Profit decrease reflects investment in business, Smith & Williamson chiefs say
TOP TEN FIRM Smith & Williamson has announced revenue growth during the six months to 31 October 2015, but a fall in profits.
Group operating income grew to £106.5m to October 2015, against a background of significant long-term investment across the firm.
Adjusted operating profit stood at £14.5m, a decline from the £19.1m in the same period the year prior, reflecting what the firm described as “planned increases in costs to support future growth of the business”.
“We are undertaking a programme of significant investment in front line services as well as infrastructure and central support to benefit our clients. As part of planned investment in group risk, compliance, IT, marketing and business development, central costs have increased to support our aim of maintaining a market-leading service while meeting the needs of evolving regulation,” said co-chief executive of Smith & Williamson and head of investment management and banking David Cobb.
“We are pleased to deliver continued growth in operating income in what has, and continues to be, a period of sustained investment across the firm,” said Kevin Stopps, co-chief executive of Smith & Williamson and managing partner of tax and business services.”
In September, when revealing its annual results, the firm had warned that profits would be impacted in the coming year due to its investment plans.
The firm is split into two distinct sections: tax and business services and investment management and banking. Revenue for the tax and business services division grew by 4% compared to the previous period while investment management fee income increased by 5%, year on year.
“We have enjoyed a solid performance across both the investment management and banking as well as the tax and business services divisions, underpinned by our unique combination of services for private clients and their business interests,” added Cobb.
Smith & Williamson is ranked 8th in the Accountancy Age Top 50+50 Survey of Firms supported by Wolters Kluwer, with £213.9m in revenues for the y/e 30 April 2015.