Wealth management company Brooks Macdonald has added to its reputation as a go-go growth play by producing an impressive rise in profits and funds under management (FUM) during a testing six months for the industry. Indeed, during the second half of last year the APCIMS Balanced index fell by 4 per cent, but Brooks' discretionary FUM managed an 8 per cent rise.
Since the start of 2012, the trading backdrop has been improving as client confidence rises in tandem with equity markets, which in turn provides a nice tailwind for the business. Brooks is also set to benefit from recent investments, including the opening of a new office and associated acquisition in Taunton, the establishment of a funds business, and the building of a state-of-the-art back-office that will administer all FUM and be able to take on business from other companies.
Other growth drivers include the increased use of self-invested personal pensions (Sipps) and a trend for independent financial advisors (IFAs) to outsource investment management to discretionary managers. Chairman Christopher Night also points out that the business will be a beneficiary of the Retail Distribution Review, which comes into effect early next year.
Broker Peel Hunt forecasts full-year EPS of 61.2p (59p in 2011), rising to 79.9p in the year to June 2013.
| Brooks Macdonald (BRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,345p | MARKET VALUE: | £143m | |
| TOUCH: | 1,315-1,375p | 12-MONTH HIGH: | 1,375p | LOW: 929p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 188p* | NET CASH: | £9.5m | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 25.1 | 3.06 | 20.3 | 5 |
| 2011 | 25.6 | 4.08 | 26.7 | 6 |
| % change | +2 | +33 | +32 | +20 |
Ex-div: 21 Mar Payment: 20 Apr *Includes intangible assets of £10m, or 94p a share | ||||
