Financial review continued
Staff costs Excluding acquisitions, staff costs decreased by 3.3% to £47.0 million (2024 restated: £48.6 million), as a result of organisational restructuring and lower variable pay, which countered inflationary pressures and senior hires to support our ‘Reignite Growth’ strategy. Total staff costs increased by 7.0% to £52.0 million, primarily as a result of 171 employees joining the Group through the acquisitions made over the year, representing c 30% of the overall headcount at 30 June 2025. Non-staff costs Excluding acquisitions, non-staff costs increased by 5.6% to £31.9 million (2024 restated £30.2 million), driven by higher regulatory fees and levies, depreciation and amortisation charges from strategic investments, and property and distribution costs. The acquisitions added £1.3 million in non-staff costs, resulting in total non-staff costs of £33.2 million (2024: £30.2 million). Profit before tax Underlying PBT decreased by 4.6% to £28.9 million (2024 restated: £30.3 million), and the underlying profit margin was 25.9% (2024 restated: 28.4%). On a statutory basis, the PBT was down 28.9% to £17.5 million (2024: £24.6 million), driven by non-recurring one-off items including acquisition and integration costs and organisational restructure costs. The profit from discontinued operations, which is presented after tax, was £9.4 million (2024: loss of £13.9 million). This comprises the operating results generated by the DCF and BMI prior to their respective disposal dates (November 2024 and February 2025, respectively) and the gains on their disposal. Further information is provided in note 13 of the consolidated financial statements.
Reconciliation between underlying and statutory PBT
Move to the LSE’s Main Market costs (£1.9 million charge) In March 2025, the Group announced its successful admission to the LSE’s Main Market, which the Board believes will further enhance the Groupʼs corporate profile and extends the opportunity to own its ordinary shares to a broader group of investors. Costs incurred in this transaction have been excluded from underlying earnings due to their one-off nature. Head office relocation (£1.3 million charge) This primarily relates to the dual running costs whilst the Group relocates to the new head office in Q4 2025. These have been excluded from underlying earnings on the basis that they are non-recurring in nature. Other non-operating items (£2.3 million credit) This primarily relates to a refund from HMRC (£3.1 million) in respect of VAT arising on the Group’s AIM Portfolio Services as it was confirmed this was exempt from VAT, covering the period from 1 October 2019 to 30 September 2024. This is partially offset by legacy legal costs and strategic and transformation reviews, conducted as a result of the significant business change following the acquisitions and BMI disposal. These items are excluded from underlying results in view of their non-recurring nature.
2025
£ million (unless stated otherwise)
2024
Underlying profit before tax
28.9
30.3
(4.4) (4.0) (2.1) (1.9) (1.3)
Acquisition and integration related costs Amortisation of acquired client relationships
(0.4) (3.4)
Organisational restructure
(2.1)
Move to the LSE’s Main Market costs Head office relocation Other non-operating items Total underlying adjustments Statutory profit before tax
– –
2.3
0.2
(11.4)
(5.7)
17.5
24.6
Amortisation of acquired client relationships (£4.0 million charge) Intangible assets are recognised on the acquisition of new businesses and in the course of acquiring FUM and financial advice portfolios. These are amortised over their useful life, which has been assessed to range between 6 and 20 years. This amortisation charge has been excluded from underlying profit since it is a significant non-cash item. Refer to note 17 of the consolidated financial statements for more detail. Organisational restructure (£2.1 million charge) As part of the Group’s strategy to ensure it operates in an efficient manner and delivers the best service to clients, further opportunities were identified to streamline and remove duplication from core processes, resulting in redundancy costs. These have been excluded from underlying earnings on the basis that they are in relation to business restructuring.
Underlying PBT is considered by the Board to be an appropriate reflection of the Group’s performance when compared to the statutory results as this excludes income and expense categories, which are deemed to be of a non- recurring nature or non-operating items. The Non-IFRS financial information section on page 162 includes a glossary of the Group’s APMs and the criteria for how each are considered. A reconciliation between underlying and statutory PBT for the year ended 30 June 2025, with comparative financial information is presented in the table above. Acquisition and integration related costs (£4.4 million charge) These represent costs incurred in relation to the Group’s recent acquisitions, and include legal fees, fair value adjustments and finance costs in relation to the deferred contingent consideration. The prior financial year charge relates to the share-based payment for share options awarded to onboarded employees as part of the integration of a prior period acquisition. These costs are excluded from the underlying results in view of their one-off nature arising as part of an acquisition.
28 Brooks Macdonald Group plc Annual Report and Accounts 2025 Brooks Macdonald Group plc 28
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