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Brooks Macdonald (BRK)

Brooks Macdonald - BRK - trading update 26th January 2016

26 January 2016

Brooks Macdonald – BRK, Andrew Shepherd, Deputy Chief Executive presents at the Equity Developments investor forum, following the 26.1.16 trading update.

BRK launched on AIM in 2005, since which they have consistently grown their profits and funds under management.; without accumulating debt on the balance sheet.

Consistency, is one of their key axioms – and it seems true in their results, as well as what they say about their offering.

Here, Andrew outlines their business, including asset management, funds, property management and their growing international business.

Asset management is currently the main driver of their business, contributing 75% of revenues, 80% of which comes from their UK bespoke portfolio service. In the future, they want to increase discretionary fund management, directed to them through professional advisers.

Currently they work with 775 firms (of advisers), and would like to work with 2,500 of the total universe of 14,450. They see great value in strategic alliances.

The market is growing, with an ageing population, less company pension provision (few final salary schemes) and the move away from annuities. They see tremendous scope for international growth too. They target an average of 10% pa organic growth in funds under management.

Dividends: they pay 2.15%, and have a progressive dividend policy. Going forward, once investment in their back office is complete, they will become increasingly cash generative, so may review their current policy in line with shareholder appetites.

As their trading update says, in spite of the challenging markets, investment performance and new business have remained strong.

 

Presentation slides can be viewed here.

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