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BREWIN DOLPHIN (LON:BRW) Interim Management Report for the Half Year

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Brewin Dolphin Holdings PLC  -  BRW   

Interim Management Report for the Half Year

Released 07:00 16-May-2018

16 May 2018

Brewin Dolphin Holdings PLC

Interim Management Report

For the Half Year Ended 31 March 2018

Highlights

 

·    Another strong period of organic fund inflows and the Group has made further progress towards achieving its strategic plan.

·    Total funds stood at £39.7bn at 31 March 2018 (H1 2017: £37.8bn, FY 2017: £40.1bn); with strong net funds flows of £0.9bn offset by lower investment returns; since then total funds have increased and as at 30 April 2018 were c.£41bn.

o Discretionary funds of £34.3bn, increased by 1.5% (FY 2017: £33.8bn).

o Net discretionary funds inflows, including transfers, of £1.3bn (H1 2017: £1.1bn) representing an annualised growth rate of 7.7% (H1 2017: 7.6%).

·    Total income for the period of £161.8m (H1 2017: £147.4m).

o Core1 income of £156.3m increased by 11.4% (H1 2017: £140.3m).

o Total fee income of £115.6m (H1 2017: £104.7m), increased by 10.4% representing 71.4% of total income (H1 2017: 71.0%); commission income was £32.9m (H1 2017: £33.0m).

·    Adjusted2,4 profit before tax of £38.8m increased by 19.8% (H1 2017: £32.4m).

o Adjusted2,4 profit before tax margin 24.0% (H1 2017: 22.0%).

·    Statutory profit before tax of £34.1m, 20.1% higher than H1 2017 (£28.4m).

·    Adjusted2,4 earnings per share:

o Basic earnings per share increased by 18.9% to 11.3p (H1 2017: 9.5p).

o Diluted earnings per share3 increased by 18.7% to 10.8p (H1 2017: 9.1p).

·    Statutory earnings per share:

o Basic earnings per share of 9.7p (H1 2017: 8.2p).

o Diluted earnings per share of 9.4p (H1 2017: 7.9p).

·    Interim dividend of 4.4p per share announced, an increase of 3.5% (2017 interim: 4.25p per share).

 

1 Core income is defined as income derived from discretionary investment management, financial planning, Brewin Portfolio Service ("BPS") and execution only services.

2 These figures have been adjusted to exclude redundancy costs - £nil (H1 2017: £0.1m), onerous contracts - £0.4m (H1 2017: £0.1m), amortisation of client relationships - £4.0m (H1 2017: £2.6m), incentivisation awards - £0.6m (H1 2017: £nil), acquisition costs - £nil (H1 2017: £1.2m) and FSCS levy refund - £0.3m (H1 2017: £nil).

3 See note 6.

4 See Annual Report and Accounts 2017 page 31 for the explanation of the adjusted measures and why they have been chosen.

 

LEI: 213800PS7FS5UYOWAC49

 

Declaration of Interim Dividend

The Board declares an interim dividend of 4.4p per share. The interim dividend is payable on 15 June 2018 to shareholders on the register at the close of business on 25 May 2018 with an ex-dividend date of 24 May 2018.

 

David Nicol, Chief Executive, said:

"I am pleased to report a robust first half of our financial year with strong net discretionary inflows, despite challenges in the wider market. We continue to deliver against our strategy and build on the positive momentum across the business. We remain positive in our outlook and confident in the strength and increasing relevance of our advice-led service."

 

For further information:

Brewin Dolphin Holdings PLC


David Nicol, Chief Executive

Tel: +44 (0)20 7248 4400



FTI Consulting


David Waller / Edward Berry

Tel: +44 (0)20 3727 1651/1046

 

Interim Management Report

To the members of Brewin Dolphin Holdings PLC

 

First half review

The first half of the financial year has seen continued positive momentum with adjusted diluted earnings per share increasing by 18.7% compared to the same period last year (statutory diluted earnings per share: 19.0% higher).

 

We continue to deliver against our strategy, focusing on generating improved and sustainable organic growth across the range of our core services by leveraging our core competencies of offering advice and investment solutions in a personalised relationship-based model.

 

Total discretionary funds grew by 1.5% in the period to £34.3bn (FY 2017: £33.8bn) with sustained net inflows of £1.3bn; including £0.2bn of net transfers from other services. The annualised growth rate of net discretionary funds flow of 7.7% is in line with the rate for both the first half of 2017 (7.6%) and the full year to 30 September 2017 (8.0%). 

 

Net inflows into our direct discretionary service doubled to £0.4bn compared to H1 2017. Gross inflows half-on-half remained stable at £0.5bn.  Over 17% of direct private client funds now receive our wealth management service which combines our financial planning and investment management services.

 

Once again we have seen strong net flows into our intermediaries services, across both our Managed Portfolio Service ("MPS") and our bespoke discretionary service. The overall product mix has changed, with net flows into our bespoke discretionary service rising by 50% in comparison to the first half of last year to £0.6bn. The combined net flows from our intermediaries services were £0.9bn (H1 2017: £0.9bn).

 

The strength of the intermediaries net flows has been driven by the continued focus of our Business Development team in engaging new intermediaries and deepening the existing relationships with intermediaries across the UK. We have seen increasing demand for our bespoke discretionary services in relation to advice around pensions freedoms, leading to an increase in our average new case size of 22%. We have also successfully completed the transition of the relevant assets within our MPS portfolios into our four new manager of manager funds, which has significantly reduced the cost of ownership for all clients, as we leverage our scale with Asset Managers.

 

Growth remains at the top of our agenda. The initiatives we highlighted at our 2017 results announcement are evolving, we are hiring talented individuals, enhancing and developing our services and focusing on distribution, all of which will be supported by an improved use of technology.

 

As announced in January 2018, we are opening a new office at 8 Waterloo Place in the West End of London aimed at providing clients with more complex needs a tailored service. We have also made progress on our new simplified wealth planning and investment advice service, WealthPilot, which is based in our London office.

 

Our Financial Planning Academy is now well established and a second cohort of 12 entrants are due to join in the second half of the year. Additionally, we launched a senior level apprenticeship programme, the Cranfield Executive MBA award, and our first intake into this two-year programme commenced in April 2018.

 

As ever, we continue to focus on improving operational efficiency, key business processes and upgrades to our technology. A complete technology workspace and communications refresh in Autumn 2017 has aided and increased collaborative working across the Group and enhanced the general working environment.

 

As we continue to grow the business, we are reviewing both our London head office space requirements and our systems needs in particular those that support client facing staff and our settlement and custody needs.

 

We completed the changes to our processes and systems to ensure compliance with the Markets in Financial Instruments Directive II ("MiFID II") requirements ahead of January 2018 and are prepared for the introduction of the General Data Protection Regulation ("GDPR") which comes into force on 25 May 2018.

 

Results and business performance

Adjusted profit before tax of £38.8m (H1 2017: £32.4m) increased by 19.8% or 13.3% after adjusting for the impact of the acquisition in H2 2017 (see below). The increase is as a result of growth in total income of 9.8% (7.7% excluding the H2 2017 acquisition) and an improved adjusted PBT margin of 24.0% (H1 2017: 22.0%).

 

Statutory profit before tax for the period was £34.1m (H1 2017: £28.4m), an increase of 20.1%.

 

 

 

 

Unaudited period to
31 March
2018

Unaudited

period to
31 March
2017


 £'m

 £'m

 Change

Core1 income

 156.3

 140.3

11.4%

Other income

 5.5

 7.1

(22.5)%

Total income

 161.8

 147.4

9.8%

Fixed staff costs

(57.8)

(55.1)

4.9%

Other operating costs

(36.4)

(34.5)

5.5%

Total fixed operating costs

(94.2)

(89.6)

5.1%

Adjusted profit before variable staff costs2,5

 67.6

 57.8

17.0%

Variable staff costs

(29.1)

(25.4)

14.6%

Adjusted operating profit2,5

 38.5

 32.4

18.8%

Net finance income

 0.3

 -


Adjusted profit before tax2,5

 38.8

32.4

19.8%

Exceptional items3

(0.7)

(1.4)


Amortisation of client relationships

(4.0)

(2.6)


Profit before tax

 34.1

 28.4

20.1%

Taxation

(7.5)

(6.1)


Profit after tax

 26.6

 22.3

19.3%





Earnings per share




Basic earnings per share

9.7p

8.2p

18.3%

Diluted earnings per share

9.4p

7.9p

19.0%

Adjusted4 earnings per share




Basic earnings per share

11.3p

9.5p

18.9%

Diluted earnings per share

10.8p

9.1p

18.7%

 

1 Core income is defined as income derived from discretionary investment management, financial planning, Brewin Portfolio Service ("BPS") and execution only services.

2 These figures have been adjusted to exclude redundancy costs - £nil (H1 2017: £0.1m), onerous contracts - £0.4m (H1 2017: £0.1m), amortisation of client relationships - £4.0m (H1 2017: £2.6m), incentivisation awards - £0.6m (H1 2017: £nil), acquisition costs - £nil (H1 2017: £1.2m) and FSCS levy refund - £0.3m (H1 2017: £nil).

3 Exceptional items include redundancy costs, onerous contracts, acquisition costs, FSCS levy refund and incentivisation awards.

4 See note 6.

5 See Annual Report and Accounts 2017 page 31 for the explanation of the adjusted measures and why they have been chosen.

 

Impact of H2 2017 acquisition

In May 2017, the Group acquired Duncan Lawrie Asset Management Limited. The acquisition contributed £3.1m of income for the 6 months ended 31 March 2018 and £2.1m to adjusted profit before tax (after associated staff costs of £0.7m and administrative, overhead and variable costs of £0.3m); this is equivalent to incremental adjusted diluted earnings per share of 0.4p. The impact on statutory profit before tax was a loss of £0.3m and a reduction of 0.1p to statutory diluted earnings per share after the costs of incentivisation awards and amortisation attributable to the acquisition, both of which are excluded from the adjusted measures.

 

Funds

Total funds were £39.7bn at 31 March 2018 (H1 2017: £37.8bn, FY 2017: £40.1bn); with strong net funds flows of £0.9bn during the period offset by lower investment returns; since then total funds have increased and, as at 30 April 2018 were c.£41bn.

 

The first six months of the year saw gross discretionary funds inflows of £1.7bn (H1 2017: £1.6bn, FY 2017: £3.4bn) and gross outflows stabilising at £0.6bn, equivalent to a 3.6% annualised outflow rate (H1 2017: 4.2%).

 

Total funds by service category

 

£'bn

31 March
2017

30 September
2017

31 March 2018

Change last
12 months

Change last
6 months

Private clients

 18.0

 18.9

18.8

4.4%

(0.5)%

Charities & corporates

 4.4

 4.5

4.4

-%

(2.2)%

Direct discretionary

 22.4

 23.4

23.2

3.6%

(0.9)%







Intermediaries

 7.3

 8.1

8.5

16.4%

4.9%

MPS

 1.8

 2.3

2.6

44.4%

13.0%

Indirect1 discretionary

 9.1

 10.4

11.1

22.0%

6.7%







Total discretionary

 31.5

 33.8

34.3

8.9%

1.5%

BPS

 0.1

 0.1

0.1

-%

-%

Execution only

 3.4

 3.5

3.7

8.8%

5.7%

Core funds

 35.0

 37.4

38.1

8.9%

1.9%

Advisory

 2.8

 2.7

1.6

(42.9)%

(40.7)%

Total funds

 37.8

 40.1

39.7

5.0%

(1.0)%







Indices






MSCI WMA Private Investor Balanced Index

1,536

1,545

1,527

(0.6)%

(1.2)%

FTSE 100

7,323

7,373

7,057

(3.6)%

(4.3)%

1 intermediary services

 

Funds flow by service category

 

£'bn

30 Sept
2017

Inflows

Outflows

Internal transfers

Net flows

Annualised growth rate

Investment performance

31 Mar 2018

Change

Private clients

18.9

0.4

 (0.3)

 0.3

0.4

4.2%

 (0.5)

18.8

(0.5)%

Charities & corporates

4.5

0.1

 (0.1)

 -

-

-%

 (0.1)

4.4

(2.2)%

Direct discretionary

23.4

 0.5

 (0.4)

 0.3

 0.4

3.4%

 (0.6)

23.2

(0.9)%

Intermediaries

8.1

 0.9

 (0.2)

 (0.1)

 0.6

14.8%

 (0.2)

8.5

4.9%

MPS

2.3

 0.3

 -

 -

 0.3

26.1%

-

2.6

13.0%

Indirect1 discretionary

10.4

 1.2

 (0.2)

 (0.1)

 0.9

17.3%

 (0.2)

11.1

6.7%

Total discretionary

33.8

 1.7

 (0.6)

 0.2

 1.3

7.7%

 (0.8)

34.3

1.5%

BPS

0.1

 -

 -

 -

 -

-%

-

0.1

-%

Execution only

3.5

 0.3

 (0.4)

 0.7

 0.6

34.3%

 (0.4)

3.7

5.7%

Core funds

37.4

 2.0

 (1.0)

 0.9

 1.9

10.2%

 (1.2)

38.1

1.9%

Advisory

2.7

 -

 (0.1)

 (0.9)

(1.0)

(74.1)%

 (0.1)

1.6

Total funds

40.1

 2.0

 (1.1)

 -

 0.9

4.5%

(1.3)

39.7

(1.0)%

1 intermediary services

 

Total discretionary funds grew by 1.5% driven by funds inflows and a lower rate of outflows offset by negative overall investment performance over the six months. Total discretionary net funds inflows of £1.3bn (H1 2017: £1.1bn) resulted from strong gross inflows of £1.7bn, gross outflows of £0.6bn and net transfers from other service categories of £0.2bn. Annualised growth from total discretionary funds was 7.7% (H1 2017: 7.6%) with positive net inflows in all discretionary services.

 

Direct discretionary funds grew by 3.4% on an annualised basis resulting from £0.5bn of gross funds inflows, stable outflows and transfers from other service categories. The intermediaries channel continued to grow strongly representing 69% (£0.9bn) of net discretionary funds inflows in the period.

 

During the period, advisory funds fell by £1.1bn, with £0.9bn of advisory funds transferred into other services within the Group, this included £0.6bn of transfers to direct discretionary from the advisory managed service. The Group has withdrawn from its advisory dealing service, following changes in regulation.

 

Execution only net fund flows were £0.6bn in the period, with £0.7bn of positive net transfers from other service categories.

 

Income

Core income grew 11.4% to £156.3m (H1 2017: £140.3m) supported by continued organic funds growth and higher financial planning income.

 

Income is analysed as follows:


Unaudited

six months to

31 March 2018

£'m

 Unaudited

six months to

31 March 2017

£'m

Change





Private clients

 92.3

85.9

7.5%

Charities & corporates

 11.3

10.8

4.6%

Direct discretionary

 103.6

96.7

7.1%





Intermediaries

 31.1

26.2

18.7%

MPS

 3.5

2.3

52.2%

Indirect discretionary

 34.6

28.5

21.4%





Total discretionary

 138.2

125.2

10.4%

Financial planning

 12.2

9.5

28.4%

BPS

 0.5

0.5

-%

Execution only

 5.4

5.1

5.9%

Core income

 156.3

140.3

11.4%





Advisory investment management

 4.4

6.9

(36.2)%

Other income

 1.1

0.2

n/a

Total other income

 5.5

7.1

(22.5)%





Total income

 161.8

147.4

9.8%

 

Positive net funds inflows in all discretionary channels of £1.3bn (H1 2017: £1.1bn) supported the 10.4% growth in discretionary income to £138.2m (H1 2017: £125.2m).

 

The Group continues to grow its indirect discretionary business, increasing the number of IFA clients who use both the discretionary and model services, which has generated significant income growth over the period.

 

Financial planning income grew strongly by 28.4% to £12.2m (H1 2017: £9.5m). Other income grew by £0.9m, following the rise in the Bank of England base rate to 0.5%.

 

Fees and Commissions

 

£'m

Unaudited six months

to 31 March 2018

  

 Unaudited six months

to 31 March 2017

  

Change


Fees

Commission

Total

Fees

Commission

Total

Fees

Commission

Total

Private clients

66.0

26.3

92.3

60.5

25.4

85.9

9.1%

3.5%

7.5%

Charities & corporates

9.8

1.5

11.3

9.3

1.5

10.8

5.4%

-%

4.6%

Direct discretionary

75.8

27.8

103.6

69.8

26.9

96.7

8.6%

3.3%

7.1%

Intermediaries

30.5

0.6

31.1

25.4

0.8

26.2

20.1%

(25.0)%

18.7%

MPS

3.5

-

3.5

2.3

-

2.3

52.2%

-%

52.2%

Indirect discretionary

34.0

0.6

34.6

27.7

0.8

28.5

22.7%

(25.0)%

21.4%

Total discretionary

109.8

28.4

138.2

97.5

27.7

125.2

12.6%

2.5%

10.4%

BPS

0.5

-

0.5

0.5

-

0.5

-%

-%

-%

Execution only

2.2

3.2

5.4

1.9

3.2

5.1

15.8%

-%

5.9%

Core income excluding financial planning

112.5

31.6

144.1

99.9

30.9

130.8

12.6%

2.3%

10.2%

 

Core fee income excluding financial planning grew by 12.6% to £112.5m reflecting the growth in funds. Overall fee income yield remained broadly consistent with prior years. Core commission income excluding financial planning grew slightly to £31.6m, reversing the decline seen over the previous 12 months, as a result of more uncertain investment markets leading to increased transaction volumes.

 

Costs

Total fixed operating costs increased by 5.1% to £94.2m (H1 2017: £89.6m).

 

Fixed staff costs increased by 4.9% to £57.8m (H1 2017: £55.1m) as a result of higher average headcount, the H2 2017 acquisition, pay rises and higher cost of sales from the continued intermediary net inflows.

 

Total employee numbers have increased by 52 to 1,646, since 31 March 2017, including the H2 2017 acquisition. During the last 6 months, there has been a net 32 increase, following selective hiring of investment managers and financial planners, as well as strategic hires in support functions.

 

Variable staff costs in the form of profit share have increased in line with business performance.

 

Other operating costs increased by 5.5% to £36.4m (H1 2017: £34.5m), primarily as a result of inflationary pressures, higher IT related, communication and market data costs and higher premises costs.

 

Exceptional items of £0.7m (H1 2017: £1.4m) include onerous lease costs and incentivisation awards offset by a FSCS levy refund. These are substantially lower than H1 2017 exceptional items which included acquisition costs relating to the acquisition in H2 2017.

 

Amortisation of intangible client relationships increased to £4.0m (H1 2017: £2.6m) and includes £1.8m of amortisation in relation to the H2 2017 acquisition.

 

Capital

The Group has a strong balance sheet with cash balances at the period end of £142.0m (H1 2017: £152.3m). These underpin its strong regulatory capital resources.

 

Dividend

The Group's dividend policy is to grow dividends in line with adjusted earnings, with a target payout ratio of 60% to 80% of annual adjusted diluted earnings per share. The interim dividend has been increased to 4.4p per share (2017 interim: 4.25p per share) and will be payable on 15 June 2018 to shareholders on the register at the close of business on 25 May 2018 with an ex-dividend date of 24 May 2018.

 

Going concern

As stated in note 1 to the condensed set of interim financial statements, the Directors believe that the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of possible adverse changes in trading performance, show that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt a going concern basis for the preparation of the condensed interim financial statements. In forming their view, the Directors have considered the Group's prospects for a period exceeding twelve months from the date the condensed interim financial statements are approved.

 

Principal risks and uncertainties

The Directors consider that the nature of the principal risks and uncertainties which may have a material effect on the Group's performance during the remainder of its financial year remain unchanged from those identified on pages 28 and 29 of the 2017 Annual Report and Accounts available on our website www.brewin.co.uk.

 

Board changes

Mike Kellard was appointed as a Non-Executive Director of the Company on 1 December 2017.  As previously announced, Andrew Westenberger will stand down as a director with effect from 16 May 2018. We would like to thank Andrew for his significant contribution over the last five years and wish him well in the future.  The Board is fully compliant with the UK Corporate Governance Code with respect to Board composition and, as outlined in the year end accounts, we hope to appoint an additional Non-Executive Director shortly.

 

Outlook

We remain confident in the prospects for long-term growth for the Group, which have once again been clearly demonstrated by continued positive momentum on all fronts, despite recent market volatility. We remain confident in the strength and increasing relevance of our advice-led service and committed to ensuring that we have skilled and engaged people providing high quality advice as part of a close client relationship. To that end, we believe that the business is on track as we continue to deliver our organic growth strategy.

 

David Nicol     

Chief Executive

           

15 May 2018

 

Condensed Consolidated Income Statement

for the six months ended 31 March 2018

 


Note

Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Revenue


160,676

147,185

303,896

Other operating income


1,081

229

568

Income


161,757

147,414

304,464






Staff costs


(86,816)

(80,496)

(162,689)

Redundancy costs


-

(104)

(742)

Onerous contracts


(374)

(142)

(1,969)

Amortisation of intangible assets - client relationships

8

(3,978)

(2,616)

(6,650)

Acquisition costs


-

(1,159)

(1,683)

Incentivisation awards


(579)

-

(1,297)

FSCS levy refund


288

-

-

Other operating costs


(36,433)

(34,494)

(71,766)

Operating expenses


(127,892)

(119,011)

(246,796)






Operating profit


33,865

28,403

57,668

Finance income

4

293

102

161

Other gains and losses


-

-

2

Finance costs

4

(35)

(123)

(188)

Profit before tax


34,123

28,382

57,643

Tax

5

(7,499)

(6,065)

(12,490)

Profit for the period


26,624

22,317

45,153






Attributable to:





Equity holders of the parent


26,624

22,317

45,153



26,624

22,317

45,153






Earnings per share





Basic

6

9.7p

8.2p

16.5p

Diluted

6

9.4p

7.9p

16.0p

 

Condensed Consolidated Statement of Comprehensive Income

for the six months ended 31 March 2018

 

                                                                                                                                                                                                        


Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Profit for the period

26,624

22,317

45,153

Items that will not be reclassified subsequently to profit and loss:




Actuarial gain on defined benefit pension scheme

388

9,061

8,558

Deferred tax charge on actuarial gain on defined benefit pension scheme

(35)

(2,142)

(1,383)


353

6,919

7,175

Items that may be reclassified subsequently to profit and loss:




Revaluation of available-for-sale investments

(29)

31

(75)

Deferred tax credit/(charge) on revaluation of available-for-sale investments

5

(6)

14

Exchange differences on translation of foreign operations

(31)

(45)

92


(55)

(20)

31

Other comprehensive income for the period net of tax

298

6,899

7,206

Total comprehensive income for the period

26,922

29,216

52,359





Attributable to:




Equity holders of the parent

26,922

29,216

52,359


26,922

29,216

52,359

 

 

Condensed Consolidated Balance Sheet

as at 31 March 2018

                                                                                                                                                                                                        


Note

Unaudited
as at
31 March
2018
£'000

Unaudited
as at
31 March
2017
£'000

Audited
as at
30 September
2017
£'000

Assets





Non-current assets





Intangible assets

8

89,681

76,462

95,791

Property, plant and equipment

9

7,160

3,975

3,840

Other receivables


200

288

200

Defined benefit pension scheme

12

6,442

3,541

4,487

Net deferred tax asset


4,270

4,818

6,743

Total non-current assets


107,753

89,084

111,061






Current assets





Available-for-sale investments

10

701

867

736

Trading investments

10

328

1,170

36

Trade and other receivables


238,910

225,035

243,144

Cash and cash equivalents


141,955

152,303

169,995

Total current assets


381,894

379,375

413,911

Total assets


489,647

468,459

524,972






Liabilities





Current liabilities





Trade and other payables


 221,036

208,490

245,309

Current tax liabilities


4,715

4,457

4,993

Provisions

11

4,719

2,759

3,755

Total current liabilities


230,470

215,706

254,057

Net current assets


151,424

163,669

159,854






Non-current liabilities





Provisions

11

7,954

6,330

8,339

Total non-current liabilities


7,954

6,330

8,339

Total liabilities


238,424

222,036

262,396

Net assets


251,223

246,423

262,576






Equity





Share capital

13

2,834

2,833

2,833

Share premium account

13

152,432

152,268

152,320

Own shares


(26,948)

(26,542)

(25,921)

Revaluation reserve


(109)

1

(85)

Merger reserve


70,553

70,553

70,553

Profit and loss account


52,461

47,310

62,876

Equity attributable to equity holders of the parent


251,223

246,423

262,576

 

Condensed Consolidated Statement of Changes in Equity

for the six months ended 31 March 2018


Attributable to the equity holders of the parent


 Share
capital
£'000

 Share premium account
£'000

 Own
 shares
£'000

 Revaluation reserve
£'000

 Merger reserve
£'000

 Profit
and loss account
£'000

 Total
£'000

At 30 September 2016 (audited)

2,830

151,836

 (29,294)

 (24)

70,553

46,908

242,809

Profit for the period

-

-

-

-

-

22,317

22,317

Other comprehensive income for the period








Deferred and current tax on other comprehensive income

 -

 -

 -

 (6)

 -

 (2,142)

 (2,148)

Actuarial gain on defined benefit pension scheme

 -

 -

 -

 -

 -

9,061

9,061

Revaluation of available-for-sale investments

 -

 -

 -

31

 -

 -

 31

Exchange differences on translation of foreign operations

 -

 -

 -

 -

 -

 (45)

 (45)

Total comprehensive income for the period

 -

 -

 -

25

 -

29,191

29,216

Dividends

 -

 -

 -

 -

 -

 (24,996)

 (24,996)

Issue of share capital

3

432

 -

 -

 -

 -

435

Own shares acquired in the period

 -

 -

 (5,741)

 -

 -

 -

 (5,741)

Own shares disposed of on exercise of options

 -

 -

8,493

 -

 -

 (8,493)

 -

Share-based payments

 -

 -

 -

 -

 -

4,149

4,149

Tax on share-based payments

 -

 -

 -

 -

 -

551

551

At 31 March 2017 (unaudited)

2,833

152,268

 (26,542)

1

70,553

47,310

246,423

Profit for the period

 -

 -

 -

 -

 -

22,836

22,836

Other comprehensive income for the period








Deferred and current tax on other comprehensive income

 -

 -

 -

20

 -

759

779

Actuarial loss on defined benefit pension scheme

 -

 -

 -

 -

 -

 (503)

 (503)

Revaluation of available-for-sale investments

 -

 -

 -

 (106)

 -

 -

 (106)

Exchange differences on translation of foreign operations

 -

 -

 -

 -

 -

137

137

Total comprehensive (expense)/income for the period

 -

 -

 -

 (86)

 -

23,229

23,143

Dividends

 -

 -

 -

 -

 -

 (11,618)

 (11,618)

Issue of share capital

 -

 52

 -

 -

 -

-

 52

Own shares acquired in the period

 -

 -

 (66)

 -

 -

-

 (66)

Own shares disposed of on exercise of options

 -

 -

687

 -

 -

 (687)

 -

Share-based payments

 -

 -

 -

 -

 -

3,903

3,903

Tax on share-based payments

 -

 -

 -

 -

 -

739

739

At 30 September 2017 (audited)

2,833

152,320

 (25,921)

 (85)

70,553

62,876

262,576

Profit for the period

 -

 -

 -

 -

 -

26,624

26,624

Other comprehensive income for the period








Deferred and current tax on other comprehensive income

 -

 -

 -

5

 -

 (35)

 (30)

Actuarial gain on defined benefit pension scheme

 -

 -

 -

 -

 -

388

388

Revaluation of available-for-sale investments

 -

 -

 -

 (29)

 -

 -

 (29)

Exchange differences on translation of foreign operations

 -

 -

 -

 -

 -

 (31)

 (31)

Total comprehensive (expense)/income for the period

 -

 -

 -

 (24)

 -

26,946

26,922

Dividends

 -

 -

 -

 -

 -

 (29,516)

 (29,516)

Issue of share capital

 1

112

 -

 -

 -

 -

113

Own shares acquired in the period

 -

 -

 (13,422)

 -

 -

 -

 (13,422)

Own shares disposed of on exercise of options

 -

 -

12,395

 -

 -

 (12,395)

 -

Share-based payments

 -

 -

 -

 -

 -

4,279

4,279

Tax on share-based payments

 -

 -

 -

 -

 -

271

271

At 31 March 2018 (unaudited)

2,834

152,432

 (26,948)

 (109)

70,553

52,461

251,223

 

Condensed Consolidated Cash Flow Statement

for the six months ended 31 March 2018

                                                                                                                                                                                                        


Note

Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Net cash inflow from operating activities

14

 20,126

 13,006

67,463






Cash flows from investing activities





Purchase of intangible assets - client relationships


 (121)

 -

-

Purchase of intangible assets - software


 (33)

 (988)

(1,437)

Purchases of property, plant and equipment


(4,874)

 (144)

(589)

Purchase of available-for-sale investments


 -

 (18)

(18)

Purchase of trading investments


 (300)

 -

-

Acquisition of subsidiary


 -

-

(25,500)

Proceeds on disposal of trading investments


 -

-

1,149

Proceeds on disposal of available-for-sale investments


6

15

42

Net cash used in investing activities


(5,322)

(1,135)

(26,353)






Cash flows from financing activities





Dividends paid to equity shareholders

7

(29,516)

(24,996)

(36,614)

Purchase of own shares


(13,422)

(5,741)

(5,807)

Proceeds on issue of shares


113

435

487

Net cash used in financing activities


(42,825)

(30,302)

(41,934)






Net decrease in cash and cash equivalents


(28,021)

(18,431)

(824)






Cash and cash equivalents at the start of period


 169,995

 170,766

170,766

Effect of foreign exchange rates


 (19)

 (32)

53

Cash and cash equivalents at the end of period


 141,955

 152,303

169,995

 

Notes to the Condensed Set of Financial Statements

 

1.   Accounting policies

Basis of preparation

The annual financial statements of Brewin Dolphin Holdings PLC are prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.

The condensed set of financial statements included in this Interim Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34'), as adopted by the European Union and the Interim Financial Report has been prepared in accordance with the Disclosure and Transparency Rules ('DTR') of the Financial Conduct Authority.

The condensed set of financial statements included in this Interim Financial Report for the six months ended 31 March 2018 should be read in conjunction with the annual audited financial statements of Brewin Dolphin Holdings PLC for the year ended 30 September 2017.

Going concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly they continue to adopt the going concern basis in preparing the condensed financial statements.

Significant accounting policies and use of estimates and judgements

The preparation of interim consolidated financial statements in compliance with IAS 34 requires the use of certain critical accounting judgements and key sources of estimation uncertainty. It also requires the exercise of judgement in applying the Group's accounting policies. There have been no material revisions to the nature and the assumptions used in estimating amounts reported in the annual audited financial statements of Brewin Dolphin Holdings PLC for the year ended 30 September 2017.

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 annual audited financial statements for the year ended 30 September 2017.

Several amendments to accounting standards apply for the first time during the period; they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

2.   General information

Brewin Dolphin Holdings PLC (the 'Company') is a public limited company incorporated in the United Kingdom. The shares of the Company are listed on the London Stock Exchange. The address of its registered office is 12 Smithfield Street, London, EC1A 9BD. This Interim Financial Report was approved for issue on 15 May 2018.

A copy of this Interim Financial Report including Condensed Financial Statements for the period ended 31 March 2018 is available at the Company's registered office and on the Company's investor relations website (www.brewin.co.uk).

The information for the period ended 30 September 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

3.   Segmental information

For management reporting purposes the Group currently has a single operating segment. This forms the reportable segment of the Group for the period. Please refer to the Condensed Consolidated Income Statement and the Condensed Consolidated Balance Sheet, for numerical information.

The Group's operations are carried out in the United Kingdom, Channel Islands and the Republic of Ireland. All segmental income related to external clients.

The accounting policies of the operating segment are the same as those of the Group.

 

4.   Finance income and costs


Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Finance income




Interest income on defined benefit pension scheme

67

-

-

Interest on bank deposits

226

102

161


293

102

161





Finance costs




Interest expense on defined benefit pension scheme

-

68

119

Unwind of discounts on provisions

25

20

58

Interest on bank overdrafts

10

35

11


35

123

188

5.   Taxation

The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.


Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Current tax




United Kingdom:




Charge for the period

5,193

 4,833

 11,594

Adjustments in respect of prior periods

 287

 (49)

 (157)

Overseas:




Charge for the period

 151

28

309

Adjustments in respect of prior periods

-

 (1)

 (8)

Total current tax

5,631

 4,811

 11,738





Deferred tax




United Kingdom:




Charge for the period

2,148

 1,205

705

Adjustments in respect of prior periods

(280)

49

47

Total deferred tax

1,868

 1,254

752





Tax charged to the Income Statement

7,499

 6,065

 12,490

 

6.   Earnings per share

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


Unaudited
six months to

31 March
2018
'000

Unaudited
six months to
31 March
2017
'000

Audited
year to
30 September
2017
'000

Number of shares




Basic




Weighted average number of shares in issue in the period

 274,397

 272,442

 272,840

Diluted




Effect of weighted average number of options outstanding for the period

 8,004

 8,701

 10,162

Diluted weighted average number of options and shares for the period

 282,401

 281,143

 283,002

Adjusted1 diluted




Effect of full dilution of employee share options which are contingently issuable or have future attributable service costs

 3,094

 5,265

 2,406

Adjusted1 diluted weighted average number of options and shares for the period

 285,495

 286,408

 285,408

 


£'000

 £'000

 £'000

Earnings attributable to ordinary shareholders




Basic and diluted profit for the year

 26,624

 22,317

 45,153

Redundancy costs

 -

104

742

Onerous contracts costs

374

142

 1,969

Amortisation of intangible assets -  client relationships

 3,978

 2,616

 6,650

Acquisition costs

 -

 1,159

 1,683

Incentivisation awards

579

 -

 1,297

FSCS levy refund

(288)

 -

 -

Disposal of available-for-sale investments

 -

-

(2)

less tax effect of above

(381)

(398)

 (1,481)

Adjusted basic and diluted profit for the period and attributable earnings

 30,886

 25,940

 56,011





Earnings per share




Basic

9.7p

8.2p

16.5p

Diluted

9.4p

7.9p

16.0p





Adjusted2 earnings per share




Basic

11.3p

9.5p

20.5p

Adjusted1 diluted

10.8p

9.1p

19.6p

1. The dilutive shares used for this measure differ from that used for statutory dilutive earnings per share; the future value of service costs attributable to employee share options is ignored and contingently issuable shares for Long-term Incentive Plan ('LTIP') options are assumed to fully vest. The Directors have selected this measure as it represents the underlying effective dilution by offsetting the impact to the calculation of basic shares of the purchase of shares by the Employee Share Ownership Trust ('ESOT') to satisfy options.

2. Excluding redundancy costs, onerous contracts costs, amortisation of client relationships, acquisition costs, incentivisation awards, FSCS levy refund and disposal of available-for-sale investments.

 

7.   Dividends


Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Amounts recognised as distributions to equity shareholders in the period:




2016/2017 Final dividend paid 7 February 2018, 10.75p per share
(2017: 9.15p per share)

 29,516

 24,996

 24,996

Interim dividend paid 16 June 2017, 4.25p per share

 -

 -

 11,618


 29,516

 24,996

 36,614

An interim dividend of 4.4p per share was declared by the Board on 15 May 2018 and has not been included as a liability as at 31 March 2018. This interim dividend will be paid on 15 June 2018 to shareholders on the register at the close of business on 25 May 2018 with an ex-dividend date of 24 May 2018.

8.   Intangible assets


 Goodwill
£'000

 Client relationships
£'000

 Software
£'000

 Total
£'000

Cost





At 30 September 2016 (audited)

48,637

 107,902

18,206

174,745

Additions

-

119

 616

 735

Exchange differences

-

 (2)

-

(2)

At 31 March 2017 (unaudited)

48,637

 108,019

18,822

175,478

Additions

-

 25,589

 263

25,852

Exchange differences

-

5

-

 5

At 30 September 2017 (audited)

48,637

 133,613

19,085

201,335

Additions

-

329

 33

 362

Exchange differences

-

 (1)

-

(1)

Disposals

-

 -

(968)

(968)

At 31 March 2018 (unaudited)

48,637

 133,941

18,150

200,728






Accumulated amortisation and impairment





At 30 September 2016 (audited)

-

 85,105

8,587

93,692

Amortisation charge for the year

-

 2,616

2,709

5,325

Exchange differences

-

 (1)

-

(1)

At 31 March 2017 (unaudited)

-

 87,720

11,296

99,016

Amortisation charge for the period

-

 4,034

2,491

6,525

Exchange differences

-

3

-

 3

At 30 September 2017 (audited)

-

 91,757

13,787

105,544

Amortisation charge for the period

-

 3,978

2,494

6,472

Exchange differences

-

 (1)

-

(1)

Disposals

-

-

(968)

(968)

At 31 March 2018 (unaudited)

-

 95,734

15,313

111,047






Net book value





At 31 March 2018 (unaudited)

48,637

 38,207

2,837

89,681

At 30 September 2017 (audited)

48,637

 41,856

5,298

95,791

At 31 March 2017 (unaudited)

48,637

 20,299

7,526

76,462

 

9.   Property, plant and equipment


Leasehold improvements
£'000

Office
equipment
£'000

Computer equipment
£'000

Total
£'000

Cost





At 30 September 2016 (audited)

 13,190

13,292

34,113

60,595

Additions

24

 40

 97

 161

Exchange differences

 (3)

 (8)

 -

 (11)

Disposals

 -

 (6)

 -

 (6)

At 31 March 2017 (unaudited)

 13,211

13,318

34,210

60,739

Additions

666

 58

 88

 812

Exchange differences

7

 20

-

 27

Disposals

 (178)

 (2)

-

 (180)

At 30 September 2017 (audited)

 13,706

13,394

34,298

61,398

Additions

215

 62

4,239

4,516

Exchange differences

 (1)

 (4)

-

 (5)

Disposals

 -

(1,300)

(3,813)

(5,113)

At 31 March 2018 (unaudited)

 13,920

12,152

34,724

60,796






Accumulated depreciation and impairment





At 30 September 2016 (audited)

 9,940

12,621

33,212

55,773

Charge for the period

500

 240

 265

1,005

Exchange differences

 (2)

 (6)

-

 (8)

Eliminated on disposal

 -

 (6)

-

 (6)

At 31 March 2017 (unaudited)

 10,438

12,849

33,477

56,764

Charge for the period

526

 148

 238

 912

Exchange differences

6

 16

-

 22

Eliminated on disposal

 (138)

 (2)

-

 (140)

At 30 September 2017 (audited)

 10,832

13,011

33,715

57,558

Charge for the period

432

 103

 660

1,195

Exchange differences

 (1)

 (3)

 -

 (4)

Eliminated on disposal

-

(1,300)

(3,813)

(5,113)

At 31 March 2018 (unaudited)

 11,263

11,811

30,562

53,636






Net book value





At 31 March 2018 (unaudited)

 2,657

 341

4,162

7,160

At 30 September 2017 (audited)

 2,874

 383

 583

3,840

At 31 March 2017 (unaudited)

 2,773

 469

 733

3,975

 

10. Investments

Trading investments (Level 1)


Listed investments
£'000

At 31 March 2018 (unaudited)

328

At 30 September 2017 (audited)

36

At 31 March 2017 (unaudited)

 1,170

The trading investments are measured at fair value which is determined directly by reference to published prices in an active market where available. They are held in an unregulated subsidiary, Brewin Dolphin MP, whose sole objective is to provide seed capital to the model portfolios managed under an investment mandate by Brewin Dolphin Limited.

 

Available-for-sale investments (Level 3)


Unaudited
as at
31 March
2018
£'000

Unaudited
as at
31 March
2017
£'000

Audited
as at
30 September
2017
£'000

At start of period

736

833

833

Additions

 -

18

18

Net (loss)/gain from changes in fair value recognised in equity

 (29)

31

 (75)

Disposals

 (6)

 (15)

 (40)

At end of period

701

867

736





Current assets




Available-for-sale investments




Equity

88

127

95

Asset-backed security

613

740

641

Total investments

701

867

736

The asset-backed security is a USD fixed rate note, due to mature on 23 September 2019. The available-for-sale investments are held at fair value.

Fair value measurement recognised in the statement of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 fair value measurements are those derived from inputs other than the quoted price included within Level 1 that are observable for the asset or a liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from formal valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair value of the Group's financial assets and liabilities that are measured at fair value on a recurring basis

Some of the Group's financial assets and liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and liabilities are determined.


Unaudited
fair value
as at
31 March 2018
£'000

Unaudited
fair value
as at
31 March 2017
£'000

Audited
fair value
as at
30 September 2017
£'000

Valuation technique(s)
and key input(s)

Significant
unobservable input(s)

Relationship of unobservable inputs
to fair value

Level 1







Trading investments

328

1,170

36

Quoted bid prices in an active market.

n/a

n/a

Level 3







Available-for-sale investments - Equity

56

95

63

The valuation is based on published monthly NAVs.

Marketability discount up to 30%.

As the marketability discount increases the valuation decreases.


32

32

32

The valuation is based on the fair value of the loan notes as presented in the most recent audited financial statements of the company.

A marketability discount is applied as this investment is highly illiquid.

Marketability discount ranging between 30-50%.

As the marketability discount increases the valuation decreases.

Available-for-sale investments - Asset-backed securities

613

740

641

The valuation is based on the fair value of the loan notes as presented in the most recent audited financial statements of the company.

A marketability discount is applied as this investment is highly illiquid.

Marketability discount ranging between 30-50%.

As the marketability discount increases the valuation decreases.

Sensitivity analysis

A sensitivity analysis of the significant unobservable inputs used in valuing the Level 3 financial instruments is set out below:

Financial asset

Assumption

Change in assumption

Impact on valuation

Current assets - Available-for-sale investments - Equity

Marketability discount

Increase by 5%

Decrease by £2,500

Current assets - Available-for-sale investments - Asset-backed securities

Marketability discount

Increase by 5%

Decrease by £47,000

 

11. Provisions


Sundry claims and associated costs
£'000

Onerous contracts
£'000

Social security and levies on share awards
£'000

Acquisition related payments
£'000

Leasehold dilapidations
£'000

Unaudited
as at
31 March
2018
£'000

Unaudited
as at
31 March
2017
£'000

Audited
as at
30 September
2017
£'000

At start of period

587

 5,367

3,474

622

 2,044

 12,094

 9,697

 9,697

Additions

536

873

 674

786

63

 2,932

 1,316

 5,004

Utilisation of provision

(152)

(612)

 (1,245)

-

(44)

(2,053)

(1,559)

(1,941)

Unwinding of discount

-

13

 -

13

-

26

20

58

Unused amounts reversed during the year

(234)

-

 (36)

-

(56)

(326)

(385)

(724)

At end of period

737

 5,641

2,867

 1,421

 2,007

 12,673

 9,089

 12,094










Included in current liabilities

737

 1,199

1,570

 1,213

-

 4,719

 2,759

 3,755

Included in non-current liabilities

-

 4,442

1,297

208

 2,007

 7,954

 6,330

 8,339


737

 5,641

2,867

 1,421

 2,007

 12,673

 9,089

 12,094

The Group recognises a provision for settlements of sundry claims and associated costs. The timing of the settlements is unknown, but it is expected that they will be resolved within 12 months.

The onerous contracts provision at 31 March 2018 is in respect of surplus office space. The valuation of an onerous contract is based on the best estimate of the likely costs discounted to present value. Where the provision is in relation to leasehold obligations on premises and it is more likely than not that the premises will be sublet, an allowance for sublease income has been included in the valuation.

Provision of £5.6 million (30 September 2017: £5.4 million) has been made for surplus office space which the Group may not be able to sublet in the short term. The maximum exposure is the current estimated amount that the Group would have to pay to meet the future obligations under these lease contracts which is approximately £11.0 million as at 31 March 2018 (30 September 2017: £13.4 million), if the assumption regarding future sublets is removed and the time value of money is ignored. The longest lease term covered by the provision has 15.0 years remaining and accounts for £4.3 million of the provision.

The Group has made a provision of £2.0 million (30 September 2017: £2.0 million) for leasehold dilapidations. These costs are expected to arise at the end of the lease. The leases covered by the provision have a maximum remaining term of 15.0 years.

The social security and levies on share awards provision is for Employer's National Insurance and Apprenticeship Levy on awards outstanding at the end of the period. The provision is based on the Group's share price, the amount of time passed and likelihood of the share awards vesting and represents the best estimate of the expected future cost.

The provision recognised for acquisition related payments is in respect of both incentivisation awards and deferred consideration payable for the acquisition of client relationships. The incentivisation award provision is £1.2 million (30 September 2017: £0.6 million) and is payable to employees in relation to the retention and acquisition of funds and is based on the best estimate of the likely future obligation discounted for the time value of money. The deferred consideration provision is £0.2 million (30 September 2017: £nil) and is based on the best estimate of the likely future obligation discounted for the time value of money.

 

12. Defined benefit pension scheme

The main financial assumptions used in calculating the Group's defined benefit pension scheme are as follows:


As at
31 March
2018

As at
31 March
2017

As at
30 September 2017

Discount rate

2.50%

2.60%

2.60%

RPI Inflation assumption

3.20%

3.30%

3.30%

CPI Inflation assumption

2.20%

2.30%

2.30%

Rate of increase in salaries

3.20%

3.30%

3.30%

LPI Pension Increases

3.10%

3.20%

3.20%





Average assumed life expectancies for members on retirement at age 65.




Retiring today




Males

88.4 years

88.8 years

88.6 years

Females

89.5 years

90.0 years

89.6 years

Retiring in 20 years' time




Males

89.7 years

90.5 years

89.9 years

Females

91.0 years

91.8 years

91.1 years

 

The value of the defined benefit pension liability as at 31 March 2018 was estimated in accordance with International Accounting Standard 19 by a qualified independent actuary.  The latest full actuarial funding valuation was carried out as at 31 December 2014 and the 31 December 2017 actuarial funding valuation is underway.

13. Called up share capital

The following movements in share capital occurred during the period:


Date

No. of shares

Exercise
price
(pence)

Share
capital
£'000

Share premium account
£'000

Total
£'000

At 1 October 2017


 283,331,882


 2,833

152,320

155,153

Issue of options

Various

68,068

 131.3p - 168.0p

1

 112

 113

At 31 March 2018


 283,399,950


 2,834

152,432

155,266

 

14. Note to the cash flow statement


Unaudited
six months to

31 March
2018
£'000

Unaudited
six months to
31 March
2017
£'000

Audited
year to
30 September
2017
£'000

Operating profit

33,865

28,403

57,668

Adjustments for:




Depreciation of property, plant and equipment

1,195

1,005

1,917

Amortisation of intangible assets - client relationships

3,978

2,616

6,650

Amortisation of intangible assets - software

2,494

2,709

5,200

Loss on disposal of fixed assets

-

-

40

Defined benefit pension scheme

(1,500)

(1,500)

(3,000)

Share-based payment expense

4,279

4,149

8,052

Translation adjustments

(13)

(11)

40

Interest income

226

102

161

Interest expense

(10)

(35)

(11)

Operating cash flows before movements in working capital

44,514

37,438

76,717

(Decrease)/increase in payables and provisions

(23,570)

(13,852)

25,662

Decrease/(increase) in receivables and trading investments

4,242

(6,975)

(25,011)

Cash generated by operating activities

25,186

16,611

77,368

Tax paid

(5,060)

(3,605)

(9,905)

Net cash inflow from operating activities

20,126

13,006

67,463

 

15. Related party transactions

There have been no related party transactions that have taken place in the period that have materially affected the financial position or the performance of the Group during the period and no changes to related party transactions from those disclosed in the 2017 Annual Report and Accounts available via our website www.brewin.co.uk that could have a material effect on the financial position or the performance of the Group. Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed. There were no other transactions with related parties which were not part of the Group during the period, with the exception of remuneration paid to key management personnel.

Cautionary statement

The Interim Management Report (the 'IMR') for the period ended 31 March 2018 has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Statement of Directors' Responsibilities

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' as adopted by the EU;

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 period ended 31 March 2018 and their impact on the condensed set of financial statements; and description of principal risks and uncertainties for the remaining six months of the year); and

c)             the interim management report includes a fair view of the information required by DTR 4.2.8R (disclosures of related parties' transactions and changes therein).

By order of the Board

 

 

David Nicol

Chief Executive

15 May 2018

 

Independent Review Report
to Brewin Dolphin Holdings PLC

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2018, which comprises the condensed consolidated statement of income, condensed consolidated statement of comprehensive income, condensed consolidated balance sheet, condensed consolidated statement of changes in equity, condensed consolidated cash flow statement and the related notes 1 to 15. 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 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 it 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 Conduct 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 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 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 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 financial statements in the half-yearly financial report for the six months ended 31 March 2018 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 Conduct Authority.

 

 

Deloitte LLP

Statutory Auditor
London, United Kingdom

15 May 2018