Brewin Dolphin Holdings plc (LON: BRW) share price plunged 9.45% despite the wealth management company reporting improved revenues and profits for its 2021 financial year ended September 2021.
The company made a pre-tax profit of £90.9 million ($121.5 million) for the latest fiscal year compared to £78.2 million in the 2020 fiscal year.
The wealth management company’s income rose 12.3% to £405.9 million versus the £361.4 million recorded in 2020. The company’s earnings per share rose to 18.8p compared to last year’s 16.3p figure.
However, it appears that investors were unimpressed by the positive earnings registered by the company amid fears that rising costs during the 2022 fiscal year would eat into the firm’s profitability.
Brewin Dolphin revealed that it expects its operating costs to rise during the upcoming financial year driven by wage inflation and the running of parallel systems. The firm also expects its recent technology investments to depreciate, contributing to the rising costs.
Robin Beer, Brewin Dolphin’s CEO, said: “We have had an exceptional year achieving record discretionary inflows and are delivering on our growth ambitions. We have remained relevant by continuing to innovate our propositions whilst also developing our digital capabilities. We have started to drive operational efficiencies through our client management system, and our new custody and settlement system is now live.”
He added:
“Looking ahead to full-year 2022, our priority is to complete the final phased rollout of functionality for our new custody and settlement system, which will complete in summer 2022. On completion, with our new technology capabilities coupled with the operational excellence programme, we expect to capture significant synergies and benefits across the business.”
Today’s plunge in Brewin’s share price seems like a market overreaction to events that are yet to happen and may provide an excellent opportunity for long-term investors.
Brewin Dolphin shares found support at the 340p level, which could trigger a future rally if it holds over the next few days. Investors looking to open new positions in the company may find its current prices quite attractive.
*This is not investment advice. Always do your due diligence before making investment decisions.
Brewin Dolphin share price.
Brewin Dolphin share price plunged 9.45% to trade at 341.15p, falling from Tuesday’s closing price of 376.75p.
Should You Invest in Brewin Dolphin Shares?
One of the most frequently asked questions we receive is, “what stocks are best to buy right now?” It's a wide-ranging question, but one that we have answered… Our AskTraders stock analysts regularly review the market and compile a list of which companies you should be adding to your portfolio, including short and longer-term positions. Here are the best stocks to buy right now.