Brooks Macdonald Group (BRK) H1 2025 earnings summary

Executive summary

• The group has been repositioned as a UK-focused wealth manager, emphasizing advisor distribution, financial planning, and digital transformation, with a new executive team and revitalized sales strategies.

• Completed three financial planning acquisitions (LIFT-Financial, Lucas Fettes, CST Wealth), increasing UK client numbers by ~15% and expanding assets under advice.

• Disposed of international operations (BMI, DCF), refocusing on the UK market.

• Initiated a move from AIM to the Main Market, expected by March 2025, to broaden the investor base.

• Launched a share buyback program of up to £10m and continued progressive dividend policy.

Financial highlights

• Funds under management rose to £15.7bn, with closing FUM up 4% year-over-year, supported by strong investment performance and platform MPS net flows.

• Revenue from continuing operations declined 2.6% to £51.9m, mainly due to lower interest income and higher client payments.

• Underlying profit before tax was £15.5m, with a margin of 29.9%; statutory profit before tax from continuing operations was £12.6m.

• Interim dividend per share increased by 3.4% to 30p, marking 19 consecutive years of growth.

• Financial planning business revenue grew 24% year-over-year, half from acquisitions and half from existing operations.

Outlook and guidance

• Full-year performance expected in line with guidance, with a return to positive net flows anticipated later in the year.

• Interest income for FY25 guided at £7-8m, reflecting rate cuts.

• CapEx for 2025 projected at £10m, up from previous guidance, to support growth and operational improvements.

• Medium-term targets: 5% annualized net inflows and cost growth below 5% per annum.

• Continued focus on cost management and delivery of acquisition synergies.