The investment management group Brewin Dolphin has admitted that it had inflated its financial figures overstating its profit for the financial year 2008 by £4.2 million to £36.2 million against its actual profit of £32 million. In the meantime, the broker has decided to change its accounting policy, and the subsequent financial statements would be announced in accordance with new policies.
The policy change prompted David McCann, an analyst at Numis, to cut the profit projections for the firm by 7 per cent for this financial year to £28.7 million. The accounting policy changes have reduced the company's net assets by £2.2 million to £113.1 million at 1 October 2007. Necessary amendments would be made to adjust a total amortization charge for the year 2008, in which figures were manipulated substantially.
Oliver Hemsley, the Chief Executive of Numis, said, "Combined commission and trading revenues reached record levels for the six months to September 30. We are encouraged by the improvement in market conditions over the course of the year and have taken full advantage of the opportunity to grow our secondary business."
Stocks of Brewin and Numis closed at 156¾p and 172p, reporting a decline of 3.87% and 2.82% respectively.