Wealth manager and Financial Planner Brooks Macdonald has reported revenue and profits down for the half year ended December.
Revenue dipped by 4.8% to £58.9m (H1 FY22: £61.9 million) due to volatile markets, lower transaction-related revenues and the repricing of its Cornelian Risk Managed Fund range.
Pre-tax profit fell to £14.5m compared to £17.6m in the same period last year. The underlying profit margin was 24.6% (H1 FY22: 28.4%).
Despite the dip in revenue and profit the company said it had seen, “solid financial performance with continuing organic growth.”
The group raised the interim dividend by 7.7% to 28.0p (H1 FY22: 26.0p).
Funds Under Management rose by 3.6% to £16.2bn during the period and the firm has committed to continue its strategy of acquiring Financial Planning firms, acquiring two during the period.
Brooks said it had seen “continuing positive net flows” over the six months, totalling £347 million (H1 FY22: £326 million).
It saw annualised net flows of 4.4% compared to 4.0% for the same period last year, despite the volatile macroeconomic backdrop.
There was positive investment performance of 1.4% for the half year, ahead of the benchmark index which saw a decline of 0.3%.
The company’s core UK discretionary business had annualised net flows of 7.8% for the period, driven by growth in Brooks Macdonald Investment Solutions (“BMIS”), the firm’s B2B offering for advisers, and in Platform Managed Portfolio Service (“PMPS”) which saw combined annualised net flows of 52.6%.
There were net outflows in the Bespoke Portfolio Service (“BPS”). The company said this was due to weaker investor sentiment and extended lead times.
The group completed two acquisitions in the period, Integrity Wealth Solutions in Nuneaton in October and Adroit Financial Planning in Manchester, acquired in December. Brooks paid a total of £11.26m for Adroit and £6.62m for Integrity, according to the results.
The company said that acquisitions remained a “an important part of our strategy, essential to achieve our ambitious medium-term target of becoming a Top 5 wealth manager in the UK and Crown Dependencies.”
Andrew Shepherd, CEO, said: “I am encouraged by our underlying profit margin for the half year remaining robust at close to 25%, a reflection of continued cost discipline offsetting the impact of difficult markets on our funds under management and hence our revenue.
“Overall, our financial performance for the period was solid with positive net flows demonstrating continuing intermediary and client demand for our products and services. This performance enabled us to increase our interim dividend by 8%, delivering continued returns for our shareholders.
“Our purpose is realising ambitions and securing futures, and we have stayed close to our clients and intermediaries when they have needed us most. We are confident in our strategy, we are making good progress and I remain optimistic about our long-term prospects. Although the short-term macroeconomic outlook remains uncertain, we are well positioned to take advantage of the growth opportunities ahead.”
• Brooks Macdonald chairman Alan Carruthers resigned recently from the firm with immediate effect due to health issues.
