Brooks Macdonald (BRK) is stripping away non-core businesses and focusing on growing margins, under new chief executive Caroline Connellan. To that end, the wealth manager sold property management business Braemar Estates for £1.9m. Its core investment management business continued to go great guns, with discretionary assets under management growing a quarter to £10.5bn.
The wealth manager gained net new business of £951m, up from £863m, and enjoyed investment growth of £1.2bn. Its UK bespoke portfolio service continued to benefit from pensions freedom changes, with most inflows gained via self-invested personal pensions (Sipps) and individual savings accounts (Isas). Two further strategic alliances were struck with intermediary organisations, while Brooks also continued to expand geographically, opening a new office in Cardiff.
The funds business passed the £1bn-mark in funds under management, reaching £1.2bn, and generated a profit for the first time. The international business – based in the Channel Islands – has largely completed its move away from advisory and towards discretionary management. The migration of data from two legacy platforms onto a system shared with the London business was also completed in June. Management hopes this will aid margins, as will the Braemar disposal, over time.
Analysts at broker Peel Hunt expect adjusted pre-tax profit of £18.4m, giving EPS of 108p (from £18.4m and 115p in 2016).
| BROOKS MACDONALD (BRK) | ||||
| ORD PRICE: | 2,215p | MARKET VALUE: | £306m | |
| TOUCH: | 2,111-2,200p | 12-MONTH HIGH: | 2,582p | LOW: 1,650p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 52 | |
| NET ASSET VALUE: | 621p* | NET CASH: | £32.2m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 63.2 | 10.4 | 65.9 | 22.5 |
| 2014 | 69.1 | 10.6 | 69 | 26 |
| 2015 | 77.7 | 11.4 | 68.3 | 30.5 |
| 2016 | 81.4 | 15.9 | 94.4 | 35 |
| 2017 | 91.7 | 8.04 | 43 | 41 |
| % change | +13 | -49 | -54 | +17 |
| Ex-div: | 28 Sep | |||
| Payment: | 27 Oct | |||
| *Includes intangible assets of £62.6m, or 454p a share | ||||
