Brewin Dolphin : Interim Financial Report for the Half Year Ended 31 March 2017

17 May 2017

Highlights

• Another strong period of organic fund inflows as we continue to deliver against our strategic plan.
• Total funds stood at £37.8bn, as at 31 March 2017, an increase of 6.8% (FY 2016: £35.4bn).
  • o Discretionary funds of £31.5bn, increased by 9.4% (FY 2016: £28.8bn).
  • o This compares to an increase of 6.1% in the FTSE 100 Index and a 5.4% increase in the MSCI WMA Private Investor Balanced Index.
  • o Record net discretionary funds inflows, including transfers, of £1.1bn (H1 2016: £0.4bn) representing an annualised growth rate of 7.6% (H1 2016: 3.2%, FY 2016: 4.4%).
• Total income for the period of £147.4m (H1 2016: £137.2m).
  • o Core income of £140.3m increased by 11.3% (H1 2016: £126.1m).
  • o Fee income of £104.7m (H1 2016: £92.7m), increased by 12.9% representing 71.0% of total income (H1 2016: 67.6%); commission income was £33.0m (H1 2016: £33.4m).
• Adjusted profit before tax of £32.4m increased by 14.1% (H1 2016: £28.4m).
  • o Adjusted profit before tax margin 22.0% (H1 2016: 20.7%).
• Statutory profit before tax of £28.4m, 32.1% higher than H1 2016 (£21.5m).
• Adjusted earnings per share:
  • o Basic earnings per share increased by 13.1% to 9.5p (H1 2016: 8.4p).
  • o Diluted earnings per share increased by 15.2% to 9.1p (H1 2016: 7.9p).
• Statutory earnings per share:
  • o Basic earnings per share of 8.2p (H1 2016: 6.3p).
  • o Diluted earnings per share of 7.9p (H1 2016: 6.1p).
• Interim dividend of 4.25p per share announced, an increase of 10.4% (H1 2016: 3.85p per share).
• Successful acquisition of Duncan Lawrie Asset Management reflecting progress towards our growth strategy and strategic objectives

Continuing operations.
Core income is defined as income derived from discretionary investment management, financial planning, Brewin Portfolio Service ('BPS') and execution only services.
These figures have been adjusted to exclude redundancy costs - £0.1m (H1 2016: £1.9m), onerous contracts - £0.1m (H1 2016: £0.3m), amortisation of client relationships - £2.6m (H1 2016: £3.3m), one-off migration costs - £nil (H1 2016: £1.5m), acquisition costs - £1.2m (H1 2016: £nil) and disposal of available-for-sale investments - £nil (H1 2016: £0.0m).
See note 6.
See Annual Report and Accounts 2016 page 42 for explanation of adjusted profit before tax and why the adjusted measures have been chosen.

Declaration of Interim Dividend

The Board declares an interim dividend of 4.25p per share. The interim dividend is payable on 16 June 2017 to shareholders on the register at the close of business on 26 May 2017 with an ex-dividend date of 25 May 2017.

David Nicol, Chief Executive, said:

'The Group has had a successful first half of 2017 in a period with a favourable market environment. The delivery against our growth strategy has contributed to an excellent financial performance, with underlying earnings growth of 14.1%. We are exceeding the organic growth targets we set as net inflows into our core discretionary service were £1.1bn, in the period, a record and helping drive year-on-year growth of 22.1% in discretionary funds.

In particular we are capturing the near-term growth opportunities in intermediary business as a direct result of current growth initiatives which are delivering tangible results. Whilst continuing to invest in other initiatives aimed at driving further longer term growth. The strength of our business and confidence in our strategy helped us in the successful acquisition of Duncan Lawrie Asset Management Limited during the period, which has been financed by surplus capital reserves and cements our position as a market leading discretionary wealth manager.'

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