Company Announcements

23 July 2020

Brewin Dolphin Holdings PLC

("Brewin Dolphin" or the "Company" or the "Group")

Quarterly Trading Update

For the third quarter ended 30 June 2020

Continued resilient performance in Q3 supported by market recovery and organic growth; total discretionary net flows of £0.4bn, an annualised growth rate of +4.5%.

Brewin Dolphin announces a trading update for the three months ended 30 June 2020.

Robin Beer, Chief Executive said:

"We continue to deliver resilient results despite the challenges the COVID-19 pandemic have imposed on our business in supporting our clients and colleagues. Overall funds increased by 12.8% in the quarter as markets recovered. We had another strong quarter of net inflows across both our direct and intermediaries' channels, with an annualised growth rate in total discretionary net flows of 4.5%, demonstrating continued demand for our services and the effectiveness of our people and operations. We are delivering on multiple infrastructure projects despite the challenges of remote working. Next week we switch over to our new client management system following comprehensive testing and remote training of our employees. In response to COVID-19 we have continued to review our office operations and have re-opened a number of small offices on a controlled basis, prioritising our employee's and clients' health and safety and ensuring consistency with government's guidelines. We anticipate that our larger offices will take longer to reopen fully. We have also reassessed the impact and potential risk on the next phase of our custody and settlement implementation programme, which requires rigorous testing of the new system interfaces with existing technology and remote training for employees. To mitigate any execution and training risk we have pushed back the implementation of the system to the first half of the 2021 calendar year.

Having transitioned into the Chief Executive role in June, I am incredibly proud and honoured to work for a Group which has not faltered through the COVID-19 crisis. Our people have continued to deliver on complex infrastructure projects, and our client-facing colleagues have gone above and beyond to support their clients whilst also securing new business. We are bidding farewell to David Nicol at the end of July, who has been instrumental in driving and expanding the business over the last seven years. His strong leadership has smoothed the transition period, allowing for continued business momentum, and we wish him well in his retirement."

Financial highlights

·    Total funds increased by 12.8% to £46.7bn in the quarter (Q2 2020: £41.4bn), with discretionary funds up 13.7% to £40.6bn (Q2 2020: £35.7bn) driven by improved investment performance and robust inflows. Total funds include £2.7bn of acquired funds following the acquisition of Investec Capital & Investments (Ireland) Limited ("ICIIL") in Q1 2020.

·    Q3 discretionary net flows of £0.4bn, +4.5%* (Q2 2020: £0.4bn, +3.8%*, Q1 2020: £0.1bn, +1.0%*).

·    Strong direct discretionary inflows of £0.4bn, similar levels to Q2. Year to date direct discretionary net flows was negatively impacted by the departure of a low margin institutional account in Q1.

·    The MSCI PIMFA Private Investor Balanced Index was up 10.6% and the FTSE 100 Index up by 8.8%, during the quarter ended 30 June 2020.

·    Total income was £92.7m (Q3 2019: £87.3m), an increase of 6.2% year on year, driven in part by higher commissions due to elevated trading activity and income from recent acquisitions of £5.2m. Year to date total income was £268.5m, an increase of 7.6% year on year.

·    Total discretionary income increased by 3.8% to £79.1m (Q3 2019: £76.2m) due to higher commissions. Year to date total discretionary income grew by 5.4% to £228.6m.

·    Financial planning income grew 15.3% to £8.3m (Q3 2019: £7.2m), driven by continued demand for integrated services and recent acquisitions. 60% of new direct discretionary private client business took advice-led services in the quarter.     

·     Operating cost savings of £6m-£8m in FY20, on track.

Notes: * annualised growth rate

Operational highlights:

·    Successful remote integration of ICIIL, migrated clients and assets in early April.

·    Systems update:

·    The client management system goes live next week. Employees have had comprehensive training and more recently completed dress rehearsals to ensure a smooth switch over. The key benefits of the new client management system include an improved client experience, from onboarding through to their suitability process, and greater operational efficiencies for our people.

·    The custody and settlement system software delivery phase has almost been completed, and the focus has moved to acceptance testing and business readiness activities. This includes testing the new system interfaces with existing technology, development of new processes and creating internal training modules for employees. Our technology and change and transformation teams have continued to reassess the timeline for the testing and readiness phase taking into consideration remote working and a multilocational team. This has impacted the timeline and to mitigate any execution and training risk we have pushed back the implementation of the custody and settlement system to the first half of the 2021 calendar year. We expect this change in timelines to have a moderate impact on the overall project costs.

Upcoming events

The preliminary results for the year ended 30 September 2020 and a strategy update will be announced on 25 November 2020.

Funds

Total funds by service category¹

Funds flow by service category - detailed movement¹ in the quarter

Funds flow by service category - detailed movement¹ year to date

Notes

¹The funds figures are rounded to one decimal place and therefore may not always cast.

Income

The Company's LEI number is 213800PS7FS5UYOWAC49

For further information:

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 £40.6 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.