CEO’s review
As I present my final review as CEO of Brooks Macdonald, I reflect on the immense pride I have felt in holding this position. Brooks Macdonald is a great business that delivers excellent outcomes for our clients across their entire investment lifecycle. By generating consistently strong investment returns to support their long-term financial goals, we provide them with increased certainty and reassurance over their financial futures, regardless of the economic backdrop. Throughout my tenure as CEO, we have remained focused on our Purpose of realising ambitions and securing futures, which means we keep our clients at the forefront of our minds, whilst also providing for all our stakeholders – employees, intermediaries and shareholders. This year has been no different. Clients have benefitted from the close relationships with our investment managers and financial planners which is even more important when markets are challenging, and have further benefitted from strong returns from our rigorous investment process. Financial performance For much of our financial year, inflation remained high, together with persistently high interest rates. Clients remained under pressure in terms of higher costs of living and continued to be encouraged to pay down increasingly expensive debt. These factors impacted our industry and our Group, where we saw net outflows of £616 million, largely in our Bespoke and Funds products. MPS continued to be a driver of growth with net inflows of £388 million, reflecting the trend for MPS as a solution of choice for accumulation.
Gross inflows across our propositions were strong throughout the year, with £2.3 billion gross inflows at the Group level and we ended the year with the best-performing quarter. Platform MPS gross inflows contributed approximately half of these flows. Although outflows were stubbornly high, we saw signs of improvement in the fourth quarter. Given our internal efforts on client retention, combined with a more stable economic outlook, we are confident that outflows will decrease. We had a year of good financial performance in FY24, with underlying profit before tax increased to £34.1 million (FY23: £30.3 million). The underlying profit margin increased by 2.1 percentage points to 26.6% as we implemented cost efficiencies and benefited from increased interest and transactional income. Statutory profit before tax fell to £11.6 million from £22.2 million, primarily due to the impairment of the International goodwill balance announced in our half-year results. Our year-end closing FUM was a record £18.0 billion, up 7% in the year, with investment performance of £1.8 billion more than offsetting the impact of net outflows.
It has been a privilege to lead such a talented and dedicated team at Brooks Macdonald and I am immensely proud of what we have achieved together.” Andrew Shepherd CEO
Investment performance and market conditions
Our aggregate investment performance across all our risk profiles for the year was 10.7%. These strong returns have been generated through our robust Centralised Investment Proposition where we have constructed portfolios with a balanced approach utilising multiple asset classes and investment vehicles against a backdrop that has seen headline index returns dominated by a focussed set of large and mega cap stocks.
10 Brooks Macdonald Group plc Annual Report and Accounts 2024
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