TIDMBRK
RNS Number : 1395T
Brooks Macdonald Group PLC
16 July 2020
16 July 2020
BROOKS MACDONALD GROUP PLC
Quarterly Trading Update and Announcement of Funds under
Management
"Strong investment performance and improving flows driving
growth in FUM"
Brooks Macdonald Group plc ("Brooks Macdonald" or the "Group")
today publishes an update on Funds under Management ("FUM") for the
fourth quarter of its financial year (ended 30 June 2020), together
with a Trading Update for the period .
Trading Update
The Group had a positive fourth quarter, building on its strong
client and adviser relationships despite the market volatility and
economic uncertainty caused by the outbreak of COVID-19. The
Group's progress in executing its strategy and ongoing cost
discipline have put it on track to meet expectations for the year.
Accordingly, the Group is maintaining the guidance given in its Q3
Trading Update, that it anticipates delivering a good full year
result, ahead of last year's in terms of both underlying profit and
underlying profit margin.
In the period, the Group was successful in transitioning rapidly
to a new operating model based on remote working following the
outbreak of COVID-19. Brooks Macdonald was able to continue to
support clients and advisers through volatile markets while
ensuring the safety and wellbeing of its staff.
In June, the Group announced the acquisition of Lloyds Bank
International's Channel Islands wealth management and funds
business adding up to c.GBP1.0 billion in FUM to the International
business. The acquisition is expected to complete during the first
half of the current financial year and represents another
significant step forward for the Group in achieving its growth
ambitions. Integration of the Cornelian business, whose acquisition
by the Group completed in February, is progressing to plan with the
business now successfully embedded into Brooks Macdonald, and the
target FY21 cost synergies of GBP3.75 million expected to be met in
full.
Funds under Management
Total Group FUM finished the quarter at GBP13.7 billion (31
March 2020: GBP12.2 billion), an overall increase of GBP1.5 billion
or 12.0%. This was mostly due to strong investment performance,
adding just over GBP1.5 billion, supported by higher gross inflows
than prior quarters resulting in reduced net outflows of GBP0.1
billion.
Highlights for the fourth quarter included:
-- Overall investment performance for the period was strong at
12.5%, ahead of the MSCI PIMFA Private Investor Balanced Index
which was up by 10.6%.
-- UKIM discretionary FUM had improving net flows and robust
investment performance, driving growth of 12.5%. Within that:
- FUM in the Bespoke Portfolio Service ("BPS") increased by
11.4% to GBP8.2 billion largely due to investment performance of
GBP0.9 billion; and
- The Managed Portfolio Service ("MPS") grew by 17.6% to GBP1.8
billion due to net new business of GBP0.1 billion, with
particularly strong flows from the Platform MPS product, and
favourable investment performance of GBP0.2 billion.
-- The UKIM Funds business saw net outflows of GBP0.1 billion,
or 3.5%, during the quarter. This was more than offset by
investment performance of GBP0.3 billion, taking the closing value
of the Funds business to over GBP2.0 billion, an increase of
10.1%.
-- The International business recorded improved flows during the
quarter and enjoyed investment performance of GBP0.2 billion
(11.1%), taking the closing FUM position to GBP1.6 billion. This is
further evidence of the continued reinvigoration of the business
which is being augmented by the recently announced acquisition of
Lloyds Bank International's Channel Islands wealth management and
funds business.
Over the course of the full financial year, FUM increased by
GBP0.5 billion or 4.1%. This reflects the assets acquired from
Cornelian in February 2020 of GBP1.2 billion and positive
investment performance of GBP0.1 billion, partly offset by organic
net outflows of GBP0.8 billion. The latter reflected the effect of
outflows of mainly lower margin business as a result of the Group's
focus on efficiency and business quality over volume and the
actions taken to support medium term value creation.
Overall investment performance for the financial year to June of
1.0% was well ahead of the MSCI PIMFA Private Investor Balanced
Index which declined by 3.5% over the same period.
Caroline Connellan, CEO of Brooks Macdonald commented:
"I am pleased by our results for the fourth quarter. We achieved
strong investment performance in difficult, volatile markets,
protecting our clients' wealth. We also delivered improved net
flows in our core discretionary business in the UK and continued to
reinvigorate International. I am impressed by, and grateful for,
our people's response to the current challenges. They have adapted
seamlessly to the remote working environment of the COVID-19
lockdown, while further reinforcing the strong relationships we
have with advisers and clients.
"Overall the year has been one of significant progress, despite
macroeconomic and political uncertainty in the first half of the
year and COVID-19 related market volatility and economic concerns
in the second. We have delivered strong commercial results and are
on track to meet profit expectations. We have made significant
steps forward in achieving our growth ambitions, including two high
quality acquisitions, while also continuing to take the necessary
actions to set the business up for further success."
Analysis of fund flows by service over the period
Quarter to 30 June 2020
GBPm Opening Organic Investment Closing Organic Total
FUM net new performance FUM net new mvmt
business business
BPS 7,402 (90) 935 8,247 (1.2)% 11.4%
MPS 1,538 91 180 1,809 5.9% 17.6%
UKIM
discretionary 8,940 1 1,115 10,056 0.0% 12.5%
Funds 1,863 (66) 254 2,051 (3.5)% 10.1%
UKIM total 10,803 (65) 1,369 12,107 (0.6)% 12.1%
International 1,420 1 157 1,578 0.0% 11.1%
Total 12,223 (64) 1,526 13,685 (0.5)% 12.0%
Total investment performance 12.5%
MSCI PIMFA Private Investor Balanced Index(2) 10.6%
Half Year to 30 June 2020
Opening Organic FUM acquired Investment Closing Organic Total
GBPm FUM(3,4) net new in the performance FUM net new mvmt
business period(1) business
BPS 8,332 (215) 445 (315) 8,247 (2.6)% (1.0)%
MPS 1,755 91 - (37) 1,809 5.2% 3.1%
UKIM
discretionary 10,087 (124) 445 (352) 10,056 (1.2)% (0.3)%
Funds 1,369 (98) 736 44 2,051 (7.2)% 49.8%
UKIM total 11,456 (222) 1,181 (308) 12,107 (1.9)% (5.7)%
International 1,633 (47) - (8) 1,578 (2.9)% (3.4)%
Total 13,089 (269) 1,181 (316) 13,685 (2.1)% 4.5%
Total investment performance (3.5)%
MSCI PIMFA Private Investor Balanced Index(2) (6.2)%
Full Year to 30 June 2020
Opening Organic FUM acquired Investment Closing Organic Total
GBPm FUM(3,4) net new in the performance FUM net new mvmt
business period(1) business
BPS 8,254 (440) 445 (12) 8,247 (5.3)% (0.1)%
MPS 1,705 81 - 23 1,809 4.7% 6.0%
UKIM
discretionary 9,959 (359) 445 11 10,056 (3.6)% 1.0%
Funds -
ongoing 1,354 (111) 736 72 2,051 (8.2)% 51.5%
Funds -
Grosvenor 230 (244) - 14 - (106)% (100)%
Funds total 1,584 (355) 736 86 2,051 (22.4)% 29.5%
UKIM total 11,543 (714) 1,181 97 12,107 (6.2)% 4.9%
International 1,604 (60) - 34 1,578 (3.7)% (1.6)%
Total 13,147 (774) 1,181 131 13,685 (5.9)% 4.1%
Total investment performance 1.0%
MSCI PIMFA Private Investor Balanced Index(2) (3.5)%
(1) Closing value of Cornelian Asset Managers Limited's FUM as
at 31 March 2020 acquired during the period.
(2) Capital-only index.
(3) 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.
(4) 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.
Enquiries to:
Brooks Macdonald Group plc www.brooksmacdonald.com
Caroline Connellan, CEO 020 7659 3492
Ben Thorpe, Group Finance Director
Peel Hunt LLP (Nominated Adviser and Broker)
James Britton / Rishi Shah / John Welch 020 7418 8900
MHP Communications
Reg Hoare / Simon Hockridge / Charlie Barker 020 3128 8540
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
GBP13.7 billion as at 30 June 2020.
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 twelve offices across the UK and the Channel
Islands including London, East Anglia, Hampshire, Leamington Spa,
Leeds, Manchester, Taunton, Tunbridge Wells, Scotland, Wales,
Jersey and Guernsey.
LEI: 213800WRDF8LB8MIEX37
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END
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