Brewin Dolphin reports record discretionary fund inflows
By Josh White
Date: Wednesday 24 Nov 2021
(Sharecast News) - Brewin Dolphin reported record discretionary fund inflows in its final results on Wednesday, with total discretionary net flows rising to £1.9bn from £0.9bn year-on-year, representing an annualised growth rate of 4.6%.
The FTSE 250 company said gross inflows reached a record £4.0bn for the 12 months ended 30 September, up from £2.8bn a year earlier, which the board said benefited from "strong" brand advocacy, as well as its range of propositions and investment solutions.
Discretionary net flows totalled £0.5bn from direct clients and £1.4bn from indirect clients, of which £1bn flowed into MPS and Voyager.
Total funds increased by 19.5% over the 12 months to £56.9bn, while total discretionary funds grew by 20.9% to £49.8bn, which Brewin Dolphin said was driven by positive net flows and strong investment performance.
Total income for the period increased by 12.3% to £405.9m, which the board put down to strong market performance and record discretionary gross inflows.
Financial planning income grew 25.7% to £41.6m, which was driven by both the '1762' service and its wealth core propositions.
Adjusted profit before tax was ahead 16.2% year-on-year at £90.9m, with its margin improving 22.4% from 21.6%.
Brewin Dolphin's board said that was driven by strong income growth, and cost savings of £2.6m associated with Covid-19 restrictions.
The company said its cash balances were "strong" at £188m, up from £180.5m a year earlier, while its capital adequacy ratio stood at 230%.
Its board declared a final dividend of 11.1p per share, up 12.1% year-on-year, taking the total distribution for the year to 15.7p per share, compared to 14.3p for the 2020 financial year.
Looking ahead, Brewin Dolphin said 2022 commission income was expected to be similar to the annualised fourth quarter figure from 2021.
Operating costs were pencilled in as growing in the mid-to-high single digits due to wage inflation, the parallel running of systems which would reverse in 2023, depreciation from recent technology investments, and continued investment in the business to support future growth.
"We have had an exceptional year achieving record discretionary inflows and are delivering on our growth ambitions," said chief executive officer Robin Beer.
"None of this would have been possible without our people, who have adapted so effectively to remote working and continue to focus on putting our clients at the centre of all their decision making.
"We have remained relevant by continuing to innovate our propositions whilst also developing our digital capabilities."
Beer said the company had started to drive operational efficiencies through its client management system, with its new custody and settlement system now live.
"Looking ahead to the 2022 financial year, our priority is to complete the final phased rollout of functionality for our new custody and settlement system, which will complete in summer 2022.
"On completion, with our new technology capabilities coupled with the operational excellence programme, we expect to capture significant synergies and benefits across the business, supporting our vision to deliver double digit earnings per share growth by 2025," Robin Beer said.
"We remain focused on becoming the leading advice-focused digitally enabled wealth manager in the UK and Ireland, which we believe will allow us to benefit from sector growth and capture market share."
At 0939 GMT, shares in Brewin Dolphin Holdings were down 5.46% at 355p.
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