Smith & Williamson, the accountancy, investment management and tax group, delivered another period of robust growth in the year to 30 April 2015 with both the Investment Management and Banking division and the Tax and Business Services division reporting strong results:
- 8% rise in group operating income to £215.1m (2014: £ 199.1m)
- 14.2% rise in adjusted operating profit* to £41.1m (2014: £36.0m)
- Adjusted operating profit margin of 19.1% (2014: 18.1%)
- 8.7% increase in funds under management and advice to £16.3billion (2014: £15.0bn)
- 14.8% increase in adjusted earnings per share, to 61.1p (2014: 53.2p)
"We are delighted to report another solid year of growth at Smith & Williamson as the unique combination of investment management, tax and accounting services that we offer our clients help us to deliver progressively stronger performance across the business. Against the backdrop of an improving UK economy, we have continued to evolve our offering to meet the changing needs of our clients, while also maintaining careful control of costs and we look to the future with confidence.”
“Notwithstanding volatile market conditions, the hard work and focus shown by colleagues over the past few years has built strong momentum in the business that is reflected in the current year’s results. We are well placed to take full advantage of future opportunities and are committed to continue investing in our people, infrastructure and business development to ensure we capitalise on our current favourable position. At the same time, we recognise that this investment is likely to have an impact on profits in the current year.”
Investment Management and Banking enjoyed growth in profits* of 9.4% to £31.5 million as funds under management and advice reached £16.3 billion, a rise of 8.7% compared with a 8.5% upturn in the FTSE WMA Stock Market Balanced Index and a 2.7% upturn in the FTSE 100 over the year. David Cobb explained:
“As ever, the division’s performance was affected by stock market levels, investor sentiment and activity levels. The past year has generally seen higher, despite volatile, stock market levels, supporting an increase in fees and commissions.”
Tax and Business Services saw profits* rise by 30.0% to £9.1 million as improved market conditions underpinned many areas of the business. Kevin Stopps noted:
“The division is now experiencing better market conditions and an improvement in returns in all eight business lines. Our fund administration service produced particularly strong results in the year and, as at 30 April 2015, acted for approximately 140 funds, representing £5.0 billion of assets.”
Strategy and key areas of focus
The firm has carried out a review of its long-term strategic direction and will continue to focus on being the leading independent provider of a range of complementary financial services, with specific focus on the core market of private clients and their business interests.
David Cobb added:
“As part of this review, Family Office Services, later life planning and entrepreneurs have been identified as key areas of focus and investment over the coming years, providing services which draw on the strength of our complementary financial services. Our pooled funds business has also been prioritised and it has recently been reorganised to create a core of actively managed funds.”
Looking to the future, Kevin Stopps explained:
“We are cautious about the short-term outlook for the UK economy due to the persistently challenging economic and geopolitical conditions in Europe. We believe changes in the financial services environment will create opportunities for us; for example, the internationalisation of clients coupled with the importance of the UK and London as a global centre, developments in pensions and the impact of Retail Distribution Review on the wealth management sector - all of which point to change and potential opportunities.”
“As ever, we are very grateful to clients and professional friends for their continued support and we value this extremely highly.”
*Adjusted operating profits exclude additional levies in respect of the Financial Services Compensation Scheme (FSCS) and amortisation of intangible assets (client relationships).
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Smith & Williamson Holdings Limited
Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.
Smith & Williamson Investment Management LLP
Authorised and regulated by the Financial Conduct Authority.
Smith & Williamson Investment Services Limited
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Smith & Williamson Fund Administration Limited
Authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority and the Prudential Regulation Authority do not regulate all of the services referred to above.