Brooks Macdonald profits slip on acquisition costs

(Sharecast News) - Wealth management firm Brooks Macdonald on Thursday reported a big jump in funds under management and advice (FUMA), though profits slipped year-on-year due to the costs associated with three financial planning acquisitions during the year. Total FUMA increased 17.3% to £19.2bn over the 12 months to30 June, comprising £16.6bn of FUM and advised-only assets of £2.6bn.

Full-year net outflows were £0.4bn, with the second half seeing an improvement as net outflows reduced to just £0.1bn from £0.3bn of outflows in the first half.

Revenues were 4.6% higher at £111.6m, supported by higher financial planning income following the acquisitions of financial planning businesses CST Wealth, Lucas Fettes and LIFT.

However, statutory profit before tax dropped 28.9% to £17.5m due to higher acquisition and integration costs. On an underlying basis, operating profit before tax was still down 4.6% at £28.9m, dragged lower by a fall in the underlying operating profit margin to 25.9% from 28.4%.

Nevertheless, the company declared a final dividend of 51p per share, making a total dividend of 81p, up 3.8% year-on-year.

"This year we have focused on the execution of our strategy to Reignite Growth," said chief executive Andrea Montague.

"We are now a UK-focused wealth manager. We have created a scalable financial planning business. We have launched a suite of Retirement Strategies that meet a growing client need and continue to deliver strong investment performance."

Brooks Macdonald shares rose in early deals, but quick erased gains to trade down 2.1% at 1,781p by 0922 BST.