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Brewin Dolphin Hldgs (BRW)

  Print          Annual reports

Thursday 28 May, 2009

Brewin Dolphin Hldgs

Half Yearly Report

RNS Number : 9144S
Brewin Dolphin Holdings PLC
28 May 2009
 



28 May 2009


Brewin Dolphin Holdings PLC


Interim Financial Report


For the Half Year Ending 29 March 2009


Highlights

 

 


  •  
Total managed funds £16.3 billion at 29 March 2009 (28 September 2008: £18.7 billion, 30 March 2008: £19.9 billion).
 
  •  
Discretionary funds £9.3 billion at 29 March 2009 (28 September 2008: £10.2 billion, 30 March 2008: £10.4 billion).
 
  •  
Total income £104.7 million (30 March 2008: £104.1 million) an increase of 1%.
 
  •  
Profit before tax after redundancy costs £13.6 million (30 March 2008: £21.8 million) a 38% decrease.
 
  •  
Profit before tax before redundancy costs £16.8 million (30 March 2008: £21.8 million) a 23% decrease.
 
  •  
Earnings per share after redundancy costs:
 
 
      -
Basic earnings per share 4.5p (30 March 2008: 7.5p) a decrease of 40%.
 
      -
Diluted earnings per share 4.4p (30 March 2008: 7.2p) a decrease of 39%.
 
  •  
Earnings per share before redundancy costs:
 
      -
Basic earnings per share 5.6p (30 March 2008: 7.5p) a decrease of 25%.
        
      -
Diluted earnings per share 5.4p (30 March 2008: 7.2p) a decrease of 25%.


Declaration of Interim Dividend

The Board is pleased to declare a maintained interim dividend of 3.55p per share. The interim dividend is payable on 24 September 2009 to shareholders on the register as at 21 August 2009, with an ex dividend date of 19 August 2009.


Jamie Matheson, Executive Chairman said


'In a period of continuing market turbulence Brewin Dolphin performed resiliently indicating the fundamental strength and scale of our business. There are some hopeful signs that the financial turmoil is easing. If this is so, then it will be good news for our clients and the Company.'


For further information


Jamie Matheson, Executive Chairman

Andrew Hayes / Wendy Baker

Brewin Dolphin Holdings PLC

Hudson Sandler

020 7248 4400

020 7796 4133


Executive Chairman's Statement 


To the members of Brewin Dolphin Holdings PLC


Introduction

This statement forms the Interim Management Report for the half year ending 29 March 2009. 


Results and review of the past six months

I am pleased to report the Interim results for the six months ended 29 March 2009. Your Group achieved pre tax profits of £13.6 million after one-off costs of £3.2 million. The results before redundancy costs show a pre-tax profit of £16.8 million compared with £21.8 million in the equivalent period to March 2008.


In a period of continuing market turbulence Brewin Dolphin performed resiliently indicating the fundamental strength and scale of our business. Total income during the period was virtually unchanged at £104.7 million compared with £104.1 million in the equivalent period to March 2008.


Shareholders will not be surprised that rigorous attention has been paid to cost control and this is reflected in over £3 million of one-off costs, which will yield annualised savings of £4.8 million pre profit share. As you would expect we continuously review the company's cost base whilst never compromising the need to maintain the highest level of customer service as well as improved efficiency. 


The performance of our Investment Management operations during the period was robust with operating profits showing a decline of only 6% to £16.6 million before redundancy costs of £2.9 million. Total income for the period from Investment Management was ahead by 5% to £101.2 million.


As expected Investment Banking was hard hit by market conditions and in particular the absence of corporate activity in the small and mid cap arena. Investment Banking saw a 54% decline in total income to £3.5 million and an operating loss of £0.8 million before redundancy costs of £0.3 million.


Fully diluted earnings per share before redundancy costs were 5.4p (4.4p after redundancy costs) compared with 7.2p in the comparable period last year. Your Board is pleased to announce that the Company will pay a maintained interim dividend of 3.55p per share payable on 24 September 2009.


During the period under review funds under management declined by 12.8% to £16.3 billion. Discretionary funds under management have fallen by 8.8% against a drop in the FTSE 100 Share Index of 23.4% and in the FTSE APCIMS Private Investor Balanced Portfolio Index of 13.5%.



 At 29 March

2009 

 At 28 September 

2008 

 %

 Change 

Indices




FTSE APCIMS Private Investor Series Balanced Portfolio

2,236 

2,586 

-13.5%

FTSE 100

3,899 

5,089 

-23.4%





Funds





 £ Billion 

 £ Billion 


Discretionary funds under management

9.3 

10.2 

-8.8%

Advisory funds under management

7.0 

8.5 

-17.6%

Total managed funds

16.3 

18.7 

-12.8%






  

A year ago I said that the market background was more challenging than at any time since the early seventies. One year on that could be considered an understatement. Nevertheless your Group continues to pursue a strategy of judicious and considered growth by adding new teams, and where appropriate new offices, as well as continuing to drive organic growth from our existing offices. We have welcomed new fund managers during the period, all within our existing office network.


Related party transactions

Related party transactions are disclosed in note 2 to the Interim Financial Report. 


Going concern

The Group has a strong balance sheet with net Firm's cash of £31.0 million at 29 March 2009 

(30 March 2008: £31.0 million).


The Directors believe the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. 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. 


Principal risks and uncertainties

Principal risks and uncertainties are covered in note 3 to the Interim Financial Report

 

Board changes

There have been no changes to your Board during the period but I did announce at the AGM that two directors, Mr Christopher Legge and Mr Simon Still, have indicated their intention to retire from the Board at the end of this financial year. Their contributions over the years have been considerable but their retirements have already been anticipated in the Group's succession planning and at this stage replacement Board members will not be sought.


Outlook

As ever our principal risk in the short term remains the threat of adverse market movements and it would be complacent, if not downright foolhardy, to assume increased stability in markets. However, there are some hopeful signs that the financial turmoil is easing. If this is so, then it will be good news for our clients and the Company


The record low level of interest rates will affect our interest income in the second half but, that apart, we would anticipate a continuation of the resilient performance from our Investment Management business.


There are some signs of improvement in trading in our Investment Banking division and it is our firmly held view that the importance of equities in the global financial system will be proved ever greater by the recent turmoil. We continue to have faith in the division's medium term prospects.

 

Your Board remains fully committed to the strategy of increasing value to shareholders through pursuing careful and considered growth and we continue to be confident in our long term prospects.


Jamie Matheson

27 May 2009



  Consolidated Income Statement

26 week period ended 29 March 2009




<-----------

Unaudited 

26 weeks to 29 March 2009

--------->

Unaudited 26 weeks to 30 March 2008

Audited 

52 weeks to 28 September 2008



Before
 
redundancy
 costs

Redundancy costs

Total




Note

£'000

£'000

£'000

£'000

£'000

Continuing operations







Revenue


89,617

-

89,617

95,130

186,969

Other operating income


15,101

-

15,101

8,967

19,526

Total income

104,718

-

104,718

104,097

206,495








Staff costs


(50,570)

(3,192)

(53,762)

(52,038)

(105,834)

Other operating costs


(38,383)

-

(38,383)

(33,349)

(70,607)



(88,953)

(3,192)

(92,145)

(85,387)

(176,441)








Operating profit


15,765

(3,192)

12,573

18,710

30,054

Finance income

1,600

-

1,600

3,518

7,142

Finance costs

(526)

-

(526)

(428)

(994)

Profit before tax

16,839

(3,192)

13,647

21,800

36,202

Tax

(5,162)

894

(4,268)

(6,447)

(11,127)

Profit attributable to equity shareholders of the parent from continuing operations

 11,677 

(2,298)

9,379

15,353

25,075








Earnings per share














From continuing operations 







 Basic

5.6p


4.5p

7.5p

12.2p








 Diluted

5.4p


4.4p

7.2p

11.7p









  Consolidated Statement of Recognised Income and Expense

26 week period ended 29 March 2009



Unaudited

26 weeks to

29 March 2009

Unaudited

26 weeks to 30 March 2008

Audited 
52 weeks to 28 September 2008



£'000

£'000

£'000






Loss on revaluation of available-for-sale investments


 (309)

 (600)

(900)

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

 87 

 168 

 254 

Actuarial loss on defined benefit pension scheme


 (1,047)

 (1,570)

 (4,375)

Deferred tax credit on actuarial loss on defined benefit pension scheme

 293 

 440 

1,225 

Current tax credit on share-based payments


 17 

 - 

 568 

Deferred tax charge on share-based payments


 (46)

 (1,125)

 (1,255)

Net expense recognised directly in equity


 (1,005)

 (2,687)

 (4,483)

Profit for the period


9,379 

15,353 

25,075 

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

8,374 

12,666 

20,592 







  Consolidated Balance Sheet

As at 29 March 2009



Unaudited as at 

29 March

2009

Unaudited as at 

30 March

2008

Audited 

as at

28 September 2008



£'000

£'000

£'000


Note




ASSETS





Non-current assets





Goodwill

92,682 

75,040 

93,023 

Property, plant and equipment

10 

28,392 

24,166 

27,975 

Available-for-sale investments

11 

10,317 

10,926 

10,626 

Other receivables


2,444 

2,270 

2,098 

Total non-current assets


133,835 

112,402 

133,722 

Current assets





Trading investments

11 

 596 

1,307 

 724 

Trade and other receivables


263,112 

290,948 

283,404 

Cash and cash equivalents


50,313 

52,915 

60,546 

Total current assets


314,021 

345,170 

344,674 

Total assets


447,856 

457,572 

478,396 






LIABILITIES





Current liabilities





Bank overdrafts


1,094 

 999 

3,717 

Trade and other payables


280,256 

304,212 

306,855 

Current tax liabilities


1,762 

3,491 

 484 

Provisions

12 

1,958 

 - 

2,068 

Shares to be issued including premium

13 

5,197 

7,674 

8,233 

Total current liabilities


290,267 

316,376 

321,357 

Net current assets


23,754 

28,794 

23,317 






Non-current liabilities





Retirement benefit obligation

14 

8,169 

5,781 

7,964 

Deferred purchase consideration

13 

2,644 

 966 

2,960 

Deferred tax liability


4,510 

2,551 

3,993 

Shares to be issued including premium 

13 

12,602 

8,413 

16,946 

Total non-current liabilities


27,925 

17,711 

31,863 

Total liabilities


318,192 

334,087 

353,220 

Net assets


129,664 

123,485 

125,176 






EQUITY





Called up share capital

16 

2,114 

2,073 

2,080 

Share premium account

16 

93,382 

89,352 

90,145 

Revaluation reserve

16 

6,676 

7,112 

6,898 

Merger reserve

16 

4,562 

4,562 

4,562 

Profit and loss account

16 

22,930 

20,386 

21,491 

Equity attributable to equity holders of the parent

16 

129,664 

123,485 

125,176 






Consolidated Cash Flow Statement

26 week period ended 29 March 2009


  


Unaudited 26 weeks to 

29 March 

2009

Unaudited 26 weeks to 

30 March 2008

Audited 52 weeks to 28 September 2008


 Note 

 £'000 

 £'000 

 £'000 

 Net cash flow from operating activities 

15

3,102

(21,247)

14,104






 Cash flows from investing activities 





 Purchases of goodwill 

9

(5,287)

(2,737)

(10,681)

 Purchases of property, plant and equipment 

10

(5,976)

(7,056)

(15,746)

 Dividend received from available-for-sale investments 


-

-

404

 Net cash used in investing activities 


(11,263)

(9,793)

(26,023)






 Cash flows from financing activities 





 Dividends paid to equity shareholders 


-

(6,869)

(21,500)

 Proceeds on issue of shares 


551

2,422

2,845

 Net cash from / (used in) financing activities 


551

(4,447)

(18,655)






 Net decrease in cash and cash equivalents  


(7,610)

(35,487)

(30,574)






 Cash and cash equivalents at the start of period 


56,829

87,403

87,403

 Cash and cash equivalents at the end of period 


49,219

51,916

56,829











Firm's cash 


32,046

32,046

38,189

Firm's overdraft


(1,094)

(999)

(3,717)

Firm's net cash


30,952

31,047

34,472

Client settlement cash


18,267

20,869

22,357

Net cash and cash equivalents


49,219

51,916

56,829






Cash and cash equivalents shown in current assets


50,313

52,915

60,546

Bank overdrafts


(1,094)

(999)

(3,717)

Net cash and cash equivalents


49,219

51,916

56,829







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

  Notes to the Interim Financial Report


1. General information and basis of preparation

The Company is a public limited company incorporated in the United Kingdom. The address of its registered office is 12 Smithfield StreetLondon EC1A 9BD. This condensed consolidated interim financial information was approved for issue on 27 May 2009. 


A copy of this Interim Financial Report is available at the Company's registered office and a copy will be posted to all shareholders. 


The condensed set of financial statements included in this Interim Financial Report for the 26 week period to 29 March 2009 has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union and the Interim Financial Report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services AuthorityThe condensed consolidated interim financial information should be read in conjunction with the annual financial statements of Brewin Dolphin Holdings PLC for the 52 week period ended 28 September 2008 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 1985 applicable to companies reporting under IFRS


The financial information set out in this Interim Financial Report in respect of the 52 week period ended 28 September 2008 does not constitute the Group's statutory accounts for the 52 week period ended 28 September 2008 as defined in section 240 of the Companies Act 1985A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. The auditors have reported on those accounts: their report was unqualified; did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 


The Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. 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.


The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited Annual Report and Accounts for the 52 week period ended 28 September 2008.


2. Related party transactions

The parent company has received no dividends from Group companies (March 2008: £16,600; September 2008: £15,016,600). There were no other related party transactions during the 26 week period to 29 March 2009 save that the Company subscribed for £2,719,306 of shares in Brewin Dolphin Limited. The amount owed by Brewin Dolphin Limited to the parent company is £8,137,000 (March 2008: £6,889,000; September 2008: £7,697,000). There have been no changes to the amounts owed by and to related parties that were disclosed in the 2008 Annual Report and Accounts available via our website www.brewin.co.uk, with the exception of the amount owed by Brewin Dolphin Limited, as described above.


3. Principal risks and uncertainties


The environment in which the Group operates has changed following the market turmoil during the last six months. The economic situation and outlook have deteriorated; at the same time the level of uncertainty within markets remains. This has the potential to impact adversely the Group's earnings. The Board performs stress testing on its forecasts as part of the Internal Capital Adequacy Assessment Process ('ICAAP') as required by the Financial Services Authority, its regulator. The ICAAP includes steps that would be taken to mitigate risks, if the level of the FTSE 100 Index fell below 2,500, the current estimated breakeven level of the Group.


The Group has so far been unaffected by the reduction in liquidity in the market place. 


With the exception of the above the Directors consider that the nature of the principal risks and uncertainties which may have a material effect on the Group's performance in the second half of the year remain unchanged from those identified in the 2008 Annual Report and Accounts available via our website www.brewin.co.uk In summary the major financial and non financial risks identified were:-


Risk Type
 
Risk
  •  
Credit risk
Counterparty risk; Trading exposure
  •  
Earnings risk
Loss of front office staff
  •  
Interest Rate risk
Interest rate risk
  •  
Liquidity risk
Bank default and other systemic; Capital adequacy
  •  
Legal and Compliance risk
Data protection; Fast changing regulatory environment; New business and product line
  •  
Operational and IT risk
Business continuity; Data integrity; Electronic dealing errors; Internet failure; Project control
  •  
Reputational risk
Poor investment performance
  •  
Settlement risk
Settlement failure
  •  
Other risk
Acquisition of new teams; Financial crime



4. 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.


26 week period ended 29 March 2009






Discretionary Portfolio Management

Advisory Portfolio Management

Total Investment Management

Investment Banking

Group


£'000

£'000

£'000

£'000

£'000







Total income

63,199 

38,005 

101,204 

3,514 

104,718 







Operating profit pre redundancy costs

10,360 

6,230 

16,590 

(825)

15,765 

Redundancy costs



(2,846)

(346)

(3,192)

Other finance income (net)





1,074 

Profit before tax





13,647 







Other Information






Capital expenditure



5,962 

14 

5,976 

Depreciation



5,455 

103 

5,558 

Share-based payments



326 

21 

347 







Segment assets excluding current tax assets



434,973 

12,883 

447,856 







Segment liabilities excluding current tax liabilities



303,547 

12,883 

316,430 







  

26 week period ended 30 March 2008







Discretionary Portfolio Management

Advisory Portfolio Management

Total Investment Management

Investment Banking

Group


£'000

£'000

£'000

£'000

£'000







Total income

60,530 

36,015 

96,545 

7,552 

104,097 







Operating profit

11,047 

6,573 

17,620 

1,090 

18,710 

Other finance income (net)





3,090 

Profit before tax





21,800 







Other Information






Capital expenditure



6,973 

83 

7,056 

Depreciation



3,791 

48 

3,839 

Share-based payments



293 

20 

313 







Segment assets excluding current tax assets



413,245 

44,327 

457,572 







Segment liabilities excluding current tax liabilities



286,269 

44,327 

330,596 








52 week period ended 28 September 2008






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

18,765 

10,791 

29,556 

498 

30,054 

Other finance income (net)





6,148 

Profit before tax





36,202 







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



447,082 

31,314 

478,396 







Segment liabilities excluding current tax liabilities



321,422 

31,314 

352,736 










  5. Finance income and costs



Unaudited 26 weeks to 29 March 2009

Unaudited 26 weeks to 30 March 2008

Audited 52 weeks to 28 September 2008


£'000

£'000

£'000

Finance income




Interest income on pension plan assets

 - 

 66 

 159 

Dividends from equity investments

 - 

 - 

 404 

Interest on bank deposits

1,600 

3,452 

6,579 


1,600 

3,518 

7,142 





Finance costs




Interest cost on pension plan liabilities

 213 

 - 

 - 

Finance cost of deferred consideration

 289 

 412 

 981 

Interest on bank overdrafts

 24 

 16 

 13 


 526 

 428 

 994 






6.Taxation



Unaudited 26 weeks to 29 March 2009

Unaudited 26 weeks to 30 March 2008

Audited 52 weeks to 28 September 2008


£'000

£'000

£'000

United Kingdom




Current year

3,023

3,758

5,955

Prior year 

225

-

192

Overseas




Current

155

111

216

Prior year 

-

-

5


3,403

3,869

6,368

United Kingdom deferred tax




Current year

1,090

2,388

5,024

Prior year 

(225)

72

(265)

Impact of change in tax rate

-

118

-


4,268

6,447

11,127


7. Earnings per share

    

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



Unaudite

26 weeks to 

29 March 

2009

Unaudited 26 weeks to 30 March 2008

Audited 

52 weeks to

28 September 2008

Number of shares





'000

'000

'000

Basic




Weighted average number of shares in issue in the period

210,196

204,770

206,157

Diluted




Weighted average number of options outstanding for the period

790

3,477

2,415

Estimated weighted average number of shares to be issued under deferred consideration arrangements

7,019

6,862

8,527

Diluted weighted average number of options and shares for the period

218,005

215,109

217,099





Earnings attributable to ordinary shareholders





£'000

£'000

£'000

Profit attributable to equity shareholders of the parent from continuing operations

9,379

15,353

25,075

Finance costs of deferred consideration (Note a)

176

254

549

 less tax 

(49)

(74)

(159)

Adjusted basic profit for the period and attributable earnings

9,506

15,533

25,465





Earnings per share








From continuing operations








  Basic

4.5p

7.5p

12.2p





  Diluted

4.4p

7.2p

11.7p









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


For the 26 week period ended 29 March 2009 earnings adjusted for post tax redundancy costs of £2,298,000 and finance costs of deferred consideration less tax of £127,000 (added back to calculate adjusted diluted earnings per share) amount to £11,804,000. The basic earnings per share calculated on this adjusted basis is 5.6p and diluted is 5.4p.



8. Dividends

    






Unaudited 26 weeks to 29 March 2009

Unaudited 26 weeks to 30 March 2008

Audited 52 weeks to 28 September 2008


£'000

£'000

£'000

Amounts recognised as distributions to equity holders in the period: 




Final dividend paid 6 April 2008, 3.5p per share

-

7,248

7,248

Interim dividend paid 24 September 2008, 3.55p per share

-

-

7,383

Final dividend paid 6 April 2009, 3.55p per share*

7,504

-

-


7,504

7,248

14,631

* approved at Annual General Meeting on 27 February 2009






An interim dividend of 3.55p per share was declared by the Board on 27 May 2009 and has not been included as a liability as at 29 March 2009. This interim dividend will be paid on 24 September 2009 to shareholders on the register at the close of business on 21 August 2009 with an ex-dividend date of 19 August 2009.

 

9. Goodwill


Goodwill can be broken down into individual cash generating units, mainly consisting of investment management teams. The cost of purchased goodwill is recognised as an asset and reviewed for impairment for each cash generating unit at least annually after the first year, using the fair value less cost to sell method. Fair value is established by valuing clients' funds under management based on the value of funds under management at the period end, the percentages of funds being used depending on values attributed in recent public transactions for the purchase of advisory and discretionary funds. If the carrying amount of goodwill relating to any cash-generating unit exceeds the calculated fair value less cost to sell, a value in use is calculated using a discounted cash flow method. Goodwill includes the cost of indivisible customer relationships and customer lists, which cannot be separated from the underlying business combination and separately reliably measured.



Unaudited as at 

29 March 2009

Unaudited as at 

30 March 2008

Audited 

as at 

28 September 2008

Group

£'000

£'000

£'000

Cost




  At start of period

93,453

65,767

65,767

Revaluations of shares to be issued and deferred purchase consideration in respect of acquisitions in prior periods

(2,246)

1,989

2,475

Additions

1,905

7,284

25,211

  At end of period

93,112

75,040

93,453





Accumulated impairment losses




  At start of period

(430)

-

-

Impairment losses for the period

-

-

(430)

  At end of period

(430)

-

(430)





Carrying amount at end of period

92,682

75,040

93,023





The above figures can be analysed as follows:








South East investment management team

9,987

9,987

9,987

Other investment management teams 

82,695

65,053

83,036


92,682

75,040

93,023


None of the constituent parts of the goodwill relating to the other investment management teams is individually significant in comparison to the total value of goodwill.



Unaudited as at 

29 March 2009

Unaudited as at 

30 March 2008

Audited 

as at 

28 September 2008


£'000

£'000

£'000

Additions relate to:




  Acquisitions in the period




Cash

323

2,989

9,749

Deferred purchase liability

56

558

2,393

Value of shares to be issued*

412

3,578

12,181


791

7,125

24,323

Acquisitions in prior periods




Cash

4,964

159

932

Issue of shares and change in shares to be issued

(3,201)

-

166

Deferred purchase liability

(649)

-

(210)

Additions in period

1,905

7,284

25,211

Issue of shares and change in shares to be issued

2,789

(3,989)

(12,347)

Deferred purchase liability

593

(558)

(2,183)

Net cash movement shown in the cash flow statement

5,287

2,737

10,681


* The number of shares issuable will be determined by the share price at the date of issue, if the shares had been issued at the end of the period the number of shares to be issued would have been 339,499 (28 September 2008: 9,648,317) ordinary 1 pence shares.


Acquisitions in the period comprise the acquisition of 3 (52 weeks to 28 September 2008: 21, 26 weeks to 30 March 2008: 10) investment management businesses and consist entirely of goodwill. Goodwill includes the cost of indivisible customer relationships and customer lists, which cannot be separated from the underlying business combination and separately reliably measured. There are no contracts which legally bind customers to the business, the relationship is with the team which looks after the client. The majority of these businesses were purchased for a consideration mainly payable in the Company's shares on deferred purchase terms dependent on results.

 

Additions relating to new acquisitions in the period were as follows:


Cash generating units

Date of acquisition

£'000

Three investment management teams

October 2008 to February 2009

791



791


There were no impairment losses recognised in the period in the profit or loss account (52 weeks to 28 September 2008: £430,000, 26 weeks to 30 March 2008: £nil).


Acquisitions during the period reduced profits for the period by £0.1 million (52 weeks to 28 September 2008: £0.6 million, 26 weeks to 30 March 2008: £0.4 million) and increased revenue by £0.3 million (52 weeks to 28 September 2008: £6.8 million, 26 weeks to 30 March 2008: £1.6 million). If the acquisitions had been effected at the start of the period profits would have increased by £nil million (52 weeks to 28 September 2008: £0.5 million, 26 weeks to 30 March 2008: £0.1 million) and revenue increased by a further £nil million (52 weeks to 28 September 2008: £0.3 million, 26 weeks to 30 March 2008: £0.3 million). 


10. Property, plant and equipment


During the period the Group spent £0.7 million (26 weeks to 30 March 2008: £2.0 million, 52 weeks to 28 September 2008: £3.4 million) on leasehold improvements, £4.9 million (26 weeks to 30 March 2008: £4.7 million, 52 weeks to 28 September 2008: £10.3 million) on computer equipment and £0.4 million (26 weeks to 30 March 2008: £0.4 million, 52 weeks to 28 September 2008: £2.0 million) on office equipment.


11. Investments

Available-for-sale investments







Listed investments

Unlisted investments

Total



£'000

£'000

£'000






Fair value





  At 29 March 2009


317

10,000

10,317






  At 30 March 2008


926

10,000

10,926






  At 28 September 2008


626

10,000

10,626






Unlisted available-for-sale investments represent the Group's holding of 19,899 ordinary shares in Euroclear plc. This holding represents 0.52% of Euroclear plc's shares. As at 28 September 2008 the Directors updated their valuation of the Group's holding in Euroclear plc; the valuation has remained unchanged at 29 March 2009. This valuation took into account the Group's share of net assets, dividend yield and the prices of similar quoted companies discounted for marketability.

Trading investments







Listed investments

Unlisted investments

Total



£'000

£'000

£'000

Fair value





  At 29 March 2009


596

-

596






  At 30 March 2008


1,307

-

1,307






  At 28 September 2008


724

-

724






Investments are measured at fair value which is determined directly by reference to published prices in an active market where available. 







12. Provisions


Unaudited

26 weeks to

29 March 2009

Audited

 52 weeks to 

28 September 2008


£'000

£'000





Sundry claims

Sundry 

Claims


At start of period

2,068 

 - 

Additions

 358 

2,068 

Utilisation of provision

(284)

 - 

Unused amounts reversed during the period

(184)

 - 

At end of period

1,958 

2,068 


The provision relates to sundry claims against the Group, where there are legal actions against the Group the estimated liability has been included above with the related insurance debtor of £1,762,000 (28 September 2008: £1,172,000) included in other debtors. The timing of settlements cannot be accurately forecast; settlement of £679,000 has been made since the balance sheet date.


13. Shares to be issued including premium and other deferred purchase liabilities


The Group acquires businesses on deferred purchase terms based on the value of income introduced over normally a three year period. The payment is normally made in ordinary shares and these have to be held typically for a further three years. At the discretion of the Board these shares can be purchased in the market rather than issued. The estimated likely cost of these shares has been updated at the half year to include new teams who have arrived and the progress of the businesses acquired. 


14. Retirement benefit obligation


The main financial assumptions used in calculating the Group's retirement benefit obligation are as follows:


As at 

29 March 

2009

As at 

30 March 

2008

As at 

28 September 

2008

Discount rate

7.20%

6.60%

7.00%

Rate of inflation

3.10%

3.50%

3.60%

Salary increases

3.10%

3.50%

3.60%

Expected return on equities

7.80%

7.60%

8.10%

Expected return on bonds

4.80%

5.20%

5.10%

Expected return on other assets

0.50%

5.75%

5.00%

Rate of increase to pensions in payment

3.10%

3.50%

3.60%


Average assumed life expectancies for members on retirement at age 65

Existing pensioners




Males

87.0 years

87.0 years

87.0 years

Females

89.8 years

89.8 years

89.8 years

Future pensioners




Males

88.1 years

88.1 years

88.1 years

Females

90.9 years

90.9 years

90.9 years


A full actuarial valuation was carried out as at 31 December 2005 and the results of this valuation have been updated to 29 March 2009 by a qualified independent actuary and reflected in the accounts A full actuarial valuation as at 31 December 2008 is currently being prepared.

  

15. Note to the cash flow statement



Unaudited 26 weeks to 29 March 2009

Unaudited 26 weeks to 30 March 2008

Audited 52 weeks to 28 September 2008


£'000

£'000

£'000

Group




Operating profit

12,573

18,710

30,054

Adjustments for:




 Depreciation of property, plant and equipment

5,558

3,839

8,585

 Loss on disposal of property, plant and equipment

-

-

135

 Goodwill impairment

-

-

430

 Retirement benefit obligation

(842)

(5,524)

(6,146)

 Share-based payment cost

347

313

661

 Discounting of shares to be issued

289

-

981

 Interest income

1,600

3,518

6,785

 Interest expense

(526)

(428)

(994)

Operating cash flows before movements in working capital

18,999

20,428

40,491

 Decrease in receivables and trading investments

20,091

65,170

73,280

Decrease in payables and provisions

(33,863)

(101,500)

(89,528)

Cash generated by / (used in) operating activities

5,227

(15,902)

24,243

 Tax paid

(2,125)

(5,345)

(10,139)

Net cash flow from operating activities

3,102

(21,247)

14,104


  

16. 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 








30 September 2007

2,035

86,968

7,544

4,562

14,223

115,332

Profit for the period

-

-

-

-

15,353

15,353

Dividends

-

-

-

-

(7,248)

(7,248)

Issue of shares

38

2,384

-

-

-

2,422

Revaluation of available-for-sale investments

-

-

(600)

-

-

(600)

Deferred and current tax on items taken directly to equity

-

-

168

-

(685)

(517)

Share-based payments

-

-

-

-

313

313

Actuarial loss on defined benefit pension scheme

-

-

-

-

(1,570)

(1,570)

30 March 2008

2,073

89,352

7,112

4,562

20,386

123,485

Profit for the period

-

-

-

-

9,722

9,722

Dividends

-

-

-

-

(7,383)

(7,383)

Issue of shares

7

793

-

-

-

800

Revaluation of available-for-sale investments

-

-

(300)

-

-

(300)

Deferred and current tax on items taken directly to equity

-

-

86

-

1,223

1,309

Share-based payments

-

-

-

-

348

348

Actuarial gain on defined benefit pension scheme

-

-

-

-

(2,805)

(2,805)

28 September 2008

2,080

90,145

6,898

4,562

21,491

125,176

Profit for the period

-

-

-

-

9,379

9,379

Dividends

-

-

-

-

(7,504)

(7,504)

Issue of shares

34

3,237

-

-

-

3,271

Revaluation of available-for-sale investments

-

-

(309)

-

-

(309)

Deferred and current tax on items taken directly to equity

-

-

87

-

264

351

Share-based payments

-

-

-

-

347

347

Actuarial loss on defined benefit pension scheme

-

-

-

-

(1,047)

(1,047)

29 March 2009

2,114

93,382

6,676

4,562

22,930

129,664










  Funds



 At 

29 March 2009 

 At 

30 March 2008 

 At 

28 September 2008 


 £ Billion 

 £ Billion 

 £ Billion 

In Group's nominee or sponsored member

9.2

10.2

10.0

Stock not held in Group's nominee

0.1

0.2

0.2

Discretionary funds under management

9.3

10.4

10.2





In Group's nominee or sponsored member

5.7

7.4

6.8

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

1.3

2.1

1.7

Advisory funds under management

7.0

9.5

8.5





Managed funds

16.3

19.9

18.7









In Group's nominee or sponsored member

3.0

2.8

3.7

Stock not held in Group's nominee

0.2

0.3

0.2

Execution only stock

3.2

3.1

3.9





Total funds

19.5

23.0

22.6





Stock




In Group's nominee or sponsored member

17.9

20.4

20.5

Stock not held in Group's nominee

1.6

2.6

2.1


19.5

23.0

22.6






  Responsibility Statement


The directors' confirm that to the best of their knowledge:


(a)

the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';


(b)

the interim management report* includes a fair view of the information required by Disclosure and Transparency Rules (DTR) 4.2.7 R (indication of important events during the first six months and description of principal risks for the remaining six months of the year); and


(c)

the interim management report* includes a fair view of the information required by DTR 4.2.8 R (disclosures of related parties' transactions and changes therein).


*encompassed within the Executive Chairman's Statement



By order of the Board



R A Bayford

Finance Director

27 May 2009

  Independent Review Report

Independent Review Report to Brewin Dolphin Holdings PLC


We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly financial report for the 26 week period ended 29 March 2009 which comprises the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 16. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements. 


This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' 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 half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 


As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of consolidated financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. 


Our responsibility 

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.


Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 


Conclusion 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly financial report for the 26 week period ended 29 March 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 





Deloitte LLP 

Chartered Accountants and Statutory Auditors

LondonUnited Kingdom

27 May 2009





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