Stock and awe: Top City biz takes £32m hit after software upgrade axed
Surprised slickers' smashing streamlining system smashed
A leading City firm has halted the roll-out of software that was supposed to streamline its business but became more trouble than it was worth. Specifically, £32m of trouble.
Brewin Dolphin, in Smithfield St, London, alleged to investors it encountered “issues” with the "robustness" of a specialist financial application. It started installing the code in 2011 but has now stopped.
The City firm said it will take a £32m "exceptional pre-tax impairment charge" in the second half of the year as a result of the rollout, now abandoned.
Brewin Dolphin said computers running the new software in its Stocktrade share-dealing business and other departments will continue to do so, but non-upgraded machines – such as those in in its wealth management business – will instead get “appropriate enhancements”. This decision should keep the IT upgrade on budget and minimise risk, the company said.
The firm now has to sort out the payment of a further £15m over the coming decade for the software. “The group is engaged in negotiations to vary and settle these arrangements,” the company said on the subject.
Brewin Dolphin is one of the UK’s largest private investment companies with a fund of £28.2bn at its disposal. Its customers include individuals, trusts, charities and pension funds.
The biz was rolling out JHC Systems' Figaro software, which is used by stockbrokers and wealth managers to run investors’ portfolios.
Brewin Dolphin plumped for Figaro in 2011, in the belief JHC’s software would streamline its business processes and improve operational efficiency. The idea was to improve group margins by between 15 and 20 per cent.
But in a statement last week, Brewin Dolphin claimed: “The implementation has uncovered a number of issues with the functionality and robustness of the software that are taking additional time and resource to address.”
JHC Systems declined to comment. ®