Brooks Macdonald Group (LON:BRK) Posts Earnings Results

Key Points

• Record assets and improved profitability: Brooks Macdonald reported record funds under management and administration of £21.7 billion, up 14%, while revenue and underlying profit before tax each rose 6%. The board recommended a 2.5% increase in the full-year dividend to £0.83 per share.
• Net flows returned to positive territory: The group generated £226 million of net inflows, a £600 million year-over-year improvement, driven by strong Platform MPS growth and reduced BPS outflows. Brooks Financial acquisitions are also contributing revenue, profit and integration synergies.
• Outlook remains cautiously positive: Management expects lower organic investment after peak transformation spending, with FY2027 performance marginally ahead of consensus and a medium-term net inflow target of 5%. However, revenue margins may decline slightly as the company stops charging investment-management fees on client cash and sees more lower-margin business.

Brooks Macdonald Group (LON:BRK - Get Free Report) announced its quarterly earnings results on Thursday. The company reported GBX 140.80 EPS for the quarter, Digital Look Earnings reports. Brooks Macdonald Group had a net margin of 5.71% and a return on equity of 4.43%.

Here are the key takeaways from Brooks Macdonald Group's conference call:

• Brooks Macdonald reported record FUMA of £21.7 billion, up 14%, with revenue increasing 6% and underlying profit before tax rising 6% to £29 million. The board recommended a full-year dividend of £0.83 per share, up 2.5%.
• The group returned to positive net flows of £226 million, a £600 million improvement year-on-year, supported by three consecutive quarters of improving flows. Platform MPS FUM grew 35% with more than £900 million of net inflows, while BPS outflows improved by around 50%.
• Management said the Brooks Financial acquisitions are progressing well, contributing £17 million of annualized revenue, £3 million of profit before tax and £1.3 million of integration synergies. Financial planning revenue grew 10% organically and now represents roughly 25% of group revenue.
• The company expects FY2027 organic investment to fall materially to the high single-digit millions after the peak transformation spending in FY2026, while maintaining its target of BAU cost growth below 5%. Management expects FY2027 performance to be marginally ahead of current consensus and is targeting medium-term annualized net inflows of 5%.
• Revenue margins are expected to decline slightly in FY2027 because Brooks Macdonald will no longer charge investment-management fees on client cash, with an anticipated revenue impact of a couple of million pounds. MPS yields also moderated due to growth in lower-margin passive and business-to-business offerings, although management said this reflected mix rather than price cuts.

Brooks Macdonald Group Stock Up 2.2%

Shares of BRK opened at GBX 1,501.73 on Thursday. Brooks Macdonald Group has a 12-month low of GBX 1,240 and a 12-month high of GBX 1,865. The company has a current ratio of 71.82, a quick ratio of 2.43 and a debt-to-equity ratio of 18.64. The company has a market capitalization of £231.99 million, a PE ratio of 15.06, a price-to-earnings-growth ratio of 0.85 and a beta of 0.78. The business's 50 day moving average is GBX 1,383.32 and its 200 day moving average is GBX 1,413.37.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on the company. Royal Bank Of Canada restated a "sector perform" rating and set a GBX 1,600 price target on shares of Brooks Macdonald Group in a research note on Tuesday, July 14th. Berenberg Bank reissued a "buy" rating and issued a GBX 1,600 price objective on shares of Brooks Macdonald Group in a report on Friday, July 3rd. Two research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of GBX 1,650.

About Brooks Macdonald Group

Brooks Macdonald Group plc, through its subsidiaries, provides a range of investment and wealth management services to private clients, pension funds, professional intermediaries, and trustees in the United Kingdom, Isle of Man, and the Channel Islands. It operates through two segments, UK Investment Management and International. The company offers financial planning advisory services to high-net-worth individuals and families; and multi-asset and specialist fund products to the retail sector, as well as investment options.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source