Wealth management group Brooks Macdonald (BRK) performed better at the half-year stage than these headline figures suggest. In fact, pre-tax profit rose 30 per cent to £5.31m - after adjusting for the costs involved in acquiring Jersey and Guernsey-based fund management group Spearpoint.
Total discretionary funds under management grew 44 per cent year on year to £4.62bn. Since the June year-end - and even after excluding funds acquired with Spearpoint - they have grown 11.8 per cent. That's not bad given the modest 4.1 per cent rise in the APCIMS Balanced index over the same period. Moreover, the Spearpoint acquisition gives the group an offshore presence with the potential to expand outside the UK.
That improvement came despite a considerable amount of systems development associated with implementation of the Retail Distribution Review. That involves banning commission-based payments, although chief executive Chris Macdonald points out that the group has been operating on a fee-based model since 1995. Group finances are in good shape, too, with cash balances up £1m from the June year-end year despite the £23.1m cost of acquiring Spearpoint - although the group also raised £21.5m through a share placing in November.
Peel Hunt expects full-year adjusted pre-tax profit of £12.7m, giving EPS of 78.7p (from £9.3m and 62.8p in 2012).
| BROOKS MACDONALD (BRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,316p | MARKET VALUE: | £175m | |
| TOUCH: | 1,310-1,350p | 12-MONTH HIGH: | 1,385p | LOW: 1,120p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 393p* | NET CASH: | £14.5m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 25.6 | 4.08 | 26.4 | 6.00 |
| 2012 | 31.5 | 4.26 | 25.4 | 6.50 |
| % change | +23 | +4 | -4 | +8 |
Ex-div: 20 Mar Payment: 18 Apr *Includes intangible assets of £45.8m, or 345p a share | ||||
