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Brewin Dolphin Hldgs (BRW)

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Thursday 24 May, 2007

Brewin Dolphin Hldgs

Interim Results

Brewin Dolphin Holdings PLC
24 May 2007


Brewin Dolphin Holdings PLC


Interim Financial Report: For the Half Year Ending 31 March 2007


Highlights

  • Discretionary funds £10.1 billion at 31 March 2007 (30 September 2006:
    £8.8 billion, 31 March 2006: £8.5 billion) an annual increase of 19%.

  • Total income £98 million (2006: £88 million) an increase of 12%.

  • Profit before tax £20.8 million (2006: £17.3 million) a 20% increase.

  • Earnings per share

    -   Basic earnings per share 7.2p (2006: 6.0p) an increase of 20%.
    -   Diluted earnings per share 6.8p (2006: 5.8p) an increase of 17%.


Jamie Matheson
Executive Chairman said:


'An important milestone was reached during the six months ended 31 March 2007
when discretionary funds under management crossed the £10 billion mark.

... once again we have been able to attract both teams and individuals to the
firm.  Since the year end a total of 57 investment managers have joined, or will
shortly be joining, the Group and we have opened offices in Oxford, Hereford and
York and have announced that we will shortly be opening in Plymouth and Swansea.
'


23rd May 2007


Media Enquiries:

Brewin Dolphin
Jamie Matheson / John Hall
Charlotte Black
020 7248 4400
www.brewindolphin.co.uk

Citigate Dewe Rogerson
George Cazenove
020 7638 9571


Chairman's Statement

Once again it is my pleasure to report to Shareholders that the first half of
the current year has been a period of satisfactory progress for your Group.
Total income during the period under review rose by some 12% to £98 million.
Profits on ordinary activities before tax rose by some 20% to £20.8 million.
Diluted earnings per share were 6.8p, up 17% on the comparable period last year
while basic earnings per share show a rise of 20% to 7.2p per share.

The main thrust of the improved performance in the first half came from the
Group's Private Client Investment Management operations.  An important milestone
was reached during the six months ended 31 March 2007 when discretionary funds
under management crossed the £10 billion mark.  Total client funds amounted to
slightly over £24 billion (September 2006 - £22 billion) of which just over £21
billion (September 2006 - £19 billion) is managed.  Discretionary income
advanced by some 33% to £51.3 million giving rise to a corresponding 49%
increase in profit before tax.

As has been the case for some time now market conditions have provided a
generally favourable background.  During the six months under review the FTSE
100 Index rose by some 5.8% (4.9% in the twelve months since March 2006).   Once
again this illustrates that a material element of the Group's progress arises
from strong organic growth, as well as the contribution made by new teams
joining your Group.  Indeed the arrival of new people has been a significant
feature of the first half when once again we have been able to attract both
teams and individuals to the firm.  Since the year end a total of 57 investment
managers have joined, or will shortly be joining, the Group and we have opened
offices in Oxford, Hereford and York and have announced that we will shortly be
opening in Plymouth and Swansea.

Profits and income generated from our Investment Banking Division (formerly
known as the Corporate Broking Division) have seen some slowdown in the first
half.  This reflects, in part, the reduced level of activity on the AIM market.
However we expect the second half of the year to produce a more encouraging
outcome, particularly given the success of the division in pursuing larger and
fully listed mandates.

As ever we continue to invest significant resources in the infrastructure of the
business in order to maintain our pursuit of high levels of client service.  In
particular the eXimius Investment Management system is now up and running and we
are currently embarking upon further strengthening of our business continuity,
both in terms of relocating our principal computer facility as well as upgrading
the hardware.  We are also expending significant time and effort in order to be
fully prepared for the implementation of MIFID (Markets in Financial Instruments
Directive) later on this year.

At the AGM in February a dividend of 2.875p per share (2.5p per share in 2006)
was declared and subsequently paid on the 10th April.  At the same time I
announced to Shareholders that the Board proposed to declare a second interim
dividend in September 2007, payable as before in October 2007.   We proposed to
declare a final dividend in late November 2007 at the same time as our
preliminary results announcement, payable in April 2008.

Since my last opportunity to address Shareholders the Board has been very
pleased to be able to announce that it has been joined by Sir Stephen Lamport.
Sir Stephen has, since October 2002, been Group Director for Public Policy and
Government Affairs for The Royal Bank of Scotland.  I am confident that the
Board and your Company will benefit significantly from Sir Stephen's
contribution.

As I have also said before your Company continues to pursue its policy of
providing bespoke services to our clients with a strong emphasis on local
presence.  This can only be achieved with the hard work and dedication of all
our people and I have great pleasure in acknowledging their contribution to the
Company's objectives.   Similarly I have also said in the past that I believe it
foolhardy to become embroiled in detailed forecasts about the short term
outlook.  However I think it is reasonable to say that the second half of the
year has got off to an encouraging start.


Jamie Matheson
Executive Chairman
23 May 2007


Independent Review Report
Independent Review Report to Brewin Dolphin Holdings PLC


Introduction

We have been instructed by the company to review the financial information for
the 26 week period ended 31 March 2007 which comprises the Consolidated Income
Statement, the Consolidated Statement of Recognised Income and Expense, the
Consolidated Balance Sheet, Consolidated Cash Flow Statement and the related
notes 1 to 9.  We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board.  Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.


Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are 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 International Standards on Auditing (UK and
Ireland) 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 26 week period
ended 31 March 2007.


Deloitte & Touche LLP
Chartered Accountants
London


23 May 2007


Consolidated Income Statement
26 week period ended 31 March 2007

                                                                                     Unaudited   Unaudited      Audited
                                                                                   26 weeks to 26 weeks to  52 weeks to
                                                                                      31 March    31 March 30 September
                                                                                          2007        2006         2006
                                                                         Note           £'000s      £'000s       £'000s
Continuing operations
Revenue                                                                                 92,838      83,517      164,594
Other operating income                                                                   5,186       4,100        9,044

Total income                                                              3             98,024      87,617      173,638

Staff costs                                                                           (51,953)    (45,141)     (91,621)
Other operating costs                                                                 (28,086)    (27,557)     (55,166)

                                                                                      (80,039)    (72,698)    (146,787)

Operating profit                                                                        17,985      14,919       26,851
Other gains and losses                                                                      58           -            -
Finance income                                                                           2,786       2,355        5,235
Finance costs                                                                             (53)         (3)         (36)

Profit before tax                                                         3             20,776      17,271       32,050
Tax                                                                                    (6,452)     (5,357)     (10,045)

Profit attributable to equity shareholders of the parent from continuing
operations                                                                              14,324      11,914       22,005

Earnings per share

From continuing operations
            Basic                                                         4               7.2p        6.0p        11.1p

            Diluted                                                       4               6.8p        5.8p        10.6p



Consolidated Statement of Recognised Income and Expense
26 week period ended 31 March 2007

                                                                   Unaudited         Unaudited               Audited
                                                                 26 weeks to       26 weeks to           52 weeks to
                                                                    31 March          31 March          30 September
                                                                        2007              2006                  2006
                                                                      £'000s            £'000s                £'000s

Gain on revaluation of available-for-sale investments                    299             1,161                 1,509
Tax on revaluation of available-for-sale investments                    (90)             (348)                 (453)
Actuarial gain /(loss) on defined benefit pension scheme               1,133             (530)               (3,251)
Tax on actuarial (gain)/loss on defined benefit pension
scheme                                                                 (340)               159                   975
Deferred tax on share based payments                                     388               795                   720

Net income recognised directly in equity                               1,390             1,237                 (500)

Transfers
Transfer to profit or loss on sale of available-for-sale                (36)                 -                     -
investments
                                                                       1,354             1,237                 (500)
Profit for period                                                     14,324            11,914                22,005

Total recognised income and expense for the period
attributable to equity shareholders of the parent                     15,678            13,151                21,505


Consolidated Balance Sheet
As at 31 March 2007
                                                              Unaudited as at      Unaudited as at        Audited as at
                                                                     31 March             31 March         30 September
                                                                         2007                 2006                 2006
                                                                       £'000s               £'000s               £'000s
                                                   Note
ASSETS
Non-current assets
Goodwill                                                               73,037               44,440               66,846
Property, plant and equipment                                          19,231               10,450               16,920
Available-for-sale investments                                         11,009               10,115               10,463
Other receivables                                                       1,896                1,938                1,988
Deferred tax asset                                                      1,531                3,358                2,473

                                                                      106,704               70,301               98,690
Current assets
Trading investments                                                     1,337                  811                2,470
Trade and other receivables                                           356,435              261,024              251,437
Cash and cash equivalents                                              54,274               54,203               61,576

                                                                      412,046              316,038              315,483

Total assets                                                          518,750              386,339              414,173

LIABILITIES
Current liabilities
Bank overdrafts                                                         1,618                  291                3,197
Trade and other payables                                              370,418              275,426              279,148
Current tax liabilities                                                 5,549                5,318                3,256
Shares to be issued including premium                                   1,000                1,000                1,000

                                                                      378,585              282,035              286,601

Net current assets                                                     33,461               34,003               28,882

Non-current liabilities
Retirement benefit obligation                        7                 13,993               13,121               15,422
Deferred purchase consideration                                         3,529                    -                3,444
Shares to be issued including premium                                  18,080                3,072               16,500

                                                                       35,602               16,193               35,366

Total liabilities                                                     414,187              298,228              321,967

Net assets                                                            104,563               88,111               92,206

EQUITY
Called up share capital                              8                  2,015                1,989                1,995
Share premium account                                8                 84,885               81,812               82,755
Revaluation reserve                                  8                  6,978                6,562                6,805
Merger reserve                                       8                  4,562                4,562                4,562
Profit and loss account                              8                  6,123              (6,814)              (3,911)

Equity attributable to equity holders of the         8                104,563               88,111               92,206
parent



Consolidated Cash Flow Statement
26 week period ended 31 March 2007
                                                                         Unaudited         Unaudited           Audited
                                                                       26 weeks to       26 weeks to       52 weeks to
                                                                          31 March          31 March      30 September
                                                                              2007              2006              2006
                                                           Note             £'000s            £'000s            £'000s

 Net cash flow from operating activities                    6                7,389            12,285            34,442

 Cash flows from investing activities
 Purchase of goodwill                                                      (3,532)             (758)           (6,289)
 Purchases of property, plant and equipment                                (5,007)           (3,491)          (11,523)
 Proceeds from sale of available-for-sale investments                          159                 -                 -
 Purchases of available-for-sale investments                                 (400)                 -                 -
 Dividend received from available-for-sale investments                           -                 -               249

 Net cash used in investing activities                                     (8,780)           (4,249)          (17,563)

 Cash flows from financing activities
 Dividends paid to equity shareholders                                     (5,488)           (4,914)           (9,884)
 Proceeds on issue of shares                                                 1,156               562             1,156
 Net cash used in financing activities                                     (4,332)           (4,352)           (8,728)

 Net (decrease) / increase in cash and cash equivalents                    (5,723)             3,684             8,151

 Cash and cash equivalents at the start of period                           58,379            50,228            50,228

 Cash and cash equivalents at the end of period                             52,656            53,912            58,379


Firm's cash                                                                 37,369            35,417            47,832
Firm's overdraft                                                           (1,618)             (291)           (3,197)

Firm's net cash                                                             35,751            35,126            44,635
Client settlement cash                                                      16,905            18,786            13,744

Net cash and cash equivalents                                               52,656            53,912            58,379

Cash and cash equivalents shown in current assets                           54,274            54,203            61,576
Bank overdrafts                                                            (1,618)             (291)           (3,197)

Net cash and cash equivalents                                               52,656            53,912            58,379



Notes to the Interim Financial Report

1.     Basis of preparation

The interim financial information for the 26 week period to 31 March 2007 has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards, the disclosure requirements of the
Listing Rules and the accounting policies set out in the Group's latest Annual
Report and Accounts for the year ended 30 September 2006.


2.     Section 240 statement

The financial information set out in this document in respect of the year ended
30 September 2006 does not constitute the Group's statutory accounts for the
year ended 30 September 2006 within the meaning of section 240 of the Companies
Act 1985. Those accounts were prepared under International Financial Reporting
Standards and have been reported on by the Company's auditors and delivered to
the Registrar of Companies. The auditors report was unqualified and did not
contain a statement under section 237 (2) or (3) of the Companies Act 1985. A
copy of this statement is available at the Company's registered office at 12
Smithfield Street, London EC1A 9BD and a copy will be posted to all
shareholders.


3.     Segmental information

For management purposes, the Group is divided into two business streams: private
client investment management and investment banking (formerly corporate
broking). These form the basis for the primary segment information reported
below. All operations are carried out in the United Kingdom and the Channel
Islands.

                                                              Unaudited         Unaudited            Audited
                                                            26 weeks to       26 weeks to        52 weeks to
                                                               31 March          31 March  30 September 2006
                                                                   2007              2006
                                                                 £'000s            £'000s             £'000s
Total income
Private client investment management
  Discretionary portfolio management                             51,382            38,652             84,878
  Advisory portfolio management                                  35,263            35,185             66,613

                                                                 86,645            73,837            151,491
Investment banking                                               11,379            13,780             22,147

                                                                 98,024            87,617            173,638

Profit before tax
Private client investment management
  Discretionary portfolio management                              8,996             6,029             12,381
  Advisory portfolio management                                   6,458             5,227              9,216

                                                                 15,454            11,256             21,597
Investment banking                                                2,531             3,663              5,254

Operating profit                                                 17,985            14,919             26,851
Net finance income and other gains and losses                     2,791             2,352              5,199

                                                                 20,776            17,271             32,050


4.     Earnings per share

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

                                                                    Unaudited         Unaudited           Audited
                                                                  26 weeks to       26 weeks to    52 weeks to 30
                                                                     31 March          31 March         September
                                                                         2007              2006              2006
Number of shares                                                         '000              '000              '000

Basic
Weighted average number of shares in issue in the period              200,138           197,041           198,025


Diluted
Weighted average number of options outstanding for the
period                                                                  5,623             5,935             4,985
Estimated weighted average number of shares earned under
deferred consideration arrangements                                     4,719             3,628             4,106

Diluted weighted average number of options and shares for
the period                                                            210,480           206,604           207,116

Earnings attributable to ordinary shareholders                         £'000s            £'000s            £'000s

Basic profit for the period and attributable earnings                  14,324            11,914            22,005


Earnings per share

From continuing operations

            Basic                                                        7.2p              6.0p             11.1p

            Diluted                                                      6.8p              5.8p             10.6p


5.     Dividends
                                                                    Unaudited         Unaudited           Audited
                                                                  26 weeks to       26 weeks to       52 weeks to
                                                                     31 March          31 March 30 September 2006
                                                                         2007              2006
                                                                       £'000s            £'000s            £'000s
Amounts recognised as distributions to equity holders in
the period:
First interim dividend paid 10 April 2007, 2.875p per share             5,793             4,970             4,970
(2006: 2.5p)
Second interim dividend paid 25 October 2006, 2.75p per                     -                 -             5,488
share
                                                                        5,793             4,970            10,458


6.     Note to the cash flow statement
                                                                    Unaudited        Unaudited          Audited
                                                                  26 weeks to      26 weeks to   52 weeks to 30
                                                                31 March 2007    31 March 2006   September 2006
                                                                       £'000s           £'000s           £'000s
Group
Operating profit                                                       17,985           14,919           26,851
Adjustments for:
 Depreciation of property, plant and equipment                          2,696            2,209            3,771
 Retirement benefit obligation                                          (296)            (346)            (766)
 Share based payment cost                                                 322              333              613
 Interest income                                                        2,786            2,355            4,987
 Interest expense                                                        (53)              (3)             (36)

Operating cash flows before movements in working capital               23,440           19,467           35,420
 Increase in receivables and trading investments                    (103,773)         (28,891)         (21,014)
 Increase in payables                                                  90,965           23,850           27,407

Cash generated by operating activities                                 10,632           14,426           41,813
 Tax paid                                                             (3,243)          (2,141)          (7,371)

Net cash flow from operating activities                                 7,389           12,285           34,442


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


7.     Retirement benefit obligation

The main financial assumptions used in calculating the Group's retirement
benefit obligation are as follows:
                                                       31 March             31 March    30 September 2006
                                                           2007                 2006

Discount rate                                              5.3%                 5.0%                 5.1%
Inflation                                                  3.1%                 2.9%                 2.9%
Salary increases                                           3.1%                 2.9%                 2.9%
Expected return on equities                                7.6%                 7.7%                 7.6%
Expected return on bonds                                   4.6%                 4.7%                 4.6%
Expected return on other assets                           4.75%                 4.5%                 4.8%


A full actuarial valuation was carried out as at 31 December 2005 and the
results of this valuation have been updated to 31 March 2007 by a qualified
independent actuary and reflected in the accounts.


8.     Reconciliation of changes in equity

                                                Called up      Share   Revaluation     Merger     Profit      Total
                                                    share    premium       reserve    reserve   and loss
                                                  capital    account                             account
                                                   £'000s     £'000s        £'000s     £'000s     £'000s     £'000s
Group
30 September 2005                                   1,965     79,287         5,749      4,562   (14,515)     77,048
Profit for the period                                   -          -             -          -     22,005     22,005
Dividends                                               -          -             -          -   (10,458)   (10,458)
Issue of shares                                        30      3,468             -          -          -      3,498
Revaluation                                             -          -         1,509          -          -      1,509
Deferred tax on items taken directly to equity          -          -         (453)          -      1,695      1,242
Share based payments                                    -          -             -          -        613        613
Actuarial loss on defined benefit pension               -          -             -          -    (3,251)    (3,251)
scheme

30 September 2006                                   1,995     82,755         6,805      4,562    (3,911)     92,206
Profit for the period                                   -          -             -          -     14,324     14,324
Dividends                                               -          -             -          -    (5,793)    (5,793)
Issue of shares                                        20      2,130             -          -          -      2,150
Revaluation                                             -          -           299          -          -        299
Deferred tax on items taken directly to equity          -          -          (90)          -         48       (42)
Released on sale of available-for-sale                  -          -          (36)          -          -       (36)
investments
Share based payments                                    -          -             -          -        322        322
Actuarial gain on defined benefit pension               -          -             -          -      1,133      1,133
scheme

31 March 2007                                       2,015     84,885         6,978      4,562      6,123    104,563


9.     Provisions

Discussions with the Group's insurers in respect of claims for amounts already
incurred and expensed in relation to legal actions have largely been concluded
and recoveries made, realising the debtor included at 30 September 2006. A
provision has been made in respect of estimated outstanding matters and included
within trade and other payables. This amount is not disclosed separately, as the
directors consider that the disclosure of any further information would
seriously prejudice the ongoing position of the Group.  The net effect of the
above matters on the current period's income statement is not material.

Client Funds

                                                                At 31 March      At 31 March     At 30 September
                                                                       2007             2006                2006
                                                                  £ Billion        £ Billion           £ Billion

In Group's nominee or sponsored member                                  9.9              8.0                 8.6
Stock not held in Group's nominee                                       0.2              0.5                 0.2

Discretionary funds under management                                   10.1              8.5                 8.8

In Group's nominee or sponsored member                                  8.2              7.6                 7.2
Other funds where valuations are carried out but where the              2.9              3.3                 2.9
stock is not under the Group's control

Advisory funds under management                                        11.1             10.9                10.1

Managed funds                                                          21.2             19.4                18.9

In Group's nominee or sponsored member                                  2.6              2.3                 2.4
Stock not held in Group's nominee                                       0.4              0.4                 0.3

Execution only stock                                                    3.0              2.7                 2.7

Total funds                                                            24.2             22.1                21.6

Stock
In Group's nominee or sponsored member                                 20.7             17.9                18.2
Stock not held in Group's nominee                                       3.5              4.2                 3.4

                                                                       24.2             22.1                21.6





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