Wealth manager 'tackling issues'
Brewin Dolphin pays price of software system setback
Wealth manager Brewin Dolphin saw its bottom line shaken after taking a multi-million pound hit on a new software installation which had to be abandoned.
Together with other exceptional costs, including redundancy payments, the group suffered a 70% fall in the statutory pre-tax profit in the year from £28.4m to £8.6m.
The company admitted that “progress against certain initiatives was slower than planned. In one area in particular, that of harnessing technology to lower operating costs, we have taken substantial write downs during the year totalling £33.7m from our decision to abandon plans to implement a new operating system.”
However, chief executive David Nicol said the group was tackling these issues and was on track to achieve the stated 25% margin target by the end of 2016. The compay has made progress in growing discretionary funds under management although advisory funds under management declined.
Rising revenue from core services and an uplift in investment markets saw adjusted profit before tax (excluding exceptionals) increase by 16% to £60.2m (2013: £52.1m). The efficiency of the business improved, reflected in an increase in the adjusted profit margin to 20.7% from 18.4% last year.
The dividend has grown in line with adjusted earnings (dividend increased by 15% to 9.9p from 8.6p last year) and capital resources increased by £32.4m to £141.1m during the year.
Nicol said “good financial and operational progress” had been made as reflected in both the adjusted profit before tax margin and in improved cash generation.
He said: “Improving revenue and efficiency are our strategic goals and we have made good progress towards our stated targets. In the process, we reassessed a significant software project and this has resulted in a material impairment charge, as previously announced.
“Nevertheless, we are well positioned for success and I remain confident that we have the right people to deliver our plans for growth throughout the business.”