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Brewin Dolphin sees boost from pensions law

David Nicol Brewin DolphinInvestment in transforming its business, together with “positive” changes to the savings industry, enabled wealth manager Brewin Dolphin to raise profits for the half year.

Chief executive David Nicol (left) said the economic backdrop in the UK, eurozone and the US continues to improve and that “supportive” economic policies and continuing low interest rates provide a favourable backdrop to economic growth.

“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,” said Mr Nicol, who two years ago replaced Jamie Matheson when he stepped down after eight years as executive chairman.

Mr Nicol, who joined from Morgan Stanley, said: “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.”

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%.

Discretionary funds under management continues to grow, generating 83% of core income. 

Adjusted profit before tax for the half year ended 31 March 2015 increased by 9% to £33m (H1 2014: £30.4m), reflecting the growth in discretionary funds under management up 15% to £26.2bn (28 September 2014: £24bn) and the benefits of ongoing control over operating costs. 

Profit before tax for the period was £37.9m (H1 2014: £22.m) and includes a gain of £9.7m from the sale of the group’s holding in Euroclear.  

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.

Sale of Stocktrade

The company said the £14m sale of  Stocktrade, its execution-only division, to Alliance Trust Savings on 14 May will result in a £1m profit.

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.

 

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