17 Apr 2020 07:00
17 April 2020
This announcement contains inside information for the purposes of the Market Abuse Regulation (596/2014/EU).
Brewin Dolphin Holdings PLC
("Brewin Dolphin" or the "Company" or the "Group")
Trading Statement
For the six-month period ended 31 March 2020
Q2 positive discretionary net flows of £0.4bn, annualised growth of 3.8% and update on the impact of COVID-19
Brewin Dolphin, one of the UK and Ireland's leading independent providers of discretionary wealth management, today provides a trading update for the six-month period ended 31 March 2020. The Company's half year financial results are scheduled to be reported on 13 May 2020.
David Nicol, Chief Executive said:
"We were encouraged by our good performance in the first quarter with improving markets and positive discretionary net inflows, which strongly accelerated into the second quarter. Not surprisingly, the rapid spread of COVID-19 and the unprecedented reaction of the global markets, has negatively impacted the value of our clients' funds and consequently our second quarter total income. We have a strong balance sheet with good cash generation, and a robust regulatory capital position, which will support us as markets recover and enable us to service the growing demand for financial advice in the UK and Ireland. We currently have no intention of participating in any Government schemes.
We have prioritised the health and wellbeing of our employees by ensuring almost all are working from home and have implemented several internal initiatives to help balance caring for family and working remotely. In these volatile markets, it has never been more important to stay connected with our clients, and we continue to see increased demand for client engagement and financial advice, which we have been able to offer remotely through video, telephone and conference calls. We are pleased to see that the investment we have made in our IT infrastructure has enabled us to continue our operations with flexibility and resilience."
Q2 highlights
· Total discretionary net flows of £0.4bn, representing an annualised growth rate of 3.8% (Q1 2020: £0.1bn, annualised growth rate of 1.0%).
· Total funds decreased by 14.6% to £41.4bn (Q1 2020: £48.5bn), with discretionary funds down 14.6% to £35.7bn (Q1 2020: £41.8bn).
· The MSCI WMA Private Investor Balanced Index fell by 15.2% and the FTSE 100 Index fell by 24.8%, during the quarter ended 31 March 2020.
H1 highlights
· Total net flows of £0.6bn, representing an annualised growth rate of 2.7%. Discretionary net flows of £0.5bn, were driven by strong flows in MPS and continued demand for our advice-led services.
· Total funds decreased by 8.0% to £41.4bn (FY 2019: £45.0bn), with discretionary funds decreasing 11.0% to £35.7bn (FY 2019: £40.1bn), due to negative market performance. Total funds include £2.7bn of acquired funds from Investec Capital & Investments (Ireland) Limited ("ICIIL"). Excluding acquired funds, total funds decreased by 14.0%.
· Total income increased by 8.3% year on year to £175.8m (H1 2019: £162.3m, H2 2019: £176.8m). Total income includes £9.3m as a result of recent acquisitions.
FY 2020 Outlook
The recent market weakness has created a high level of uncertainty as to the outlook for the remainder of the financial year and it is still too early to ascertain the impact this may have on our full year 2020 income and profitability. We continue to be fully engaged with our clients and are confident in our ability to respond to the increased demand for financial advice at this time of uncertainty, while supporting our employees and suppliers and continuing to deliver our strategic objectives.
Funds
Funds flow by service category for H1 20201
£bn | 30 September 2019 | Inflows | Outflows | Internal transfers | Net flows | Growth rate2 | Acquired | Investment performance | 31 March 2020 |
Direct discretionary | 26.3 | 0.7 | (0.5) | (0.2) | - | 0.0% | 1.0 | (4.1) | 23.2 |
Intermediaries | 10.0 | 0.4 | (0.2) | (0.1) | 0.1 | 2.0% | - | (1.3) | 8.8 |
MPS | 3.8 | 0.4 | - | - | 0.4 | 21.1% | - | (0.5) | 3.7 |
Indirect discretionary | 13.8 | 0.8 | (0.2) | (0.1) | 0.5 | 7.2% | - | (1.8) | 12.5 |
Total discretionary | 40.1 | 1.5 | (0.7) | (0.3) | 0.5 | 2.5% | 1.0 | (5.9) | 35.7 |
Execution only | 3.9 | 0.1 | (0.3) | 0.3 | 0.1 | 5.1% | 0.5 | (0.8) | 3.7 |
BPS | 0.2 | - | - | - | - | 0.0% | - | - | 0.2 |
Advisory | 0.8 | 0.1 | (0.1) | - | - | 0.0% | 1.2 | (0.2) | 1.8 |
Total funds | 45.0 | 1.7 | (1.1) | - | 0.6 | 2.7% | 2.7 | (6.9) | 41.4 |
Funds flow by service category for Q2 20201
£bn | 31 December 2019 | Inflows | Outflows | Internal transfers | Net flows | Growth rate2 | Investment performance | 31 March 2020 |
Direct discretionary | 27.5 | 0.4 | (0.3) | (0.1) | - | 0.0% | (4.3) | 23.2 |
Intermediaries | 10.2 | 0.2 | (0.1) | 0.1 | 0.2 | 7.8% | (1.6) | 8.8 |
MPS | 4.1 | 0.2 | - | - | 0.2 | 19.5% | (0.6) | 3.7 |
Indirect discretionary | 14.3 | 0.4 | (0.1) | 0.1 | 0.4 | 11.2% | (2.2) | 12.5 |
Total discretionary | 41.8 | 0.8 | (0.4) | - | 0.4 | 3.8% | (6.5) | 35.7 |
Execution only | 4.5 | 0.1 | (0.1) | 0.1 | 0.1 | 8.9% | (0.9) | 3.7 |
BPS | 0.2 | - | - | - | - | 0.0% | - | 0.2 |
Advisory | 2.0 | 0.1 | (0.1) | (0.1) | (0.1) | (20.0)% | (0.1) | 1.8 |
Total funds | 48.5 | 1.0 | (0.6) | - | 0.4 | 3.3% | (7.5) | 41.4 |
1 The funds figures are rounded to one decimal place and therefore may not always cast.
2 Annualised.
Total funds by service category1
£bn | 31 March 2019 | 30 September 2019 | 31 March 2020 | Change | |
Last12 months | Last6 months | ||||
Direct discretionary | 24.8 | 26.3 | 23.2 | (6.5)% | (11.8)% |
Intermediaries | 9.5 | 10.0 | 8.8 | (7.4)% | (12.0)% |
MPS | 3.2 | 3.8 | 3.7 | 15.6% | (2.6)% |
Indirect discretionary | 12.7 | 13.8 | 12.5 | (1.6)% | (9.4)% |
Total discretionary | 37.5 | 40.1 | 35.7 | (4.8)% | (11.0)% |
Execution only | 3.8 | 3.9 | 3.7 | (2.6)% | (5.1)% |
BPS | 0.2 | 0.2 | 0.2 | 0.0% | 0.0% |
Advisory | 0.9 | 0.8 | 1.8 | 100% | 125.0% |
Total funds | 42.4 | 45.0 | 41.4 | (2.4)% | (8.0)% |
Indices |
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MSCI WMA Private Investor Balanced Index | 1,587 | 1,665 | 1,423 | (10.3)% | (14.5)% |
FTSE 100 | 7,279 | 7,408 | 5,672 | (22.1)% | (23.4)% |
1 The funds figures are rounded to one decimal place and therefore may not always cast.
Income
| Unaudited six months to31 March2020 | Unaudited six months to31 March2019 | Change | |||||||
£m | Fees | Commission | Total | Fees | Commission | Total | Fees | Commission | Total | |
Private clients | 68.9 | 31.1 | 100.0 | 66.0 | 26.6 | 92.6 | 4.4% | 16.9% | 8.0% | |
Charities and corporates | 9.1 | 2.0 | 11.1 | 9.6 | 1.3 | 10.9 | (5.2)% | 53.8% | 1.8% | |
Direct discretionary | 78.0 | 33.1 | 111.1 | 75.6 | 27.9 | 103.5 | 3.2% | 18.6% | 7.3% | |
Intermediaries | 32.6 | 0.6 | 33.2 | 32.4 | 0.5 | 32.9 | 0.6% | 20.0% | 0.9% | |
MPS | 5.2 | - | 5.2 | 4.2 | - | 4.2 | 23.8% | n/a | 23.8% | |
Indirect discretionary | 37.8 | 0.6 | 38.4 | 36.6 | 0.5 | 37.1 | 3.3% | 20.0% | 3.5% | |
Total discretionary | 115.8 | 33.7 | 149.5 | 112.2 | 28.4 | 140.6 | 3.2% | 18.7% | 6.3% | |
Financial planning | n/a | n/a | 16.4 | n/a | n/a | 12.6 | n/a | n/a | 30.2% | |
Execution only | 2.2 | 3.5 | 5.7 | 2.2 | 3.1 | 5.3 | 0.0% | 12.9% | 7.5% | |
BPS | 0.7 | - | 0.7 | 0.6 | - | 0.6 | 16.7% | n/a | 16.7% | |
Advisory | 1.6 | 0.6 | 2.2 | 1.1 | 0.2 | 1.3 | 45.5% | 200.0% | 69.2% | |
Other income | n/a | n/a | 1.3 | n/a | n/a | 1.9 | n/a | n/a | (31.6)% | |
Total income | n/a | n/a | 175.8 | n/a | n/a | 162.3 | n/a | n/a | 8.3% | |
The Company's LEI number is 213800PS7FS5UYOWAC49
For further information:
Brewin Dolphin Holdings PLC | Tel:+44 (0) 20 7248 4400 |
David Nicol, Chief Executive |
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Siobhan Boylan, Chief Financial Officer |
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Carla Bloom, Head of Investor Relations |
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Camarco | Tel:+44 (0) 799 065 3341 |
Ben Woodford / Geoffrey Pelham-Lane |
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Notes to Editors:
About Brewin Dolphin
Brewin Dolphin is one of the UK and Ireland's leading independent providers of discretionary wealth management.
We continue to focus on discretionary investment management, and we manage £35.7 billion of funds on a discretionary basis. In line with the premium we place on personal relationships, we have built a network of offices across the UK, Channel Islands and the Republic of Ireland, staffed by qualified investment managers and financial planners. We are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients' needs at the core.