Brewin Dolphin’s pre-tax profit tanks 6% in the first half of fiscal 2020

Brewin Dolphin Holdings (LON: BRW) said on Wednesday that its pre-tax profit came in lower in the first half of the current fiscal year. The company attributed its downbeat performance to the Coronavirus pandemic. The impact of COVID-19, it added, was mostly seen in the last two months of the second quarter.

In the 6 months that ended on 31^st March, the UK company saw its pre-tax profit decline to £21.4 million as compared to £22.8 million in the same period last year. Brewin’s total income, however, climbed 8.3% in the first half of fiscal 2020 to £175.8 million.

Brewin Dolphin’s assets under management reduce to £41.4 billion

The FTSE 250 listed firm said that it closed fiscal 2019 with £45.0 billion of total funds. At the end of the second quarter, however, it valued its total assets under management at a lower £41.4 billion.

Despite challenges ascribed to the flu-like virus that has so far infected more than a quarter-million people in the United Kingdom and caused over 32,500 deaths, Brewin Dolphin’s board decided in favour of maintaining its interim dividend at 4.4 pence per share. According to CEO David Nicol:

“We saw a greater level of direct inflows in the first half, with strong demand for integrated wealth-management service. We have a strong balance sheet and good cash generation although we need to be mindful of the high level of uncertainty for the remainder of the financial year.”

As Coronavirus pushes the global economy into recession, investors are taking their money out of the risky assets this year. On top of that, the recent crash in global oil prices fuelled the trend further.

Brewin Dolphin’s total discretionary net flows post a 2.5% increase

According to Brewin, however, integrated wealth management services were greatly demand in the first half with total discretionary net flows posting a 2.5% year over year increase to £500 million.

In an announcement on Wednesday, the investment management and financial planning company also expressed plans of £6 million to £8 million cost savings in the 2^nd half of fiscal 2020.

At 265 GBX per share, Brewin Dolphin is currently 30% down year to date in the stock market after recovering from a low of 138 GBX per share in March. In 2019, on the contrary, its performance was reported moderately upbeat with an annual gain of around 13%.

Brewin Dolphin is currently valued at £803.57 million and has a price to earnings ratio of 15.95.