Brooks Macdonald Reports Strong Funds And Profit Growth

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Wealth management firm Brooks Macdonald has reported full-year growth exceeding expectations, in a rare glimmer of light for a sector that has been struggling to stem the flow of client outflows.

The company reported a profit before tax of £21m for the year ending 30 June, an 11.8 per cent increase on the previous year.

Read more: Political turbulence hits investment industry as assets under management flatline

Assets under management (AUM) grew 6.8 per cent to a record £13.2bn, while Brooks’ revenue increased 7.3 per cent to £107.3m.

The AIM-listed wealth manager announced a final dividend of 51p, 8.5 per cent ahead of its proposed figure.

Chief executive Caroline Connellan admitted that “market conditions haven’t been easy”, but told City A.M. she was happy with the “good set of results”.

Connellan said the growth had been driven by a strong “appetite” from investors for Brooks’ Defensive Capital Fund, which she said was “well-suited to the market at the moment”. The fund now has £700m AUM.

Brooks completed the first round of a cost-cutting drive during the year, which Connellan described as “reinforcing the foundations of the business and focussing on our core offer as a wealth manager”.

With the first round of the process completed, Brooks has begun the process of reinvesting the savings made expanding its asset management and sales teams, she added.

“The short term challenges are all about the political uncertainty we face,” said Connellan. “We’re just focused on the things we can control”, she said, including “delivering for clients and advisers and going after those opportunities there are in the market”.

A key part of this will be focusing on sustainable investment, with Connellan telling City A.M. innovations in that area are “a big part of how we compete in these uncertain times”.

“We do have an offer around the more traditional approach of avoiding certain investments, but actually the bit that is getting real traction and interest is our advanced mandate, which invests in funds that provide real solutions to sustainability issues or those that have strong corporate policies that relate to ESG [environment and social governance] criteria,” she said.

Read more: Investors engaged with environmental and governance issues, but audit and trust lag behind

Responding to the results, Nuis analysts said: “While Brooks has seen a great deal of operational and management change in recent years as it looks to scale the business, this does seem to have been delivered, so judging what it can deliver over the next three-to-five years will be the challenge once Brexit finally clears.”

Brooks shares were flat in midday trading at 1,960p.

Main image credit: Getty