11th May 2022 10:03
(Alliance News) - Brewin Dolphin Holdings PLC on Wednesday posted a first-half profit fall on rising costs, as it edges closer to being acquired by Royal Bank of Canada.
The investment advice company's first half total funds dipped, meanwhile, as markets have been hit by the Ukraine war and an uncertain macroeconomic environment.
In the six months to March 31, Brewin's pretax profit fell 5.7% year-on-year to GBP38.4 million from GBP40.7 million.
Hurting profit were chunkier costs. Inflationary pressures meant fixed staff costs rose 4.4% yearly to GBP77.6 million, while variable staff costs were 1,6% higher at GBP38.3 million.
In addition, the company reported GBP9.7 million in adjusted items, up 54% from a year prior. These were in relation to an accounting impact from National Insurance provision for share awards, higher this time around due its stock price rise after agreeing to the RBC buyout.
Its top-line saw a boost, however. Income rose 4.8% to GBP209.5 million from GBP199.9 million a year prior.
Brewin at the end of March agreed to be purchased by RBC for GBP1.6 billion.
RBC will pay 515 pence per Brewin Dolphin share, a 62% premium to its 318p closing price the day before the deal was announced.
Brewin shares were trading flat at 513.00p each in London on Wednesday morning.
The company's total funds declined by 1.1% to GBP56.3 billion at March 31, from GBP56.9 billion at its financial year end.
It reported GBP2.0 billion in inflows and GBP1.0 billion in outflows, therefore achieving net flows of GBP1.0 billion during the six months.
However, its investment performance resulted in a GBP1.6 billion hit in total funds. The company said the "volatile market performance driven by the conflict in Ukraine and the macroeconomic environment".
Brewin decided against an interim dividend, amid the RBC buyout. It had paid a 4.6p per share dividend a year earlier.
The company expects the RBC deal to be completed in the third quarter of the 2022 calendar year.
By Eric Cunha; [email protected]
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