Plenty of seasonal cheer

Brewin Dolphin’s latest year to end-September has not been an easy one and most forecasts were reduced in October (by which time they were, presumably, ‘hindcasts’). However, after Charles Stanley’s disappointing interims (see later) last week, there was a collective sigh of relief when “adjusted” profits were reported to be 7% up on 2013/4, albeit marginally below the consensus forecast and the share price has recovered just over one-tenth of its fall since May.
Despite its shares moving to all-time highs, this weeks’ trading update fromMattioli Woods gave no hint of business momentum slowing down. On the contrary, client assets were reported to have grown by 20% just in the 5 month period to end October and now stand at over £6.5bn (this is despite a fall in the All Share index). Strong profit growth expectations, coupled with excellent market positioning, suggests further good times lie ahead for shareholders.
Numis updated on a rise of 5% in revenue and 7% in profits, which is a good result. This was achieved despite the market: its commission income suffering from the decline in trading during the first and fourth quarters of its year; also its market-making profits were little better than half those in 2013/4 as lower trading combined with a modest decline in the AIM All-Share index.
The good news for Charles Stanley is that pre-tax profit was more than half the pre-tax loss in H1 2014/5 and AUMA only fell 6% in the half-year compared to a 7% fall in the benchmark. Discretionary FUM showed net inflows but only due to switching from advisory funds – excluding switches both saw net outflows; only execution-only had a net inflow.

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