Brooks Macdonald Group H2 Earnings Call Highlights

Brooks Macdonald Group (LON:BRK) reported record funds under management and advice for fiscal 2026, alongside its first positive annual net flows since 2023, as investments in technology, distribution and financial planning supported growth across the business.

Chief Executive Officer Andrea Montague said the company’s “Reignite Growth” strategy had transformed the group into a “human-led, digitally enabled wealth manager.” She said the bulk of the investment needed to modernize the business had now been completed and was beginning to drive client flows.

Total funds under management and advice rose 14% during the year to a record £21.7 billion. Total funds under management increased 17% to £19.3 billion, including a £2.5 billion contribution from market and investment performance. Assets under advice increased to £5.7 billion from £5.3 billion a year earlier.

Profit, Revenue and Dividend Growth

Chief Financial Officer Katherine Jones said revenue increased 6% for the year, while underlying costs declined 3% on a like-for-like basis. Underlying profit before tax was £29 million, while underlying earnings per share rose 6% to 137.9 pence.

The board recommended a final dividend of 52 pence per share, bringing the full-year dividend to 83 pence, up 2.5% year-over-year and consistent with the group’s progressive dividend policy.

Fee income growth was primarily supported by higher average funds under management. Managed portfolio service revenue increased 16% to £16.7 million, while financial planning revenue grew 10% on a like-for-like basis. Jones noted that lower trading activity and lower average interest rates reduced transaction and interest income compared with the prior year.

Jones said almost 40% of the business was now delivering double-digit revenue growth. She expects fiscal 2026 trends in fee income yields and financial planning to continue into fiscal 2027, though the company expects its decision to stop charging investment-management fees on client cash to reduce revenue by roughly £2 million and modestly lower margins.

Flows Return to Positive Territory

Brooks Macdonald generated net inflows of £226 million during fiscal 2026, an improvement of more than £600 million from the prior year. The group recorded three consecutive quarters of positive and expanding net flows.

Platform managed portfolio service, or MPS, assets rose 35%, aided by more than £900 million of net inflows and an annualized growth rate of 15%. Total MPS assets increased 30% to nearly £9 billion.

Brooks Personal Services, or BPS, funds under management increased 9%. While BPS continued to record net outflows, Jones said those outflows improved by around 50% from fiscal 2025, reflecting client-engagement efforts, distribution initiatives and a strengthened regional presence.

Montague said the company’s updated product range, expanded distribution capabilities and focus on the U.K. independent financial adviser market were contributing to the improved flow trajectory. The group is targeting national advisory firms and networks, as well as smaller “new model adviser” firms and strategic partnerships.

Montague said Brooks Macdonald was already the chosen partner for two of the 10 national and network firms it is targeting, which collectively have £250 billion of assets under management and around 3,500 financial advisers.

Financial Planning Integration and Cost Actions

The company highlighted progress at Brooks Financial, its financial planning operation, which was built through the integration of six businesses. The acquired businesses added £17 million of annualized revenue and £3 million of annualized profit before tax, according to Jones.

Brooks Financial now accounts for 25% of group revenue. The unit achieved £1.3 million in cost synergies, exceeding its £1 million target, while 58% of its assets are now advised and managed, compared with 51% a year earlier. Montague said client satisfaction stood at 93% and client retention was 98% during the integration year.

Underlying cost savings totaled £8.3 million, including £3.3 million from organizational restructuring, £1.3 million in integration synergies and £1 million in non-staff savings such as contract renegotiations and supplier consolidation. The company also increased costs by £4 million to add growth capacity, including investment and distribution hires, regional expansion, events, sponsorships and marketing.

Brooks Macdonald invested £9.1 million in products, propositions, digital tools and artificial intelligence initiatives during the year. It also incurred £5.1 million in restructuring costs and invested £19.4 million in merger, acquisition and integration activity, including deferred consideration related to Lucas Fettes and LIFT.

Fiscal 2027 Priorities and Outlook

The company ended the year with £25 million in cash and liquid assets and generated £26.7 million in post-tax operating cash flow from underlying operations. It returned almost £16 million to shareholders through dividends and share buybacks during the year.

For fiscal 2027, Jones said organic investment is expected to decline materially to the high single-digit millions, with spending focused on the company’s strategic priorities. The group also expects net deferred-consideration receipts of £10 million to £15 million from previous transactions.

Management reiterated its medium-term targets of annualized net inflows of 5% and business-as-usual cost growth below 5%. Montague said the company expected full-year fiscal 2027 performance to be “marginally ahead of current consensus.”

Among the group’s planned initiatives are further AI, digital and automation projects, including tools designed to improve financial-planner productivity, streamline administration and enhance client onboarding and self-service. Montague said the company would prioritize organic growth while considering financial planning acquisitions only where they offered a suitable cultural fit and were financially compelling.

About Brooks Macdonald Group (LON:BRK)

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.