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Brooks Macdonald declares higher dividend despite annual profit fall

14th Sep 2023 14:01

(Alliance News) - Brooks Macdonald Group PLC on Thursday said it expected net flows to remain positive despite posting a fall in annual profit.

The wealth manager said in the financial year that ended on June 30, pretax profit declined 25% to GBP22.2 million from GBP29.5 million a year prior.

Revenue climbed 1.3% to GBP123.8 million from GBP122.2 million.

"While inflation has been steadily falling in the US, UK inflation has remained stubborn and it is less clear at what level it will settle in the post Covid-19 world. Against this backdrop central banks have been eager to show their commitment to battle inflation, causing bond markets to price in higher interest rates for longer. Our short-duration bond allocation was well positioned for this repricing of bond markets and allowed portfolios to weather the recent rises in gilt yields as well as those around the UK mini-budget of last year," the company said.

Net flows were higher at 5.2% compared to 4.8%. Meanwhile, funds under management as at June 30 rose 7.5% to GBP16.8 billion from GBP15.7 billion.

The company proposed a final dividend of 47.0 pence per share, up 4.4% from 45.0p a year ago. This brings the total dividend to 75.0p, 5.6% higher than 71.0p paid for financial 2022.

Net cash as at June 30 fell 13% to GBP53.4 million from GBP61.3 million.

Looking ahead, Brooks eyes falling inflation in Europe and the UK, but expects further volatility within bond and equity markets due to uncertainty around what would be considered the new "normal" level of inflation.

Further, the company said that its structural growth opportunity "remains highly attractive, underpinned by demographics, government policy, increasing use of advice, fragmented nature of the market."

Chief Executive Officer Andrew Shepherd said: "We are aiming to deliver 8-10% annual net flows in the medium term, now potentially delayed by short-term headwinds, and we aspire to be a top 5 wealth manager in the UK and Crown Dependencies."

Brooks Macdonald shares fell 3.1% to 1,870.00 pence each on Thursday afternoon in London.

By Tom Budszus, Alliance News reporter

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