BROOKS MACDONALD GROUP PLC

Earnings Release • Jul 15, 2021

National Storage Mechanism | Additional information

RNS Number : 2843F

Brooks Macdonald Group PLC

15 July 2021

15 July 2021

BROOKS MACDONALD GROUP PLC

Quarterly Trading Update and Announcement of Funds under Management

"Growing momentum with a return to positive net flows"

Brooks Macdonald Group plc ("Brooks Macdonald" or "the Group") today publishes a Trading Update and announces its Funds under Management ("FUM") for the fourth quarter of its financial year (ended 30 June 2021).

Trading Update

The Group had a positive fourth quarter, benefiting from its strong client and intermediary relationships combined with continued robust investment performance.  The Group anticipates a full year result in line with market expectations and previous guidance.

Funds under Management

Total Group FUM finished the quarter at a record £16.5 billion (31 March 2021: £15.6 billion), an overall increase of 5.3% in the quarter and 20.3% compared to the FY20 close (30 June 2020: £13.7 billion).

The increase in the quarter was driven by both strong investment performance (adding £0.7 billion), and a return to positive net flows (£0.1 billion), as per previous guidance.  Every month in the quarter had positive net flows at Group level with June having the strongest monthly figure, underscoring the growing momentum behind the business and its strategy.

Highlights for the fourth quarter included:

·    Overall investment performance for the period was robust at 4.4%, in line with the MSCI PIMFA Private Investor Balanced Index which was up by 4.3%.

·    UKIM discretionary FUM had strongly positive net flows of £0.2 billion, an annualised rate of 7.6%.  Within that:

-     Net flows in the Bespoke Portfolio Service ("BPS") returned to positive territory at £28 million, driven in particular by our specialist products (Responsible Investment Service, Decumulation, AIM Portfolio Service, and Court of Protection); and

-     The Managed Portfolio Service ("MPS") had net flows of £184 million, driven by a number of Investment Solutions mandates.

·    Flows in the UKIM Funds business were broadly flat.  Outflows in the Defensive Capital Fund slowed materially with a small net positive result in June.

·    The International business recorded net outflows during the quarter of £73 million, primarily reflecting the previously disclosed loss of a low-yielding mandate.

Over the course of the full financial year, FUM increased by £2.8 billion (20.3%).  This reflects the Channel Islands wealth management assets acquired from Lloyds Banking Group in November 2020 of £0.9 billion in combination with positive investment performance of £2.2 billion, partly offset by organic net outflows of £0.3 billion.

Overall investment performance for the financial year to June was 15.8%, well ahead of the MSCI PIMFA Private Investor Balanced Index which rose by 12.9% over the same period.

Andrew Shepherd, CEO designate of Brooks Macdonald commented:

"I'm pleased to see Brooks Macdonald returning to positive net flows and I'm hugely excited by the opportunity before us.  We've put in an enormous amount of effort over the last few years to build the foundations for the future success of the Group and I'm delighted with the progress we've made.

"We move ahead with confidence because of the talent and commitment of the people who work here.  I'm deeply impressed by how everyone has pulled together to deliver strong results during an especially challenging time. We maintained high quality service to our clients and intermediaries and delivered robust investment performance, well ahead of the relevant index over the year.  We have a great team in place and an exciting future ahead."

Analysis of fund flows by service over the period

Quarter to 30 June 2021 (£m)
	Opening FUM 1 Apr 21	Organic net new business	Investment performance in the period	Closing FUM 30 Jun 21	Organic net new business	Total mvmt
BPS	9,018	28	414	9,460	0.3%	4.9%
MPS	2,129	184	98	2,411	8.6%	13.2%
UKIM discretionary	11,147	212	512	11,871	1.9%	6.5%
Funds - DCF	480	(18)	16	478	(3.8)%	(0.4)%
Funds - Other	1,523	6	69	1,598	0.4%	4.9%
Funds total	2,003	(12)	85	2,076	(0.6)%	3.6%
UKIM total	13,150	200	597	13,947	1.5%	6.1%
International	2,488	(73)	97	2,512	(2.9)%	1.0%
Total	15,638	127	694	16,459	0.8%	5.3%
Total investment performance					4.4%
MSCI PIMFA Private Investor Balanced Index1					4.3%

Six months to 30 June 2021 (£m)
	Opening FUM 1 Jan 21	Organic net new business	Investment performance in the period	Closing FUM 30 Jun 21	Organic net new business	Total mvmt
BPS	8,910	2	548	9,460	0.0%	6.2%
MPS	1,962	323	126	2,411	16.5%	22.9%
UKIM discretionary	10,872	325	674	11,871	3.0%	9.2%
Funds - DCF	509	(59)	28	478	(11.6)%	(6.1)%
Funds - Other	1,536	(22)	84	1,598	(1.4)%	4.0%
Funds total	2,045	(81)	112	2,076	(4.0)%	1.5%
UKIM total	12,917	244	786	13,947	1.9%	8.0%
International	2,586	(152)	78	2,512	(5.9)%	(2.9)%
Total	15,503	92	864	16,459	0.6%	6.2%
Total investment performance					5.6%
MSCI PIMFA Private Investor Balanced Index1					6.0%

Full Year to 30 June 2021 (£m)
	Opening FUM	Organic net new business					FUM acquired in the year2	Inv. Perf. in the year	Closing FUM	Total organic net new business	Total mvmt
1 Jul 20	Q1	Q2	Q3	Q4	Total	30 Jun 21
BPS	8,247	(119)	(43)	(26)	28	(160)	-	1,373	9,460	(1.9)%	14.7%
MPS	1,809	(81)	40	139	184	282	-	320	2,411	15.6%	33.3%
UKIM discretionary	10,056	(200)	(3)	113	212	122	-	1,693	11,871	1.2%	18.0%
Funds - DCF	617	(73)	(74)	(41)	(18)	(206)	-	67	478	(33.4)%	(22.5)%
Funds - Other	1,434	(27)	(10)	(28)	6	(59)	-	223	1,598	(4.1)%	11.4%
Funds total	2,051	(100)	(84)	(69)	(12)	(265)	-	290	2,076	(12.9)%	1.2%
UKIM total	12,107	(300)	(87)	44	200	(143)	-	1,983	13,947	(1.2)%	15.2%
International	1,578	39	(19)	(79)	(73)	(132)	882	184	2,512	(8.4)%	59.2%
Total	13,685	(261)	(106)	(35)	127	(275)	882	2,167	16,459	(2.0)%	20.3%
Total investment performance										15.8%
MSCI PIMFA Private Investor Balanced Index1										12.9%

1Capital-only index.

2Closing FUM of the acquired Lloyds Bank International's Channel Islands wealth management and funds business at the completion date, 30 November 2020.

Enquiries to:

Brooks Macdonald Group plc Andrew Shepherd, Group CEO designate Ben Thorpe, Chief Financial Officer	www.brooksmacdonald.com 020 7659 3492
Peel Hunt LLP (Nominated Adviser and Broker) Rishi Shah / John Welch	020 7418 8900
FTI Consulting Ed Berry / Laura Ewart / Katherine Bell	brooksmacdonald@fticonsulting.com 07703 330199 / 07711 387085 / 07976 870961

Notes to editors

Brooks Macdonald Group plc, through its various subsidiaries, provides leading investment management services in the UK and internationally. The Group, which was founded in 1991 and began trading on AIM in 2005, had discretionary Funds under Management of £16.5 billion as at 30 June 2021.

Brooks Macdonald offers a range of investment management services to private high net worth individuals, pension funds, institutions, charities and trusts. The Group also provides financial planning as well as international investment management, and acts as fund manager to a range of onshore and international funds.

The Group has thirteen offices across the UK and the Channel Islands including London, Cheltenham, East Anglia, Exeter, Hampshire, Leamington Spa, Leeds, Manchester, Tunbridge Wells, Scotland, Wales, Jersey and Guernsey.

LEI: 213800WRDF8LB8MIEX37

www.brooksmacdonald.com / @BrooksMacdonald

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