Brooks Macdonald eyes potential M&A despite profit dip in H1 2025

Financial Performance - Brooks Macdonald Group reported an underlying profit before tax of £13.6 million, a decrease of 12% from £15.5 million in the same period last year [1] - Revenue increased by 12% to £58.2 million, driven by growth in financial planning and fee income, although this was partially offset by reduced interest and transactional income [1] - Total funds under management and advice rose to £20.1 billion, up from £19.1 billion at the end of June 2025 [1] Asset Management - Of the total funds, £17.8 billion was managed directly, while £2.3 billion represented advised-only assets [2] - The company reported net inflows of £2 million, reversing the net outflows of £262 million recorded in the first half of 2025, marking the first positive net flows since the second half of 2023 [2] Cost Management - Underlying costs, excluding acquisitions and net finance income, increased by 3% to £45.4 million, while total underlying costs, including acquisition-related costs, rose by 20% from £37.8 million in the previous year [2] - The company achieved annualised savings of £3 million through the use of AI to reduce administrative workload and restructuring [4] Dividends and Growth Strategy - The board proposed an interim dividend of 31.0 pence per share, reflecting a 3% increase [3] - The company is focused on its 'Reignite Growth' strategy, investing in digital infrastructure, AI applications, and product development [3] Client Retention and Service Growth - Client retention remained high at 98%, with ongoing double-digit growth in Managed Portfolio Service assets and a 4% increase in Bespoke Portfolio Service assets [4][5] - There was a nearly 50% reduction in net outflows from bespoke portfolios and an 8% rise in high-net-worth clients [4] Future Outlook - The company expects revenue patterns from the first half to continue into the second half of the year, with costs anticipated to remain similar to earlier in the year [5] - Full-year results are expected to align with current market expectations, maintaining medium-term goals for net inflows and cost growth [6]