Brewin Dolphin has unveiled plans to raise up to £40m through a share placing in a bid to ramp up its growth strategy.
The plans come as the wealth manager’s latest interim financial report shows its profit before tax was down 43.9 per cent during the six months to 31 March.
In an announcement to the London Stock Exchange, the group says it plans to place up to 19,001,738 new ordinary shares to raise about £40m to boost its investment capacity.
Brewin Dolphin says two-thirds of the raised capital will be used for accelerating the growth strategy, through means such as building its client base in strategic regions like the south-east through new team hires and increasing the efficiency of its investment management teams.
Around one-third of the raised cash will be used lift equity capital and associated solvency levels to at least 150 per cent.
Brewin Dolphin chief executive David Nicol says: “There is considerable change in the private client investment management market, in part due to the current economic and regulatory climate. Additional capital will enable us to take full advantage of the opportunities our leading market position presents.”
In a separate announcement, the group reports that profit before tax for the half-year ending 31 March came in at £6.9m – down from the £12.3m posted for the same period in 2012.
The interim financial report also reveals that total managed funds at the group has risen to £28.1bn, up from the £25.7bn seen one year earlier. Brewin Dolphin’s discretionary funds business saw assets under management move from £17.3bn to £20.4bn over the same period.
Nicol says: “We are now two years into the transformation and growth strategy announced in 2011. We have made good progress against our stated objectives including delivering strong growth in funds under management.
“Our strategy has two main objectives: continued strong growth and increased efficiency. These objectives are underpinned by a series of initiatives to transform the business which will improve efficiency, ensure it is best placed to meet regulatory demands, and at the same time continue to enhance client service and improve shareholder returns.”