Wealth manager Brooks Macdonald (BRK) is in the right place at the right time. Discretionary fund management - where private clients hand over their money to be managed, rather than sign off day-to-day investment decisions - is riding a wave of demand. For Brooks, these funds increased 13 per cent to £7.4bn. Underlying profit rose at the same rate to £15m.
Brooks has also grown its number of distribution partners by 100 to more than 770 institutions and professional intermediaries. Here the manager has the advantage of operating a 'clean fee' model - charging investors purely on the basis of asset levels, rather than for trading - which is favoured by clients and regulators. Organic growth brought in £645m of assets. The in-house funds business, which includes a multi-asset range, also increased its assets by 28 per cent to £663m. Encouragingly, management say this business has broken into profit since the year-end.
But Brooks will have taken a hit from the equity market drops. "What we haven't seen is a change in investor sentiment," comments chief executive Chris Macdonald. "A surprising number of investors have seen this as an opportunity to get off the fence."
As a result of the equity market falls, analysts at Peel Hunt expect to reduce their adjusted EPS forecast by 3 per cent to 104p, compared with 91.3p in 2015.
| BROOKS MACDONALD (BRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,936p | MARKET VALUE: | £265m | |
| TOUCH: | 1,900-1,960p | 12-MONTH HIGH: | 1,960p | LOW: 1,301p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 541p* | NET CASH: | £19.3m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 52.2 | 7.3 | 51.9 | 15 |
| 2012 | 53.3 | 8.5 | 57.4 | 18.5 |
| 2013 | 63.2 | 10.4 | 65.9 | 22.5 |
| 2014 | 69.1 | 10.6 | 69.0 | 26 |
| 2015 | 77.7 | 11.4 | 68.3 | 30.5 |
| % change | +12 | +8 | -1 | +17 |
Ex-div: 24 Sep Payment: 28 Oct *Includes intangible assets of £65m, or 476p a share | ||||
