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Brewin Dolphin Hldgs (BRW)

  Print          Annual reports

Wednesday 02 December, 2009

Brewin Dolphin Hldgs

Group Preliminary Results

RNS Number : 4303D
Brewin Dolphin Holdings PLC
02 December 2009
 

 







2 December 2009


Brewin Dolphin Holdings PLC


Group Preliminary Results


For the 52 weeks ended 27 September 2009

Highlights


Total income £212.3 million (2008: £206.5 million).

Discretionary funds £11.8 billion at 27 September 2009 (2008: £10.2 billion), an increase of 15.7% which compares to a fall of 0.1% in the FTSE 100 Share Index.

 

Profit excluding amortisation of intangible asset - client relationships and redundancy costs and before tax £32.1 million (2008: £36.8 million).

 

Profit before tax £21.9 million (2008: £32.0 million).

Earnings per share:


  • Basic earnings per share 7.4p (2008: 10.7p).


  • Diluted earnings per share 7.2p (2008: 10.3p).

Earnings per share excluding amortisation of intangible asset - client relationships and redundancy costs:


  • Basic earnings per share 10.8p (2008: 12.4p).


  • Diluted earnings per share 10.6p (2008: 11.9p).

The total dividend for the period is 7.1p per ordinary share (2008: 7.1p).

Proposed final dividend 3.55p per share (2008: 3.55p).

 

Declaration of Final Dividend


The Board is pleased to announce that we are proposing a final dividend of 3.55p, to be approved at the 2010 AGM and payable on 5 April 2010 to shareholders on the register at close of business on 12 March 2010, with an ex-dividend date of 10 March 2010.


Jamie Matheson, Executive Chairman said:


"Current trading continues to be satisfactory although we should not assume that the economic woes of this country and the rest of the world are completely behind us. Your Board remains confident about the future prospects of Brewin Dolphin."


For further information, please contact:


Brewin Dolphin Holdings PLC

Tel: 020 7248 4400

Jamie Matheson, Executive Chairman




Hudson Sandler


Andrew Hayes / Wendy Baker

Tel: 020 7796 4133



Executive Chairman's Statement

In a year which has seen financial markets across the globe go through perhaps the most difficult times in living memory, I am pleased to report that Brewin Dolphin has been able to sail a relatively steady course through some pretty rough seas. I believe this gives shareholders grounds for continued confidence in the fundamental strengths and resilience of the business. 


Total income for the year to 27 September 2009 was £212.3 million, 2.8% up on last year, against a fall in the FTSE 100 average level across each financial year of 21.6%.  Pre-tax profits excluding redundancy costs and amortisation of the intangible asset - client relationships were £32.1 million, 12.7% down on last year.  Pre-tax profits were £21.9 million. 


Investment Management

Our mainstream Investment Management business continued to make material progress, adding substantially to our funds under management.  

  

Investment Management is by far and away the largest part of your Group's activities and once again performed well in an extraordinarily turbulent year. Indeed it has been gratifying to note that the business has seen a material inflow of funds during the period reflecting a combination of our clients' confidence in our business and our ability to provide clear and straight forward long term investment strategies.  The division's income rose by 5.3% during the period and profits (excluding redundancy costs and amortisation of client relationships) by 3.1%. Total funds under management increased from £18.7bn to £20.5bn, a 9.6% increase with, most importantly, discretionary funds rising by 15.7%. During the same period the FTSE100 index fell by 0.1% and the FTSE APCIMS Private Investor Series Balanced Portfolio rose by 2.1%.


We have continued to benefit from the arrival of new Investment Managers and Financial Planners and I would anticipate this being a feature again in the coming year. We now have a network of forty offices throughout the UK providing good national coverage. While I should not rule out one or two further new openings, it is your Board's intention that the main thrust of future growth within the UK be centred on the existing offices as we leverage the network now in place. In parallel with this we continue to put special emphasis on the maintenance and development of our business support operations to improve further our efficiency and our client services.


Investment Banking

Despite operating in a very tough trading environment, our Investment Banking division importantly remained profitable, reflecting the flexibility of its business model.


A year ago the outlook for our Investment Banking division was somewhat uncertain but we remained confident that the short term impact would be containable. Having reported an operating loss of £0.8 million at the interim stage (excluding redundancy costs), the division has been able to end the year in the black. Trading activity and the level of enquiries that are being received suggest that the outlook for the current year is somewhat more encouraging.


Dividend

The Board is proposing a final dividend of 3.55p, to be approved at the 2010 AGM and payable on 5 April 2010.


Regulation

The events of the last two years mean that the role of regulation in the affairs of your Group will remain significant and it continues to be very much the policy of your Board to see that the Group fully meets the standards and requirements of modern day regulation. In this ever evolving environment it is important that your Board keeps the Group's level of capital adequacy under review.


Board Changes

Nick Hood, David McCorkell, Michael Williams and Jock Worsley will be standing for re-election at the AGM and I commend them to you.


Two Directors retired from the Board at the year end, Christopher Legge and Simon Still.  Simon Still joined the Group at the time of the acquisition of Wise Speke and the Board in 2001 as Chief Operating Officer. Simon was responsible for our business support operations.  This part of the Group is very often less visible than the client facing side, but its contribution to client service should not be underestimated. I would like to put on record the Board's appreciation of Simon's efforts in charge of this part of the Group.


Christopher Legge remains actively involved in managing clients affairs - albeit no longer every day of the week.  As a relative newcomer to the Group it is not easy for me to put into words adequately Christopher's contribution over nearly 50 years. He is very much one of the founding fathers of Brewin Dolphin and his passionate belief in behaving with the utmost integrity and looking after the best interests of clients is a fine legacy that he leaves us.  Christopher's contribution at Board level has been invaluable and he has never failed to deliver a reasonedalways valuable and not infrequently passionate point of view. I thank both these gentlemen for their contribution to the affairs of your Group.


Strategy and Re-branding

Brewin Dolphin's strategy remains to grow our business to the benefit of our shareholders by maintaining the quality and increasing the depth of service to our clients. Following our re-branding last year and the amalgamation of our divisions under the Brewin Dolphin name, we have this year sponsored a number of events which have raised significant sums for charity. The most notable of these was our sponsorship of Sir Ranulph Fiennes third and successful attempt to climb Everest which helped him reach his goal of raising a remarkable £3m for Marie Curie Cancer Care. 


Outlook

The performance for the year is the result of the hard work of Brewin Dolphin people and the continued support of our clients, for which we are extremely grateful. I believe the results achieved by your Group give justifiable cause for pride, particularly given the extraordinary circumstances of the last year.  As a firm we have always believed in the merits of long term prudent equity based investment and have never lost sight of the merits of dividend as a sound method of return to investors.  This approach has played no small part in allowing us to grow funds under management this year. I believe the debt culture, so prevalent in the last decade, is at last being seen for what it is, so its diminution continues to bode well for our Group.


Current trading continues to be satisfactory although we should not assume that the economic woes of this country and the rest of the world are completely behind us. Your Board remains confident about the future prospects of Brewin Dolphin. 


Jamie Matheson

1 December 2009



Business Review 


Investment Management Report

By D W McCorkell - Executive Director - Head of Investment Management


It is a pleasure to report a record year for the Investment Management Division in what has proved to be one of the most interesting years for global stock markets.


Investment Management's operating profits excluding redundancy costs and amortisation of client relationships, rose to £30.6 million from £29.7 million, an increase of 3.1%. Total income rose to £204.0 million, an increase of 5.3% over the 2008 figure of £193.7 million, an excellent performance considering market conditions during the year.



Indices and Values of Funds under Management ("FUM") 


 At

27 September

2009

 At

28 September

2008

 % Change 

Indices




FTSE APCIMS Private Investor Series Balanced Portfolio

 2,640 

 2,586 

2.1%

FTSE 100

 5,082 

 5,089 

-0.1%





Funds Under Management





 £ billion 

 £ billion 


Discretionary funds  

 11.8 

 10.2 

15.7%

Advisory funds  

8.7 

8.5 

2.4%





Total managed funds

 20.5 

 18.7 

9.6%


Total funds under Discretionary Management at the year end were £11.8 billion against £10.2 billion last year, a rise of 15.7%, which compares to a fall of 0.1% in the FTSE100 Share Index and a rise of 2.1% in the FTSE APCIMS Private Investors Services Balanced Portfolio Index. Funds under Advisory Management were £8.7 billion, a rise of 2.4% over the year, giving total funds under management of £20.5 billion, a rise of 9.6% overall. The figures include £127 million of new funds brought in by new teams who joined in the year. The teams who joined us in 2008 have introduced £1.3 billion of Discretionary funds and £0.7 billion of Advisory funds since they arrived. 



Financial performance


Total Income

2009

£ million

Operating

Profit*

2009

£ million 

Total Income

2008

£ million

Operating

Profit *

2008

£ million

Discretionary Portfolio Management

128.8

19.4

123.0

18.9

Advisory Portfolio Management

75.2

11.2

70.7

10.8


204.0

30.6

193.7

29.7

*  Excluding redundancy costs and amortisation of client relationships


Fees, interest and other recurring income has increased by 4% in the year, with commission income increasing by 7%. Recurring income is 54% (2008: 55%) of total income. The trend towards an increasing level of Discretionary Management continues but the exceptionally high level of activity seen during the year has resulted in this modest increase in the proportion of non-recurring income.



The Business


During the yearwe have added six new Investment Management teams to the Group. Four of these teams joined our offices in London, Teesside, Leeds and Guernsey. The largest team, consisting of four Divisional Directors and three staff joined us in Brighton where we have opened a new office. In January 2010, our Eastbourne office will relocate to join this new team in Brighton. The other new branch opening during the year was in Truro, where the total number of staff is six, including two Divisional Directors. In addition, we have relocated part of our business support operations from London and Leicester to new and much more efficient premises in Edinburgh.


Following the retirement of a number of Senior Investment Managers, we now have a total of 643 Client Executives and Investment Managers. We thank all of them for their contribution over many years and wish them a long and happy retirement. We have developed our Graduate Trainee Programme, with the largest ever number of Graduates starting the programme this September. All of last year's graduates completed the programme and have now joined teams around the Group.


Financial Planning continues to be an important area of our business. Economic uncertainty has resulted in many clients undertaking a full financial review with our Financial Planning teams and their usual Investment Managers.  We have 61 qualified Financial Planners across the Group, with clients of all branches having access to their advice. 


The Financial Services Authority ("FSA") will publish the Retail Distribution Review ("RDR") early next year and after a final period of consultation, it will be implemented at the end of 2012. The RDR will affect the way we do our business and will require Investment Managers to have a minimum level of qualifications and to enter our continual professional development programme. We have enhanced our training and competence systems so that all our Investment Managers meet these requirements.


We have continued to grow our Business Development Team which introduces Brewin Dolphin services to Independent Financial Advisors ("IFAs") and other Professional Intermediaries in the UK. In the period, this team has introduced £235 million of new FUM. Further enhancement to the services we provide for intermediaries and their clients, particularly in light of the RDR, will be introduced in 2010. 


Management of charities' assets is a growing part of our business. At the year end charitable FUM had risen to £1.5 billion from £1.3 billion in September 2008. A specialist Charity Investment Management Team now provides services throughout the UK. We have also seen a significant increase in our FUM in various 'tax wrappers' with £2.3 billion now in Offshore Bonds, SIPPs and other self invested pension schemes


We are delighted to report that we have won several awards this year, importantly, the Shares Magazine Award for Best Discretionary Stockbroker 2009.  At the Daily Telegraph Wealth Management Awards we were very proud that a senior member of our operations team won the Award for exceptional performance in Business Support and our Perspective newsletter the Best Market Newsletter category. 


We have developed our web presence and will improve it further to increase the variety and depth of our online services for clients and intermediaries. It is important for us to ensure that our basic online services are always stable and reliable prior to considering additional functionality. We are working to increase the online access and range of reports we provide for our clients.


The strength of our business model has been demonstrated throughout this difficult period. We have seen significant inflows of new business and clients often tell us how important it is to be able to talk to a real person whom they know and trust. I would like to thank all our Investment Managers and support staff for the enormous efforts they have made in looking after our clients so well during one of the most extraordinary years in stock market history. 



Investment Banking Report

By G Summers - Director of Brewin Dolphin Limited - Head of Investment Banking


The financial period under review was extremely challenging, with a further deterioration in conditions in capital markets around the world. The UK small and mid cap market place suffered more than most with a further significant drop in corporate activity and trading, as access to both debt and equity capital became severely constrained. 

However, it is pleasing to report despite these testing conditions that the Investment Banking team managed to come through the year making a small profit, maintaining its unbroken track record of profitability. Though it is still early days there are signs that capital markets have begun to recover. We are cautiously optimistic that this will be sustained.

The Investment Banking division has a team of sixty professionals specialising in six core sectors: Consumer; Healthcare; Industrials; IT; Resources and Support Services. Our Research, Sales and Trading team is well regarded in the City and team members enjoy independent recognition in surveys such as Extel and Starmine. Our Corporate Broking and Advisory team continues to offer innovative solutions and best advice to our corporate clients. 


We have recruited two more experienced analysts during the year and a new director in corporate finance to complement our existing teams.   We have appointed a new Head of Equities and a new Head of Corporate Finance.  

The business is firmly committed to our core values of diligence and integrity which together help us deliver a valued service to our clients. This approach has enabled us to come through the recent difficult markets with an enhanced reputation and should ensure that we continue to build on our very solid foundations, into the medium term and beyond.


Consolidated Income Statement

52 week period ended 27 September 2009



Note

52 weeks to

27 September 2009

(Restated)

52 weeks to

28 September 2008



£'000

£'000

Continuing operations




Revenue


187,241 

186,969 

Other operating income


25,071 

 19,526 

Total income

2 

212,312 

206,495 





Staff costs


(102,763)

(105,200)

Redundancy costs


(3,638)

 (634)

Amortisation of intangible assets - client relationships


(6,566)

(4,244)

Other operating costs


(78,873)

(70,607)

Operating expenses

 

(191,840)

(180,685)





Operating profit


20,472 

 25,810 

Finance income

3 

 2,435 

 7,142 

Finance costs

3 

 (968)

 (994)

Profit before tax

 

21,939 

 31,958 

Tax

4 

(6,404)

(9,939)

Profit attributable to equity shareholders of the parent from continuing operations

 

15,535 

 22,019 





Earnings per share








From continuing operations 




Basic

6 

7.4p

10.7p





Diluted

6 

7.2p

10.3p




Consolidated Statement of Recognised Income and Expense

52 week period ended 27 September 2009



52 weeks to

 27 September

 2009

(Restated)

 52 weeks to

28 September

2008


Note

£'000

£'000





Loss on revaluation of available-for-sale investments


(17)

(900)

Deferred tax credit on revaluation of available-for-sale investments


254 

Actuarial loss on defined benefit pension scheme


(9,556)

(4,375)

Deferred tax credit on actuarial loss on defined benefit pension scheme


2,676 

1,225 

Current tax credit on share-based payments


63 

568 

Deferred tax charge on share-based payments


(75)

(1,255)

Net expense recognised directly in equity

(6,905)

(4,483)

Profit for period

15,535 

22,019 

Total recognised income and expense for the period attributable to equity shareholders of the parent

8,630 

17,536 

Effects of change in accounting policy attributable to equity shareholders of the parent

1

-


(2,227)



8,630 

15,309 







Consolidated Balance Sheet

As at 27 September 2009



As at

27 September

2009

(Restated)

As at

28 September

2008


Note

£'000

£'000

ASSETS




Non-current assets




Intangible assets


89,605 

 85,685 

Property, plant and equipment


22,260 

 27,975 

Available-for-sale investments


10,609 

 10,626 

Other receivables


 2,269 

 2,098 

Deferred tax asset


852 

 

 

125,595 

126,384 

Current assets




Trading investments


644 

724 

Trade and other receivables


441,290 

283,404 

Cash and cash equivalents


69,271 

 60,546 

 

 

511,205 

344,674 

Total assets

 

636,800 

471,058 

LIABILITIES




Current liabilities




Bank overdrafts


 4,289 

 3,717 

Trade and other payables


468,619 

306,855 

Current tax liabilities


 1,715 

484 

Provisions


 1,871 

 2,068 

Shares to be issued including premium


 5,056 

 8,233 

 


481,550 

321,357 

Net current assets

 

29,655 

 23,317 

Non-current liabilities




Retirement benefit obligation


16,253 

 7,964 

Deferred tax liabilities


 1,938 

Deferred purchase consideration


 3,221 

 2,960 

Provisions


172 

Shares to be issued including premium


17,385 

 16,946 

 

 

37,031 

 29,808 

Total liabilities

 

518,581 

351,165 

Net assets

 

118,219 

119,893 

EQUITY




Called up share capital

7

 2,122 

 2,080 

Share premium account

7

94,140 

 90,145 

Revaluation reserve

7

 6,885 

 6,898 

Merger reserve

7

 4,562 

 4,562 

Profit and loss account

7

10,510 

 16,208 

Equity attributable to equity holders of the parent

7

118,219 

119,893 


 


Company Balance Sheet

As at 27 September 2009



As at 27 September 2009

As at 28 September 2008



£'000

£'000


Note



ASSETS




Non-current assets




Investment in subsidiaries


141,719 

141,052 

Other receivables


329 

430 

 


142,048 

141,482 

Current assets




Trade and other receivables


 3,739 

 7,708 

Cash and cash equivalents


291 

57 

 


 4,030 

 7,765 

Total assets

 

146,078 

149,247 





LIABILITIES




Current liabilities




Trade and other payables


 7,352 

 7,357 

Shares to be issued including premium


 5,056 

 8,233 

 


12,408 

 15,590 

Net current liabilities


(8,378)

(7,825)





Non-current liabilities




Shares to be issued including premium


17,385 

 16,946 

 


17,385 

 16,946 

Total liabilities


29,793 

 32,536 

Net assets


116,285 

116,711 





EQUITY




Called up share capital

7

 2,122 

 2,080 

Share premium account

7

94,140 

 90,145 

Merger reserve

7

 4,847 

 4,847 

Profit and loss account

7

15,176 

 19,639 

Equity attributable to equity holders

7

116,285 

116,711 








Consolidated Cash Flow Statement

52 week period ended 27 September 2009


  


52 weeks to 27 September 2009

(Restated)

52 weeks to 28 September 2008


 Note 

 £'000 

 £'000 

 Net cash inflow from operating activities 

8 

37,389 

 14,104 





 Cash flows from investing activities 




 Purchase of intangible assets - goodwill 


 (987)

 Purchase of intangible assets - client relationships 


(5,360)

(10,681)

 Purchase of intangible assets - software 


(5,088)

 Purchases of property, plant and equipment 


(4,443)

(15,746)

 Dividend received from available-for-sale investments 


352 

404 

 Net cash used in investing activities 

 

(15,526)

(26,023)





 Cash flows from financing activities 




 Dividends paid to equity shareholders 


(15,027)

(21,500)

 Proceeds on issue of shares 


 1,317 

 2,845 

 Net cash used in financing activities 

 

(13,710)

(18,655)





 Net increase/(decrease) in cash and cash equivalents  

 

 8,153 

(30,574)

 Cash and cash equivalents at the start of period 


56,829 

 87,403 

 Cash and cash equivalents at the end of period 

 

64,982 

 56,829 









Firm's cash 


43,118 

38,189 

Firm's overdraft


(4,289)

(3,717)

Firm's net cash


38,829 

34,472 

Client settlement cash


26,153 

22,357 

Net cash and cash equivalents


64,982 

56,829 





Cash and cash equivalents shown in current assets


69,271 

60,546 

Bank overdrafts


(4,289)

(3,717)

Net cash and cash equivalents


64,982 

56,829 





For the purposes of the cash flow statement, cash and cash equivalents include bank overdrafts.


Notes to the Financial Statements

1.

Change in accounting policy


After a long and constructive dialogue with the Financial Reporting Review Panel the Group has considered the additional clarification which the forthcoming standard IFRS 3 (2008) brings to the recognition of intangible assets and the various practices currently applied by other firms in the purchase of investment management businesses, and has retrospectively changed its accounting policy. Payments to acquire teams of investment managers, bringing with them funds under management, have been re-classified as the intangible asset - client relationships, rather than goodwill. Similarly intangible assets representing client relationships acquired as part of business combinations have been recognised separately to goodwill. The new accounting policy is considered preferable as it brings us into line with our peers and is more transparent.


This new accounting policy has been applied retrospectively from the date of the Group's transition to IFRS and the comparative figures for 2008 in these financial statements have been restated. 


Opening retained earnings as at 1 October 2007 have been reduced by £2.2m after deferred taxation which is the cumulative amount of the adjustment relating to periods prior to 2008.

 

The main changes to our financial statements are presented below:




2009

2009


2008

2008



Prior to change of accounting policy 

Following change of accounting policy


Previously reported

As restated



£'000

£'000


£'000

£'000








Profit before tax and amortisation


28,505 

28,505 


36,202 

36,202 

Amortisation of the intangible asset - client relationships


 - 


(6,566)


 - 


(4,244)

Profit before tax


28,505 

21,939 


36,202 

31,958 

Taxation


(8,242)

(6,404)


(11,127)

(9,939)

Profit after taxation


20,263 

15,535 


25,075 

22,019 






















Basic earning per share post amortisation


9.6p 

7.4p 


12.2p

10.7p

Fully diluted earning per share post amortisation


9.4p 

7.2


11.7p

 10.3p 










2009

2009


2008

2008



Prior to change of accounting policy 

Following change of accounting policy


Previously reported

As restated



£'000

£'000


£'000

£'000








Net assets


128,230 

118,219 


125,176 

119,893 








Intangible assets







Goodwill


99,095 

48,438 


93,023 

48,376 

Client relationships


 - 

36,753 


 - 

37,309 



99,095 

85,191 


93,023 

85,685 








Deferred tax asset / (liability)


(3,041)

852 


(3,993)

(1,938)



2.

Segmental information

For management purposes, the Group is divided into two business streams: Investment Management and Investment Banking. These form the basis for the primary segment information reported below. All operations are carried out in the United Kingdom and the Channel Islands. All segment income relates to external clients.

52 week period ended 27 September 2009 







Discretionary Portfolio Management 

 Advisory Portfolio Management 

 Total Investment Management 

 Investment Banking 

 Group 


 £'000 

 £'000 

 £'000 

 £'000 

 £'000 







 Total income 

 128,790 

75,225 

 204,015 

8,297 

 212,312 

 Operating profit before redundancy costs and amortisation of client relationships 

19,428 

11,173 

 30,601 

 75 

 30,676 

 Redundancy costs 



(3,393)

(245)

(3,638)

 Amortisation of client relationships 



(6,566)

-

(6,566)

 Operating profit 





 20,472 

 Finance income (net) 





 1,467 

 Profit before tax 





 21,939 







 Other Information 






 Capital expenditure 



 4,404 

 39 

 4,443 

 Depreciation 



 9,982 

 171 

 10,153 

 Amortisation of intangible asset - software 



 674 

 674 

 Share-based payments 



 652 

 34 

 686 







 Segment assets excluding current tax assets 



 567,683 

 69,117 

 636,800 

 Segment liabilities excluding current tax liabilities 


 447,749 

 69,117 

 516,866 






 52 week period ended 28 September 2008 (Restated) 






Discretionary Portfolio Management 

 Advisory Portfolio Management 

 Total Investment Management 

 Investment Banking 

 Group 


 £'000 

 £'000 

 £'000 

 £'000 

 £'000 







 Total income 

 122,975 

70,721 

 193,696 

12,799 

 206,495 

 Operating profit before redundancy costs and amortisation of client relationships 

18,845 

10,845 

 29,690 

 998 

 30,688 

 Redundancy costs 



(134)

(500)

(634)

 Amortisation of client relationships 



(4,244)

-

(4,244)

 Operating profit 





 25,810 

 Finance income (net) 





 6,148 

 Profit before tax 





 31,958 







 Other Information 






 Capital expenditure 



 15,147 

 599 

 15,746 

 Depreciation 



 8,459 

 126 

 8,585 

 Share-based payments 



 621 

 40 

 661 







 Segment assets excluding current tax assets 



 439,744 

 31,314 

 471,058 

 Segment liabilities excluding current tax liabilities 


 319,367 

 31,314 

 350,681 



3.

Finance income and finance costs



2009

2008


52 Weeks

52 Weeks


 £'000 

 £'000 

Finance income



Interest income on pension plan assets

 - 

 159 

Dividends from available-for-sale investments

 352 

 404 

Interest on bank deposits

2,083 

6,579 


2,435 

7,142 




Finance costs



Finance cost of deferred consideration

 509 

 981 

Interest expense on pension plan assets

 412 

 - 

Interest on bank overdrafts

47 

13 


 968 

 994 



4.

Taxation


2009

(Restated) 2008


52 Weeks

52 Weeks


 £'000 

 £'000 

United Kingdom



   Current tax

5,931 

5,955 

   Prior year

 667 

 192 

Overseas tax



   Current tax

 174 

 216 

Prior year

(246)


6,526 

6,368 

United Kingdom deferred tax 



Current year

 531 

3,836 

Prior year

(653)

(265)


6,404 

9,939 




United Kingdom corporation tax is calculated at 28% (2008: 29%) of the estimated assessable taxable profit for the period.




Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.




The charge for the year can be reconciled to the profit per the income statement as follows: 




Profit before tax

21,939 

31,958 

Tax at the UK corporation tax rate of 28% (2008: 29%)

6,143 

9,268 

Tax effect of expenses that are not deductible in determining taxable profit

 493 

 551 

Tax effect of prior year tax

 532 

 197 

Tax effect of prior year deferred tax

(653)

(265)

Tax effect of share-based payments

(196)

 162 

Tax effect of deferred tax timing differences

 (83)

(148)

Tax effect of leasehold property depreciation

 279 

 174 

Tax effect of prior year leasehold property allowances

(111)

 - 

Tax expense

6,404 

9,939 

Effective tax rate for the year

29%

31%


In addition to the amount charged to the income statement, deferred tax relating to the revaluation of the Group's available-for-sale investments amounting to £4,000 (2008: £254,000) has been credited directly to equity and deferred tax relating to the actuarial loss in the defined benefit pension scheme amounting to £2,676,000 (2008: £1,225,000) has been credited directly to equity. Deferred tax on share-based payments of £75,000 (2008: £1,255,000) has been credited directly to equity.



5.

Dividends



2009

2008


52 Weeks

52 Weeks


£'000

£'000

Amounts recognised as distributions to equity shareholders in the period: 






Final dividend paid 6 April 2009, 3.55p per share (2008: 3.5p per share)

7,504 

7,248 

Interim dividend paid 25 September 2009, 3.55p per share (2008: 3.55p per share)

7,523 

7,383 


15,027 

14,631 




Proposed final dividend for the 52 weeks ended 27 September 2009 of 3.55p (2008: 3.55p) per share based on shares in issue at 10 November 2009 (7 November 2008)

7,537 

7,388 




The proposed final dividend for the 52 week period ended 27 September 2009 of 3.55p per share is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. 



6.

Earnings per share


The calculation of the basic and diluted earnings per share is based on the following data:


2009

(Restated) 2008

Number of shares




'000

'000

Basic



Weighted average number of shares in issue in the period

210,940 

206,157 

Diluted



Weighted average number of options outstanding for the period

1,271 

2,415 

Estimated weighted average number of shares earned under deferred consideration arrangements

6,555 

8,527 

Diluted weighted average number of options and shares for the period

218,766 

217,099 




Earnings attributable to ordinary shareholders




£'000

£'000




Profit attributable to equity shareholders of the parent from continuing operations

15,535 

22,019 

Redundancy costs

3,638 

 634 

 less tax 

 (1,019)

(184)

Amortisation of intangible assets - client relationships

6,566 

4,244 

 less tax 

 (1,838)

 (1,188)

Adjusted basic profit for the period and attributable earnings excluding redundancy costs and amortisation of client relationships

22,882 

25,525 




Profit attributable to equity shareholders of the parent from continuing operations

15,535 

22,019 

Finance costs of deferred consideration (Note a)

 277 

 549 

 less tax 

(78)

(159)

Adjusted fully diluted profit for the period and attributable earnings

15,734

22,409 

Redundancy costs

3,638 

 634 

 less tax 

 (1,019)

(184)

Amortisation of intangible assets - client relationships

6,566 

4,244 

 less tax 

 (1,838)

 (1,188)

Adjusted fully diluted profit for the period and attributable earnings excluding redundancy costs and amortisation of client relationships

23,081 

25,915 




From continuing operations






Basic

7.4p 

10.7p 




Diluted

7.2

10.3p 




From continuing operations excluding redundancy costs and amortisation of client relationships





Basic

10.8p 

12.4p 




Diluted

10.6p 

11.9p 




a) Finance costs of deferred consideration are added back where the issue of shares is more dilutive than the interest cost saved.




The numerators for the purposes of calculating both basic and diluted earnings per share have been adjusted following the change in accounting policy described in note 1.



7.

Reserves and reconciliation of changes in equity



 Called up share capital 

 Share premium account 

 Revaluation reserve 

 Merger reserve 

 Profit and loss account 

 Total 


 £'000 

 £'000 

 £'000 

 £'000 

 £'000 

 £'000 

 Group 

 

 

 

 

 

 

 Previously reported 30 September 2007 

2,035 

86,968 

7,544 

4,562 

 14,223 

115,332 

 Prior year adjustment (note 1

 - 

 - 

 - 

 - 

(2,227)

 (2,227)

 As restated 30 September 2007 

2,035 

86,968 

7,544 

4,562 

 11,996 

113,105 

 Profit for the period 

 - 

 - 

 - 

 - 

 22,019 

22,019 

 Dividends

 - 

 - 

 - 

 - 

(14,631)

 (14,631)

 Issue of shares 

45 

3,177 

 - 

 - 

3,222 

 Revaluation 

 - 

 - 

(900)

 - 

 (900)

 Deferred and current tax on items taken directly to equity 

 - 

 - 

 254 

 - 

538 

792 

 Share-based payments 

 - 

 - 

 - 

 - 

661 

661 

 Actuarial loss on defined benefit pension scheme 

 - 

 - 

 - 

 - 

(4,375)

 (4,375)

 28 September 2008 

2,080 

90,145 

6,898 

4,562 

 16,208 

119,893 

 Profit for the period 

 - 

 - 

 - 

 - 

 15,535 

15,535 

 Dividends

 - 

 - 

 - 

 - 

(15,027)

 (15,027)

 Issue of shares 

42 

3,995 

 - 

 - 

4,037 

 Revaluation 

 - 

 - 

(17)

 - 

 (17)

 Deferred and current tax on items taken directly to equity 

 - 

 - 

 - 

 2,664 

2,668 

 Share-based payments 

 - 

 - 

 - 

 - 

686 

686 

 Actuarial loss on defined benefit pension scheme 

 - 

 - 

 - 

 - 

(9,556)

 (9,556)

 27 September 2009 

2,122 

94,140 

6,885 

4,562 

 10,510 

118,219 









 Called up share capital 

 Share premium account 

 Revaluation reserve 

 Merger reserve 

 Profit and loss account 

 Total 


 £'000 

 £'000 

 £'000 

 £'000 

 £'000 

 £'000 

 Company 

 

 

 

 

 

 

 30 September 2007 

2,035 

86,968 

 - 

4,847 

 18,714 

112,564 

 Profit for the period 

 - 

 - 

 - 

 - 

 14,895 

14,895 

 Dividends

 - 

 - 

 - 

 - 

(14,631)

 (14,631)

 Share-based payments 

 - 

 - 

 - 

 - 

661 

661 

 Issue of shares 

45 

3,177 

 - 

 - 

3,222 

 28 September 2008 

2,080 

90,145 

 - 

4,847 

 19,639 

116,711 

 Profit for the period 

 - 

 - 

 - 

 - 

 9,878 

9,878 

 Dividends

 - 

 - 

 - 

 - 

(15,027)

 (15,027)

 Share-based payments 

 - 

 - 

 - 

 - 

686 

686 

 Issue of shares 

42 

3,995 

 - 

 - 

4,037 

 27 September 2009 

2,122 

94,140 

 - 

4,847 

 15,176 

116,285 










8.

Notes to the cash flow statement



52 weeks to 27 September 2009

(Restated)

52 weeks to 28 September 2008


£'000

£'000

Group



Operating profit as previously reported


30,054 

Prior period adjustment (note 1)

 

(4,244)

Operating profit

20,472 

25,810 

Adjustments for:



 Depreciation of property, plant and equipment

10,153 

8,585 

 Amortisation of intangible assets - client relationships

6,566 

4,244 

 Amortisation of intangible assets - software

674 

 - 

 Loss on disposal of property, plant and equipment

 135 

 Intangible asset impairment

230 

 430 

 Retirement benefit obligation

(1,267)

(6,146)

 Share-based payment cost

686 

661 

 Unwind of discount of shares to be issued and 

 deferred purchase consideration

509 

 981 

 Interest income

2,083 

6,785 

 Interest expense

(968)

(994)

Operating cash flows before movements in working capital

39,143 

40,491 

 Decrease in receivables and trading investments

161,518 

73,280 

 Decrease in payables

(157,976)

(89,528)

Cash generated by operating activities

42,685 

24,243 

 Tax paid

(5,296)

(10,139)

Net cash inflow from operating activities

37,389 

14,104 




Company






Operating profit

9,878 

14,895 

 Unwind of discount of shares to be issued and 

 deferred purchase consideration

 - 

11 

Operating cash flows before movements in working capital

9,878 

14,906 

 Decrease in receivables and trading investments

4,070 

3,619 

(Decrease)/Increase in payables

 (4)

Cash generated by operating activities

13,944 

18,530 

 Tax paid

 - 

 - 

Net cash inflow from operating activities

13,944 

18,530 




Cash and cash equivalents comprise cash at bank and bank overdrafts.




  


9.

Funds



 At 27 September 2009 

 At 28 September 2008 


 £ Billion 

 £ Billion 

In Group's nominee or sponsored member

 11.6 

 10.0 

Stock not held in Group's nominee

 0.2 

 0.2 

Discretionary funds under management

 11.8 

 10.2 




In Group's nominee or sponsored member

 7.2 

 6.8 

Other funds where valuations are carried out but where the stock is not under the Group's control

 1.5 

 1.7 

Advisory funds under management

 8.7 

 8.5 




Managed funds

 20.5 

 18.7 







In Group's nominee or sponsored member

 3.7 

 3.7 

Stock not held in Group's nominee

 0.4 

 0.2 

Execution only stock

 4.1 

 3.9 




Total funds

 24.6 

 22.6 




Stock



In Group's nominee or sponsored member

 22.5 

 20.5 

Stock not held in Group's nominee

 2.1 

 2.1 


 24.6 

 22.6 






10.

Additional Information

The accounting policies used in arriving at the preliminary figures are consistent with those which will be published in the full financial statements. They are also consistent with those policies which were set out in the Group's Annual Report and Accounts for 2008, save that as set out in note 1. We have retrospectively changed an accounting policy, so that payments to acquire teams of investment managers, bringing with them funds under management, are now classified as the intangible asset - client relationships, rather than goodwill.


This preliminary announcement was approved by the Board on 1 December 2009.


The financial information in this press release does not constitute statutory accounts for the period ended 27 September 2009 or 29 September 2008. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the Company's Annual General Meeting. The auditors have reported on the 2008 and 2009 accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under section 237(2) or (3) of the Companies Act 1985 in respect of the accounts for 2008 nor a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2009. 


Whilst the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in January 2010.



11.

Annual General Meeting


The Annual General Meeting will be held at 12 noon on 26 February 2010 at Merchant Taylors' Hall, 30 Threadneedle Street, London, EC2R 8JB.



12.

Going concern


The Directors believe that the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of possible adverse changes in trading performance, show that the Group should be able to operate within the level of its current financing arrangements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements.



13.

Availability of Annual Report


The Annual Report will be posted to shareholders during January 2010. Copies will be available from the registered office of the Company, 12 Smithfield StreetLondonEC1A 9BD.  It will also be available as a download from the Company's website www.brewin.co.uk.  A further notification will be made to advise of posting and publishing on the website.



14.

Forward-looking statements 


This announcement contains certain forward-looking statements with respect to the Brewin Dolphin's Group's financial condition, operations, and business opportunities. These forward-looking statements represent the Group's expectations or beliefs concerning future events, and involve known and unknown risks, and uncertainty, that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. Past performance cannot be relied on as a guide to future performance.




This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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