17th Apr 2020 09:50
(Alliance News) - Brewin Dolphin Holdings PLC on Friday reported a sharp drop in funds under management during the first half, but was able to secure net inflows in an "encouraging" performance.
Shares in the asset manager were 12% higher in London on Friday morning at 238.26 pence each.
At March 31, funds under management stood at GBP41.4 billion, down 15% from GBP48.5 billion at the end of 2019, and 8.0% lower than the GBP45.0 billion seen at the end of September.
In the first half, Brewin recorded GBP600 million in net inflows, but this was more than offset by market movements, slicing GBP6.9 billion off total funds.
Most of this damage occurred in the second quarter, as the Covid-19 pandemic disrupted global financial markets.
The three months to March 31, market performance lopped GBP7.5 billion off total funds. More promisingly, however, Brewin was able to record GBP400 million in net inflows in the period - which represents 3.8% year on year growth.
Chief Executive David Nicol said he was "encouraged" by the company's performance, noting the 14.6% decrease in funds in the second quarter outperformed the MSCI WMA Private Investor Balanced Index - down 15.2% - and the FTSE 100 Index - down 25%.
"Not surprisingly, the rapid spread of Covid-19 and the unprecedented reaction of the global markets, has negatively impacted the value of our clients' funds and consequently our second quarter total income. We have a strong balance sheet with good cash generation, and a robust regulatory capital position, which will support us as markets recover and enable us to service the growing demand for financial advice in the UK and Ireland," Nicol added.
In the second quarter, Brewin's Direct Discretionary funds slipped 16% to GBP23.2 billion, while its Indirect Discretionary funds fell 13% to GBP12.5 billion.
Brewin's total income in the first half was up 8.3% year on year to GBP175.8 million from GBP162.3 million.
This was driven by Direct Discretionary - particularly Private Client - income rising 7.3% year on year.
Looking ahead, Brewin said it is till too early to know the full damage of Covid-19.
"We continue to be fully engaged with our clients and are confident in our ability to respond to the increased demand for financial advice at this time of uncertainty, while supporting our employees and suppliers and continuing to deliver our strategic objectives," the asset manager added.
By Paul McGowan; [email protected]
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