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October 14, 2008

Smith & Williamson posts record profit

UK mid-tier firm Smith & Williamson has reported a record profit before tax of £31.2 million ($54.4 million) in the year ended 30 April 2008. This represents growth of 23 percent, which the firm said was due to strong performances by its investment management and banking, and tax and business service teams.

Smith & Williamson’s operating income grew 13 percent to £170.3 million and the firm was able to offer shareholders a final dividend of 17 pence per share, which increased the annual dividend by 24 percent to 20.5 pence per share.

“I think what really stands out is the performance of our private client investment management business, which grew funds under management by 4 percent against the decline in the market of 4 percent so we were particularly pleased about that,” Smith & Williamson chairman Gareth Pearce said. “I think the important stuff is that we maintained a good operating performance while we went on investing in our future.”

Of the core service lines, the firm noted that personal finance and wealth management generated £81.6 million, tax work produced £32.2 and audit and accounting services generated revenue of £24.7 million. Corporate recovery earned £11.4 million.

A year of expansion

Pearce said the acquisition of Irish firm Oliver Freaney & Company, the integration of a new team in Bristol and the recent opening of a Birmingham office were highlights for the firm. The Birmingham office will provide investment management and financial services but the firm plans to eventually build it into a full service office in coming years.

Pearce said that although Smith & Williamson is pleased with its geographical spread at present, the firm would like to expand its presence in the north of England when the economic climate improves.

“I think we would like a base in the north of England and whether that will be in Manchester or Leeds very much depends on the opportunities,” he said.

Pearce does not expect the firm to make any significant profit in the coming financial year. He said executing on recent investments while steering the firm through the economic downturn will be a core focus.

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