Brooks Macdonald Group today (7 March) said that it was actioning a strategic review of the international business which has offices in Jersey, Guernsey and most recently the Isle of Man.
In the group's half-year results for the six months ended 31 December 2023, the statement said: "The performance of our international operations is behind plan and in the interests of achieving the best return for shareholders, we have commenced a strategic review of the business."
Brooks Macdonald added that it had "recognised an £11.6 million one-off, non-cash impairment charge on the goodwill associated with the International business acquired in 2012. This has led to a statutory loss before tax of £0.8 million at the Group level, compared with a profit of £9.8 million in H1 FY23.
"The impairment charge does not impact cash nor regulatory capital, and has not limited the Group's ability to distribute capital to shareholders in accordance with our progressive dividend policy."
In terms of revenue by segment: H1 FY24 H1 FY23 FY23
UK Investment Management (£m) 54.2 48.8 103.5
International (£m) 9.4 10.1 20.3
For the group as a whole funds under management grew to a record £17.6bn, up 4.3% over the half year (30 June 2023: £16.8bn), while funds under management or advice with private clients reached £5.2bn, with £4.4bn relating to portfolios within the group's investment management and £0.8bn to portfolios with third party investment managers.
Andrew Shepherd (pictured), CEO, said: “I am pleased to report that demand for our products and services remains strong across our Group with £1.2 billion of gross inflows during the period. This rounds out a solid half year in which revenue growth and a focus on cost control delivered an improved underlying profit margin of 26.9%.
“During the last six months our priority has been to help our clients and advisers navigate the challenging markets that the wealth management industry has continued to face. The need for trusted advice and robust long-term investment management remains as strong as ever. As a management team, we have been proactive in adapting our business to the current environment, resulting in a Group that is in a stronger operational position, well-placed to take advantage of the opportunity ahead.
“These results are a testament to the expertise and hard work of our people and our collective drive to deliver long-term sustainable results. Although the short-term macroeconomic outlook remains uncertain, we have confidence in our growth strategy and our ability to keep delivering for all our stakeholders.”
Among organisational changes, Brooks Macdonald further said it had "reduced headcount by c. 10%, which will result in an annual cost saving of c. £4 million, designed to strengthen the business operationally and best deliver on the strategy to drive growth".
Other highlights included:
• Investment performance was 5.3% for the half year, in line with the MSCI PIMFA balanced index, which was up 5.6%, offsetting net outflows in the period of £0.2bn or 1% of opening FUM;
• Revenue increased by 8.0% to £63.6m (H1 FY23: £58.9m) driven by higher financial planning revenue, following the acquisitions in the prior period, and transactional and net interest income;
• Underlying costs increased by 4.7% in line with guidance and primarily due to the full period impact of the acquisitions made in the prior period and cost inflation. The benefits from the organisational changes implemented in December will be realised in the second half;
• Underlying profit before tax was £17.1 million, up from £14.5m in the same period last year, with the underlying profit margin increasing to 26.9% (H1 FY23: 24.6%), consistent with the Group’s commitment to achieving a top quartile underlying profit margin