Brewin profit jumps despite market havoc

INVESTMENT manager and stockbroker Brewin Dolphin saw its profits jump over the first half of the year as it benefited from the long-term outlook of many of its risk-averse clients.

Brewin Dolphin posted a pre-tax profit of £15.2m for the half-year to March, 37 per cent above the £11.1m it made in the corresponding six month period last year.

Total income rose 15 per cent to £120.9m, of which £115.1m was generated by the investment management arm. Funds under management at the division strengthened 12.2 per cent to £23bn, of which discretionary funds rose 15.3 per cent to £13.6bn.

“It’s a very resilient performance given the turbulent conditions, although the markets in which we operate were fairly benign,” Brewin chairman Jamie Matheson said. “Our client base is not prone to wild fluctuations, they are long-term investors with an eye to income and returns.”

Matheson said the new coalition government’s focus on economic stability as a major priority was a welcome move, though he added that adverse market movements “remain a risk and cannot be ruled out”.

Brewin’s corporate advisory and broking arm, which struggled to make ends meet over the course of the financial crisis, also moved back into the black over the half year with an operating profit of £962,000.

But the firm admitted its cost base had jumped over the period due to an increased profit share paid out to its staff and a £2.2m contract renewal incentive, issued as part of a ten-year group cycle. Costs were also impacted by the tightening regulatory environment and the Financial Services Compensation Scheme levy.