Brewin profits dive 70% on tech writedown

Brewin Dolphin’s pre-tax profit fell 70 per cent to £8.6m in the 12 months to 28 September, down from £28.4m in 2013, largely due to £34m costs associated with its major technology writedown.

The wealth manager announced in May that it expected to make a £32m writedown after dropping plans to implement the Figaro software package across its wealth management business.

A further £2m charge was added to settle contractual obligations.

Redundancy costs of £2.3m through closures of its Chester, Dorchester, Guernsey, Stoke, Truro, Lymington and York offices and surplus property costs of £2m tool total exceptional costs to £38m.

Brewin’s fee income rose 17 per cent to £177m during the year, up from £152m in 2013 whilst discretionary funds grew 7 per cent across the year and now make up 82 per cent of Brewin’s total managed funds.

Trail income fell to £5.5m in 2014, down from £14.8m in 2013 as income from discretionary, advisory and execution only services grew 8 per cent to £265.9m, up from £245.5m.

Income from discretionary alone rose 12 per cent to £216m, up from £193m in 2013.

Fee income now accounts for 67 per cent of core income, up from 62 per cent in 2013. Income from advisory services fell 9 per cent to £31.6m, down from £34.7m in the previous year.

Chief executive David Nicol says: “2014 was a year in which good financial and operational progress was made as reflected in both the adjusted profit before tax margin of 20.7% and in improved cash generation. Improving revenue and efficiency are our strategic goals and we have made good progress towards our stated targets.

“In the process, we reassessed a significant software project and this has resulted in a material impairment charge, as previously announced. Nevertheless, we are well positioned for success and I remain confident that we have the right people to deliver our plans for growth throughout the business.”