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Brewin Dolphin Hldgs (BRW)

  Print          Annual reports

Wednesday 27 May, 2015

Brewin Dolphin Hldgs

Interim Results

RNS Number : 2932O
Brewin Dolphin Holdings PLC
27 May 2015
 

 

 

 

27 May 2015

Brewin Dolphin Holdings PLC

 

Interim Management Report

For the Half Year Ended 31 March 2015

 

Highlights

 

Total Discretionary Funds under Management £26.2bn (FY 2014: £24.0bn, H1 2014: £22.7bn)

 

 

Total income of £148.4m (H1 2014: £146.3m)

 

 

Adjusted1 profit before tax £33.0m (H1 20142: £30.4m)

 

 

Adjusted1 profit before tax margin 22.3% (H1 20142: 20.8%)

 

 

Profit before tax £37.9m (H1 20142: £22.0m)

 

 

Adjusted1 earnings per share:

 


-

Basic earnings per share of 9.8p (H1 20142: 9.3p)

 


-

Diluted earnings per share3 of 9.2p (H1 20142: 8.8p)

 

Statutory earnings per share:

 


-

Basic earnings per share of 11.2p (H1 20142: 6.9p)

 


-

Diluted earnings per share of 10.7p (H1 20142: 6.5p)

 

 

Interim dividend of 3.75p per share (H1 2014: 3.65p per share)

 

 

Announced sale of Stocktrade on 14 May 2015

 

 

1 These figures have been adjusted to exclude redundancy costs, FSCS levy rebate, onerous contracts provision, disposal of available-for-sale investment and amortisation of client relationships.

2 Restated see notes 2 and 18.

3 See note 7.

 

0B0B0BDeclaration of Interim Dividend

The Board declares an interim dividend of 3.75p per share.  The interim dividend is payable on 26 June 2015 to shareholders on the register at the close of business on 5 June 2015 with an ex-dividend date of 4 June 2015.

 

 



 

David Nicol, Chief Executive, said:

 

"Against the backdrop of the ongoing transformation of the Group, financial performance in the first half was good. The growth in Funds under Management has been strong, helped by the overall upward trend in investment markets over the half year, although periods of volatility did impact transaction volumes and, therefore, impeded income growth. Nonetheless, the benefits of the more focused and efficient business emerging from the business transformation helped maintain profit growth, with the adjusted PBT margin increasing further to 22.3%.

 

The focus of the transformation programme remains to achieve a stronger business model which can create further value through long term sustainable growth with manageable risks. Increased efficiencies have delivered short term benefits in terms of enhanced shareholder returns. More importantly as we move out of the initial restructuring and simplification phase, these efficiencies enable re-investment in the business which is critical to sustaining organic growth."

 

 

For further information:

 

David Nicol, Chief Executive

Andrew Westenberger, Finance Director

Andrew Monkhouse, Head of Investor Relations

 

Brewin Dolphin Holdings PLC

020 7248 4400

 

Andrew Hayes / Wendy Baker

Hudson Sandler 

020 7796 4133

 

 

Notes to Editors:

 

About Brewin Dolphin

 

The Brewin Dolphin Group ("the Group") has 28 offices throughout the UK and the Channel Islands.

 

Established in 1762, the Group is one of the UK's largest independently-owned private client wealth managers and provides a wide-ranging investment management and financial planning service for private investors, charities and pension funds.

 

Brewin Dolphin Limited is the principal operating company of Brewin Dolphin Holdings PLC. Brewin Dolphin Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.

 

Please see the Media Centre section on our website: http://www.brewindolphinmedia.co.uk/media.aspx for more details.

 

 

 



 

Interim Management Report

 

To the members of Brewin Dolphin Holdings PLC

 

Financial highlights

Adjusted profit before tax for the half year ended 31 March 2015 increased by 9% to £33.0m (H1 2014: £30.4m), reflecting the growth in Discretionary Funds under Management to £26.2bn (28 September 2014: £24.0bn) and the benefits of ongoing control over operating costs. The adjusted profit before tax margin was 22.3% (H1 2014: 20.8%). Adjusted diluted earnings per share grew by 5% to 9.2p (H1 2014: 8.8p).

 

Profit before tax for the period was £37.9m (H1 2014: £22.0m) and includes a gain of £9.7m from the sale of the Group's holding in Euroclear plc. Statutory diluted earnings per share of 10.7p were 65% higher than the prior year (H1 2014: 6.5p).

 

The interim dividend has been increased by 0.10p to 3.75p per share (2014 interim: 3.65p per share) and will be paid on 26 June 2015.

 

First half review

The half year ended 31 March 2015 contained a period of relative stock market volatility, with the FTSE 100 index fluctuating in a range of over 850 points. Over the period as a whole, the FTSE 100 index increased by 1.9%, while the WMA Private Investor Series Balanced Portfolio index grew by 6.4%. The volatility of the market negatively impacted transaction volumes, whilst the overall market provided support to Funds under Management growth.

 

The business transformation, initiated in 2012, continues with further progress made implementing enhanced client advice processes together with ongoing development of our investment management processes. These processes are being underpinned by new technology, which together with organisational improvements such as larger investment teams, continues to improve client service, risk management and efficiency.

 

The quality of the business continues to improve with an increasing proportion of Funds under Management ('FUM') and income from the core Discretionary business. Discretionary FUM continues to grow, increasing by 15% over the last twelve months; from £22.7bn to £26.2bn, and growing by 68% over the last three and a half years. 83% of core income is generated from the Discretionary service. Discretionary FUM growth has benefitted from positive investment returns. Organic growth has been maintained, increasingly from intermediary sources, including Managed Funds Services.

 

Sale of Stocktrade

On 14 May 2015, the Group announced the sale of Stocktrade, its Execution Only division to Alliance Trust Savings ("ATS") for £14m in cash, payable in full upon completion.

 

At 31 March 2015, Stocktrade had Assets under Administration of £4.6bn. For the year ended 28 September 2014, Stocktrade had income of £9.6m and contributed approximately £1.3m of pre-tax profit.

 

After accounting for all related costs, the transaction is expected to result in a net gain of approximately £1.0m, subject to final separation costs. The net sale proceeds will be used for general corporate purposes. The sale will enable additional operational efficiencies that, over time, are anticipated to largely offset Stocktrade's contribution to the Group.

 

The sale is consistent with our strategy of streamlining and simplifying the Group's operations and will help further enhance shareholder value by allowing us to continue to focus on growing our core Discretionary wealth management business.

 



 

Results and business performance

The underlying results for the half year ended 31 March 2015 reflect the continued progress that the Group has made to date on delivering against its strategic objectives. Adjusted profit before tax grew by 9% to £33.0m (H1 2014: £30.4m) and adjusted diluted EPS grew by 5% to 9.2p from 8.8p in the same period last year.

 

The adjusted profit before tax growth was driven by a 1% rise in income, together with improving efficiency, and control over operating costs, delivering an increased profit margin of 22.3% (H1 2014: 20.8%).


Unaudited
as at
31 March
2015

Unaudited
as at
30 March
20141

 

 

 

% change


£m

£m


Income




Core2

136.0

134.4

1%

Other

12.4

11.9

4%

Total income

148.4

146.3

1%





Fixed staff costs

(53.4)

(51.3)

4%

Other operating costs

(36.6)

(39.8)

-8%

Total fixed operating costs

(90.0)

(91.1)

-1%

Adjusted3 profit before variable staff costs

58.4

55.2

6%

Variable staff costs

(25.7)

(25.1)

2%

Adjusted3 operating profit

32.7

30.1

9%

Net finance income and other gains and losses

0.3

0.3

0%

Adjusted3 profit before tax

33.0

30.4

9%

Exceptional gains/(costs)

10.1

(2.0)

n/a

Amortisation of client relationships

(5.2)

(6.4)

-19%

Profit before tax

37.9

22.0

72%

Taxation

(7.8)

(3.9)

100%

Profit after tax

30.1

18.1

66%





Earnings per share




Basic earnings per share

11.2p

6.9p

62%

Diluted earnings per share

10.7p

6.5p

65%





Adjusted3 earnings per share




Basic earnings per share

9.8p

9.3p

5%

Diluted earnings per share4

9.2p

8.8p

5%





1 Restated see notes 2 and 18.




2 Core income is defined as income derived from fees and commissions charged for management and/or advice and execution activities relating to client portfolios. 

3 These figures have been adjusted to exclude redundancy costs, FSCS levy rebate, onerous contracts provision, disposal of available-for-sale investment and amortisation of client relationships.

4 See note 7.

 

Total income increased by £2.1m half on half with core income increasing by £1.6m, driven by a 12% rise in fee income to £95.9m (H1 2014: £86.0m), offset by a 17% fall in commission to £40.1m (H1 2014: £48.4m). Fee income increased largely as a result of growth in Funds under Management (H1 2015: £39.1bn, H1 2014: £36.1bn).

 

Commissions reduced because of lower trading volumes and clients joining on "fee only" rate cards. The lower transaction volumes arose partly because of volatile markets in the first three months of the period. The last three months (March to May 2015) have seen a partial rebound in transaction volumes.

 

Discretionary income of £112.6m was 5% higher than H1 2014 (£107.7m), and amounted to 83% of core income. Advisory income and Execution Only income accounted for 10% and 7% of core income respectively.

 

Other income increased by 4% to £12.4m, with Financial Planning increasing by 21% to £7.4m (H1 2014: £6.1m), trail income up by 8% to £2.7m, in line with valuation increases as a result of  market growth, and interest income down by 30% to £2.3m (H1 2014: £3.3m) as a result of continued falling margins on cash deposits.

 

Total fixed operating costs declined by 1% to £90.0m, from £91.1m in the same period last year.

 

Fixed staff costs increased by 4% to £53.4m (H1 2014: £51.3m), as a result of both inflationary pay rises and a temporary increase in contractor numbers to support the enhanced client advice processes.

 

Other operating costs declined 8% from £39.8m in the same period last year to £36.6m.  Reduced property costs resulting from a smaller office network, and lower discretionary and variable costs all contributed to the decline.

 

Exceptional gains were £10.1m, compared to losses of £2.0m in the same period last year. The major components are profit of £9.7m from the sale of the Group's holding in Euroclear plc and a £1.2m Financial Services Compensation Scheme levy rebate.

 

Amortisation of intangible client relationships was 19% lower than in same period last year (H1 2014: £6.4m).

 

Funds under Management 

 

£bn

28 September 2014

Inflows

Outflows

Service Switching

Net Flows

Growth Rate % *

Market Movement

 31 March 2015










Discretionary

 24.0

 1.1

(0.6)

 0.2

 0.7

6%

 1.5

 26.2










Advisory Managed

4.1

 0.1

(0.2)

 (0.4)

(0.5)

-24%

 0.2

 3.8

Advisory Dealing

 1.3

 0.0

(0.1)

 (0.5)

(0.6)

-92%

 0.0

 0.7

Total Advisory

 5.4

 0.1

(0.3)

 (0.9)

(1.1)

-41%

 0.2

 4.5










Total Managed/Advised

 29.4

 1.2

(0.9)

 (0.7)

(0.4)

-3%

 1.7

 30.7










Stocktrade

4.3

0.2

(0.1)

0.0

0.1

5%

0.2

4.6

Brewin Dolphin

3.1

0.3

(0.4)

0.7

0.6

39%

0.1

3.8

Execution Only

7.4

0.5

(0.5)

0.7

0.7

19%

0.3

8.4

Total Funds

 36.8

 1.7

(1.4)

 0.0

0.3

2%

2.0

39.1


 *Annualised








 

 


31 March 2015

28 September 2014


% change

 

 

Indices





 

 

FTSE WMA Private Investor Series Balanced Portfolio

3,684

3,462


6.4%

 

 

FTSE 100

6,773

6,649


1.9%

 

 

 

The Group continues to focus on its core Discretionary service whilst managing the transfer of FUM out of the Advisory service. This is reflected in the on-going growth in Discretionary (and Execution Only) FUM and net outflows from Advisory FUM. 

 

Total Discretionary FUM increased by 9% over the period to £26.2bn (FY 2014: £24.0bn), and by 15% over the last twelve months (H1 2014: £22.7bn).

 

Discretionary net inflows were £0.7bn, an annualised rate of 6%, above the target of achieving 5% per annum net FUM inflows.  Discretionary FUM now represents 85% (28 September 2014: 82%) of total Managed/Advised FUM.

 

 

Capital

The Group has a strong balance sheet with cash balances at period end of £115m.  These underpin its regulatory capital resources which continue to be in significant surplus to requirements.

 

 

Dividend

The Group's dividend policy is to grow dividends in line with adjusted earnings, with a target payout ratio of 60% to 80% of annual adjusted diluted earnings per share. In accordance with our normal practice, it is intended that the final dividend will be used to reflect full year profitability. Accordingly, an interim dividend of 3.75p per share is payable on 26 June 2015 to shareholders on the register at the close of business on 5 June 2015 with an ex-dividend date of 4 June 2015.

 

The variable final dividend will be based on the full year target dividend payout ratio of 60% to 80% adjusted earnings per share. 

 

 

Going concern

As stated in note 2 to the condensed set of financial statements, 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 has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt a going concern basis for the preparation of the condensed financial statements. In forming their view, the Directors have considered the Group's prospects for a period exceeding 12 months from the date the condensed financial statements are approved.

 

 

Principal risks and uncertainties

The Directors consider that the nature of the principal risks and uncertainties which may have a material effect on the Group's performance during the remainder of its financial year remain unchanged from those identified on pages 27 to 32 of the 2014 Annual Report and Accounts available via our website www.brewin.co.uk.

 

 

Board changes

Kath Cates was appointed to the Board as a Non-Executive Director with effect from 18 December 2014. Michael Williams and Sir Stephen Lamport retired from the Board at the AGM on 20 February 2015. All of the non-executive directors are considered by the Company to be independent and the Board is fully compliant with the UK Corporate Governance Code with respect to Board composition.

 

 



 

Outlook

The economic backdrop in the UK, Eurozone and the US is continuing to improve. Supportive economic policies and continuing low interest rates provide a favourable backdrop to economic growth. Key growth and employment indicators appear positive for the medium term.

 

Whilst it is too early to assess the impact of the recent UK general election result on the performance of the economy, it is expected that the outcome will provide a favourable environment for the wealth management industry as a whole.

 

The UK has an ageing population with growing wealth, and a broad history of under-saving. This creates a positive backdrop for the industry in which the firm operates, coupled with positive recent developments in pension legislation.

 

The Group is entering the final stages of its transformation programme, and remains focused on continuing to develop both the capability and capacity to grow sustainably in the long term.

 

 

David Nicol


Chief Executive


26 May 2015


 

 

 

 



 

Condensed Consolidated Income Statement

for the period ended 31 March 2015

 

 



Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September
20141


Notes

£'000

£'000

£'000

Revenue


 146,054

 142,972

 284,374

Other operating income


 2,336

 3,339

 6,108

Total income


 148,390

 146,311

 290,482






Staff costs


 (79,098)

 (76,438)

 (149,476)

Redundancy costs


(970)

(984)

 (2,269)

FSCS levy rebate


 1,181

-

-

Onerous contracts provision


131

(981)

 (2,005)

Amortisation of intangible assets - client relationships

9

 (5,162)

 (6,426)

 (13,592)

Impairment of intangible assets - software


-

-

 (31,693)

Licence provision


-

-

 (2,034)

Other operating costs


 (36,561)

 (39,787)

 (82,023)

Operating expenses


 (120,479)

 (124,616)

 (283,092)






Operating profit


 27,911

 21,695

 7,390

Finance income

4

525

555

 1,549

Other gains and losses

5

 9,712

-

-

Finance costs

4

(224)

(282)

(546)

Profit before tax


 37,924

 21,968

 8,393

Tax

6

 (7,778)

 (3,842)

 (1,722)

Profit for the period


 30,146

 18,126

 6,671






Attributable to:





Equity shareholders of the parent


 30,146

 18,126

 6,671



 30,146

 18,126

 6,671






Earnings per share










Basic

7

11.2p

6.9p

2.5p

Diluted

7

10.7p

6.5p

2.4p






1 Restated see notes 2 and 18.





 



 

Condensed Consolidated Statement of Comprehensive Income

for the period ended 31 March 2015

 



Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September
20141



£'000

£'000

£'000

Profit for the period


 30,146

 18,126

 6,671

Items that will not be reclassified subsequently to profit and loss:





Actuarial gain/(loss) on defined benefit pension scheme


 1,328

(826)

 (1,223)

Deferred tax charge/(credit) on actuarial gain/(loss) on defined benefit pension scheme


(266)

165

245



 1,062

(661)

(978)

Items that may be reclassified subsequently to profit and loss:





Reversal of revaluation of available-for-sale investments


 (9,565)

-

-

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


 1,913

-

-

Exchange differences on translation of foreign operations


(311)

(88)

(302)



 (7,963)

(88)

(302)

Other comprehensive expense for the period


 (6,901)

(749)

 (1,280)

Total comprehensive income for the period


 23,245

 17,377

 5,391






Attributable to:





Equity shareholders of the parent


 23,245

 17,377

 5,391



 23,245

 17,377

 5,391






1 Restated see notes 2 and 18.







Condensed Consolidated Statement of Changes in Equity

for the period ended 31 March 2015


Attributable to the equity shareholders of the parent


 Called up share capital

 Share premium account

 Own shares

 Revaluation reserve

 Merger reserve

 Profit and loss account

 Total


 £'000

 £'000

 £'000

 £'000

 £'000

 £'000

 £'000

Balance at 29 September 2013

 2,712

133,341

(12,734)

7,652

 61,380

 29,294

221,645

Restatement (see notes 2 and 18)

 -

-

-

-

 -

(549)

 (549)

Balance at 29 September 2013 (restated)

 2,712

133,341

(12,734)

7,652

 61,380

 28,745

221,096

 Profit for the period

 -

-

-

-

 -

 18,126

18,126

 Other comprehensive income for the period








 Deferred and current tax on other comprehensive income

 -

-

-

-

 -

165

 165

 Actuarial loss on defined benefit pension scheme

 -

-

-

-

 -

(826)

 (826)

 Exchange differences on translation of foreign operations

 -

-

-

-

 -

(88)

 (88)

 Total comprehensive income for the period

 -

-

-

-

 -

 17,377

17,377

 Dividends

 -

-

-

-

 -

(13,438)

(13,438)

 Issue of shares

25

4,540

-

-

 -

-

4,565

 Own shares acquired in the period

 -

-

(4,135)

-

 -

-

(4,135)

 Own shares disposed of on exercise of options

 -

-

3,819

-

 -

 (3,819)

-

 Share-based payments

 -

-

-

-

 -

 3,187

3,187

 Tax on share-based payments

 -

-

-

-

 -

 2,250

2,250

 Balance at 30 March 2014

 2,737

137,881

(13,050)

7,652

 61,380

 34,302

230,902

 Loss for the period

 -

-

-

-

 -

 (11,455)

(11,455)

 Other comprehensive income for the period








 Deferred and current tax on other comprehensive income

 -

-

-

-

 -

80

 80

 Actuarial loss on defined benefit pension scheme

 -

-

-

-

 -

(397)

 (397)

 Exchange differences on translation of foreign operations

 -

-

-

-

 -

(214)

 (214)

 Total comprehensive income for the period

 -

-

-

-

 -

 (11,986)

(11,986)

 Dividends

 -

-

-

-

 -

 (9,688)

(9,688)

 Issue of shares

8

1,539

-

-

 -

-

1,547

 Own shares acquired in the period

 -

-

(3,828)

-

 -

-

(3,828)

 Own shares disposed of on exercise of options

 -

-

 833

-

 -

(833)

-

 Share-based payments

 -

-

-

-

 -

 5,311

5,311

 Tax on share-based payments

 -

-

-

-

 -

(988)

 (988)

 Balance at 28 September 2014

 2,745

139,420

(16,045)

7,652

 61,380

 16,118

211,270

 Profit for the period

 -

-

-

-

 -

 30,146

30,146

 Other comprehensive income for the period








 Deferred and current tax on other comprehensive income

 -

-

-

1,913

 -

(266)

1,647

Actuarial gain on defined benefit pension scheme

 -

-

-

-

 -

 1,328

1,328

 Revaluation of available-for-sale investments

 -

-

-

(9,565)

 -

-

(9,565)

 Exchange differences on translation of foreign operations

 -

-

-

-

 -

(311)

 (311)

 Total comprehensive income for the period

 -

-

-

(7,652)

 -

 30,897

23,245

 Dividends

 -

-

-

-

 -

(16,845)

(16,845)

 Issue of shares

45

2,402

-

-

 9,173

-

11,620

 Own shares acquired in the period

 -

-

(13,048)

-

 -

-

(13,048)

 Own shares disposed of on exercise of options

 -

-

7,234

-

 -

 (7,234)

-

 Share-based payments

 -

-

-

-

 -

 4,617

4,617

 Tax on share-based payments

 -

-

-

-

 -

411

 411

 Balance at 31 March 2015

 2,790

141,822

(21,859)

-

 70,553

 27,964

221,270



Condensed Consolidated Balance Sheet

as at 31 March 2015



Unaudited
as at
31 March
2015

Unaudited
as at
30 March
20141

Audited
as at
28 September
20141


Notes

£'000

£'000

£'000

ASSETS





Non-current assets





Intangible assets

9

 90,245

 126,435

 94,311

Property, plant and equipment

10

 9,139

 12,886

 11,076

Available-for-sale investments

11

-

 10,000

 10,000

Other receivables


834

 1,182

 1,092

Deferred tax asset


 9,684

 2,621

 9,136

Total non-current assets


 109,902

 153,124

 125,615

Current assets





Trading investments

11

977

897

912

Trade and other receivables


 279,457

 265,929

 302,065

Cash and cash equivalents


 114,816

 109,174

 136,383

Total current assets


 395,250

 376,000

 439,360

Total assets


 505,152

 529,124

 564,975






LIABILITIES





Current liabilities





Bank overdrafts


50

231

 1,270

Trade and other payables


 258,829

 263,501

 311,146

Current tax liabilities


 4,421

 3,342

 3,888

Provisions

12

 2,657

 4,000

 4,973

Shares to be issued including premium

13

 9,361

 6,112

 10,068

Total current liabilities


 275,318

 277,186

 331,345

Net current assets


 119,932

 98,814

 108,015






Non-current liabilities





Retirement benefit obligation

14

 5,042

 8,684

 7,735

Deferred purchase consideration


-

 1,131

 1,271

Provisions

12

 3,522

 3,055

 4,142

Shares to be issued including premium

13

-

 8,166

 9,212

Total non-current liabilities


 8,564

 21,036

 22,360

Total liabilities


 283,882

 298,222

 353,705

Net assets


 221,270

 230,902

 211,270






EQUITY





Called up share capital

15

 2,790

 2,737

 2,745

Share premium account

15

 141,822

 137,881

 139,420

Own shares


 (21,859)

 (13,050)

 (16,045)

Revaluation reserve


-

 7,652

 7,652

Merger reserve


 70,553

 61,380

 61,380

Profit and loss account


 27,964

 34,302

 16,118

Equity attributable to equity holders of the parent


 221,270

 230,902

 211,270






1 Restated see notes 2 and 18.







Condensed Consolidated Cash Flow Statement

for the period ended 31 March 2015



Unaudited
period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September 20141


Notes

 £'000

 £'000

 £'000

Net cash inflow from operating activities

17

 1,471

 16,978

 59,968






 Cash flows from investing activities





 Purchase of intangible assets - client relationships


(3)

(147)

(150)

 Purchase of intangible assets - software


 (2,530)

 (4,697)

 (7,450)

 Purchases of property, plant and equipment


(737)

 (1,559)

 (2,751)

 Proceeds on disposal of available-for-sale investments


 10,147

 -

 -

 Dividend received from available-for-sale investments


 -

-

307

Net cash from/(used in) investing activities


 6,877

 (6,403)

 (10,044)






 Cash flows from financing activities





 Dividends paid to equity shareholders

8

 (16,845)

 (13,438)

 (23,126)

 Purchase of own shares


 (13,048)

 (4,135)

 (7,963)

 Proceeds on issue of shares


 1,597

 2,447

 3,048

Net cash used in financing activities


 (28,296)

 (15,126)

 (28,041)






Net (decrease)/increase in cash and cash equivalents

 (19,948)

 (4,551)

 21,883






 Cash and cash equivalents at the start of period


 135,113

 113,533

 113,533

 Effect of foreign exchange rates


(399)

(39)

(303)

Cash and cash equivalents at the end of period


 114,766

 108,943

 135,113






Cash and cash equivalents shown in current assets


 114,816

 109,174

 136,383

Bank overdrafts


(50)

(231)

 (1,270)

Net cash and cash equivalents


 114,766

 108,943

 135,113






1 Restated see notes 2 and 18.





 

 

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



Notes to the Condensed Set of Financial Statements

 

1.

General information

Brewin Dolphin Holdings PLC (the 'Company') is a public limited company incorporated in the United Kingdom. The shares of the Company are listed on the London Stock Exchange. The address of its registered office is 12 Smithfield Street, London EC1A 9BD. This Interim Financial Report was approved for issue on 26 May 2015.

 

A copy of this Interim Financial Report including Condensed Financial Statements for the
period ended 31 March 2015 is available at the Company's registered office and on the Company's investor relations website (www.brewin.co.uk).

 

The information for the 52 week period ended 28 September 2014 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

2.

Accounting policies

Basis of preparation

The annual financial statements of Brewin Dolphin Holdings PLC are prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.

 

The condensed set of financial statements included in this Interim Financial Report for the
period ended 31 March 2015 should be read in conjunction with the annual audited financial statements of Brewin Dolphin Holdings PLC for the 52 week period ended 28 September 2014.

 

The condensed set of financial statements included in this Interim Financial Report 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 ('DTR') of the Financial Conduct Authority.

 

Going concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly they continue to adopt the going concern basis in preparing the condensed financial statements.

 

Changes in accounting policy and disclosure

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 annual audited financial statements for the 52 week period ended 28 September 2014, except for the adoption of new standards and interpretations effective as of 29 September 2014 and a change in accounting policy for client settlement cash.

 

The Group has applied for the first time IFRIC 21 'Levies' that requires restatement of previous financial statements.  In addition, the Group has amended its accounting policy for client settlement cash.

 

The nature and the effect of these changes are disclosed below. Several other new standards and amendments apply for the first time during the period, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group. 

 

IFRIC 21 Levies

IFRIC 21 is effective for annual periods beginning on or after 1 January 2014 and has been applied retrospectively. It is applicable to all levies imposed by financial services regulators under legislation, other than outflows that are within the scope of other standards and fines or other penalties for breaches of legislation. The interpretation clarifies that an entity recognises a liability for a levy, when the activity that triggers payment as identified by the relevant legislation occurs.

 

The trigger that gives rise to the liability to pay the FSCS Levy is that Brewin Dolphin Limited is a company authorised by the FCA at the levy date of 1 July. At this point, the full FSCS Levy should be recognised.

 

The impact of this new interpretation in the current period is to reduce other operating costs by £865,000 and increase profit for the period by £688,000.  The impact on prior periods is outlined in note 18.

 

Client settlement cash

Client settlement account balances were previously shown as client settlement cash included within cash and cash equivalents. The accounting policy has been changed to reclassify these balances to either trade and other payables or trade and other receivables, which better reflects the substance of these balances.

 

The impact of this change in the current period is to reduce cash and cash equivalents by £18.5 million, decrease trade and other payables by £13.9 million, and increase trade and other receivables by £4.6 million. There is no impact on profit for the period. The impact on prior periods is outlined in note 18, firm's cash was not impacted by the change.

 

3.

Segmental information

For management reporting purposes the Group currently has a single operating segment.  This forms the reportable segment of the Group for the period. Please refer to the Consolidated Income Statement and the Consolidated Balance Sheet, for numerical information.

 

The Group's operations are carried out in the United Kingdom, Channel Islands and the Republic of Ireland.  Income generated in the Republic of Ireland is reported as part of the Investment Management division.  All segmental income related to external clients. 

 

The accounting policies of the operating segment are the same as those of the Group. 

 

4.

Finance income and costs

 


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
2014

Audited
52 weeks to
28 September
2014


 £'000

 £'000

 £'000

Finance income




Dividends from available-for-sale investments

 -

 -

472

Interest on bank deposits

525

555

 1,077


525

555

 1,549





Finance costs




Finance cost of deferred consideration

49

65

129

Interest expense on defined pension obligation

135

184

338

Unwind of discounts on provisions

20

16

48

Interest on bank overdrafts

20

17

31


224

282

546

 



 

5.

Other gains and losses

 


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
2014

Audited
52 weeks to
28 September
2014


 £'000

 £'000

 £'000

Profit on disposal of available-for-sale investments

9,712

-

-

 

The Group sold its holding in Euroclear plc for £10.1 million in December 2014.

 

6.

Taxation

 


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September
20141


 £'000

 £'000

 £'000

United Kingdom




Current tax

 5,828

 3,094

 8,391

Prior period

309

 -

(50)

Overseas tax




Current tax

129

147

204

Prior period

1

 -

(1)


 6,267

 3,241

 8,544

United Kingdom deferred tax




Current year

 1,851

672

 (6,246)

Prior period

(340)

(71)

(576)

Total

 7,778

 3,842

 1,722





1 Restated see notes 2 and 18.




 

 

The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.

 



 

7.

Earnings per share

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


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September
20141


'000

'000

'000

Number of shares




Basic




Weighted average number of shares in issue in the period

269,126

264,623

268,399

Diluted




Effect of weighted average number of options outstanding for the period

9,989

11,500

11,726

Effect of estimated weighted average number of shares to be earned under deferred consideration arrangements

2,655

2,768

2,635

Diluted weighted average number of options and shares for the period

281,770

278,891

282,760

Adjusted2 diluted




Effect of full dilution of employee share options which are contingently issuable or have future attributable service costs

5,148

2,275

2,196

Adjusted diluted weighted average number of options and shares for the period

286,918

284,956






£'000

£'000

£'000

Basic earnings attributable to ordinary shareholders




Profit for the period

30,146

18,126

6,671

Disposal of available-for-sale investment

(9,712)

 -

 -

Redundancy costs

 970

 984

2,269

FSCS levy rebate

(1,181)

 -

 -

Onerous contracts provision

 (131)

 981

2,005

Amortisation of intangible assets - client relationships

5,162

6,426

13,592

Impairment of intangible assets - software

 -

 -

31,693

Licence provision

 -

 -

2,034

 less tax effect of above

1,003

(1,846)

(11,350)

Adjusted3 basic profit for the period and attributable earnings

26,257

24,671

46,914





Diluted earnings attributable to ordinary shareholders




Profit for the period

30,146

18,126

6,671

Finance costs of deferred consideration4

 49

 58

 117

 less tax

 (10)

 (13)

 (26)

Adjusted fully diluted profit for the period and attributable earnings

30,185

18,171

6,762

Disposal of available-for-sale investment

(9,712)

 -

 -

Redundancy costs

 970

 984

2,269

FSCS levy rebate

(1,181)

 -

 -

Onerous contracts provision

 (131)

 981

2,005

Amortisation of intangible assets - client relationships

5,162

6,426

13,592

Impairment of intangible assets - software

 -

 -

31,693

Licence provision

 -

 -

2,034

 less tax effect of above

1,003

(1,846)

(11,350)

Adjusted3 diluted profit for the period and attributable earnings

26,296

24,716

47,005

 

 




Earnings per share




Basic

11.2p

6.9p

2.5p

Diluted

10.7p

6.5p

2.4p

 

 




Adjusted3 earnings per share




Basic

9.8p

9.3p

17.5p

Adjusted2 diluted

9.2p

8.8p

16.5p

 

1 Restated see notes 2 and 18.

2 The dilutive shares used for this measure differ from that used for statutory dilutive earnings per share; the future value of service costs attributable to employee share options is ignored and contingently issuable shares for Long-term Incentive Plan ('LTIP') options are assumed to fully vest. The Directors have selected this measure as it represents the underlying effective dilution by offsetting the impact to the calculation of basic shares of the purchase of shares by the Employee Share Ownership Trust ('ESOT') to satisfy options.

3 Excluding disposal of available-for-sale investment, redundancy costs, FSCS levy rebate, onerous contracts provision, amortisation of client relationships, impairment of intangible assets - software and licence provision .

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

 

8.

Dividend

 


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
2014

Audited
52 weeks to
28 September
2014


£'000

£'000

£'000

Amounts recognised as distributions to equity shareholders in the period:








Final dividend paid 23 March 2015, 6.25p per share (2014: 5.05p per share)

 16,845

 13,438

 13,438

Interim dividend paid 4 July 2014, 3.65p per share

 -

 -

 9,688


 16,845

 13,438

 23,126





 

An interim dividend of 3.75p per share was declared by the Board on 26 May 2015 and has not been included as a liability as at 31 March 2015. This interim dividend will be paid on 26 June 2015 to shareholders on the register at the close of business on 5 June 2015 with an ex-dividend date of 4 June 2015.

 



 

 

9.

Intangible assets

 



 

Goodwill

 Client relationships

 

Software

 

Total



 £'000

 £'000

 £'000

 £'000

Cost






 At 29 September 2013


48,637

100,578

46,615

 195,830

 Additions


-

 740

4,479

 5,219

 Disposals


-

-

-

 -

 Exchange differences


-

 (2)

-

(2)

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


-

1,453

-

 1,453

 At 30 March 2014


48,637

102,769

51,094

 202,500

 Additions


-

 (793)

2,563

 1,770

 Disposals


-

-

 (2)

(2)

 Exchange differences


-

 (9)

-

(9)

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


-

6,079

-

 6,079

 At 28 September 2014


48,637

108,046

53,655

 210,338

 Additions


-

 83

2,482

 2,565

 Disposals


-

-

-

 -

 Exchange differences


-

 (12)

-

(12)

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


-

 121

-

121

 At 31 March 2015


48,637

108,238

56,137

 213,012













 Accumulated amortisation and impairment






 At 29 September 2013


-

55,997

12,385

 68,382

 Amortisation charge for the period


-

6,426

1,257

 7,683

 Impairment losses for the period


-

-

-

 -

 At 30 March 2014


-

62,423

13,642

 76,065

 Amortisation charge for the period


-

7,166

1,103

 8,269

 Impairment losses for the period


-

-

31,693

 31,693

 At 28 September 2014


-

69,589

46,438

 116,027

 Amortisation charge for the period


-

5,162

1,578

 6,740

 Impairment losses for the period


-

-

-

 -

 At 31 March 2015


-

74,751

48,016

 122,767













Net book value






 At 29 September 2013


48,637

44,581

34,230

 127,448

 At 30 March 2014


48,637

40,346

37,452

 126,435

 At 28 September 2014


48,637

38,457

7,217

 94,311

 At 31 March 2015


48,637

33,487

8,121

 90,245

 



 

 

 

10.

Property, plant and equipment

 



Leasehold Improvements

Office Equipment

Motor
Vehicles

Computer Equipment

Total



£'000

£'000

£'000

£'000

£'000

Cost







At 29 September 2013


 12,687

 13,681

34

 77,771

104,173

Additions


256

157

-

 1,149

1,562

Exchange differences


(2)

(7)

-

-

(9)

Disposals


(470)

(62)

-

(86)

(618)

At 30 March 2014


 12,471

 13,769

34

 78,834

105,108

Additions


473

79

-

671

1,223

Exchange differences


(10)

(28)

(2)

-

(40)

Disposals


 (1,131)

(565)

-

(313)

 (2,009)

At 28 September 2014


 11,803

 13,255

32

 79,192

104,282

Additions


500

162

-

80

 742

Exchange differences


(14)

(39)

(2)

-

(55)

Disposals


(81)

(60)

-

(41)

(182)

At 31 March 2015


 12,208

 13,318

30

 79,231

104,787








Accumulated depreciation







At 29 September 2013


 7,230

 10,428

14

 72,181

89,853

Charge for the period


620

822

4

 1,349

2,795

Exchange differences


(2)

(5)

-

-

(7)

Eliminated on disposal


(283)

(54)

-

(82)

(419)

At 30 March 2014


 7,565

 11,191

18

 73,448

92,222

Charge for the period


614

720

4

 1,238

2,576

Exchange differences


(10)

(26)

(1)

-

(37)

Eliminated on disposal


(738)

(513)

-

(304)

 (1,555)

At 28 September 2014


 7,431

 11,372

21

 74,382

93,206

Charge for the period


649

627

4

 1,375

2,655

Exchange differences


(13)

(33)

(2)

-

(48)

Eliminated on disposal


(71)

(53)

-

(41)

(165)

At 31 March 2015


 7,996

 11,913

23

 75,716

95,648








Net book value







At 29 September 2013


 5,457

 3,253

20

 5,590

14,320

At 30 March 2014


 4,906

 2,578

16

 5,386

12,886

At 28 September 2014


 4,372

 1,883

11

 4,810

11,076

At 31 March 2015


 4,212

 1,405

7

 3,515

9,139

 

 

 



 

11.

Investments

 

Available-for-sale


Unlisted investments



£'000


Fair value






At 31 March 2015

 -


At 30 March 2014

 10,000


At 28 September 2014

 10,000





 

The Group sold its unlisted available-for-sale investment in Euroclear plc (refer to note 5) in December 2014.

 

The holding in Euroclear plc resulted from a £431,000 strategic investment in Crest, the London based settlement system which was taken over by Euroclear plc.

 

Trading investments

 


Listed investments



£'000


Fair value






At 31 March 2015

977


At 30 March 2014

897


At 28 September 2014

912





 

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

 



 

12.

Provisions

 


Licence provision

Sundry claims and associated costs

Onerous contracts

Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
2014

Audited
52 weeks to
28 September
2014





Total

Total

Total


£'000

£'000

£'000

£'000

£'000

£'000

At start of period

 1,429

 1,907

 5,779

 9,115

 7,665

7,665

Additions

 -

768

802

 1,570

 1,716

6,750

Utilisation of provision

 (1,429)

(313)

 (1,439)

 (3,181)

 (1,086)

 (3,500)

Unwinding of discount

 -

 -

20

20

16

 48

Unused amounts reversed during the period

 -

(413)

(932)

 (1,345)

 (1,256)

 (1,848)

At end of period

 -

 1,949

 4,230

 6,179

 7,055

9,115








Provisions







Included in current liabilities

 -

 1,949

708

 2,657

 4,000

4,973

Included in non-current liabilities

 -

 -

 3,522

 3,522

 3,055

4,142


 -

 1,949

 4,230

 6,179

 7,055

9,115

 

 

The Group recognises a provision for settlements of sundry claims and associated costs; settlement of £101,000 (30 March 2014: £nil, 28 September 2014: £nil) has been made since the balance sheet date.

 

The onerous contracts provision is in respect of surplus office space, which the Group may not be able to sublet in the short term. The maximum exposure is the current estimated amount that the Group would have to pay to meet the future obligations under these lease contracts which is approximately £12.9 million as at 31 March 2015, if the assumption regarding sub-lets is removed and the time value of money is ignored.

 

13.

Shares to be issued including premium and other deferred purchase liabilities

In prior periods, the Group acquired investment businesses and teams of investment managers, bringing with them funds under management (the latter classified as the intangible asset client relationships) 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 shares typically have to be held 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 in light of actual results of previously acquired business teams.



 

14.

Retirement benefit obligation

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

 










As at

31 March
2015

As at

30 March
2014

As at

28 September 2014

Discount rate



3.30%

4.30%

3.90%

RPI Inflation assumption



2.90%

3.20%

3.10%

CPI Inflation assumption



1.90%

2.20%

2.10%

Rate of increase in salaries



2.90%

3.20%

3.10%

LPI Pension Increases



2.85%

3.10%

3.00%







Average assumed life expectancies for members on retirement at age 65.

Retiring today






Males



89.0 years

88.9 years

88.9 years

Females



90.2 years

90.1 years

90.1 years

Retiring in 20 years time






Males



90.3 years

90.2 years

90.2 years

Females



91.7 years

91.6 years

91.6 years

 

A full actuarial valuation was carried out as at 1 January 2012 and the results of this valuation have been updated to 31 March 2015 by a qualified independent actuary.

 

15.

Called up share capital

The following movements in share capital occurred during the period:

 


Date

No. of Fully Paid Shares

No. of Nil Paid Shares

Exercise/

Issue Price (pence)

Called up share capital

Share premium account

Total






£'000

£'000

£'000

At 28 September 2014


 274,452,745

615,864


2,745

139,420

142,165

Settlement of deferred consideration

4 December 2014

282,933

-

 289.2p

 3

 815

 818

Settlement of deferred consideration: Tilman Brewin Dolphin Limited

9 December 2014

 3,191,058

-

 288.45p

 32

-

 32

Issue of options

Various

606,196

-

 98p - 175.25p

 6

 940

 946

Nil paid shares now paid up

Various

482,882

(482,882)

 104p - 162.5p

 4

 655

 659

Cost of issue of shares


-

-


-

(8)

(8)

At 31 March 2015


 279,015,814

132,982


2,790

141,822

144,612

 

 

The share premium arising on the shares issued on the settlement of the deferred consideration for Tilman Brewin Dolphin Limited has been credited to the Merger Reserve.



 

16.

Share based payments

In December 2014, 1,667,624 share options were granted to senior executives and the Directors under the Long-term Incentive Plan ('LTIP'). The options vest on the third anniversary of the date of grant provided certain performance conditions and targets, set prior to the grant, have been met. If the performance conditions are not met the options lapse. The fair value at grant date is estimated using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. There is no cash settlement of the options. The fair value of options granted during the period ended 31 March 2015 was estimated on the date of grant using the following assumptions:



Weighted average share price

289.2p

Weighted average exercise price

-

Expected volatility

27%

Expected life (yrs)

3

Risk free rate

1.2%

Expected dividend yield

5.4%

 

The weighted average fair value of the options granted during the period was 246.25p (52 week period ended 28 September 2014: 290.31p).

 

The Group recognised total expenses in the period of £4,617,000 (30 March 2014: £3,187,000, 28 September 2014: £8,498,000) related to equity-settled share-based payment transactions.

 

17.

Note to the cash flow statement

 


Unaudited period to
31 March
2015

Unaudited
26 weeks to
30 March
20141

Audited
52 weeks to
28 September
20141


£'000

£'000

£'000

Operating profit

27,911

21,695

7,390

Adjustments for:




Depreciation of property, plant and equipment

2,655

2,795

5,371

Amortisation of intangible assets - client relationships

5,162

6,426

13,592

Amortisation of intangible assets - software

1,578

1,257

2,360

Impairment of intangible assets

-

-

31,693

Loss on disposal of property, plant and equipment

16

198

653

Loss on disposal of intangible asset - purchased software

-

-

2

Retirement benefit obligation

(1,500)

(1,500)

(3,003)

Share-based payment cost

4,617

3,187

8,498

Translation adjustments

88

(51)

(3)

Interest income

525

555

1,077

Interest expense

(20)

(17)

(31)

Operating cash flows before movements in working capital

41,032

34,545

67,599

(Decrease)/increase in payables and provisions

(56,793)

(10,982)

39,585

Decrease/(increase) in receivables and trading investments

22,961

(3,717)

(39,778)

Cash generated by operating activities

7,200

19,846

67,406

 Tax paid

(5,729)

(2,868)

(7,438)

Net cash inflow from operating activities

1,471

16,978

59,968

 

1 Restated see notes 2 and 18.




 

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

18.

Restatement of prior period information

As disclosed in note 2, the Group adopted IFRIC 21 Levies on 29 September 2014 and amended its accounting policy for client settlement cash.

 

These amendments have resulted in the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet and the Consolidated Cash Flow Statement being restated. 

 

The amount of the restatement for each financial statement line item affected by retrospective application of IFRIC 21 and change of accounting policy for client settlement cash is set out below: 

 


As reported

26 weeks to 30 March 2014

Adjust-

ment

IFRIC

21

Adjust-

ment

client settlement cash

Restated

26 weeks to 30 March 2014

As reported

52 weeks to

28 September 2014

Adjust-ment IFRIC

21

Adjust-ment

client settlement cash

Restated

52 weeks to

28 September 2014


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Consolidated Income Statement









Other operating costs

(40,399)

612

(39,787)

(81,770)

(253)

(82,023)

Operating expenses

(125,228)

612

(124,616)

(282,839)

(253)

(283,092)

Operating profit

21,083

612

21,695

7,643

(253)

7,390

Profit before tax

21,356

612

21,968

8,646

(253)

8,393

Tax

(3,707)

(135)

(3,842)

(1,820)

98

(1,722)

Profit for the period

17,649

477

18,126

6,826

(155)

6,671










Earnings per share









Basic

6.7p

0.2p

6.9p

2.5p

-

2.5p

Diluted

6.3p

0.2p

6.5p

2.4p

-

2.4p








Adjusted1 earnings per share









Basic

9.1p

0.2p

9.3p

17.5p

-

17.5p

Diluted2

8.6p

0.2p

8.8p

16.5p

-

16.5p








Consolidated Statement of Comprehensive Income









Profit for the period

17,649

477

18,126

6,826

(155)

6,671

Total comprehensive income for the period

16,900

477

-

17,377

5,546

(155)

-

5,391










 


As reported
as at
30 March 2014

Adjust-

ment

IFRIC

21

Adjust-

ment

client settlement cash

Restated
as at
30 March 2014

As reported
as at
28 September 2014

Adjust-ment IFRIC 21

Adjust-

ment

client settlement cash

Restated
as at
28 September 2014


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Consolidated Balance Sheet









Deferred tax asset

2,621

-

2,621

8,959

177

9,136

Total non-current assets

153,124

-

153,124

125,438

177

125,615

Trade and other receivables

262,672

-

265,929

297,322

(865)

302,065

Cash and cash equivalents







 - Firm's cash

109,174

-

109,174

136,383

-

136,383

 - Client settlement cash

27,204

-

-

21,687

-

-

Total cash and cash equivalents

136,378

-

109,174

158,070

-

136,383

Total current assets

399,947

-

376,000

456,304

(865)

439,360

Total assets

553,071

-

529,124

581,742

(688)

564,975

Trade and other payables

287,448

-

263,501

327,225

-

311,146

Current tax liabilities

3,270

72

3,342

3,872

16

3,888

Total current liabilities

301,061

72

277,186

347,408

16

331,345

Net current assets

98,886

(72)

98,814

108,896

(881)

108,015

Total liabilities

322,097

72

298,222

369,768

16

353,705

Net assets

230,974

(72)

230,902

211,974

(704)

211,270

Profit and loss account

34,374

(72)

34,302

16,822

(704)

16,118

Equity attributable to equity holders of the parent

230,974

(72)

-

230,902

211,974

(704)

-

211,270









As reported
26 weeks to
30 March 2014

Adjust-

ment

IFRIC

21

Adjust-

ment

client settlement cash

Restated
26 weeks to
30 March 2014

As reported
52 weeks to
28 September 2014

Adjust-ment

IFRIC

21

Adjust-ment

client settlement cash

Restated
52 weeks to
28 September 2014


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Consolidated Cash Flow Statement









Net cash inflow from operating activities

23,881

-

16,978

61,354

-

59,968

Net (decrease)/increase in cash and cash equivalents

2,352

-

(4,551)

23,269

-

21,883

Cash and cash equivalents at the start of period

133,834

-

113,533

133,834

-

113,533

Cash and cash equivalents at the end of period

136,147

-

108,943

156,800

-

135,113

Cash and cash equivalents shown in current assets

136,378

-

109,174

158,070

-

136,383

Net cash and cash equivalents

136,147

-

(27,204)

108,943

156,800

-

(21,687)

135,113








1 These figures have been adjusted to exclude redundancy costs, FSCS levy rebate, onerous contracts provision, impairment of intangible assets - software and amortisation of client relationships.

2See note 7.

 

The impact of retrospective application on each component of equity is shown in the Consolidated Statement of Changes in Equity. As at 29 September 2013, the profit and loss account was restated by £549,000, which was the result of IFRIC 21. There was no impact on equity as a result of the change in accounting policy for client settlement cash.

 

Consequential amendments have also been made to the notes to the interim financial statements. 



 

 

 

19.

Post Balance Sheet Event

On 14 May 2015, the Group announced the decision to dispose of its Stocktrade business, to Alliance Trust Savings for £14 million in cash, payable in full upon completion.  The agreement was signed on 13 May 2015 and the disposal is expected to be completed in 2015 and is conditional upon regulatory conditions customary for this type of transaction.   

 

Based in Edinburgh, Stocktrade is the execution-only division of Brewin Dolphin and as at 31 March 2015, the business had Assets under Administration of £4.6 billion.  For the year ended 28 September 2014 Stocktrade had revenues of £9.6 million and contributed an estimated £1.3 million of pre-tax profit subject to final cost allocation as permitted by IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'.

 

After accounting for all related costs, the transaction is expected to result in a net gain of approximately £1 million, subject to final separation costs. The net sale proceeds will be used for general corporate purposes.

 

20.

Related party transactions

There have been no related party transactions that have taken place in the period that have materially affected the financial position or the performance of the Group during the period and no changes to related party transactions from those disclosed in the 2014 Annual Report and Accounts available via our website www.brewin.co.uk that could have a material effect on the financial position or the performance of the Group. Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed. There were no other transactions with related parties which were not part of the Group during the period, with the exception of remuneration paid to key management personnel.

Cautionary statement

 

The Interim Management Report (the 'IMR') for the period ended 31 March 2015 has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

 

The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

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 period ended 31 March 2015 and description of principal risks and uncertainties 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).

 

 

By order of the Board

           

David Nicol

Andrew Westenberger

Chief Executive             

26 May 2015

Finance Director

 

 



Independent Review Report

to Brewin Dolphin Holdings PLC

 

 

We have been engaged by Brewin Dolphin Holdings PLC ("the Company") to review the condensed set of financial statements in the half-yearly financial report for the period ended 31 March 2015 which comprises the Condensed Consolidated Income Statement, the Statement of Comprehensive Income, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Statement of Changes in Equity and the Condensed Consolidated Cash Flow Statement and related notes 1 to 20. 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 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 it 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 Conduct Authority.

 

As disclosed in note 2, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of 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 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 financial statements in the half-yearly financial report for the period ended 31 March 2015 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 Conduct Authority.

 

 

 

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdon

26 May 2015


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