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Brooks readies for RDR with £4.4m acquisition and 17% profit rise

by Sarah Miloudi on Sep 13, 2012 at 07:50

Brooks readies for RDR with £4.4m acquisition and 17% profit rise

Brooks Macdonald has grown its pre-tax profit 17% year-on-year and has marked the beginning of a period of 'significant change' with a fresh acquisition.

Brooks' chief executive officer (CEO) Chris Macdonald said that while last year had been 'tough' it was also successful.

Unveiling his firm's results for the 12 months to the end of June, Macdonald (pictured) said the group was looking to the future beyond the retail distribution review (RDR), adding that the financial services industry generally would go through a huge shift as a result of the new regulation.

'We believe market conditions will remain volatile and, given the onset of RDR, that we are entering a period of significant change in the distribution landscape for financial services. We are fortunate that the group is well positioned, financially stable and with a large number of exciting opportunities,' Macdonald said.

'We have had an encouraging start to the new financial year with funds under management continuing to grow, enhanced by Braemar's appointment as property manager of the Ground Rents Income fund and we look forward with confidence,' he added.

Brooks' pre-tax profit for the year was £8.5 million, a 17% rise on last year's £7.3 million.  Funds under management climbed by 19% to £3.52billion, up from 2011's £2.97 billion, and on the back of these results Brooks proposed raising its dividend by 25%.


As outlined by Macdonald, the wealth manager has had a busy 12 months with its reporting stretch including the acquisition of Clarke Willmott's Investment management team and since the year end its subsidiary, Braemar Estates, being appointed property manager of £50 million Ground Rents Income fund.

Brooks also acquired the Park Street London Limited introducer business, a long term introducer of funds and clients to the group, since its year-end.  It struck a deal for an estimated maximum cash consideration of £4.4 million, payable in instalments over a three year period.

Brooks said that its most recent acquisition and the Clarke Willmott deal were funded out of the group's own cash resources.  The Clarke Willmott team added £114 million to the AIM-listed company's funds under management, while the team went to its Taunton office.

Christopher Knight, the company's chairman, said that in addition to these acquisitions Brooks had 'continued to invest significantly in its future'.


Additionally, Brooks used its final results to outline its post-RDR framework.  It told investors its asset management business will be restricted, advising only on investment management, whereas its consulting business will be Independent, advising where appropriate on all aspects of financial planning.

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How is regulation feeding the outsourcing trend?

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