Small investors fuel Brewin growth

INVESTORS are returning to the City in droves, private client stockbroker Brewin Dolphin claimed today. The upbeat assessment of market prospects came as the firm, which specialises in private client and stockbroking services, reported a recovery in trading volumes as investors went hunting for opportunities.

Chief executive John Hall said the firm had seen resurgent interest in the medium and small-cap end of the market, which had been outperforming the main market indices.

He said the firm had doubled the amount under discretionary management in five years after adjusting for market movements and this has improved the quality of earnings.

Hall added: 'There has been a much larger degree of interest in the market. Private investors are out there in force and we are benefiting from this. It is always difficult to be absolutely sure but the medium-term prospects over the next two years are looking very positive.'

Pre-tax profits for the six month period were down from £6.5m to £5.6m, reflecting the cost of a one-off payment to the Financial Services Authority's settlement fund for people who lost out after being advised to invest in zero dividend preference shares. Brewin Dolphin's contribution amounted to £5m.

Describing the payment as 'ancient history', Hall said he believed it was important to put the matter behind the firm. 'Obviously from our point of view, it's a balance sheet item,' he added.

After stripping out the £5m payment, Brewin Dolphin profits were up 39% from £8.9m to £12.4m. Shareholders get a first interim dividend of 2.0p per share.

Separately the firm announced that chairman Sir Fred Holliday is to step down later this year, in favour of director Jamie Matheson who will become executive chairman. Holliday, a former vice-chancellor of Durham University, is a former chairman of the Go Ahead Group and also Northumbrian Water.