Brooks Macdonald's profit rises despite low investor sentiment post Brexit

Investment management company Brooks Macdonald full year revenue and profits increased despite low investor sentiment in the run-up to, and following the EU referendum in June.

For the year ended 30 June, revenue grew by 5% to £81.4m compared to the same period last year.

Underlying pre-tax profit rose 3% to £15.5m, although underlying earnings per share fell to 87.92p from 91.33p.

Statutory pre-tax profits grew by 39% to £15.9m due to a reduction in the estimated deferred consideration payment to the vendors of Levitas Investment Management Services, following the acquisition in July 2014.

The EU referendum affected the company as during the first half of the year it decided to postpone the launch of two new funds. The company said in the second half of the year investment returns were challenging and in the final quarter investor sentiment was weaker.

The AIM listed company said despite these market conditions, its discretionary funds under management grew by 12% to over £8.3bn, which compares favourably to the growth of the WMA private investor balanced index of 4.6%.

Chairman Christopher Knight, said: “Markets have improved since the EU referendum, but sentiment remains volatile. Despite the uncertainties surrounding our exit from the EU and the associated market volatility, we believe the strength of our investment proposition will enable us to deliver good risk-adjusted returns for our clients.”

Organic growth of the funds under management grew 11.7% to £863m, excluding market growth of £25m.

Property assets under administration, which are managed by Braemar Estates, were £1.1bn down slightly from last year with £1.14bn.

Third-party assets under administration increased and are in excess of £270m, compared to £255m in 2015..

Earnings per share fell 38% to 94.41p

Chief executive Chris Macdonald, said it had been a “good year” for the business in spite of some significant headwinds from political and market uncertainty.

"We are well positioned strategically, have a strong balance sheet, are growing our brand, have high-quality staff across the group, are working with an increasing number of professional intermediaries and are constantly developing our investment offering. We have made a good start to the new financial year, with further organic growth in discretionary funds under management and look forward with confidence."

The company recommended a final dividend of 23p per share, if approved, will result in total dividends of 35p, a 15% increase, to be paid on 28 October.

Shares in Brooks Macdonald were down 1.06% to 1,962p at 1023 BST.