Brewin Dolphin growth after ‘good’ yearly figures

Investment manager Brewin Dolphin said it is targeting expansion and is well-placed to capitalise on opportunities, as it posted its full-year results but failed to meet some City expectations.

David Nicol is optimistic about the business. Picture: Contributed
David Nicol is optimistic about the business. Picture: Contributed

The company yesterday reported that adjusted pre-tax profit was up by 7 per cent to reach £62.2 million, with its total income increasing by 1 per cent to £283.7m.

Fee income jumped by 7 per cent to £188.5m, representing 66 per cent of total income, compared to 63 per cent in the prior year.

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Net discretionary inflows reached £1.1bn, which it said is in line with its target of 5 per cent per year. Chief executive David Nicol said the period marked a “good year” for the firm, while the head of its Edinburgh operations, Jonathan Tweedie, said it saw it “building foundations for growth and delivering value to our clients”.

Tweedie added: “These results reflect our confidence as a team in Edinburgh, the continued quality of client service and potential for new business in our region as we see increasing demand for professional and trusted wealth management advice.”

However, while Brewin Dolphin highlighted the launch of its lower-cost investment products, analyst Paul McGinnis at brokerage Shore Capital said: “We have reservations around whether a high-net-worth discretionary business should stretch its brand to also go after lower value ‘advice gap’ customers.”

He said the firm did not meet his team’s pre-tax profit forecast of £63.5m, and its assets under management, £32 billion at year-end compared to £32.5bn 12 months previously, came in below his expectations of £32.8bn.

Nevertheless Nicol was optimistic about the business, which has undergone consolidation including the disposal of its execution-only division Stocktrade to Alliance Trust Savings for £14m. Brewin Dolphin has “financial strength and genuine scalability,” he said.