Brooks Macdonald Group (BRK)

Sector:

Financials

Index:

FTSE AIM 100

2,010.00p
   
  • Change Today:
    -10.00p
  • 52 Week High: 2,160.00p
  • 52 Week Low: 1,590.00p
  • Currency: UK Pounds
  • Shares Issued: 16.47m
  • Volume: 12,516
  • Market Cap: £331.10m
  • RiskGrade: 164

Brooks Macdonald underlying profit rises, international business falls short

By Josh White

Date: Thursday 07 Mar 2024

LONDON (ShareCast) - (Sharecast News) - Brooks Macdonald reported a strong first-half performance on Thursday, as its underlying profit before tax rose 18% to £17.1m, with its underlying profit margin climbing to 26.9%, although it did flag struggles in its international operations.
The AIM-traded firm put the increase down to a number of factors, including a record total funds under management of £17.6bn, up 4.3% from the last half-year period.

It said the growth in funds under management was particularly notable within private clients, where funds under management or advice (FUMA) reached £5.2bn.

Revenue also saw a notable uptick, rising by 8% to £63.6m for the six month period ended 31 December, driven by higher financial planning revenue and transactional and net interest income.

Despite facing net outflows of £0.2bn during the period, which accounted for 1% of opening funds under management, the company said it managed to maintain its investment performance at 5.3%, aligning with the MSCI PIMFA balanced index.

However, Brooks Macdonald acknowledged that the performance of its international operations fell short of expectations.

As a result, it had initiated a strategic review of the business.

Additionally, an £11.6m one-off, non-cash impairment charge on goodwill associated with the International business acquired in 2012 was recognized, leading to a statutory loss before tax of £0.8m at the group level.

In response to market conditions and to fortify its operational efficiency, the company executed organisational changes in the half-year, resulting in a reduction of about 10% in headcount, with an anticipated annual cost saving of around £4m.

Additionally, Brooks Macdonald said it was continuing to prioritise digital transformation, having completed the first phase of implementing a new client relationship management system and embedding outsourced adviser- and client-facing processes and systems to enhance client service.

Looking ahead, the company was optimistic about achieving its underlying profit targets for the year, with momentum expected to persist in gross inflows.

However, the company anticipated continued elevated levels of outflows given prevailing macroeconomic conditions, resulting in a projected net outflow for the full year at the group level.

However, it added that the benefits of organisational changes were expected to materialise from the second half of the year.

"I am pleased to report that demand for our products and services remains strong across our group with £1.2bn of gross inflows during the period," said chief executive officer Andrew Shepherd.

"This rounds out a solid half year in which revenue growth and a focus on cost control delivered an improved underlying profit margin of 26.9%.

"During the last six months our priority has been to help our clients and advisers navigate the challenging markets that the wealth management industry has continued to face."

Shepherd said the need for trusted advice and robust long-term investment management remained "as strong as ever".

"As a management team, we have been proactive in adapting our business to the current environment, resulting in a group that is in a stronger operational position, well-placed to take advantage of the opportunity ahead.

"These results are a testament to the expertise and hard work of our people and our collective drive to deliver long-term sustainable results.

"Although the short-term macroeconomic outlook remains uncertain, we have confidence in our growth strategy and our ability to keep delivering for all our stakeholders."

At 1023 GMT, Brooks Macdonald Group shares were down 2.73% at 1,605p.

Reporting by Josh White for Sharecast.com.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

BRK Market Data

Currency UK Pounds
Share Price 2,010.00p
Change Today -10.00p
% Change -0.50 %
52 Week High 2,160.00p
52 Week Low 1,590.00p
Volume 12,516
Shares Issued 16.47m
Market Cap £331.10m
RiskGrade 164

BRK Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
9.84% above the market average9.84% above the market average9.84% above the market average9.84% above the market average9.84% above the market average
65.77% below the sector average65.77% below the sector average65.77% below the sector average65.77% below the sector average65.77% below the sector average
Price Trend
11.94% below the market average11.94% below the market average11.94% below the market average11.94% below the market average11.94% below the market average
12.07% below the sector average12.07% below the sector average12.07% below the sector average12.07% below the sector average12.07% below the sector average
Income
55.78% above the market average55.78% above the market average55.78% above the market average55.78% above the market average55.78% above the market average
29.23% below the sector average29.23% below the sector average29.23% below the sector average29.23% below the sector average29.23% below the sector average
Growth
68.33% below the market average68.33% below the market average68.33% below the market average68.33% below the market average68.33% below the market average
36.54% below the sector average36.54% below the sector average36.54% below the sector average36.54% below the sector average36.54% below the sector average

What The Brokers Say

Strong Buy 2
Buy 3
Neutral 1
Sell 1
Strong Sell 0
Total 7
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

BRK Dividends

  Latest Previous
  Interim Final
Ex-Div 14-Mar-24 21-Sep-23
Paid 16-Apr-24 03-Nov-23
Amount 29.00p 47.00p

Trades for 12-Jul-2024

Time Volume / Share Price
16:35 4 @ 2,010.00p
16:35 2 @ 2,010.00p
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16:23 18 @ 2,010.00p
14:16 2 @ 2,027.20p

BRK Key Personnel

Chair Maarten Slendebroek

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