28th Jan 2015 07:00
28 January 2015
Brewin Dolphin Holdings PLC
Interim Management Statement
Quarter ended 31 December 2014
The Group has grown funds under management and continues to make good progress towards its strategic targets, despite continuing market volatility impacting commission income.
Q1 Highlights
· | First quarter 2015 core income was £64.4 million, 1% up on the quarter to 29 December 2013 (£63.8 million) | ||
o | Fee income increased by 14% to £47.4 million (29 December 2013: £41.5 million). | ||
o | Commission income declined by 23% to £17.0 million principally as a result of lower transaction volumes in line with industry trends. | ||
· | Total income grew by 1% to £70.2 million (29 December 2013: £69.6 million). | ||
· | Total funds under management increased by 5% to £37.9 billion at 31 December 2014 from £36.0 billion at 29 December 2013 and were up by 3% from £36.8 billion at 28 September 2014. | ||
· | Discretionary funds under management continued to grow strongly and reached £24.8 billion at 31 December 2014, up 12% from £22.2 billion at 29 December 2013 and up 3% from £24.0 billion at 28 September 2014. | ||
· | The rate of net organic growth in discretionary funds under management continued to meet our target of 5% per annum (annualised), with £0.3 billion of net inflows into this service in the three months to 31 December 2014. | ||
· | 84% of total managed/advised funds now receive our discretionary service and we continue to make good progress towards our target of 90%. | ||
· | £0.6 billion of net internal transfers from advisory services to execution only during the quarter. | ||
David Nicol, Chief Executive said:
"Despite tough market conditions in the first quarter the Group has made good progress growing overall funds under management, in particular in our discretionary service, whilst continuing to invest in the business to drive future growth.
Strong growth in fee income was driven by organic fund inflows and positive investment performance. However total income growth in the quarter was impacted by a material decline in commission income as a result of lower transaction volumes due to volatile market conditions.
Continued market volatility from global economic concerns coupled with political uncertainty in the UK and Europe is likely to persist in the short term. This may lead to a continuation of the trend for lower transaction volumes and associated commission income. Our outlook remains positive as we continue to implement our transformation and growth strategy. Our financial position remains strong and the business continues to benefit from the initiatives being pursued to deliver improved efficiency and organic growth in funds under management."
Funds under Management ("FUM")
£ billion | % movement | ||||
29 December 2013 | 28 September 2014 | 31 December 2014 | last 12 months | last 3 months | |
Discretionary Managed | 22.2 | 24.0 | 24.8 | 12 | 3 |
Advisory Managed | 4.7 | 4.1 | 3.9 | (17) | (5) |
Advisory Dealing | 1.9 | 1.3 | 0.9 | (53) | (31) |
Total Advisory | 6.6 | 5.4 | 4.8 | (27) | (11) |
Total Managed/Advised | 28.9 | 29.4 | 29.6 | 2 | 1 |
Execution Only | 7.1 | 7.4 | 8.3 | 17 | 12 |
Total Funds | 36.0 | 36.8 | 37.9 | 5 | 3 |
Indices | |||||
FTSE WMA Private Investor Series Balanced Portfolio | 3,392 | 3,462 | 3,537 | 4 | 2 |
FTSE 100 | 6,751 | 6,649 | 6,566 | (3) | (1) |
Percentage of managed FUM in Discretionary | 77% | 82% | 84% | ||
Funds under Management - detailed movement in the quarter
£ billion | Quarter to 31 December 2014 | |||||||
28 September 2014 | Inflows | Outflows | Internal transfers | Net Flows | Growth Rate % * | Investment performance | 31 December 2014 | |
Discretionary Managed | 24.0 | 0.4 | (0.1) | - | 0.3 | 5% | 0.5 | 24.8 |
Advisory Managed | 4.1 | - | - | (0.2) | (0.2) | (20)% | - | 3.9 |
Advisory Dealing | 1.3 | - | - | (0.4) | (0.4) | n/m | - | 0.9 |
Total Advisory | 5.4 | - | - | (0.6) | (0.6) | (44)% | - | 4.8 |
Total Managed/Advised | 29.4 | 0.4 | (0.1) | (0.6) | (0.3) | (4)% | 0.5 | 29.6 |
Execution Only | 7.4 | 0.2 | (0.2) | 0.6 | 0.6 | 32% | 0.3 | 8.3 |
Total Funds | 36.8 | 0.6 | (0.3) | 0.0 | 0.3 | 3% | 0.8 | 37.9 |
*Annualised
Discretionary managed funds increased to £24.8 billion during the quarter as a result of good investment performance and net organic inflows. The annualised net organic growth rate of 5% is in line with our long-term target and is continuing to benefit from the relationships developed with financial intermediaries. As a result of internal transfers advisory funds under management fell by £0.6 billion to £4.8 billion. Execution only funds grew by £0.9 billion to £8.3 billion primarily as the result of transfers of advisory dealing and advisory managed clients.
Income
First quarter ended | |||
£ million | 31 December 2014
| 29 December 2013
| Change % |
Commissions | 17.0 | 22.2 | (23) |
Fees | 47.4 | 41.5 | 14 |
Core Income | 64.4 | 63.8 | 1 |
Other | 5.8 | 5.9 | n/a |
Total Income | 70.2 | 69.6 | 1 |
Total income increased by 1% to £70.2 million in Q1 2015 (Q1 2014: £69.6 million).
Core income grew 1% in Q1 2015 as strong growth in fees of 14% to £47.4 million was largely offset by lower than anticipated commission income which fell by 23% to £17.0 million. Fee income continues to grow in line with higher FUM particularly in our core discretionary service. As a proportion of total income, fee income continues to increase as the business mix continues to change. The significant fall in commission income in the quarter was primarily a result of lower transaction volumes due to market volatility in the period.
Other income remained flat at £5.8 million (29 December 2013: £5.9 million) with growth in financial planning income offset by reduced net interest income.
For further information please contact:
David Nicol, Chief Executive
Andrew Westenberger, Finance Director
Matthew Sims, Director of Investor Relations
Brewin Dolphin Holdings PLC
020 7248 4400
Andrew Hayes/Wendy Baker
Hudson Sandler
020 7796 4133
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