Brooks Macdonald considers M&A opportunities despite profit decline in first half

Brooks Macdonald Group recently disclosed its financial performance for the initial six months of 2026, showcasing an underlying profit before tax of £13.6m ($18.3m), a 12% decrease from the £15.5m recorded in the corresponding period the prior year.

The company observed a 12% rise in revenue, totaling £58.2m, primarily fueled by the growth in financial planning and fee income, although there was a decline in interest and transactional income during this period.

Furthermore, the total funds under management and advice surged to £20.1bn from £19.1bn by the conclusion of June 2025. Within this figure, £17.8bn was directly managed, while £2.3bn represented advised-only assets. Notably, there were net inflows of £2m, reversing the net outflows of £262m documented in the initial half of 2025. This marks the first time since the second half of 2023 that the company experienced positive net flows for a half-year sequence.

Excluding acquisitions and net finance income, underlying costs escalated by 3% to £45.4m. Total underlying costs, encompassing acquisition-related costs, witnessed a 20% increase from the previous year’s £37.8m. The board proposed an interim dividend of 31.0 pence per share, reflecting a 3% boost.

Brooks Macdonald also reported a consistent annual double-digit growth in the managed portfolio service that was introduced the previous year. The company is committed to delivering its ‘Reignite Growth’ plan, focusing on organic investments aligned with strategic priorities, alongside exploring potential financial planning M&A prospects.

The firm’s ongoing endeavors encompass digital infrastructure, AI applications, and product innovation as part of its ‘Reignite Growth’ project. The implementation of AI facilitated a reduction in administrative workload and the restructuring of certain organizational aspects, realizing annualized savings of £3m. Additionally, there was a 4% rise in bespoke portfolio service assets, coupled with a notable 50% decline in net outflows from bespoke portfolios.

High-net-worth clients surged by 8%, and advisers utilizing multiple bespoke services rose by 4%. With the inception and consolidation of Brooks Financial, annualized cost efficiencies exceeded £1m, while client retention stood at an impressive 98%.

Looking ahead, Brooks Macdonald anticipates a continuation of revenue trends from the first half into the latter part of the year. Costs are expected to remain consistent with the earlier part of the year before considering the FSCS levy. The company remains optimistic that full-year results will align with current market projections, adhering to its medium-term goals concerning net inflows and cost growth.