25th May 2005 07:00
Brewin Dolphin Holdings PLC25 May 2005 25 May 2005 BREWIN DOLPHIN HOLDINGS PLC INTERIM RESULTS FOR THE 26 WEEKS TO 25 MARCH 2005 Highlights • Total income £68 million (2004: £59 million) an increase of 15% • Profit £12.4 million before tax and goodwill amortisation and exceptional item (2004: £8.9 million) an increase of 39%. Profit before tax £5.6 million (2004: £6.5 million) • Diluted earnings per share excluding goodwill amortisation and exceptional item 4.2p (2004: 3.0p) an increase of 40%. Basic and diluted earnings per share 1.7p (2004: 2.0p) • First interim dividend of 2.0p per share (2004: 1.5p) a 33% increase • £6 billion funds under discretionary management Sir Fred Holliday, Chairman said: "I am delighted to report to shareholders an increase of 39% in the profitbefore tax, goodwill and an exceptional item for the first half of the currentyear. We have now doubled the amount under discretionary management in fiveyears after adjusting for market movements and this has served to improve thequality of our earnings. Whilst the short term outlook is always difficult toforecast, the second half of the year has started well. " For further information John Hall, Chief ExecutiveBrewin Dolphin 020 7248 4400 Toby Mountford/Anthony KennawayCitigate Dewe Rogerson 020 7638 9571 CHAIRMAN'S STATEMENT It is with pleasure that I report to shareholders an increase of 39% in theprofit before tax, goodwill and an exceptional item for the first half of thecurrent year. This has been achieved during a period of relatively stablemarkets, which are a good background for the investment industry. The value ofthe funds under our discretionary management has risen to £6bn. We have nowdoubled the amount under discretionary management in five years after adjustingfor market movements. The results reflect the hard work that has been undertakenover the past five years to improve the quality of your Company's earnings. The first interim dividend of 2p per share (2004: 1.5p) was declared at our AGMin February and paid on 6th April 2005. As last year, the Board will considerthe payment of a second interim dividend in September 2005 which would be paidtowards the end of October 2005. As announced in December 2004 we made an ex gratia contribution of £5m to thefund that was established for the benefit of investors in certain Zero DividendPreference Shares of the split capital investment trusts. After deducting thisexceptional item and goodwill amortisation, the profit before tax was£5.6million (2004 £6.5million). An encouraging feature of the last few months has been the number of individualinvestment managers and teams who have approached us, attracted by ourinvestment philosophy and the truly individual service we give our clients. Iwould like to welcome those new executives who have either just joined us or arein the process of doing so, particularly those in Belfast, where we haverecently established a new branch, also teams in London, Birmingham andLeicester. It is with this positive record that I would like to inform you of my decisionto stand down as your Chairman from today in favour of my co-Director JamieMatheson (51) who will be Executive Chairman. He currently heads our corporatebroking and institutional division, an area in which he will retain an activeinvolvement. Jamie joined the company in 1996 and the Board in 2002. He hasbeen in broking all his working life, is thoroughly imbued with the ethos of thecompany and carries the unanimous support and confidence of the Board and allhis colleagues. Jamie and his fellow Directors make a strong team. For myself, I joined the company in the heady days of the dot-com boom and havesince seen many changes. I took over the chairmanship following the marketcrash and the trauma of 11th September 2001. Your Company successfullyweathered that period and is in a strong financial position and I am delightedthat I am now able to pass over the Chairmanship with the Company in good heart. I will remain a Director until the end of the current financial year. Whilst the short term outlook is always difficult to forecast, the second halfof the year has started well. Our discretionary portfolio management enables usto look after clients requirements so much more efficiently whilst stillproviding a highly personalised service. This together with the expansion of ourWealth Management Service and the development of our financial planning arm,will I am sure take the group from strength to strength. INDEPENDENT REVIEW REPORT TO BREWIN DOLPHIN HOLDINGS PLC Introduction We have been instructed by the company to review the financial information forthe 26 weeks ended 25 March 2005, which comprises the consolidated profit andloss account, the consolidated balance sheet, the consolidated cash flowstatement and related notes 1 to 6. We have read the other information containedin the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority, which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom auditing standards and thereforeprovides a lower level of assurance than an audit. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the 26 weeks ended25 March 2005. Deloitte & Touche LLP Chartered Accountants London 25 May 2005 Interim Consolidated Profit Statement for the 26 weeks to 25 March 2005 (2004 26 weeks) Notes 26 weeks 26 weeks 52 weeks to to to 25 March 26 March 24 September 2005 2004 2004 £000's £000's £000's Turnover 64,496 54,773 113,007Other operating income 3,828 4,146 8,397Total Income 1 68,324 58,919 121,404 Staff costs (35,235) (29,034) (62,252)Other operating costs (29,525) (24,593) (50,984) (64,760) (53,627) (113,236) OPERATING PROFIT 3,564 5,292 8,168Other interest receivable and similar income 1,998 1,264 3,148Interest payable and similar charges (6) (22) (42) PROFIT ON ORDINARY ACTIVITIES BEFORE GOODWILLAMORTISATION AND EXCEPTIONAL ITEM 12,361 8,879 16,113 Exceptional item 2 (4,838) - -Goodwill amortisation (1,967) (2,345) (4,839)PROFIT ON ORDINARY ACTIVITIESBEFORE TAXATION 5,556 6,534 11,274 Tax on profit on ordinary activities (2,210) (2,588) (4,510) PROFIT ON ORDINARY ACTIVITIESAFTER TAXATION 3 3,346 3,946 6,764Dividends 4 (3,927) (2,932) (6,843) (581) 1,014 (79) EARNINGS PER SHARE Basic 1.7p 2.0p 3.5pDiluted 1.7p 2.0p 3.4p Excluding goodwill amortisation and exceptional itemBasic 4.3p 3.1p 5.7pDiluted 4.2p 3.0p 5.6p 000's 000's 000'sAverage number of shares in issue 196,027 193,292 194,418Average number of shares in issue - fully diluted 202,290 198,923 199,958 CONSOLIDATED BALANCE SHEET AS AT 25 MARCH 2005 Notes as at as at as at 25 March 26 March 24 September 2005 2004 2004 £000's £000's £000's Fixed AssetsIntangible assets 37,107 38,315 38,589Tangible assets 7,216 7,961 7,208Investments 7,500 431 7,500 51,823 46,707 53,297 Current AssetsInvestments 1,057 263 298Debtors 295,377 201,891 200,374Cash at bank and in hand 40,117 36,547 50,701 336,551 238,701 251,373 Creditors: amounts falling due within one year (303,638) (206,410) (219,424) Net Current Assets 32,913 32,291 31,949 Total assets less current liabilities 84,736 78,998 85,246 Provision for liabilities and charges - (2,355) - Shareholders' funds 5 84,736 76,643 85,246 CONSOLIDATED CASH FLOW STATEMENT FOR THE 26 WEEKS TO 25 MARCH 2005 (2004 26 WEEKS) 26 weeks 26 weeks 52 weeks to 25 to 26 March to 24 September March 2005 2004 2004 £000's £000's £000's Cash (outflow)/inflow from operating activities (4,086) 13,311 32,207Return on investment and servicing of finance 1,992 1,242 3,106Taxation (3,040) (1,286) (4,402)Capital expenditure (2,205) (1,127) (2,600)Acquisitions (707) (298) (445)Equity dividends paid (3,910) (1,913) (4,846) CASH(OUTFLOW)/ INFLOW BEFORE THE MANAGEMENTOF LIQUID RESOURCES AND FINANCING (11,956) 9,929 23,020Financing 137 941 949(DECREASE)/INCREASE IN CASH IN THE PERIOD (11,819) 10,870 23,969 Notes to the cash flow statement RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOW Operating profit 3,564 5,292 8,168Depreciation and amortisation 4,320 4,561 9,281Increase/(decrease) in provisions - 80 (1,819)Movement on other current assets (11,970) 3,378 16,577Net cash (outflow)/inflow from operating activities (4,086) 13,311 32,207 ANALYSIS OF NET FUNDS 25 March 24 September 2005 Cash flow 2004 £000's £000's £000's Group's cash 28,634 (10,348) 38,982Group's overdraft (2,293) (1,235) (1,058)Group's net funds 26,341 (11,583) 37,924Client settlement cash 11,483 (236) 11,719Net funds 37,824 (11,819) 49,643 Notes 1.Total income and operating profit before goodwillamortisation and exceptional item 26 weeks 26 weeks 52 weeks to to to 25 March 26 March 24 September 2005 2004 2004 £000's £000's £000'sTotal incomeDiscretionary portfolio management 29,641 24,514 52,593Advisory portfolio management 29,482 26,471 49,523Stocktrade (execution only) 3,067 3,331 6,373Corporate finance and institutional 6,134 4,603 12,915 68,324 58,919 121,404Operating profit before goodwill amortisation andexceptional itemDiscretionary portfolio management 4,349 3,200 5,477Advisory portfolio management 4,326 3,230 5,090Stocktrade (execution only) 205 329 414Corporate finance and institutional 1,489 878 2,026 10,369 7,637 13,007 2. Exceptional item - Split capital trusts In December 2004 the Group made a £5m ex gratia contribution to a fund managed by Fund Distribution Limited, set upunder the auspices of the Financial Services Authority for certain investors who have lost money in certain ZeroDividend Preference Shares. The charge for the period represents this payment, less recoveries, plus directlyattributable costs. The Directors believe that, having carefully examined all claims received to date, no further provision for splitcapital liabilities is required. If there prove to be further liabilities, the Directors believe that these will befully covered by insurance. The Directors are currently in discussion with the Group's insurers in respect of claims for costs already incurredand expensed regarding split capital trusts. An estimate of the potential favourable financial effect is not givenas the Directors consider that any such disclosure would seriously prejudice their negotiations with insurers. 26 weeks 26 weeks 52 weeks to to to 25 March 26 March 24 September 2005 2004 2004 £000's £000's £000's3. Attributable earningsBasic profit for the period and attributable earnings 3,346 3,946 6,764Goodwill amortisation 1,967 2,345 4839 less taxation (266) (251) (498)Exceptional item 4,838 - - less taxation (1,451) - -Adjusted attributable earnings 8,434 6,040 11,105 4. Dividend First interim dividend, paid 6 April 2005, 2.0p pershare (2004: 1.5p). 3,927 2,932 6843 5. Movement in shareholders' funds Other Share Total capital reserves and premium including shares to be issued £000's £000's £000's Balance at 24 September 2004 810 84,436 85,246Reduction in shares to be issued - (66) (66)Issue of shares - 137 137Profit for the period 3,346 - 3,346Dividend (3,927) - (3,927) Balance at 25 March 2005 229 84,507 84,736 6. The interim accounts, which are unaudited, have been prepared on the basis of the accounting policies set out inthe Annual Report 2004. The figures shown for the full year ended 24 September 2004 represent an abridged version ofthe audited financial statements of Brewin Dolphin Holdings PLC for that year, which have been filed with theRegister of Companies and on which the auditors have given an unqualified report which did not contain statementsunder section 237(2) or (3) of the Companies Act 1985. The financial information contained in this interim reportdoes not constitute the Group's statutory accounts within the meaning of section 240 of the Companies Act 1985. Acopy of this statement is available at the Company's registered office at 5 Giltspur Street, London EC1A 9BD and acopy will be posted to all shareholders. Funds at 25 at 24 March September 2005 2004 £ Billion £ BillionIn Group's nominee or sponsored member 5.8 5.2stock not held in Group's nominee 0.2 0.4Discretionary funds under management 6.0 5.6 In Group's nominee or sponsored member 6.1 5.8stock not held in Group's nominee 3.1 3.5Advisory funds under management 9.2 9.3 MANAGED FUNDS 15.2 14.9stock not held in Group's nominee 2.0 1.3Advisory funds under management 0.3 0.7Execution only 2.3 2.0Total 17.5 16.9 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BRW.L