Trading Update

RNS Number : 7222C

Brooks Macdonald Group PLC

24 January 2018

 



24 January 2018

BROOKS MACDONALD GROUP PLC

Half Year Trading Update and Quarterly Announcement of Funds under Management

Notice of Half Year Results

Brooks Macdonald Group plc (the "Group"), the AIM listed investment management group, today publishes its Trading Update for its half year ended 31 December 2017, together with a quarterly update on its Discretionary Funds Under Management.

In the period, we completed the sale of our Braemar Estates property business, as announced at our annual results in September 2017.

Half Year Trading Update

Funds under Management ("FUM") have risen by 12.3% over the last six months, ending the period at £11.7 billion (30 June 2017: £10.5 billion).  This compared to a rise in the MSCI WMA Balanced Index of 4.3%.  Net organic growth over the period was 7.7%, with rates of growth remaining strong in UK Investment Management, whilst the International business showed improving growth compared to the year to June 2017.

The revenue impact of higher FUM over the period has been offset, partly by lower yields.  This is principally due to continued movements in product mix, the competitive environment including the ongoing shift towards all-in fees, and reduced transactional income against a background of lower market volatility in the period.  Further, we have continued to invest in our regulatory change agenda (in particular, MiFID II and GDPR), as previously disclosed.  

We continue to exercise cost discipline, alongside our previously stated focus on growing our business sustainably and delivering medium-term margin improvement.

Overall, the anticipated outcome for the financial year remains in line with management's expectations.

Quarterly Funds under Management Update

As at 31 December 2017, discretionary FUM totalled £11.7 billion, an increase of 6.8% over the quarter (30 September 2017: £11.0 billion).  As a comparison the WMA Balanced Index increased by 3.5%. 

This growth was a combination of performance (£319m) and net new business (£431m) over the quarter, compared to £474m from performance and £808m from net new business for the half year.

Analysis of discretionary fund flows over the quarter and half year

	Quarter to 31 December 2017			Half Year to 31 December 2017
£m	UK IM	BMI	TOTAL	UK IM	BMI	TOTAL
Opening FUM	9,404	1,584	10,987	8,927	1,529	10,456
Net new business	396	36	431	724	83	808
Performance	271	48	319	418	55	474
Closing FUM	10,070	1,668	11,738	10,070	1,668	11,738
Organic growth	4.2%	2.3%	3.9%	8.1%	5.4%	7.7%
Total growth	7.1%	5.3%	6.8%	12.8%	9.1%	12.3%

Notice of Half Year Results

The Group intends to issue its Half Year Results on Wednesday 14 March 2018.  Given ongoing levels of IT investment, we will include software amortisation in our calculation of underlying profit from the Half Year Results onwards.

Caroline Connellan, Chief Executive of Brooks Macdonald commented:

"I am pleased to report that in our second quarter we have maintained the good momentum seen in the first quarter.  Our focus on our client and adviser relationships has supported strong net new business which, combined with good portfolio performance, has resulted in substantial FUM growth across all areas of our business."

"Our strong FUM trajectory, combined with a disciplined approach to costs, means we are well placed to mitigate external pressures on revenue yield."

"We continue to make good progress with our planned investment in our operational and risk management framework to build a stronger, sustainable platform for the business.  This will enable us to take full advantage of the significant growth opportunities open to us, whilst enhancing efficiency and delivering improved operating margins in the medium term."

 

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