Brewin Dolphin Holdings PLC
30 May 2002
30th May 2002
Brewin Dolphin Holdings PLC
Interim Results for the Months Ending 30th March 2002
Highlights
• Funds under full discretionary management rose to a record £4.9bn (2001:
£4.4 bn). Total funds under management stand at £16.8 bn (2001: £17bn)
• Cost savings and operational efficiencies achieved. Fixed costs, excluding
goodwill amortisation, have decreased by 6% overall despite the increase in
the number of client executives
• Pre-tax profit for 26 weeks ended 31st March 2002, down 32% to £7m (2001:
£10.2m)
• Acquisition of Popes (Stoke-on-Trent and Hull) and Aitken MacDonald
(Dundee). New team also arrived in Glasgow
• Market conditions remain quiet
• Well positioned to benefit substantially from any upturn in investor
confidence
Sir David Rowe-Ham said:
'With the FTSE Index in its present trading range, market sentiment and
confidence remain finely balanced. However, with our increased number of
discretionary clients and enlarged U.K. geographical base we will benefit
substantially from any upturn in confidence.'
Enquiries:
Brewin Dolphin 020 7248 4400
John Hall
Citigate Dewe Rogerson 020 7638 9571
Patrick Donovan/Sarah Gestetner
CHAIRMAN'S STATEMENT
Profit before tax, goodwill amortisation and exceptional items for the 26 weeks
to 31st March 2002 was £7 million (2001 - £10.2 million). Whilst this is a 32%
reduction against the comparable period in 2001, this result has been achieved
in very subdued market conditions, and reflects our close attention to cost
control. Fully diluted earnings per share for the half year, on a similar basis,
were 2.5p (2001 - 3.5p).
The first interim dividend of 2p per share which was paid on the 8th April was
unchanged. It is intended to pay a second interim dividend at the beginning of
October which will be announced in August. Last year, the payment was 1.5p.
Despite the movement in markets, I am glad to be able to report that funds under
full discretionary management have risen to £4.9bn, a record level. Total funds
under management stand at £16.8bn. The comparable figures a year ago were £4.4bn
and £17bn respectively. We have continued to focus on efficiencies and control
of our cost base. Fixed costs, excluding goodwill amortisation, have decreased
by 6% overall despite the increase in the number of client executives.
On 7th May we were glad to announce the acquisition of Popes, an old established
stockbroking partnership based in Stoke-on-Trent with a branch in Hull. Further,
on 13th May we acquired Aitken MacDonald independent financial advisers, who
have joined our office in Dundee. Since last reporting, we have been joined by a
further portfolio management team in Glasgow and we are also having on-going
discussions with a number of others who may wish to join us.
In March the Group's London Stock Exchange shares, no longer considered a
strategic holding, were sold for £8.3m and the excess over book value of £2.2m
taken to profit and loss as an exceptional item.
With the FTSE Index in its present trading range, market sentiment and
confidence remain finely balanced. However, with our increased number of
discretionary clients and enlarged U.K. geographical base we will benefit
substantially from any upturn in confidence.
Sir David Rowe-Ham
30 May 2002
Unaudited Interim Consolidated Profit Statement
for the 26 weeks to 31 March 2002 (2001 26 weeks)
Notes 26 weeks 26 weeks 52 weeks
to to to
31 March 30 March 30 September
2002 2001 2001
£000's £000's £000's
Turnover 51,472 58,667 111,591
Other operating income 3,527 2,632 5,576
---------- ---------- ----------
54,999 61,299 117,167
---------- ---------- -----------
Staff costs 1 (28,634) (29,705) (55,399)
Other operating costs (including goodwill amortisation) (23,413) (24,471) (50,013)
----------- ------------ -----------
(52,047) (54,176) (105,412)
----------- ------------ ------------
OPERATING PROFIT 2,952 7,123 11,755
Profit on disposal of fixed assets 2 2,206 - -
Other interest receivable and similar income 989 1,912 3,269
Interest payable and similar charges (81) (176) (298)
PROFIT ON ORDINARY ACTIVITIES BEFORE
GOODWILL AMORTISATION AND EXCEPTIONAL ITEMS 6,978 10,248 17,501
Goodwill amortisation and exceptional items net 3 (912) (1,389) (2,775)
---------- ---------- ---------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 3 6,066 8,859 14,726
Tax on profit on ordinary activities (2,404) (3,233) (5,599)
---------- ------------ -------------
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION FOR THE PERIOD 3,662 5,626 9,127
Dividends 4 (3,688) (3,598) (6,354)
----------- ----------- ----------
(26) 2,028 2,773
====== ======= ========
EARNINGS PER SHARE
Basic 2.0 p 3.1 p 5.0 p
Diluted 1.9 p 2.8 p 4.7 p
Excluding goodwill amortisation and exceptional items
Basic 3 2.6 p 3.9 p 6.6 p
Diluted 3 2.5 p 3.5 p 6.1 p
000's 000's 000's
Average number of shares in issue 184,367 179,753 181,011
Average number of shares in issue - fully diluted 196,332 198,707 195,357
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2002
Notes As at As at
31 March 30 September
2002 2001
£000s £000s
FIXED ASSETS
Intangible assets 49,755 51,840
Tangible assets 14,194 13,998
Investments 431 6,354
--------- ----------
64,380 72,192
====== =======
CURRENT ASSETS
Investments 565 649
Debtors 230,298 165,035
Cash at bank and in hand 47,169 41,545
----------- -----------
278,032 207,229
---------- ----------
CREDITORS: amounts falling due within one year (250,771) (180,380)
------------ --------------
NET CURRENT ASSETS 27,261 26,849
------------- ---------------
TOTAL ASSETS LESS CURRENT LIABILITIES 91,641 99,041
PROVISIONS FOR LIABILITIES AND CHARGES (1,248) (1,485)
--------------- ------------
SHAREHOLDERS' FUNDS 5 90,393 97,556
======== =======
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 26 WEEKS TO THE 31 MARCH 2002 (2001 26 WEEKS)
26 weeks 26 weeks 52 weeks
to to to
31 March 30 March 30 September
2002 2001 2001
£000's £000's £000's
Cash inflow/(outflow) from operating activities 10,367 (2,594) 7,151
Return on investment and servicing of finance 908 1,736 2,971
Taxation (2,922) (3,346) (6,243)
Capital expenditure (2,972) (3,515) (7,609)
Disposal of the Stock Exchange shares 8,290 - -
Acquisitions (7,245) (1,229) (1,586)
Equity dividends paid (2,756) (2,250) (5,836)
----------- ------------ --------------
CASH INFLOW/(OUTFLOW) BEFORE THE MANAGEMENT
OF LIQUID RESOURCES AND FINANCING 3,670 (11,198) (11,152)
Financing 152 (61) 698
----------- --------- ----------
INCREASE/(DECREASE) IN CASH IN THE PERIOD 3,822 (11,259) (10,454)
======= ======= =======
RECONCILIATION OF OPERATING PROFIT TO
OPERATING CASH FLOW
Operating profit 2,952 7,123 11,755
Depreciation and amortisation 4,776 3,591 7,625
Movement on other current assets 2,639 (13,308) (12,229)
--------- ----------- --------
Net cash inflow/(outflow) from operating activities 10,367 (2,594) 7,151
====== ======= =======
ANALYSIS OF NET FUNDS
2002 Cash flow 2001
£000's £000's £000's
Group's cash 23,488 4,445 19,043
Overdrafts (2,605) (1,802) (803)
----------- ----------- -----------
Group's net funds 20,883 2,643 18,240
Client settlement cash 23,681 1,179 22,502
------------ ------------- --------------
Net cash 44,564 3,822 40,742
======= ======= =======
Notes
1. Included in staff costs is anticipated profit share of £4,871,000 ( 2001 half
year £4,530,000, full year £8,529,000) and exceptional redundancy and
similar costs £1,118,000 (2001 £nil).
2. Profit on disposal of fixed assets 26 weeks 26 weeks
to to
31 March 30 March
2002 2001
£000's £000's
Profit on sale of the London Stock Exchange shares 2,206 -
======= ==========
In March 2002 the Group's holding of London Stock Exchange shares was sold
for £8.3m, the excess over the book value at 30 September 2001 has been
taken to profit and loss in the period, and the Previously established
revaluation reserve of £4,259,000, net of deferred tax, taken to profit and
loss reserve.
2. Profit excluding goodwill amortisation and exceptional items
Profit on ordinary activities before taxation 6,066 8,859
Goodwill amortisation 2,000 1,389
Profit on sale of Stock Exchange (2,206) -
shares
Redundancy and similar costs 1,118 -
--------- --------
Pre tax profit before exceptional items and goodwill 6,978 10,248
amortisation
Taxation (2,404) (3,233)
Net taxation on goodwill amortisation and exceptional items 239 -
----------- -------------
Adjusted attributable earnings 4,813 7,015
========= =========
4. Dividend
First interim dividend, paid 8 April 2002, 2p per share 3,688 3,598
(2001 2p).
======== ========
5. Movement in shareholders' fund
share
other capital shares to be
reserves and premium issued Total
£000's £000's £000's £000's
Balance at 30 September 2001 (500) 73,299 24,757 97,556
Completion of prior period acquisitions (1,160) 6,780 (10,257) (4,637)
Estimated movement in value of shares to
be issued - - (2,500) (2,500)
Profit for the period 3,662 - - 3,662
Dividend (3,688) - - (3,688)
------------ ------------ ------------ -------------
Balance at 31 March 2002 (1,686) 80,079 12,000 90,393
======= ======= ======= ======
6. In accordance with current corporate governance practice, we have reviewed
the appointment of our auditors, and following a tender process have
appointed Deloitte & Touche to be auditors to the Group for the 2002
accounts. This re-appointment will be put to shareholders for confirmation
at the next Annual General Meeting.
7. The interim figures are unaudited. The accounts for the year ended
30 September 2001 are abridged. Full Accounts for that period on which the
auditors of the Group made an unqualified audit report have been Delivered
to the registrar of Companies. A copy of this statement is available at the
Company's registered office at 5 Giltspur Street, London EC1A 9BD and a copy
will be posted to all shareholders.
INDEPENDENT REVIEW REPORT TO BREWIN DOLPHIN HOLDINGS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2002 which comprises the profit and loss account,
the balance sheet, the cash flow statement and related notes 1 to 7. We have
read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2002.
Deloitte & Touche
Chartered Accountants
Stonecutter Court
1 Stonecutter Street
London
EC4A 4TR
30 May 2002
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