Brewin Dophin to take one-off hit after pulling software roll-out

13th May 2014 08:07

- 32m-pound impairment to be taken in H2- FIGARO roll-out to be stopped- Margin targets maintainedInvestment management and financial planning company Brewin Dolphin is to take a one-off charge this year after deciding to pull the roll-out of the JHC Figaro (FIGARO) software across the group.Brewin said it expects to register a £32m exceptional pre-tax impairment charge in the second half. The company reassured that this will be a non-cash item and will not have an impact on its regulatory capital position or adjusted profit figure.The implementation of FIGARO began in 2011 under the previous management team as part of an attempt to improve operational efficiency by streamlining business processes and improve the operating margin from 15% to 20%. The first stage of the FIGARO roll-out into its execution-only sharedealing division, Stocktrade, has now been completed. However, Brewin said it had uncovered a number of issues with the "functionality and robustness" of the software that were taking additional time and resource to address.As such, the company said it now believes FIGARO is not an "appropriate operating system" for its Discretionary Wealth Management business and has decided not to roll out the software more broadly across the group."The board believes the decision to cease the roll out of FIGARO is in the best commercial interests of the group. Moreover, it remains confident that the 2016 operating margin target will be achieved through on-going business improvements." As well as the £32m impairment charge, Brewin said it will need to address payment of around £15m pre-tax over the next 10 years under the original contracts.Nevertheless, the company said it still remains on track to hit its medium-term operating margin target of over 25% by the end of 2016.Brewin's shares were down 2.8% at 318.1p by 08:22.BC