The Brooks MacDonald Group has a progressive dividend policy, growing dividends in line with the Group's underlying earnings. The Board recognises the importance of dividends to shareholders and the benefit of providing sustainable shareholder returns. In determining the level of dividend in any year, the Board considers a number of factors such as the level of retained earnings, future cash commitments, statutory profit cover, capital and liquidity requirements and the level of profit retention required to sustain the growth of the Group. The Board has declared an interim dividend of 23.0p (H1 FY20: 21.0p). This represents an increase of 9.5% compared to the previous period. The interim dividend will be paid on 16 April 2021 to shareholders on the register as at 19 March 2021. Refer to Note 9 of the Condensed consolidated financial statements for more details.
Other financial highlights include:
Total Funds under Management ("FUM") reached a record level of £15.5 billion at 31 December 2020 (30 June 2020: £13.7 billion, 31 December 2019: £13.1 billion), representing an increase of 13.3% in the period, driven by:
- Robust investment performance of 9.5% despite volatile markets, compared to an increase of 6.5% in the MSCI PIMFA Private Investor Balanced Index
- Net flows of £(367) million (H1 FY20: £(506) million), with Q2 stronger than Q1, evidencing early signs of an improving trend
- Completion of the acquisition of Lloyds Banking Group's Channel Islands funds and wealth management business in November.
Revenue increased by 1.8% to £55.9 million (H1 FY20: £54.9 million) with the positive impact on average FUM of strong investment performance and two acquisitions partly offset by weaker net flows, particularly in Q1.
Underlying profit before tax up 21.7% to £14.0 million (H1 FY20: £11.5 million) with a significantly increased underlying profit margin of 25.1% (H1 FY20: 20.9%), driven by higher revenue and strong cost discipline.
Statutory profit before tax increased 84.1% to £14.1 million (H1 FY20: £7.7 million), due to the improved underlying performance and an exceptional gain related to the Lloyds Channel Islands acquisition.
Underlying diluted earnings per share rose by 8.3% to 73.2p (H1 FY20: 67.6p), reflecting higher total underlying earnings partly offset by the issue of new shares in relation to the acquisition of Cornelian Asset Managers Group Limited.
Group net flows have been marginally positive in the calendar year to end February, excluding the Defensive Capital Fund ("DCF") which continues to experience outflows in line with trends in the Targeted Absolute Return sector. Net flows at the Group level are expected to be modestly positive for H2.
