Brewin Dolphin cautious despite profit surge to £15m

Executive chairman Jamie Matheson yesterday hailed the "very resilient performance" given the turbulent economic conditions, but insisted that its markets were "fairly benign".

Matheson said the recent volatility witnessed across global markets due to fears over eurozone debt contagion were "challenging", but he stressed that clients were holding their nerve and remained defensive.

"Our client base is not one prone to wild fluctuations; they are very much long-term investors with an eye to income and returns," he said.

"Britain could have some squalls as a result of what is going on in Europe, but we should be grateful we have our own currency."

Total assets under management grew by 12.2 per cent from 20.5 billion to 23bn during the six months to 28 March. Brewin's discretionary arm – which is a higher-margin business – was the main driver, with funds up 15.3 per cent from 11.8bn to 13.6bn. Advisory funds under management were up 8 per cent.

Matheson said the growth in assets was driven equally by inflows, recovery in asset prices and organic growth.

Salaries went up thanks to an increased profit share paid out to employees and a 2.2m "contract renewal incentive" payment. Shareholders voted in a new contract to pay bonuses in shares that will be held for three years in line with Sir David Walker's guidelines on remuneration in the financial services sector.

Matheson said: "We thought it was important to get ahead on this one."

Brewin's pre-tax profits rose 37 per cent on income of 120.9m, which was up a more modest 15 per cent.

Marc Wilkinson, head of Brewin's Edinburgh office, said: "Our clients have had a robust attitude throughout the market volatility and we have seen a good flow of new business as investors continue to seek higher returns for the cash they used to hold on deposit.

"We are cautiously optimistic for the rest of the year."