Interim Results For the half year to 31 March 2012 Themes Good - PowerPoint PPT Presentation

Interim Results For the half year to 31 March 2012

Themes • Good performance in challenging market • Growth in discretionary funds under management • Growth in recurring income • Strategic change – implementation on time and on budget • 250th Anniversary 1

Results – Highlights March 2012 March 2011 % change £’000 £’000 Revenue 122,812 123,616 -1% Other operating income 8,566 7,849 9% Total income 131,378 131,465 0% Profit before tax* 18,901 22,759 -17% Profit before tax 12,307 11,898 3% Diluted earnings per share 3.5p 3.5p - Diluted earnings per share* 5.5p 6.9p -20% Dividend 3.55p 3.55p - * pre redundancy cost, additional FSCS Levy and amortisation of client relationships 2

Income Statement March 2012 March 2011 % Change £’000 £’000 Total Income 131,378 131,465 0% Salaries (47,050) (43,546) 8% Other operating costs (48,947) (47,429) 3% Profit before profit share* 35,381 40,490 -13% Profit share (16,463) (17,887) -8% Operating Profit* 18,918 22,603 -16% Net finance income and other gains and losses (17) 156 Profit before tax* 18,901 22,759 -17% Redundancy cost (87) (577) -85% Additional FSCS Levy (553) (6,058) -91% Amortisation of client relationships (5,954) (4,226) 41% Profit before tax 12,307 11,898 3% * pre redundancy cost, additional FSCS Levy and amortisation of client relationships 3

Capital Adequacy March 2012 £’m Capital Resources 69.1 Capital Requirement 49.3 Surplus 19.8 Firm’s cash 42.3 4

Difficult Background • Market down on average – FTSE 5.6% – APCIMS 1.9% • Volumes down – over all by 17% – 1st quarter - 25% – 2nd quarter - 11% 5

Fixed salary costs up • Front office – up £942K (3.4%) - 2% salary increases + 1.4% new staff • Business support and overheads up £2,562K (16%) - 4% salary increases + 12% new staff - Regulation and Risk - new departments and new staff 6

7 Movement in Profitability 2011 to 2012

Funds Under Management March 2012 Sept 2011 % change Indices FTSE APCIMS Private Investor Series Balanced Portfolio 3,002 2,735 9.7% FTSE 100 5,768 5,128 12.5% Funds Discretionary funds under management £17.3bn £15.6bn 10.9% Advisory funds under management £8.4bn £8.4bn 0% Total managed funds £25.7bn £24bn 7.1% 9

Funds Under Management Flow Advisory funds Discretionary funds Total Managed funds 0% 10.9% 7.1% % change in funds since 30 Sept 2011 £ billion £ billion £ billion Value of funds at 30 September 2011 8.4 15.6 24.0 Inflows 0.1 0.7 0.8 Outflows (0.5) (0.4) (0.9) Transfers (0.2) 0.2 - Market movement 0.6 1.2 1.8 Value of funds at 31 March 2012 8.4 17.3 25.7 10

Re-pricing – Attrition to date Notes: Attrition data updated as of 11/05/2012. Attrition at risk includes accounts at risk and confirmed departures. 11

Return on Funds Under Management 2012 2011 Average return on discretionary funds 1.12% 1.20% Average return on advisory funds 0.94% 0.92% 12

13 Funds Under Management trend

14 Split of Total Income

15 Split of Income by service

Systems changes • Total change – not tweaks • Migration begins at the end of 2012 • Integration of IM and FP proposition • On time and on budget • Cost savings in 2014 17

New client proposition • Client experience – materially enhanced • National proposition – but still bespoke – Consistent and quality service – National rate card – Re pricing – over 1/3 complete – Trail largely phased out by end 2012 – Less time spent on administration 18

Developments • New Ipswich office • Consolidation of small offices • Good book of potential recruits • Pensions +£500m - now over £4bn • ISAs - £3.8bn (£3.4bn March 2011) 19

Marketing Developments • Benefits of single brand and ongoing activity • National advertising campaign • Awareness of Brewin Dolphin now over 30% • from 20% in 2008 • those considering us “better than most” has doubled Events all around the country to mark 250 th Anniversary • • Commodores Cup, the Irish Open, the Chelsea Flower Show and many others… 21

Outlook • Growing demand for our services • Competitive proposition post RDR • Systems and services efficiency improved • Scale and approach see us well positioned • Plans for margin enhancement of 20%+ on track 24

Analysis of Funds Discretionary £17.3bn Advisory £8.4bn Execution-only £5.3bn Total funds £31.0bn Custody £29.3bn Certificated £1.7bn Total funds £31.0bn 26

27 Regional Network

28 Asset Allocation

Assets under management March 2012 September 2011 Pension funds £4.1bn Pension funds £3.6bn Charitable funds £1.9bn Charitable funds £1.7bn ISAs £3.8bn ISAs £3.4bn 29

Staff • Total Staff – 1931 • FSA approved staff* – 602 • Staff shareholders own 35% * CF30’s - 585 30

Approach to Investment What makes us special is that the person who talks to the client makes the investment decisions. With the help of our: • Asset Allocation Committee • Strong research departments • Collective funds analysis service • Model portfolios management options • Strong compliance • Solution for smaller portfolios and MFS for Intermediaries 31

Remuneration • Basic salary • Profit share - Third paid in shares over £50,000 (to be held for 3 yrs) • All personnel believe they can make a difference 32