Brooks Macdonald profits jump 78%, divi hiked 64%

Private client group Brooks Macdonald has reported a 78% jump in pre-tax profits for the financial year ending 30 June 2010.

The company saw its pre-tax profits rise to £5.68 million, up from £3.18 million in 2009.

Funds under management continued climbing, growing from £1.38 billlion to £2.18  billion, a rise of 57%. During the same period the Apcims Private Client index increased by only 12.7%.

Brooks Macondald’s share price was up 12.5p, or 1.35%, to 940p on the news.

The company reported growth from all parts of the business, including Sipps, private portfolios, financial consulting and its managed portfolio service.

Brooks Macdonald delivered a final dividend of 9p for the year, an increase of 64% from the 5.5p paid out in 2009. However, the firm's founder and chief executive Chris Macdonald said despite the hike in dividend the company preferred to err on the side of caution.

'We are a growth company but at the same time we run business very conservatively,' he said. 'I'm a great believer of this barbell approach. Our dividend is covered four times and that that is deemed to be an ultra conservative stance by some.'

Earnings per share also rose 69%, up from 22.56p to 38.10p. Similarly, revenue at the company increased by 61% to £35.1 million, up from 21.8% in 2009.

Brooks Macdonald said more than 80% of the group's growth derived from the business it conducts with IFAs and professional introducers.

Macdonald added the group had continued to make significant strides in the Sipp market. '[It] now accounts for 42% of funds under management. Our MPS [managed portfolio service], aimed at clients with portfolios of between £20,000 and £150,000, has seen considerable growth in the number of Sipp accounts but also noticeably from ISA amalgamations.