Brooks Macdonald Group plc · LSE:BRK
Brooks Macdonald — H1 FY2016 Earnings Presentation
27 slides from Brooks Macdonald's earnings presentation, 2016
Slide 1: Half Year Results for the six months ended 31 December 2015
Half Year Results for the six months ended 31 December 2015 Chris Macdonald, Chief Executive, Simon Jackson, Finance Director & Andrew Shepherd, Deputy Chief Executive
Slide 2: Contents
Contents Business highlights Financial overview Outlook and conclusions Appendix Half Year Results for the six months ended 31 December 2015 2
Slide 3: Highlights
Highlights Financial Business Total discretionary FUM up to £7.82bn 5.3% organic growth in FUM Underlying pre-tax profit up 6% to £7.13m BMAM, BMI and BMF all grew FUM Underlying EPS up 3% to 42.59p Impact of advisory to discretionary at BMI Interim dividend up 20% to 12p Continued investment in inf
Slide 4: Asset growth across the Group
Asset growth across the Group Discretionary Funds Dec 2015 June 2015 Dec 2014 Under Management AM £5.83bn £5.59bn £5.24bn BMI £1.25bn £1.16bn £1.16bn Funds £739m £663m £550m TOTAL £7.82bn £7.41bn £6.95bn Dec 2015 June 2015 Dec 2014 Property AUA £1.13bn £1.14bn £1.09bn Third Party AUA >£270m >£255m >
Slide 5: Discretionary funds under management for last 5 years
Discretionary funds under management (£m) for last 5 years 8000 7000 6000 5000 4000 3000 2000 1000 0 Year to Year to Year to Year to Year to Half Year June 11 June 12 June13 June 14 June 15 to Dec 15 Total BM FUM (£m) 2,969 3,520 5,110 6,550 7,413 7,822 % Increment 35.8 18.6 45.0 28.2 13.1 5.52 % FT
Slide 6: Analysis of discretionary fund flows
Analysis of discretionary fund flows 6 months to Year to 6 months to £m Dec 2015 June 2015 Dec 2014 Opening discretionary FUM 7,413 6,550 6,550 Net new discretionary business 394 645 238 Acquisitions - - 0 Investment growth 15 218 165 Total FUM growth 409 863 403 Closing FUM 7,822 7,413 6,953 Organi
Slide 7: Analysis of discretionary funds under management HY16
Analysis of discretionary funds under management HY16 Funds under Management Revenue 3% 9% 5% 5% AM 16% AM 15% BMI BMI FC Funds Funds 72% Estates 75% Service Clients (BMAM) 11% 6% 12% BPS 38% SIPPs MPS Private Funds Trusts/Charities 56% 77% Half Year Results for the six months ended 31 December 2015
Slide 8: Continued growth in distribution and capacity
Continued growth in distribution and capacity Dec June 2011 June 2012 June 2013 June 2014 June 2015 2015 Number of introducing firms1 241 420 544 670 775 900 Number of strategic alliances 9 11 12 15 17 17 Investment managers and trainees 56 67 90 107 102 102 Total staff numbers 248 282 376 457 471 4
Slide 9: Financial highlights
Financial highlights HY16 HY15 % Change Revenue £38.70m £37.50m 3% Underlying profit before taxation* £7.13m £6.72m 6% Profit before taxation £5.48m £4.48m 22% Underlying earnings per share* 42.59p 41.25p 3% Basic earnings per share 32.44p 26.63p 22% Interim dividend 12.0p 10.0p 20% Cash at bank £15
Slide 10: Underlying profit before tax
Underlying profit before tax £’000 HY16 HY15 % Change Investment Management fee income 31,678 30,793 3% Fees from other advisory services and other income 5,590 5,039 8% Commission income 57 155 (63%) Pre RDR payments to introducers 1,373 1,516 (9%) Underlying operating income 38,698 37,503 3% Under
Slide 11: Underlying segmental results
Underlying segmental results HY16 Investment Financial Funds* and International Group and Total £’000 management planning property central costs management Revenue 27,798 2,039 3,114 5,747 - 38,698 Underlying profit 9,155 (12) (1,045) 532 (1,495) 7,135 Margin 32.9% (0.6%) (33.6%) 9.3% - 18.4% Annual
Slide 12: Operating expenses
Operating expenses £’000 HY16 HY15 % Change Fixed staff costs 13,174 12,934 2% Variable staff costs 7,931 7,693 3% Average employees in period 480 465 3% Actual employees at period end 474 464 2% Other direct expenses 9,821 10,306 (5%) Underlying operating expenses 30,926 30,933 0% Amortisation char
Slide 13: Underlying operating expenses
Underlying operating expenses HY16 Staff costs - payroll (fixed) HY15 Staff costs - other (variable) Commission & fees 7% 3% 5% 3% 2% 2% ICT 3% 2% 2% 2% Investment administration 9% 43% 11% 42% £30.9m Professional, regulatory & £30.9m 6% financial 7% Depreciation & amortisation Property & office 26%
Slide 14: IT investment – new Wealth Management system
IT investment – new Wealth Management system Est Est £’000 Total est FY17 H216 H116 FY 2015 IT investment £5.3m £1.0m £1.7m £1.3m £1.3m The projected investment has increased from £4.7m to £5.3m • Increased scope over MiFID II and changes to CASS rules during the project • Enhanced development over
Slide 15: Cash bridge
Cash bridge 20,000 19,274 1,443 17,500 2,166 15,425 15,000 2,758 5,203 12,500 1,772 859 100 46 10,000 Opening Tax paid Fixed, Final Dividend Deferred Purchase of Investment in Issue of new Cash Closing balance 1 July intangible and FY15 consideration shares for EBT subsidiary and shares generated ba
Slide 16: Analysis of balance sheet
Analysis of balance sheet £m HY16 HY15 Assets Cash 15.43 11.77 Accrued income and other assets 24.15 23.48 Property plant and equipment 3.56 2.66 Intangible assets 65.5 65.56 Total assets 108.64 103.47 Liabilities Trade payables and accruals (15.02) (14.32) Current tax liabilities (1.49) (0.7) Defer
Slide 17: Strategies for growth
Strategies for growth To be the discretionary fund manager of choice for professional intermediaries and private clients on and offshore Focussing on consistency, in: • Managing money in a highly disciplined manner and delivering strong risk adjusted returns • Servicing Clients and Intermediaries wi
Slide 18: Industry background, our positioning and the key drivers for growth in FY16
Industry background, our positioning and the key drivers for growth in FY16 Industry Background Our Positioning Key Growth Drivers Continuing consolidation and Taking advantage of growth in SIPPs remain substantial area of acquisition opportunities professional adviser community: growth, but legisla
Slide 19: Outlook & conclusions
Outlook & conclusions Good progress in H1: strong organic growth and risk adjusted returns for clients despite difficult markets Continued to see strong organic growth in the early weeks of the second half Fall in markets since the New Year is likely to impact FUM since the period end Continued conv
Slide 20: Appendices
Appendices
Slide 21: Bespoke Portfolio Service performance vs ARC Private Client Indices
Brooks Macdonald Asset Management Limited Bespoke Portfolio Service Performance vs ARC Private Client Indices Rolling 12 months performance (% ) Cumulative performance (% ) 12 mths 12 mths 12 mths 12 mths 12 mths 3 Year to 5 Year to Calendar years to to to to to YTD 31.12.15 31.12.15 31.12.11 31.12.
Slide 22: Asset allocation
Asset allocation Current Guidance portfolios – February 2016 The investment managers’ tolerance limits: +/- 3 +/- 5 +/- 7 Low Growth, Low Income Low to Med Medium Med to High High Income & Growth UK fixed income 22 20 13 8 0 0 International fixed income 18 15 9 3 2 0 UK equities 14 14 21 28 33 37 No
Slide 23: Revenue and profits growth
Revenue and profits growth Underlying profit Revenue 80.00 77.7 75.00 69.1 70.00 65.00 62.9 60.00 55.00 52.18 53.3 50.00 45.00 38.7 40.00 35.1 35.00 30.00 25.00 20.00 15.08 13.45 13.32 15.00 7.60 9.03 10.00 5.68 7.13 5.00 0.00 FY10 FY11 FY12 FY13 FY14 FY 15 HY 16 Half Year Results for the six months
Slide 24: Underlying earnings per share and dividend growth
Underlying earnings per share and dividend growth Underlying earnings per share (p) Total Dividend (p) Interim Dividend (p) 91.33 87.94 86.24 62.84 55.07 41.18 42.59 24.76 30.5 26 22.5 12.41 18.5 15 10 12 9 7 5.5 5 6 6.5 3.5 3 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15 Dec 15 Half Year
Slide 25: Recent awards & ratings
Recent awards & ratings Half Year Results for the six months ended 31 December 2015 25
Slide 26: Contacts
Contacts Chris Macdonald Simon Jackson Andrew Shepherd Chief Executive Finance Director Deputy Chief Executive 72 Welbeck Street 72 Welbeck Street 72 Welbeck Street London London London W1G 0AY W1G 0AY W1G 0AY T 020 7499 6424 T 020 7499 6424 T 020 7499 6424 D 020 7408 5597 D 020 7408 5541 D 020 7408
Slide 27: Important information
Important information This presentation has been prepared for general information on matters of interest only and does not constitute an invitation to treat or a promotion, solicitation, or offer capable of acceptance and does not constitute professional advice of any kind. You should not act upon t
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