InvestmentsSep 21 2017

Brooks Macdonald sells property arm as profits slump

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Brooks Macdonald sells property arm as profits slump

Wealth manager Brooks Macdonald has reported a near halving of its pre-tax profits, and announced it has sold its property management business.

Statutory pre-tax profits fell from £15.9m to £8m in the year to the end of June, a fall of 49.3 per cent.

At the same time costs increased, which the company attributed to investment in IT and compliance, and in dealing with “legacy matters” from its ownership of the Spearpoint business.

Statutory earnings per share dropped to 43p, from the previous 94p.

The dividend increased to 41p, from the previous year's 35p.

Discretionary funds under management rose to £10.5bn from the previous £8.3bn.

The fund management business now has assets of £1.2bn, an increase of 46 per cent, with the Defensive Capital Fund now having assets of £425m.

The company's underlying profit margin for the year was 20.1 per cent, up from the previous year’’s 19.1 per cent.

Alongside the results statement, Brooks Macdonald announced that it has sold Braemar Estates, which is a property management company. The buyer is Rendall and Rittner. 

Caroline Connellan, chief executive of Brooks Macdonald said the disposal of this business is to allow the company to focus on its core business.

She said the sale of the property business will likely help margins to  improve in the coming years.

The company said Braemer accounted for 1.4 per cent of profit but had a net of liabilities over assets of £500,000. 

On the company's results, Ms Connellan said: “As we look to the future and build on our success to date, my focus is on positioning the business to capture the significant growth opportunities open to us.

"We will continue to enhance the services we offer and improve business efficiency while responding to the rapidly changing competitive and regulatory environment, and the increasing influence of technology.

"We have started our new financial year with positive momentum and look forward with confidence, notwithstanding our relative caution around markets and client sentiment.”

David.Thorpe@ft.com