Wealth manager Brooks Macdonald (BRK) delivered an impressive first-half performance, with organic growth driving discretionary funds under management up 11 per cent to £5.68bn over the six months – a year-on-year gain of 23 per cent. Crucially, there was a net inflow of £315m from new business, with the balance of £255m achieved through investment gains.
Changes introduced as a result of the Retail Distribution Review have pushed up costs, but chief executive Chris Macdonald reckons these have now peaked as a percentage of revenue. Adjusted pre-tax profits were barely ahead at £6.16m, but this is after acquiring an option to buy Levitas Investment Management Services, exercisable from July this year. This will increase the group’s exposure to the individual pensions market following auto-enrolment legislation, which requires employers to offer employee pensions.
Brooks Macdonald has also acquired a 60 per cent stake in investment group North Row Capital, which specialises in offering liquid exposure to global real-estate markets. A new fund North Row launched at the end of February has already raised £15m.
Analysts at Numis Securities are forecasting full-year adjusted pre-tax profits £10.8m and EPS of 85.7p (from £10.4m/85.9p) in 2013.
| BROOKS MACDONALD (BRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,730p | MARKET VALUE: | £ 232m | |
| TOUCH: | 1,716-1,810p | 12-MONTH HIGH: | 1,817p | LOW: 1,140p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 446p* | NET CASH: | £14.7m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 31.5 | 4.3 | 25.4 | 6.5 |
| 2013 | 33.4 | 4.9 | 32.6 | 7 |
| % change | +6 | +14 | +28 | +8 |
Ex-div:19 Mar Payment:17 Apr *Includes intangible assets of £44m or 329p a share | ||||
