Brewin Dolphin's annual profits dive 70% after technology write-down

3rd Dec 2014 07:56

The previously-announced write-off of a major technology project resulted in annual profits at Brewin Dolphin diving 70%, though the investment management group still hiked its dividend by 15%.Brewin had decided during the year to abandon plans to implement a new operating system, leading to a write-down of £33.7m.This, along with redundancy costs and provisions for onerous contracts, mean that exceptional costs totalled £38m in the year ended 28 September, up from just £12.1m the year before.As such, statutory profit before tax came to £8.6m, compared with £28.4m previously.Excluding these one-off items, adjusted profits improved 16% to £60.2m.Chief executive David Nicol said the company made "good financial and operational progress" during the year."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."Total revenues rose 2% to £290.5m, with a 17% jump in fee income to £177.3m partly offset by a 5% decline in commissions to £88.6m. Commissions fell in line with reduced transactions volumes as a result of market volatility in the second half.The group had net cash of £135.1m by the end of the year, up from £113.5m previously.The final dividend was lifted by 24% to 6.25p, leading to a full-year dividend payment of 9.9p, up from 8.6p the year before.The stock was down 1.3% at 275.2p by 08:07.Analyst Paul McGinnis from Shore Capital said the results were "broadly in line with consensus", but the dividend missed forecasts slightly. He had expected a full-year dividend of 10.6p."This is a payout [ratio] of 60%, the bottom end of the new 60-80% target range the company set 12 months ago," McGinnis said.