Discretionary fund management - where private clients hand over their money to be managed rather than signing off day-to-day investment decisions themselves – is continuing to grow in popularity, if Brooks Macdonald 's (BRK) full-year results are anything to go by. Overall funds under management (FUM) surpassed the £8bn mark, up 12 per cent from a year earlier. Almost all of this increase was new business inflows, with market growth down from £218m in the prior period to just £25m.
Brooks' performance is more impressive given sector growth of just 5 per cent over the period, according to the WMA Balanced Index. However, the core investment management business did not do all the work, as total FUM at the funds and property management business grew by a fifth to almost £800m. This was driven particularly by increased inflows into its multi-asset funds. Management also says it hopes to establish two property funds - previously slated for launch last year - during this financial year. However, much of the uplift in pre-tax profits was due to a reduction in the amount payable for its recent acquisition of Levitas, since it did not achieve its target funds under management.
Analysts at Numis expect adjusted pre-tax profits of £19.6m and EPS of 114p for the year to June 2017 (up from £15.6m and 92.1p in FY2016).
BROOKS MACDONALD (BRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,950p | MARKET VALUE: | £267m | |
| TOUCH: | 1,930-1,950p | 12-MONTH HIGH: | 2,075p | LOW: 1,400p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 606p* | NET CASH: | £19m | |
| Year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 81.4 | 15.9 | 94.4 | 35 |
| % change | +5 | +39 | +38 | +15 |
Ex-div: 29 Sep Payment: 28 Oct *Includes intangible assets of £66m, or 482p a share | ||||
