH FLOW
Operating profit                                             11,755    20,928
Depreciation and amortisation                                 7,625     4,319
Profit share paid in shares to be issued                          -       500
Loss on sale of fixed assets and lease finance                   96       193
Increase in investments                                         (4)     (242)
Decrease/(increase) in debtors                              143,497  (13,929)
(Decrease)/increase in trade creditors                    (150,819)       890
(Decrease)/increase in other creditors                      (4,999)    12,793
Net cash inflow from operating activities                     7,151    25,452
Financing
Issue of shares                                                 794        27
Repayment of finance leases                                    (96)     (712)
                                                                698     (685)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET FUNDS
(Decrease)/Increase in cash in the period                  (10,454)     7,984
Cash movement from change in lease financing                     96       234
Change in net funds resulting from cash flows              (10,358)     8,218
Client cash arising as part of acquisitions                       -     2,499
Net funds at start of period                                 51,100    40,383
Net funds at end of period                                   40,742    51,100
ANALYSIS OF NET FUNDS
                                                    2001  Cash flow      2000
                                                  £000's     £000's    £000's
Cash                                              41,545   (10,800)    52,345
Overdraft                                          (803)        346   (1,149)
Finance lease                                          -         96      (96)
                                                  40,742   (10,358)    51,100




NOTES
                                                 2001                      2000
1. OTHER OPERATING INCOME                    52 weeks                  53 weeks
                                               £000's                    £000's
 Interest receivable on clients' free money    29,605                    23,524
 Interest payable on clients' free money     (24,029)                  (19,631)
                                                5,576                     3,893


2. TOTAL INCOME AND PROFIT BEFORE TAX                 2001                 2000
                                                  52 weeks             53 weeks
                                         Total      Profit    Total      Profit
                                                    before               before
                                        income    taxation   income    taxation
                                        £000's      £000's   £000's      £000's
Discretionary portfolio management      34,514       6,473   35,216       7,159
Advisory portfolio management           59,894       5,012   59,069       7,884
Stocktrade                               9,518     (1,872)   12,195       (256)
Corporate finance and institutional     13,241       4,917   19,485       7,069
OPERATING PROFIT BEFORE GOODWILL                    14,530               21,856
AMORTISATION
Interest net                                         2,971                3,281
PROFIT BEFORE TAX AND GOODWILL                      17,501               25,137
AMORTISATION
Goodwill amortisation                              (2,775)                (928)
                                       117,167      14,726  125,976      24,209

In the 2000 financial statements the Group's institutional business was
included within advisory portfolio management and other. The Directors now
consider that the institutional business is more closely aligned to the
corporate finance business segment and have aggregated the institutional
business with the corporate finance business and restated the 2000
comparatives accordingly.
                                                                   2001    2000
3. EMPLOYEES                                                         52      53
                                                                  weeks   weeks
                                                                 £000's  £000's
The aggregate payroll costs were as follows:
Wages and salaries                                               47,548  47,289
Social security costs                                             3,101   2,823
Other pension costs                                               4,750   5,327
                                                                 55,399  55,439
The above figures include payments under staff bonus and profit   8,529  17,646
share schemes of :-

4. TAX ON PROFIT ON ORDINARY ACTIVITIES
United Kingdom corporation tax based on the taxable profit
for the period at 30% (2000 30%)
Current                                                        6,769      6,486
Prior year                                                      (51)      (162)
Deferred - UK only                                           (1,205)      1,098
Prior year deferred - UK only                                      -      (233)
Overseas tax                                                      86        222
                                                               5,599      7,411



5. DIVIDENDS
First interim dividend of 2p (2000 2p) paid 6 April 2001           3,598  3,335
Second interim dividend of 1.5p per share paid 1 October 2001      2,756  2,238
(2000 1.25p)
                                                                   6,354  5,573

In accordance with the Groups stated dividend policy there are two interim
dividends paid and no final dividend.

6. EARNINGS PER SHARE
                                                            2001       2000
                                                  52 week period   53 weeks
                                                              No         No
                                                           000's      000's
 Basic
 Weighted average number of shares in issue in           181,011    167,368
 the period
 Diluted
 Weighted average number of options outstanding            4,244      4,817
 for the period
 Estimated weighted average number of shares
 earned under
 deferred consideration arrangements                      10,102      4,970
 Diluted weighted average number of shares in            195,357    177,155
 issue in the period
                                                          £000's     £000's
 Basic profit for the period and attributable              9,127     16,798
 earnings
 Goodwill amortisation                                     2,775        928
 Adjusted basic profit for the period and                 11,902     17,726
 attributable earnings





7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
At 30 September 2000                              90,523                 27,235
Issue of shares in period                          2,403                 31,968
New shares to be issued created in period          2,000                 16,000
Estimated movement in
Value of shares to be issued                        (80)                  1,217
Prior period acquisitions                          (209)                (1,235)
Revaluation                                          146                  4,113
Profit for the period                              9,127                 16,798
Dividends                                        (6,354)                (5,573)
At 30 September 2001                              97,556                 90,523


8. The financial information in this press release does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985,
but is derived from the accounts. Statutory accounts for 2000 have been
delivered to the Register of Companies, and those for 2001 will be delivered
following the Company's Annual General Meeting. The auditors have reported on
those accounts; their reports were unqualified and did not contain statements
under section 237 (2) or (3) of the Companies Act 1985.
9. The Annual General Meeting will be held at 12 noon on 27 February 2002.



                                                                                
                    

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