Brooks Macdonald Group plc has announced its audited results for the year ended 30 June 2022. These include financial highlights, the strategic process and an overall outlook on the results.
· Group Funds Under Management (“FUM”) closing at £15.7 billion (down 4.8% on FY21) as positive net flows were offset by the impact of declining markets on asset values
· Positive net flows throughout the year, now five successive quarters, with net flows for the full year of 4.8%, representing a £1.1 billion improvement on prior year
· Flows particularly strong in the fourth quarter (three months to 30 June 2022) with the annualised rate reaching 6.7% and 8.6% for Group and UK Investment Management respectively
· Group revenue of £122.2 million, up 3.4% on FY21, driven by higher average FUM and the full year impact of the Group’s acquisition of the Lloyds Channel Islands business
· Underlying profit margin up by 2.3 points to 28.2%, in line with the Group’s commitment to deliver top quartile margin over the medium term
· Investment performance across the range of services of (9.6)% for the year, driven by declining and volatile markets
· Total dividend increased by 12.7% to 71.0p (FY21: 63.0p), in line with the increase in underlying profit before tax, reflecting the Board’s confidence in the Group’s prospects.
Strategic progress
· Remaining client- and adviser-facing processes now live on the SS&C platform, shortly after year end, a major milestone in the Group’s digital transformation which will make Brooks Macdonald increasingly easy to do business with. Work now continuing to embed and refine the systems and processes
· Investing for growth, with repositioning of the Group’s Funds business under way through material repricing of the Cornelian Risk Managed Fund range to drive medium-term growth
· Continued rapid growth of Brooks Macdonald Investment Solutions (“BMIS”), with FUM more than doubling during the financial year
· Increasing momentum in the Managed Portfolio Service (“MPS”) with 34.4% net flows for the year
· Continued positive net flows in the Group’s specialist Bespoke Portfolio Service products – Responsible Investment Service, Decumulation, AIM Portfolio Service and Court of Protection
· Improving flows and solid commercial performance in International despite difficult market conditions. New Isle of Man office progressing well and expected to be a source of growth, particularly through the Group’s referral agreement with Lloyds Bank
· Acquisition of Integrity Wealth Solutions, subject to regulatory approval, bringing further scale, capability and management expertise to the Private Clients business.
Outlook
· Fundamental long-term opportunity remains strong, driven by demographic and policy trends as well as continuing adviser demand for outsourced investment management
· Medium-term ambition for net flows is 8-10%p.a., and the Group expects that flows will remain positive despite ongoing short-term market uncertainty affecting client confidence and conversion times
· FY23 underlying profitability in line with current market expectations
· Well positioned, continuing to deliver on the Group’s ambitious growth strategy, looking forward with confidence
Andrew Shepherd, CEO of Brooks Macdonald, commented: “This has been another strong year for Brooks Macdonald – we’ve delivered higher net flows, we’ve hit another record for underlying profit margin, and we’ve increased our full year dividend for the seventeenth consecutive year. We have made good progress in driving our digital transformation forward, having now gone live with our remaining client- and adviser-facing processes on the SS&C platform. This will make Brooks Macdonald increasingly easy to do business with, delivering a best-in-class adviser experience and client service.
“Our clients and advisers are facing a challenging macroeconomic and market environment and, as ever, we will support them through these difficult times. Nonetheless, the fundamental long-term opportunity for Brooks Macdonald remains strong despite these challenges. We have momentum, we have an ambitious growth strategy and we have a strong team with the capabilities to take full advantage of the opportunities ahead.”
Key financial results
|
|
Year ended 30.06.2022 |
Year ended 30.06.2021 |
Change |
|
|
|
|
|
|
Funds under management (“FUM”) |
£15.7bn |
£16.5bn |
(4.8)% |
|
Revenue |
£122.2m |
£118.2m |
3.4% |
Underlying results1
|
Underlying profit before tax |
£34.5m |
£30.6m |
12.7% |
|
Underlying profit margin before tax |
28.2% |
25.9% |
2.3ppt |
|
Underlying basic earnings per share |
174.1p |
155.6p |
18.5p |
|
Underlying diluted2 earnings per share |
168.7p |
150.6p |
18.1p |
Statutory results
|
Statutory profit before tax |
£29.5m |
£25.1m |
17.5% |
|
Statutory profit margin before tax |
24.1% |
21.2% |
2.9ppt |
|
Statutory basic earnings per share |
149.0p |
125.3p |
23.7p |
|
Statutory diluted2 earnings per share |
144.4p |
121.3p |
23.1p |
|
|
|
|
|
|
Net cash |
£61.3m |
£54.9m |
11.7% |
Dividends
|
Proposed final dividend per share |
45.0p |
40.0p |
12.5% |
|
Total dividend per share |
71.0p |
63.0p |
12.7% |
