Half Yearly Report

28th May 2009 07:00



28 May 2009

Brewin Dolphin Holdings PLC

Interim Financial Report

For the Half Year Ending 29 March 2009

Highlights

 

 

	Total managed funds £16.3 billion at 29 March 2009 (28 September 2008: £18.7 billion, 30 March 2008: £19.9 billion).
	Discretionary funds £9.3 billion at 29 March 2009 (28 September 2008: £10.2 billion, 30 March 2008: £10.4 billion).
	Total income £104.7 million (30 March 2008: £104.1 million) an increase of 1%.
	Profit before tax after redundancy costs £13.6 million (30 March 2008: £21.8 million) a 38% decrease.
	Profit before tax before redundancy costs £16.8 million (30 March 2008: £21.8 million) a 23% decrease.
	Earnings per share after redundancy costs:
	-	Basic earnings per share 4.5p (30 March 2008: 7.5p) a decrease of 40%.
	-	Diluted earnings per share 4.4p (30 March 2008: 7.2p) a decrease of 39%.
	Earnings per share before redundancy costs:
	-	Basic earnings per share 5.6p (30 March 2008: 7.5p) a decrease of 25%.
	-	Diluted earnings per share 5.4p (30 March 2008: 7.2p) a decrease of 25%.

Declaration of Interim Dividend

The Board is pleased to declare a maintained interim dividend of 3.55p per share. The interim dividend is payable on 24 September 2009 to shareholders on the register as at 21 August 2009, with an ex dividend date of 19 August 2009.

Jamie Matheson, Executive Chairman said

"In a period of continuing market turbulence Brewin Dolphin performed resiliently indicating the fundamental strength and scale of our business. There are some hopeful signs that the financial turmoil is easing. If this is so, then it will be good news for our clients and the Company."

For further information

Jamie Matheson, Executive Chairman	Andrew Hayes / Wendy Baker
Brewin Dolphin Holdings PLC	Hudson Sandler
020 7248 4400	020 7796 4133

Executive Chairman's Statement 

To the members of Brewin Dolphin Holdings PLC

Introduction

This statement forms the Interim Management Report for the half year ending 29 March 2009. 

Results and review of the past six months

I am pleased to report the Interim results for the six months ended 29 March 2009. Your Group achieved pre tax profits of £13.6 million after one-off costs of £3.2 million. The results before redundancy costs show a pre-tax profit of £16.8 million compared with £21.8 million in the equivalent period to March 2008.

In a period of continuing market turbulence Brewin Dolphin performed resiliently indicating the fundamental strength and scale of our business. Total income during the period was virtually unchanged at £104.7 million compared with £104.1 million in the equivalent period to March 2008.

Shareholders will not be surprised that rigorous attention has been paid to cost control and this is reflected in over £3 million of one-off costs, which will yield annualised savings of £4.8 million pre profit share. As you would expect we continuously review the company's cost base whilst never compromising the need to maintain the highest level of customer service as well as improved efficiency. 

The performance of our Investment Management operations during the period was robust with operating profits showing a decline of only 6% to £16.6 million before redundancy costs of £2.9 million. Total income for the period from Investment Management was ahead by 5% to £101.2 million.

As expected Investment Banking was hard hit by market conditions and in particular the absence of corporate activity in the small and mid cap arena. Investment Banking saw a 54% decline in total income to £3.5 million and an operating loss of £0.8 million before redundancy costs of £0.3 million.

Fully diluted earnings per share before redundancy costs were 5.4p (4.4p after redundancy costs) compared with 7.2p in the comparable period last year. Your Board is pleased to announce that the Company will pay a maintained interim dividend of 3.55p per share payable on 24 September 2009.

During the period under review funds under management declined by 12.8% to £16.3 billion. Discretionary funds under management have fallen by 8.8% against a drop in the FTSE 100 Share Index of 23.4% and in the FTSE APCIMS Private Investor Balanced Portfolio Index of 13.5%.

	At 29 March 2009	At 28 September  2008	%  Change
Indices
FTSE APCIMS Private Investor Series Balanced Portfolio	2,236	2,586	-13.5%
FTSE 100	3,899	5,089	-23.4%
Funds
	£ Billion	£ Billion
Discretionary funds under management	9.3	10.2	-8.8%
Advisory funds under management	7.0	8.5	-17.6%
Total managed funds	16.3	18.7	-12.8%

  

A year ago I said that the market background was more challenging than at any time since the early seventies. One year on that could be considered an understatement. Nevertheless your Group continues to pursue a strategy of judicious and considered growth by adding new teams, and where appropriate new offices, as well as continuing to drive organic growth from our existing offices. We have welcomed new fund managers during the period, all within our existing office network.

Related party transactions

Related party transactions are disclosed in note 2 to the Interim Financial Report. 

Going concern

The Group has a strong balance sheet with net Firm's cash of £31.0 million at 29 March 2009 

(30 March 2008: £31.0 million).

The Directors believe the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of possible adverse changes in trading performance, show that the Group should be able to operate within the level of its current financing arrangements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements. 

Principal risks and uncertainties

Principal risks and uncertainties are covered in note 3 to the Interim Financial Report

 

Board changes

There have been no changes to your Board during the period but I did announce at the AGM that two directors, Mr Christopher Legge and Mr Simon Still, have indicated their intention to retire from the Board at the end of this financial year. Their contributions over the years have been considerable but their retirements have already been anticipated in the Group's succession planning and at this stage replacement Board members will not be sought.

Outlook

As ever our principal risk in the short term remains the threat of adverse market movements and it would be complacent, if not downright foolhardy, to assume increased stability in markets. However, there are some hopeful signs that the financial turmoil is easing. If this is so, then it will be good news for our clients and the Company. 

The record low level of interest rates will affect our interest income in the second half but, that apart, we would anticipate a continuation of the resilient performance from our Investment Management business.

There are some signs of improvement in trading in our Investment Banking division and it is our firmly held view that the importance of equities in the global financial system will be proved ever greater by the recent turmoil. We continue to have faith in the division's medium term prospects.

 

Your Board remains fully committed to the strategy of increasing value to shareholders through pursuing careful and considered growth and we continue to be confident in our long term prospects.

Jamie Matheson

27 May 2009

  Consolidated Income Statement

26 week period ended 29 March 2009

				Unaudited  26 weeks to 29 March 2009	--------->	Unaudited 26 weeks to 30 March 2008	Audited  52 weeks to 28 September 2008
			Before redundancy costs	Redundancy costs	Total
	Note		£'000	£'000	£'000	£'000	£'000
Continuing operations
Revenue			89,617	-	89,617	95,130	186,969
Other operating income			15,101	-	15,101	8,967	19,526
Total income	4		104,718	-	104,718	104,097	206,495
Staff costs			(50,570)	(3,192)	(53,762)	(52,038)	(105,834)
Other operating costs			(38,383)	-	(38,383)	(33,349)	(70,607)
			(88,953)	(3,192)	(92,145)	(85,387)	(176,441)
Operating profit			15,765	(3,192)	12,573	18,710	30,054
Finance income	5		1,600	-	1,600	3,518	7,142
Finance costs	5		(526)	-	(526)	(428)	(994)
Profit before tax	4		16,839	(3,192)	13,647	21,800	36,202
Tax	6		(5,162)	894	(4,268)	(6,447)	(11,127)
Profit attributable to equity shareholders of the parent from continuing operations			11,677	(2,298)	9,379	15,353	25,075
Earnings per share
From continuing operations
Basic		7	5.6p		4.5p	7.5p	12.2p
Diluted		7	5.4p		4.4p	7.2p	11.7p

  Consolidated Statement of Recognised Income and Expense

26 week period ended 29 March 2009

		Unaudited 26 weeks to 29 March 2009	Unaudited 26 weeks to 30 March 2008	Audited 52 weeks to 28 September 2008
		£'000	£'000	£'000
Loss on revaluation of available-for-sale investments		(309)	(600)	(900)
Deferred tax credit on revaluation of available-for-sale investments		87	168	254
Actuarial loss on defined benefit pension scheme		(1,047)	(1,570)	(4,375)
Deferred tax credit on actuarial loss on defined benefit pension scheme		293	440	1,225
Current tax credit on share-based payments		17	-	568
Deferred tax charge on share-based payments		(46)	(1,125)	(1,255)
Net expense recognised directly in equity		(1,005)	(2,687)	(4,483)
Profit for the period		9,379	15,353	25,075
Total recognised income and expense for the period attributable to equity shareholders of the parent		8,374	12,666	20,592

  Consolidated Balance Sheet

As at 29 March 2009

		Unaudited as at  29 March 2009	Unaudited as at  30 March 2008	Audited  as at 28 September 2008
		£'000	£'000	£'000
	Note
ASSETS
Non-current assets
Goodwill	9	92,682	75,040	93,023
Property, plant and equipment	10	28,392	24,166	27,975
Available-for-sale investments	11	10,317	10,926	10,626
Other receivables		2,444	2,270	2,098
Total non-current assets		133,835	112,402	133,722
Current assets
Trading investments	11	596	1,307	724
Trade and other receivables		263,112	290,948	283,404
Cash and cash equivalents		50,313	52,915	60,546
Total current assets		314,021	345,170	344,674
Total assets		447,856	457,572	478,396
LIABILITIES
Current liabilities
Bank overdrafts		1,094	999	3,717
Trade and other payables		280,256	304,212	306,855
Current tax liabilities		1,762	3,491	484
Provisions	12	1,958	-	2,068
Shares to be issued including premium	13	5,197	7,674	8,233
Total current liabilities		290,267	316,376	321,357
Net current assets		23,754	28,794	23,317
Non-current liabilities
Retirement benefit obligation	14	8,169	5,781	7,964
Deferred purchase consideration	13	2,644	966	2,960
Deferred tax liability		4,510	2,551	3,993
Shares to be issued including premium	13	12,602	8,413	16,946
Total non-current liabilities		27,925	17,711	31,863
Total liabilities		318,192	334,087	353,220
Net assets		129,664	123,485	125,176
EQUITY
Called up share capital	16	2,114	2,073	2,080
Share premium account	16	93,382	89,352	90,145
Revaluation reserve	16	6,676	7,112	6,898
Merger reserve	16	4,562	4,562	4,562
Profit and loss account	16	22,930	20,386	21,491
Equity attributable to equity holders of the parent	16	129,664	123,485	125,176

Consolidated Cash Flow Statement

26 week period ended 29 March 2009

		Unaudited 26 weeks to  29 March  2009	Unaudited 26 weeks to  30 March 2008	Audited 52 weeks to 28 September 2008
	Note	£'000	£'000	£'000
Net cash flow from operating activities	15	3,102	(21,247)	14,104
Cash flows from investing activities
Purchases of goodwill	9	(5,287)	(2,737)	(10,681)
Purchases of property, plant and equipment	10	(5,976)	(7,056)	(15,746)
Dividend received from available-for-sale investments		-	-	404
Net cash used in investing activities		(11,263)	(9,793)	(26,023)
Cash flows from financing activities
Dividends paid to equity shareholders		-	(6,869)	(21,500)
Proceeds on issue of shares		551	2,422	2,845
Net cash from / (used in) financing activities		551	(4,447)	(18,655)
Net decrease in cash and cash equivalents		(7,610)	(35,487)	(30,574)
Cash and cash equivalents at the start of period		56,829	87,403	87,403
Cash and cash equivalents at the end of period		49,219	51,916	56,829
Firm's cash		32,046	32,046	38,189
Firm's overdraft		(1,094)	(999)	(3,717)
Firm's net cash		30,952	31,047	34,472
Client settlement cash		18,267	20,869	22,357
Net cash and cash equivalents		49,219	51,916	56,829
Cash and cash equivalents shown in current assets		50,313	52,915	60,546
Bank overdrafts		(1,094)	(999)	(3,717)
Net cash and cash equivalents		49,219	51,916	56,829

For the purposes of the cash flow statement, cash and cash equivalents include bank overdrafts.

  Notes to the Interim Financial Report

1. General information and basis of preparation

The Company is a public limited company incorporated in the United Kingdom. The address of its registered office is 12 Smithfield Street, London EC1A 9BD. This condensed consolidated interim financial information was approved for issue on 27 May 2009. 

A copy of this Interim Financial Report is available at the Company's registered office and a copy will be posted to all shareholders. 

The condensed set of financial statements included in this Interim Financial Report for the 26 week period to 29 March 2009 has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union and the Interim Financial Report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements of Brewin Dolphin Holdings PLC for the 52 week period ended 28 September 2008 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act 1985 applicable to companies reporting under IFRS. 

The financial information set out in this Interim Financial Report in respect of the 52 week period ended 28 September 2008 does not constitute the Group's statutory accounts for the 52 week period ended 28 September 2008 as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. The auditors have reported on those accounts: their report was unqualified; did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 

The Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of possible adverse changes in trading performance, show that the Group should be able to operate within the level of its current financing arrangements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited Annual Report and Accounts for the 52 week period ended 28 September 2008.

2. Related party transactions

The parent company has received no dividends from Group companies (March 2008: £16,600; September 2008: £15,016,600). There were no other related party transactions during the 26 week period to 29 March 2009 save that the Company subscribed for £2,719,306 of shares in Brewin Dolphin Limited. The amount owed by Brewin Dolphin Limited to the parent company is £8,137,000 (March 2008: £6,889,000; September 2008: £7,697,000). There have been no changes to the amounts owed by and to related parties that were disclosed in the 2008 Annual Report and Accounts available via our website www.brewin.co.uk, with the exception of the amount owed by Brewin Dolphin Limited, as described above.

3. Principal risks and uncertainties

The environment in which the Group operates has changed following the market turmoil during the last six months. The economic situation and outlook have deteriorated; at the same time the level of uncertainty within markets remains. This has the potential to impact adversely the Group's earnings. The Board performs stress testing on its forecasts as part of the Internal Capital Adequacy Assessment Process ("ICAAP") as required by the Financial Services Authority, its regulator. The ICAAP includes steps that would be taken to mitigate risks, if the level of the FTSE 100 Index fell below 2,500, the current estimated breakeven level of the Group.

The Group has so far been unaffected by the reduction in liquidity in the market place. 

With the exception of the above the Directors consider that the nature of the principal risks and uncertainties which may have a material effect on the Group's performance in the second half of the year remain unchanged from those identified in the 2008 Annual Report and Accounts available via our website www.brewin.co.uk.  In summary the major financial and non financial risks identified were:-

4. Segmental information

For management purposes, the Group is divided into two business streams: Investment Management and Investment Banking. These form the basis for the primary segment information reported below. All operations are carried out in the United Kingdom and the Channel Islands.

26 week period ended 29 March 2009
	Discretionary Portfolio Management	Advisory Portfolio Management	Total Investment Management	Investment Banking	Group
	£'000	£'000	£'000	£'000	£'000
Total income	63,199	38,005	101,204	3,514	104,718
Operating profit pre redundancy costs	10,360	6,230	16,590	(825)	15,765
Redundancy costs			(2,846)	(346)	(3,192)
Other finance income (net)					1,074
Profit before tax					13,647
Other Information
Capital expenditure			5,962	14	5,976
Depreciation			5,455	103	5,558
Share-based payments			326	21	347
Segment assets excluding current tax assets			434,973	12,883	447,856
Segment liabilities excluding current tax liabilities			303,547	12,883	316,430

  

26 week period ended 30 March 2008
	Discretionary Portfolio Management	Advisory Portfolio Management	Total Investment Management	Investment Banking	Group
	£'000	£'000	£'000	£'000	£'000
Total income	60,530	36,015	96,545	7,552	104,097
Operating profit	11,047	6,573	17,620	1,090	18,710
Other finance income (net)					3,090
Profit before tax					21,800
Other Information
Capital expenditure			6,973	83	7,056
Depreciation			3,791	48	3,839
Share-based payments			293	20	313
Segment assets excluding current tax assets			413,245	44,327	457,572
Segment liabilities excluding current tax liabilities			286,269	44,327	330,596

52 week period ended 28 September 2008
	Discretionary Portfolio Management	Advisory Portfolio Management	Total Investment Management	Investment Banking	Group
	£'000	£'000	£'000	£'000	£'000
Total income	122,975	70,721	193,696	12,799	206,495
Operating profit	18,765	10,791	29,556	498	30,054
Other finance income (net)					6,148
Profit before tax					36,202
Other Information
Capital expenditure			15,147	599	15,746
Depreciation			8,459	126	8,585
Share-based payments			621	40	661
Segment assets excluding current tax assets			447,082	31,314	478,396
Segment liabilities excluding current tax liabilities			321,422	31,314	352,736

  5. Finance income and costs

	Unaudited 26 weeks to 29 March 2009	Unaudited 26 weeks to 30 March 2008		Audited 52 weeks to 28 September 2008
	£'000	£'000		£'000
Finance income
Interest income on pension plan assets	-	66		159
Dividends from equity investments	-	-		404
Interest on bank deposits	1,600	3,452		6,579
	1,600	3,518		7,142
Finance costs
Interest cost on pension plan liabilities	213	-		-
Finance cost of deferred consideration	289	412		981
Interest on bank overdrafts	24	16		13
	526	428		994

6.Taxation

	Unaudited 26 weeks to 29 March 2009	Unaudited 26 weeks to 30 March 2008	Audited 52 weeks to 28 September 2008
	£'000	£'000	£'000
United Kingdom
Current year	3,023	3,758	5,955
Prior year	225	-	192
Overseas
Current	155	111	216
Prior year	-	-	5
	3,403	3,869	6,368
United Kingdom deferred tax
Current year	1,090	2,388	5,024
Prior year	(225)	72	(265)
Impact of change in tax rate	-	118	-
	4,268	6,447	11,127

7. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

	Unaudited  26 weeks to  29 March  2009		Unaudited 26 weeks to 30 March 2008		Audited  52 weeks to 28 September 2008
Number of shares
	'000		'000		'000
Basic
Weighted average number of shares in issue in the period	210,196		204,770		206,157
Diluted
Weighted average number of options outstanding for the period	790		3,477		2,415
Estimated weighted average number of shares to be issued under deferred consideration arrangements	7,019		6,862		8,527
Diluted weighted average number of options and shares for the period	218,005		215,109		217,099
Earnings attributable to ordinary shareholders
	£'000		£'000		£'000
Profit attributable to equity shareholders of the parent from continuing operations	9,379		15,353		25,075
Finance costs of deferred consideration (Note a)	176		254		549
less tax	(49)		(74)		(159)
Adjusted basic profit for the period and attributable earnings	9,506		15,533		25,465
Earnings per share
From continuing operations
Basic	4.5p		7.5p		12.2p
Diluted	4.4p		7.2p		11.7p
a) Finance costs of deferred consideration are added back where the issue of shares is more dilutive than the interest cost saved.

For the 26 week period ended 29 March 2009 earnings adjusted for post tax redundancy costs of £2,298,000 and finance costs of deferred consideration less tax of £127,000 (added back to calculate adjusted diluted earnings per share) amount to £11,804,000. The basic earnings per share calculated on this adjusted basis is 5.6p and diluted is 5.4p.

8. Dividends

	Unaudited 26 weeks to 29 March 2009	Unaudited 26 weeks to 30 March 2008	Audited 52 weeks to 28 September 2008
	£'000	£'000	£'000
Amounts recognised as distributions to equity holders in the period:
Final dividend paid 6 April 2008, 3.5p per share	-	7,248	7,248
Interim dividend paid 24 September 2008, 3.55p per share	-	-	7,383
Final dividend paid 6 April 2009, 3.55p per share*	7,504	-	-
	7,504	7,248	14,631
* approved at Annual General Meeting on 27 February 2009

An interim dividend of 3.55p per share was declared by the Board on 27 May 2009 and has not been included as a liability as at 29 March 2009. This interim dividend will be paid on 24 September 2009 to shareholders on the register at the close of business on 21 August 2009 with an ex-dividend date of 19 August 2009.

 

9. Goodwill

Goodwill can be broken down into individual cash generating units, mainly consisting of investment management teams. The cost of purchased goodwill is recognised as an asset and reviewed for impairment for each cash generating unit at least annually after the first year, using the fair value less cost to sell method. Fair value is established by valuing clients' funds under management based on the value of funds under management at the period end, the percentages of funds being used depending on values attributed in recent public transactions for the purchase of advisory and discretionary funds. If the carrying amount of goodwill relating to any cash-generating unit exceeds the calculated fair value less cost to sell, a value in use is calculated using a discounted cash flow method. Goodwill includes the cost of indivisible customer relationships and customer lists, which cannot be separated from the underlying business combination and separately reliably measured.

	Unaudited as at  29 March 2009	Unaudited as at  30 March 2008	Audited  as at  28 September 2008
Group	£'000	£'000	£'000
Cost
At start of period	93,453	65,767	65,767
Revaluations of shares to be issued and deferred purchase consideration in respect of acquisitions in prior periods	(2,246)	1,989	2,475
Additions	1,905	7,284	25,211
At end of period	93,112	75,040	93,453
Accumulated impairment losses
At start of period	(430)	-	-
Impairment losses for the period	-	-	(430)
At end of period	(430)	-	(430)
Carrying amount at end of period	92,682	75,040	93,023
The above figures can be analysed as follows:
South East investment management team	9,987	9,987	9,987
Other investment management teams	82,695	65,053	83,036
	92,682	75,040	93,023

None of the constituent parts of the goodwill relating to the other investment management teams is individually significant in comparison to the total value of goodwill.

	Unaudited as at  29 March 2009	Unaudited as at  30 March 2008	Audited  as at  28 September 2008
	£'000	£'000	£'000
Additions relate to:
Acquisitions in the period
Cash	323	2,989	9,749
Deferred purchase liability	56	558	2,393
Value of shares to be issued*	412	3,578	12,181
	791	7,125	24,323
Acquisitions in prior periods
Cash	4,964	159	932
Issue of shares and change in shares to be issued	(3,201)	-	166
Deferred purchase liability	(649)	-	(210)
Additions in period	1,905	7,284	25,211
Issue of shares and change in shares to be issued	2,789	(3,989)	(12,347)
Deferred purchase liability	593	(558)	(2,183)
Net cash movement shown in the cash flow statement	5,287	2,737	10,681
* The number of shares issuable will be determined by the share price at the date of issue, if the shares had been issued at the end of the period the number of shares to be issued would have been 339,499 (28 September 2008: 9,648,317) ordinary 1 pence shares.

Acquisitions in the period comprise the acquisition of 3 (52 weeks to 28 September 2008: 21, 26 weeks to 30 March 2008: 10) investment management businesses and consist entirely of goodwill. Goodwill includes the cost of indivisible customer relationships and customer lists, which cannot be separated from the underlying business combination and separately reliably measured. There are no contracts which legally bind customers to the business, the relationship is with the team which looks after the client. The majority of these businesses were purchased for a consideration mainly payable in the Company's shares on deferred purchase terms dependent on results.

 

Additions relating to new acquisitions in the period were as follows:

Cash generating units	Date of acquisition	£'000
Three investment management teams	October 2008 to February 2009	791
		791

There were no impairment losses recognised in the period in the profit or loss account (52 weeks to 28 September 2008: £430,000, 26 weeks to 30 March 2008: £nil).

Acquisitions during the period reduced profits for the period by £0.1 million (52 weeks to 28 September 2008: £0.6 million, 26 weeks to 30 March 2008: £0.4 million) and increased revenue by £0.3 million (52 weeks to 28 September 2008: £6.8 million, 26 weeks to 30 March 2008: £1.6 million). If the acquisitions had been effected at the start of the period profits would have increased by £nil million (52 weeks to 28 September 2008: £0.5 million, 26 weeks to 30 March 2008: £0.1 million) and revenue increased by a further £nil million (52 weeks to 28 September 2008: £0.3 million, 26 weeks to 30 March 2008: £0.3 million). 

10. Property, plant and equipment

During the period the Group spent £0.7 million (26 weeks to 30 March 2008: £2.0 million, 52 weeks to 28 September 2008: £3.4 million) on leasehold improvements, £4.9 million (26 weeks to 30 March 2008: £4.7 million, 52 weeks to 28 September 2008: £10.3 million) on computer equipment and £0.4 million (26 weeks to 30 March 2008: £0.4 million, 52 weeks to 28 September 2008: £2.0 million) on office equipment.

11. Investments

Available-for-sale investments
		Listed investments	Unlisted investments	Total
		£'000	£'000	£'000
Fair value
At 29 March 2009		317	10,000	10,317
At 30 March 2008		926	10,000	10,926
At 28 September 2008		626	10,000	10,626
Unlisted available-for-sale investments represent the Group's holding of 19,899 ordinary shares in Euroclear plc. This holding represents 0.52% of Euroclear plc's shares. As at 28 September 2008 the Directors updated their valuation of the Group's holding in Euroclear plc; the valuation has remained unchanged at 29 March 2009. This valuation took into account the Group's share of net assets, dividend yield and the prices of similar quoted companies discounted for marketability.
Trading investments
		Listed investments	Unlisted investments	Total
		£'000	£'000	£'000
Fair value
At 29 March 2009		596	-	596
At 30 March 2008		1,307	-	1,307
At 28 September 2008		724	-	724
Investments are measured at fair value which is determined directly by reference to published prices in an active market where available.

12. Provisions

	Unaudited 26 weeks to 29 March 2009	Audited  52 weeks to  28 September 2008
	£'000	£'000
	Sundry claims	Sundry  Claims
At start of period	2,068	-
Additions	358	2,068
Utilisation of provision	(284)	-
Unused amounts reversed during the period	(184)	-
At end of period	1,958	2,068

The provision relates to sundry claims against the Group, where there are legal actions against the Group the estimated liability has been included above with the related insurance debtor of £1,762,000 (28 September 2008: £1,172,000) included in other debtors. The timing of settlements cannot be accurately forecast; settlement of £679,000 has been made since the balance sheet date.

13. Shares to be issued including premium and other deferred purchase liabilities

The Group acquires businesses on deferred purchase terms based on the value of income introduced over normally a three year period. The payment is normally made in ordinary shares and these have to be held typically for a further three years. At the discretion of the Board these shares can be purchased in the market rather than issued. The estimated likely cost of these shares has been updated at the half year to include new teams who have arrived and the progress of the businesses acquired. 

14. Retirement benefit obligation

The main financial assumptions used in calculating the Group's retirement benefit obligation are as follows:

	As at  29 March  2009	As at  30 March  2008	As at  28 September  2008
Discount rate	7.20%	6.60%	7.00%
Rate of inflation	3.10%	3.50%	3.60%
Salary increases	3.10%	3.50%	3.60%
Expected return on equities	7.80%	7.60%	8.10%
Expected return on bonds	4.80%	5.20%	5.10%
Expected return on other assets	0.50%	5.75%	5.00%
Rate of increase to pensions in payment	3.10%	3.50%	3.60%
Average assumed life expectancies for members on retirement at age 65
Existing pensioners
Males	87.0 years	87.0 years	87.0 years
Females	89.8 years	89.8 years	89.8 years
Future pensioners
Males	88.1 years	88.1 years	88.1 years
Females	90.9 years	90.9 years	90.9 years

A full actuarial valuation was carried out as at 31 December 2005 and the results of this valuation have been updated to 29 March 2009 by a qualified independent actuary and reflected in the accounts.  A full actuarial valuation as at 31 December 2008 is currently being prepared.

  

15. Note to the cash flow statement

	Unaudited 26 weeks to 29 March 2009	Unaudited 26 weeks to 30 March 2008	Audited 52 weeks to 28 September 2008
	£'000	£'000	£'000
Group
Operating profit	12,573	18,710	30,054
Adjustments for:
Depreciation of property, plant and equipment	5,558	3,839	8,585
Loss on disposal of property, plant and equipment	-	-	135
Goodwill impairment	-	-	430
Retirement benefit obligation	(842)	(5,524)	(6,146)
Share-based payment cost	347	313	661
Discounting of shares to be issued	289	-	981
Interest income	1,600	3,518	6,785
Interest expense	(526)	(428)	(994)
Operating cash flows before movements in working capital	18,999	20,428	40,491
Decrease in receivables and trading investments	20,091	65,170	73,280
Decrease in payables and provisions	(33,863)	(101,500)	(89,528)
Cash generated by / (used in) operating activities	5,227	(15,902)	24,243
Tax paid	(2,125)	(5,345)	(10,139)
Net cash flow from operating activities	3,102	(21,247)	14,104

  

16. Reconciliation of changes in equity

	Called up share capital	Share premium account	Revaluation reserve	Merger reserve	Profit and loss account	Total
	£'000	£'000	£'000	£'000	£'000	£'000
30 September 2007	2,035	86,968	7,544	4,562	14,223	115,332
Profit for the period	-	-	-	-	15,353	15,353
Dividends	-	-	-	-	(7,248)	(7,248)
Issue of shares	38	2,384	-	-	-	2,422
Revaluation of available-for-sale investments	-	-	(600)	-	-	(600)
Deferred and current tax on items taken directly to equity	-	-	168	-	(685)	(517)
Share-based payments	-	-	-	-	313	313
Actuarial loss on defined benefit pension scheme	-	-	-	-	(1,570)	(1,570)
30 March 2008	2,073	89,352	7,112	4,562	20,386	123,485
Profit for the period	-	-	-	-	9,722	9,722
Dividends	-	-	-	-	(7,383)	(7,383)
Issue of shares	7	793	-	-	-	800
Revaluation of available-for-sale investments	-	-	(300)	-	-	(300)
Deferred and current tax on items taken directly to equity	-	-	86	-	1,223	1,309
Share-based payments	-	-	-	-	348	348
Actuarial gain on defined benefit pension scheme	-	-	-	-	(2,805)	(2,805)
28 September 2008	2,080	90,145	6,898	4,562	21,491	125,176
Profit for the period	-	-	-	-	9,379	9,379
Dividends	-	-	-	-	(7,504)	(7,504)
Issue of shares	34	3,237	-	-	-	3,271
Revaluation of available-for-sale investments	-	-	(309)	-	-	(309)
Deferred and current tax on items taken directly to equity	-	-	87	-	264	351
Share-based payments	-	-	-	-	347	347
Actuarial loss on defined benefit pension scheme	-	-	-	-	(1,047)	(1,047)
29 March 2009	2,114	93,382	6,676	4,562	22,930	129,664

  Funds

	At  29 March 2009	At  30 March 2008	At  28 September 2008
	£ Billion	£ Billion	£ Billion
In Group's nominee or sponsored member	9.2	10.2	10.0
Stock not held in Group's nominee	0.1	0.2	0.2
Discretionary funds under management	9.3	10.4	10.2
In Group's nominee or sponsored member	5.7	7.4	6.8
Other funds where valuations are carried out but where the stock is not under the Group's control	1.3	2.1	1.7
Advisory funds under management	7.0	9.5	8.5
Managed funds	16.3	19.9	18.7
In Group's nominee or sponsored member	3.0	2.8	3.7
Stock not held in Group's nominee	0.2	0.3	0.2
Execution only stock	3.2	3.1	3.9
Total funds	19.5	23.0	22.6
Stock
In Group's nominee or sponsored member	17.9	20.4	20.5
Stock not held in Group's nominee	1.6	2.6	2.1
	19.5	23.0	22.6

  Responsibility Statement

The directors' confirm that to the best of their knowledge:

(a)	the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";
(b)	the interim management report* includes a fair view of the information required by Disclosure and Transparency Rules (DTR) 4.2.7 R (indication of important events during the first six months and description of principal risks for the remaining six months of the year); and
(c)	the interim management report* includes a fair view of the information required by DTR 4.2.8 R (disclosures of related parties' transactions and changes therein).

*encompassed within the Executive Chairman's Statement

By order of the Board

R A Bayford

Finance Director

27 May 2009

  Independent Review Report

Independent Review Report to Brewin Dolphin Holdings PLC

We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly financial report for the 26 week period ended 29 March 2009 which comprises the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 16. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements. 

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. 

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of consolidated financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union. 

Our responsibility 

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

Conclusion 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly financial report for the 26 week period ended 29 March 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 

Deloitte LLP 

Chartered Accountants and Statutory Auditors

London, United Kingdom

27 May 2009

ENDIR PUUPWAUPBGMM

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