TIDMBRK
RNS Number : 9543Z
Brooks Macdonald Group PLC
16 January 2020
16 January 2020
BROOKS MACDONALD GROUP PLC
Half Year Trading Update and Quarterly Announcement of Funds
under Management
Notice of Half Year results
"Good progress on strategy delivery, on track to meet margin and
profit expectations"
Brooks Macdonald Group plc ("Brooks Macdonald" or the "Group")
today publishes its Trading Update for its half year ended 31
December 2019, together with an update on discretionary Funds under
Management ("FUM") for the second quarter.
Revenue, underlying profit and underlying profit margin are all
ahead of the same period last year and in line with
expectations.
Total FUM remained stable over the half year ending the period
at GBP13.1 billion (30 June 2019: GBP13.1 billion). During the
quarter ended 31 December 2019, total FUM decreased by 1.5% (30
September 2019: GBP13.3 billion).
UKIM discretionary FUM, comprising our BPS and MPS services,
grew by 1.3% during the first half driven by continued strong
investment performance ahead of the MSCI WMA Private Investor
Balanced Index. Net flows in this part of the business were broadly
in line with expectations, given softer client sentiment in the
light of the political and macroeconomic backdrop, and the Group's
focus on efficiency and business quality.
Within Funds, our Defensive Capital Fund continued to perform
well, with FUM reaching the milestone of GBP700 million, growing by
6.6% during the first half and 2.0% during the quarter.
During the second quarter, the Group's investment management
agreement for the Grosvenor Wealth Management funds was terminated.
This accounted for GBP244 million of FUM corresponding to
annualised revenues of circa GBP0.6 million. This followed
extensive discussions between Brooks Macdonald and Grosvenor over
the purchase of the sponsorship company attached to the Grosvenor
funds, where we were unable to reach a satisfactory commercial
arrangement that met our stated acquisition criteria.
International FUM performed in line with expectations ending the
first half up by 1.8%, demonstrating the continuing reinvigoration
of the business.
Caroline Connellan, Chief Executive of Brooks Macdonald
commented:
"It has been a positive six months for Brooks Macdonald. Over
the first half of our financial year we maintained FUM levels,
delivered strong investment performance, and made good progress in
our International business. We continue to deliver on our
commitment to improve profit margins over the medium term, and the
recently announced acquisition of Cornelian represents a
significant step forward in our strategy of delivering sustainable
value-enhancing growth.
"While the recent UK election has removed some uncertainty, the
broader macroeconomic and political backdrop makes it prudent to
remain somewhat cautious about the short-term outlook for flows. We
remain optimistic about the opportunities for Brooks Macdonald and,
given our continued investment in talent, focus on delivering for
clients and advisers, and ongoing cost discipline, our expectations
for full year profit remain unchanged."
Analysis of discretionary fund flows over the period
Six months to 31 December 2019
Opening Net new Closing Net new Total growth
GBPm FUM(1,2) business Performance FUM business (%)
(%)
---------- ---------- -------------- --------- ---------- -------------
BPS 8,254 (225) 303 8,332 (2.7) 0.9
---------- ---------- -------------- --------- ---------- -------------
MPS 1,705 (10) 60 1,755 (0.6) 2.9
---------- ---------- -------------- --------- ---------- -------------
UKIM discretionary
total 9,959 (235) 363 10,087 (2.4) 1.3
---------- ---------- -------------- --------- ---------- -------------
Funds - ongoing 1,354 (14) 29 1,369 (1.0) 1.1
---------- ---------- -------------- --------- ---------- -------------
Funds - Grosvenor 230 (244) 14 - (106) (100)
---------- ---------- -------------- --------- ---------- -------------
Funds total 1,584 (258) 43 1,369 (16.3) (13.6)
---------- ---------- -------------- --------- ---------- -------------
UKIM total 11,543 (493) 406 11,456 (4.3) (0.8)
---------- ---------- -------------- --------- ---------- -------------
International 1,604 (13) 42 1,633 (0.8) 1.8
---------- ---------- -------------- --------- ---------- -------------
Total 13,147 (506) 448 13,089 (3.8) (0.4)
---------- ---------- -------------- --------- ---------- -------------
Total investment performance 3.4%
-------------
MSCI WMA Private Investor Balanced Index 2.9%
-------------
Quarter to 31 December 2019
Opening Net new Closing Net new Total growth
GBPm FUM(1,2) business Performance FUM business (%)
(%)
---------- ---------- -------------- --------- ---------- -------------
BPS 8,275 (172) 229 8,332 (2.1) 0.7
---------- ---------- -------------- --------- ---------- -------------
MPS 1,738 (19) 36 1,755 (1.1) 1.0
---------- ---------- -------------- --------- ---------- -------------
UKIM discretionary 10,013 (191) 265 10,087 (1.9) 0.7
---------- ---------- -------------- --------- ---------- -------------
Funds - ongoing 1,387 (37) 19 1,369 (2.7) (1.3)
---------- ---------- -------------- --------- ---------- -------------
Funds - Grosvenor 244 (244) - - (100) -
---------- ---------- -------------- --------- ---------- -------------
Funds total 1,631 (281) 19 1,369 17.2
---------- ---------- -------------- --------- ---------- -------------
UKIM total 11,644 (472) 284 11,456 (4.1) (1.6)
---------- ---------- -------------- --------- ---------- -------------
International 1,641 (6) (2) 1,633 (0.4) (0.5)
---------- ---------- -------------- --------- ---------- -------------
Total 13,285 (478) 282 13,089 (3.6) (1.5)
---------- ---------- -------------- --------- ---------- -------------
Total investment performance 2.1%
-------------
MSCI WMA Private Investor Balanced Index 0.9%
-------------
(1) As announced on 24 October 2019, Braemar Group PCC
Limited-UK Agricultural Land fund (the "PCC"), to which the Group
acts as promoter and distributor, is being wound up following the
EGM held on 14 August 2019. Accordingly, the PCC's assets, which
were valued at GBP4 million as at 30 June 2019, have been excluded
from all figures shown in this announcement.
(2) As announced on 24 July 2019, the Group exited from its
investment management agreement with the Ground Rents Income Fund
plc ("GRIF"), a specialised property fund, on 13 May 2019.
Accordingly, comparative FUM figures shown in this announcement
have been restated to exclude GRIF's assets.
Notice of Half Year results
The Group intends to issue its preliminary statement of half
year results for the period ended 31 December 2019 on Thursday 5
March 2020.
An analyst meeting will be held at 9.15 for 9.30am on Thursday,
5 March at the offices of Peel Hunt, 120 London Wall, London, EC2Y
5ET. Please contact Ailsa Prestige at MHP Communications on 020
3128 8147 or e-mail brooks@mhpc.com for further details.
Enquiries to:
Brooks Macdonald Group plc www.brooksmacdonald.com
Caroline Connellan, Chief Executive 020 7499 6424
Ben Thorpe, Group Finance Director
Peel Hunt LLP (Nominated Adviser and Broker)
Guy Wiehahn / John Welch 020 7418 8900
MHP Communications
Reg Hoare / Simon Hockridge / Charlie Barker 020 3128 8734
Notes to editors
Brooks Macdonald Group plc, through its various subsidiaries,
provides leading investment management services in the UK and
internationally. The Group, which was founded in 1991 and began
trading on AIM in 2005, had Discretionary Funds under Management of
GBP13.1 billion as at 31 December 2019.
Brooks Macdonald offers a range of investment management
services to private high net worth individuals, pension funds,
institutions, charities and trusts. The Group also provides
financial planning as well as offshore investment management and
acts as fund manager to a regulated OEIC providing a range of
risk-managed multi-asset funds and a specialised absolute return
fund.
The Group has thirteen offices across the UK and the Channel
Islands including London, East Anglia, Hampshire, Leamington Spa,
Leeds, Manchester, Taunton, Tunbridge Wells, Wales, Scotland,
Jersey, and Guernsey.
LEI: 213800WRDF8LB8MIEX37
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END
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