FUM closed FY23 (30 Jun 23) on £16.9bn, 7.5% up y-o-y (30 Jun 22: £15.7bn) and 0.3% up over Q4 (31 Mar 23: £16.8bn). Q4’s net FUM flow of +£97m continues BM’s impressive run of positive net flows (now spanning nine consecutive quarters) during a period of difficult market conditions and investor nervousness. FY23 net flows totalled +£817m (FY22: +£785m). BM has flagged a healthy pipeline for FY24, although investor sentiment is still subdued.
Andrea Montague has been appointed CFO and Executive Director, effective 1 Aug 23, to replace Ben Thorpe, subject to regulatory approval. Andrea has an impressive executive and board track record in the long-term savings and asset management sector. She leaves Aviva where she was Group Chief Risk Officer, and prior to that, Group Chief Financial Controller.
BM has indicated it expects FY23 results to be in line with forecasts, although we see a slight change in how revenue is made up (FUM ending the year a little below our previous estimate and average revenue yield expected to be a little higher with the continued rise in interest rates). The slightly lower closing FY23 FUM level reduces our FY24 forecasts: revenue from £131.5m to £128.2m and underlying PBT from £34.1m to £31.2m. Our fundamental valuation reduces to 3,100p per share but is still 38% above the current share price.
An additional noteworthy point for investors is the marked uptick in the volume of shares being traded since late 2022, which suggests growing investor interest in BM (see page 2 of the note).
