Welcome all to Brooks Macdonald's full year 2023 interim results presentation. It feels like yesterday that I was last talking to you. It's incredible how fast six months passes, and incredible what you can achieve in a six-month period. Today, I'm joined by Ben Thorpe, CFO, and by Robin Eggar, who's Managing Director of our UK Investment Management and advice businesses. If I could guide you to slide four in the deck. In summary, I'm pleased to be able to report that with a background of difficult economic and market conditions, we've made good progress strategically, while also maintaining a stable financial base, with profits in line with expectations and a robust underlying profit margin of nearly 25%, allowing us to announce an increase in the interim dividend of GBP 0.02.
Looking at our strategic progress, our flows have continued positively at an annualized 4.4% in the half, with a strong pipeline driven by the growth of our B2B Investment Solutions and our platform MPS services. Sarah Ackland joined us in September as Global Head of Distribution to ensure that we reach our intended target markets with our various services. She has already made a big impact with plans afoot for improved distribution of our BPS and fund services. Sarah's also recruited Leanne Barnham as Global Head of Marketing to spearhead the growth of our services profile in those markets. We anticipate broader growth across these services in periods to come.
Over the six months, we went live on the SS&C platform, a significant step forward for us, and we're now in the process of embedding the systems and realizing the benefits from them, which should come through in our FY 2024 numbers. This is only part of the digital transformation at Brooks Macdonald, with advice and distribution improvements also in train and now technology for finance and HR departments, making them more efficient as well. We completed the acquisitions of Integrity Wealth Solutions and Adroit Financial Planning, bolstering our advice business with additional management and advice capability, and both financed by retained earnings generated by the business, a self-sustaining growth model. As I said, we've achieved much in these six months, and I'm proud of the team for their delivery, for their focus on our clients, and for the work that they've done in preparation for further growth.
Now I'm gonna pass over to Ben Thorpe, our CFO, to go through the financial results. This being Ben's last results presentation before he moves on to a new role, I'd like to say thank you to him for all that he has done in contributing to the recent success of the business, which is greatly appreciated. Over to you, Ben.
Thanks, Andrew. I appreciate the kind words. Turning to my first slide six. Although performance has been impacted by the 10% reduction in average markets year-on-year, I am pleased to report we have delivered a set of results in line with expectations. Despite this backdrop, we have continued to make good progress on our strategy, winning market share in MPS and making progress towards our net flows goal of 8%-10%. Looking at the numbers themselves, total revenue was down 5% to GBP 58.9 million. Underlying profit was down 18% to GBP 14.5 million. The underlying profit margin was 24.6%. Statutory profit fell by 25.7%.
Underlying diluted EPS was only down by 15%, partly helped by a lower effective tax rate off the back of R&D credits we received relating to our new operating platform implementation. Finally, we are pleased to announce an interim dividend of 28 pence a share, which is up 8% year-on-year, showing the board's continued confidence in the business and its prospects. Turning to slide seven. Before we get into the detail, I want to take a minute to set the scene for the overall H1 outturn. As you know, our business model is geared to the market. When average markets are down 10% year-on-year, that will always impact income. As markets recover, so will income, and quickly, profitability.
We continue to be laser-focused on growth. Last year we took the deliberate decision to invest in the multi-asset segment through a relaunch of our Cornelian fund offering. This was underpinned by a material price reduction. That was the right thing to do, and it still is. In the short term it also impacts income. When you put that together with the fall in market levels, you get a 14% reduction in fee income. This reduction has been partly offset by non-fee income and, in particular, interest income. This will be no surprise to anyone given the recent increases in base rates. Interest margin is an important part of our business model. Helpfully, higher levels of interest income tend to come when markets are choppier. Therefore, overall non-fee income is up 61% year on year.
Financial planning income is broadly flat, with the small increase coming from the two acquisitions, which we only owned for a very limited period in H1. Putting this all together, income is down by only 5% versus the 10% decrease in markets. Costs have been kept flat overall due to the operational gearing in the variable pay model, driving a lower bonus accrual. This reduction has been offset by increases elsewhere in the cost base, which I'll cover in more detail later. Overall, we delivered a robust margin of 25%. Turning to page eight and funds under management. I won't cover this page in too much detail given we covered it back in January. We'll pull out a couple of key points.
Firstly, total funds under management increased by 3.6% in the half on H2 last year, driven by relatively strong investment performance and an annualized net flows of 4.4%. Secondly, although total firm is down 6% from last year's high point, net flows are up 6% on H1 last year, showing continued momentum in new business. Turning to slide nine in yield. Overall, the blended group yield was up by 1.3 basis points to 70.3 basis points. Non-fee income increased by 5.8 basis points due to higher interest rates, but this was offset by the reduction in pricing for the Cornelian funds of 1.3 basis points and the impact of business mix of 2.7 bps, with platform MPS's share of the book increasing from 10% to 15%.
This impact has been quite marked in half given the shape of our flows. I would not expect that to moderate in H2, but it should improve in FY24 as net flows become more balanced across the product range. Encouragingly, pricing was broadly stable elsewhere in the book. Turning to slide 10 on costs. We've worked hard this year, as you would expect, we've seen inflationary pressures across the entire cost stack. We remain confident that we can stick to our guidance of a year-on-year cost increase of just 6%. In H1, we have held costs flat at a total level with a reduction in our variable pay accrual due to lower profitability, offsetting increases in the rest of the cost base. Staff costs increased in line with guidance at 6% due to mid-single-digit pay rises and some selective growth-focused hiring.
Non-staff costs increased by 16% at a headline level. This was slightly higher than expected, but within this, we incurred several one-off costs, for example, legal and professional fees relating to terminated merger and acquisitions activity. Given our ambitious inorganic growth agenda, this will happen from time to time, Andrew will talk more about M&A in a minute. If we x out these one-off costs and the impact of acquisitions before variable pay, total costs only increase by a reasonable 5.6%. Turning to page 11 and the segmental view. Both business segments have obviously been impacted by market levels. However, UK Investment Management still delivered a decent performance with a margin of 34.6%, down from 37.1% last year.
International produced a small loss on a fully loaded basis, driven by markets, prior year net outflows, and increases in direct costs due to inflation and some one-off costs. The group continues to see a material market opportunity in the Crown dependencies, and we will continue to invest in the islands while being focused on improving the short-term performance of the business. Turning to slide 12 on capital. We remain well-capitalized and continue to produce meaningful amounts of surplus capital every six months. From this, we can drive increases in the dividend and fund further investment in the business. The recent acquisitions are good examples of this, and we expect to do more of this type of deal as and when the opportunity arises. On the dividend, the payout rate increased slightly to 39% as EPS fell back on lower profits.
However, the 8% increase is a good one given the backdrop. Turning to page 13 on cash flow. We have a broadly similar shape to last year's first half, with the only differences being the outlay for the two acquisitions this year and on deferred consideration, where we've now fully paid for both Lloyds and Cornelian. Overall, cash generation remains strong and the business is debt-free. Turning to my final slide on guidance, slide 14. We remain on track to deliver market expectations once they've been marked to market and the recent acquisitions are added in. Therefore, I would expect consensus profit for this year and next to increase. On flows, H2 has started strongly, and we are aiming for a full year outturn somewhere around 5%-6%.
This will set us up well to move closer to 7%-8% next year and 9%-10% the year after. Despite inflationary pressure in the one-off costs I mentioned earlier, we stick with the same cost guidance, with total costs expected to rise 6% year-on-year, which means an outturn somewhere in the early to mid GBP 90 millions. In conclusion, we continue to make good progress and are on track to deliver as expected. I now hand you back to Andrew.
Thanks, Ben. If I can turn you to slide 16. At the full year, I spent some time talking through the opportunity as we see it. Today, I'm gonna hand over that task to Robin Eggar, who as somebody with day-to-day experience, can bring it to life for you. Robin, over to you.
Thank you, Andrew, and good morning all. As Andrew alluded to, at our full year results, he spent some time talking through the significant opportunity in front of us and the key dynamics driving both organic and inorganic growth ambitions. I thought it worthwhile today to look briefly at a couple of key points from this. Firstly, the demographic and policy underpins that we have, and secondly, the changing habits within the advice and IFA market. Turning to demographics, put very simply, people are living longer and the burden of providing for that eventuality is falling more and more onto the shoulders of the individual.
As a result, people are saving more and the value of personal wealth is growing and is expected to continue as seen by the top right chart. At the same time, the change in the pensions market over the last 10 years is truly stark, with defined contribution schemes now firmly outnumbering defined benefit schemes, and indeed, those with no pension provision at all has more than halved over that same period. We see this on a daily basis in the business with both new and existing clients seeking to rationalize DC schemes into one, recognizing the key role that this part is likely to play in their future retirement plans. This focus on savings and self-provision more broadly plays firmly into the need for advice, and of course, our primary distribution channel, financial advisors.
Meanwhile, the highly fragmented nature of the wealth management industry, as seen on the bottom right chart, provides significant opportunity for us to capture and increase our market share, whether this be through acquisition or indeed through organic growth, both from financial advisors for investment work and indeed within our own advice business, where we're able to capture the full value chain of the client. Turning to slide 17, this requirement for self-provision and the associated requirement to seek financial advice has played through into the statistics with a number of ongoing clients with IFAs increasing steadily over the last five years. At the same time, however, the number of regulated advisors has failed to keep pace with the increase in demand for their services.
As such, this has led to a clear need for advisors to increase their efficiency and productivity, and outsourcing investment decisions to a third-party discretionary manager is a key part of achieving this. It is also fair to say that markets over the last three years and the rapid inflection points that we have seen perhaps have focused the minds of advisors who historically may have been happy to pick funds on an advisory basis for their clients. Without solving the active versus passive debate today, the need for an actively managed underlying portfolio and asset allocation has never been more clear. This outsourcing trend is one that we have been a major beneficiaries of and one which the research suggests will continue as seen in the bottom left chart.
Whilst the demand for bespoke investment products has remained broadly flat over the last three years, the substantial growth in model portfolio services and funds also plays the shift in demand and requirement to increase advisor productivity. Advisors need to ensure consistency and quality of outcome for their clients, both driven by the regulator and their own need for business success. Model solutions are a clear way to deliver this, and as we will see on subsequent slides, is a trend that's provided clear opportunities for Brooks Macdonald. Those opportunities are underpinning both our ambitious growth strategy and our value drivers from an investment perspective. We will cover those drivers more, in more detail over the next few slides, and I hope this broad outline of our strategy as shown below is familiar to you.
As such, I wanted to focus today on our purpose and on our people and culture. Our purpose is to realize ambitions and secure futures for all of our stakeholders, namely our clients, employees, introducers, and shareholders. Whilst in my role, I hope you might forgive me for my daily focus on the first three of these, I hope you also agree that if we're able to achieve this, it will undoubtedly lead to positive results for shareholders too. As a people business in what is still a people industry, investing in our people is key, and ensuring that they have opportunities to develop and grow with the business is vital.
Looking at the mix of talent we have across the business, both in terms of long-standing colleagues and those newer to the firm through organic growth and acquisition, gives me the confidence and belief that we can continue to deliver value and opportunity for all of our stakeholders. Like Andrew, I've been with Brooks Macdonald now for well over 20 years. The unrelenting focus on people and culture as well as the end client is what I believe has made BM so successful and gives us the capacity to continually invest for future growth. Turning back to the value drivers in a little more detail, we continue to make good progress on organic growth, with gross inflows higher and gross outflows lower than they were this time a year ago.
Given the market backdrop and uncertainty of the second half of calendar year 2022, as well as the seasonality of flows we have come to expect, it is not perhaps surprising that the position has weakened a touch in the first half of FY23. I'm proud of the efforts put in by colleagues across the business to support clients over this difficult period. This focus on clients was especially possible within our high-touch bespoke portfolio offerings, where outflows in the U.K. were GBP 50 million less in the first half of FY 2023 when compared with the same period last year. Whilst new clients in this segment have understandably been a little less willing to commit monies to markets over that period, the pipeline of new inquiries remains healthy, although the sales cycle for conversions has clearly increased.
Despite this, the gross inflows level of 15% has now been consistent for the last two years, and pleasingly, outflows have stabilized around 10%. Our intention and focus remains on improving both of these numbers, so increasing inflows and decreasing outflows, in order to make that next step up like we did in the second half of FY 2021. This will need to be across our full product range and is what Sarah and Leanne are working on now, more of which to follow at the full year. We know the components that would allow us to achieve this, and they have not changed. Delivering the right proposition with strong investment performance, a great client experience, and a can-do culture is and will continue to deliver strong results.
Turning to slide 20, the power behind organic growth has been the growth seen in our platform MPS offering. Whether this is through our core platform service or our specialist B2B investment solutions offering. Growth here, despite the growth in funds under management, is still accelerating, now up at 64%. Whilst this cannot go up forever, it is exciting to think that it may not yet have peaked, and our market share capture can increase further from here. This has all been achieved without the need to change our existing centralized investment proposition, but rather by proactively positioning ourselves for how advisors want to access our services. It is the advisor's choice of which platform to use, and it is our job to make the choice of using us as easy as possible by being available on whatever platform they choose to use.
Furthermore, having witnessed the trend for advisors to use models more, as we saw on slide 17, and the desire to consolidate client assets on one or two platforms, and likely in one solution, this gave further credence to our investment solutions offering. This deep knowledge and experience of the advisor market enabled the leverage of our existing investment proposition. By backing this with a dedicated sales team, has allowed us to increase our market share in what is a highly competitive sector. Performance and price are always going to be important in this market, but they should only ever be hygiene factors. The key is the attitude and culture that you bring to all interactions with the advisor firms and the ability to help them grow their businesses and ultimately realize their ambitions.
A further benefit of the investment solutions offering, which is perhaps less obvious from this slide, is the greater breadth of opportunity that those clients bring to our business. I'm pleased to say that now in addition to the platform monies, we have over GBP 50 million of new bespoke portfolio funds introduced from Investment Solutions Advisors who would otherwise have been unknown to Brooks Macdonald. This should remain a powerful driver for growth going forward. I will now hand back to Andrew to talk through the other value drivers in more detail.
Thanks, Robin. I remain truly excited about the opportunity before us and the pace of growth in the platform MPS section of the business. Our job now is to get them all firing together. Looking at the second value driver, service and operational excellence on slide 21, key to our success is that we're able to bring a real ease of doing business to our clients and to their introducers. In terms of our progress in this regard, in this period, we crucially went live on the SS&C platform, a migration that went as well as could have been hoped for. Huge credit to the teams at both SS&C and at BM for their work in achieving this.
We're now going through the embedding process and are continuing to work with SS&C, as we will do for the duration of this contract, to develop the systems to deliver the full benefits to the business, to our clients, and to their introducers. Work we expect to be completed in the coming months. Importantly, the ability for us to leverage the contract with SS&C is in place, increasing FUM will give us real operational gearing. The SS&C replatforming is only one, if the biggest, of a number of digital changes within Brooks Macdonald. With our advice business moving on to the intelliflo financial planning platform during this time, an agreement reached with Salesforce to use their systems across our business, starting with distribution in this financial year.
Not to mention the other functions who have moved on to new technology designed to make their working experience easier and more efficient and more effective. The digital transformation is an important step forward in enabling our organic growth in terms of our ability to offer excellence in service, but it's also key from the perspective of our inorganic growth, our third value driver on slide 23. As before, we are looking at acquisitions across advisors and investment managers and potentially transformational transactions, and we completed two advisor acquisitions in the period. Both Integrity and Adroit are long-term users of intelliflo already, which reduces the amount of system upheaval and makes the integration into Brooks Macdonald much easier, and they will also help us to maximize the benefits from the new technology.
They're high-quality businesses who add capability and skill sets that we didn't have, strong profitability and great growth potential with both firms having an enviable professional network with introducers and the ability to widen those nets considerably. Most importantly, they both have cultures which are closely aligned to Brooks Macdonald and have been for a considerable period of time, as we know through the long relationships we've had with them both. As important as the acquisitions that we have made are those we have not. Over the period, we've had a close look at a number of businesses, including two investment managers who we didn't proceed with. These are both high-quality businesses who could have fit culturally and added assets to our platform, neither of whom had the compelling strategic logic we're looking for to drive us forward as a business.
It's a high bar, but it protects us from making decisions with short-term gains in mind, which are likely to cause long-term problems. Turning to slide 24, at the full year, I talked to our medium-term ambition to be a top five wealth manager in the UK and the Crown Dependencies. That is very much our intent. This requires us to move to a higher level of organic flows, and I believe we have the right ingredients in place to enable that growth. With a culture allied to our clients and introducers, robust investment performance, the right attitude to excellence, and a proposition set which fits our target markets. Ally this to a renewed focus on distribution, which we're now bringing to bear. I think the future looks very promising.
We do have some work to do in the international business to move it forward, but we have made great progress in making our group more global to grow that business with a focus on our offering to private clients across all three islands. Across the group, the overall growth profile looks encouraging and the proposition in good shape. With Brooks Macdonald Investment Solutions and platform MPS leading the way, a renewed focus on funds and BPS, as well as a growing private client proposition, allowing us to service a wider range of needs for our clients. To meet our objective, clearly acquisitions will be necessary, but as I shared earlier, we will not be buying anything for the sake of buying it. We will maintain our discipline and focus on buying truly additive businesses.
To conclude on slide 25, the business has now been in positive net flows for nearly two years. We have had a margin at around and above 25% during that time period. We've successfully completed two acquisitions in the last quarter and continue to raise the dividend. Such is our confidence in our strategy and in our ability to take advantage of the opportunities that are placed before us. Thank you very much.
The first question is from Alan of Paul, with Brian. Please go ahead.
Thanks, gents, for the presentation. Two from me, please, one on BPS and one on international. On the BPS side, there's been some small outflow over the last few quarters. You showed a chart today showing the market is relatively flat in that space. Could you give us any comment on specific actions you're taking, you know, to grow market share in the BPS market specifically? Just almost a bit of a sub-question there as well. Is there an element of funds flowing from BPS to MPS within Brooks Macdonald? Existing clients shifting between those two products. On the international space, similar question, could you give us a flavor of... You kind of alluded to a few actions you're taking there to kickstart growth in the international business.
Anything you could add to that to give us a flavor of exactly what that might entail? Thank you.
Hi, Paul. Thank you for the question. Just so everyone's aware of who's on this side of the telephone. It's myself, Andrew Shepherd. Got Ben Thorpe with me and Robin Eggar. I'll pick up the international piece in a minute, but I'll pass over to Robin first for some thoughts on BPS.
Yeah. Thanks, Andrew. Yeah, on BPS over the period, it is more of an inflow story than an outflow story. We've seen the outflows continue to reduce, half on half, GBP 50 million less in this six-month period when compared to the same period last year. At the same time, inflows have been a little weaker, which has led to the small negative movement. That's really reflective of the six-month period that we saw, which came on, you know, the back of the first half of the year with war in Ukraine, et cetera, followed on by the macroeconomic backdrop, the political uncertainty, et cetera, in the second half of the year. We just saw clients a little bit less willing perhaps to commit new monies to market over the period.
We saw our typical conversion period move out a little bit over that period in terms of time taken from an initial inquiry to monies in the door. The pipeline of inquiries remained healthy as really good interactions with advisers and their clients. In terms of what we're doing, the focus is very much still on the specialist products. Decumulation, quarter protection, risk also net positive flows over that period. That's where we're seeing increased demand, where there is that real need for a bespoke service, and for clients who want a dedicated investment manager to take them through that journey. Yeah, that's the.
Our focus clearly is still on improving what we do in the BPS world, making sure it still fits the purpose as the market changes. As we alluded to as well, Leanne and Sarah, it's quite a big focus of their initial work. And we look forward to sharing more of that with you in due course. In terms of the other point, BPS to MPS, the simple answer is no, not really. Clearly the market for MPS Solutions is growing as we've shown.
This being primarily in the advisor market, where they're perhaps consolidating existing solutions they have on platform, looking for that efficiency, that increase in productivity, et cetera, where they can outsource all of their investment decisions for their full client bank. We've seen big footloose in that market. It's quite a different dynamic to that within the BPS market.
Yeah. I'd back that up, Robin, and I'll link it into international in a moment. I think what we're expecting over time is that we're building up a big bank of clients in MPS who will then have specialist requirements as they move towards retirement, whether that's decumulation
Building portfolios for tax purposes. I'd like to think that we'll see an MPS to BPS move over a period of time, which is certainly what we're seeing in the past in our own business. Robin touched upon Sarah and Leanne joining which is very much focused on distribution across the range of services that we've got, and I touched on it in here in the presentation. They're both deliberately called global.
To move on to the international question, ensuring that the group is thinking globally and that the international business is getting the full benefit of the might of Brooks might be over-egging it a little bit, but certainly the strength and the power of the overall group, I think is really important. I've no doubt that their addition will help to push for performance. It's also the case that we see a major opportunity in that international business, particularly around the private clients on the three islands, where it's incredibly fragmented and there's no real leadership across the Crown dependencies.
We will have a bit more of a focus on what we're doing with the individuals on the island over the coming years, where I think that's the biggest opportunity.
Thanks, both. That's very useful.
No problem.
The next question is from the line of Rahim Karim with Investec. Please go ahead.
Morning, gents. Hopefully you can hear me and apologies for the background noise. Three questions if I may. The first was perhaps to Robin in the context of his comments on culture and people. Just would be interested to see what he's seeing in terms of demand for talent in the industry and how that sits versus some of the moves that you've seen in terms of variable comp and whether there's any risk there. I appreciate the need to keep costs in check, and I'm sure shareholders would appreciate that in short-term. Just wondering if there was any long-term concerns that he has about that dynamic. The second question, Andrew, you kind of commented on the acquisitions that didn't go through in terms of the last six months.
I was hoping if you could give perhaps a little bit more color on any specific issues that you saw. It didn't sound like price was one of the things, and obviously you have the new platform that should help you drive, you know, material cost synergies. Just trying to understand what it was about those businesses that didn't appeal. The final question was just around, you know, the use of capital. Obviously, I appreciate, you know, very healthy increase in the dividend. Just wondering how you think about the retention of retained earnings and whether, you know, as you go through kind of more M&A and look at that, whether you see the need to perhaps conserve a little bit more of those earnings to fund future growth.
That's great. Thank you, Rahim. You've nicely split that up between the three of us. I won't argue with you. I'll pass over to Robin on the first point on talent. I'm sure we can all dip in on variable comp as well.
Yeah.
I'll pick up on the on the acquisitions and then on the use of capital. Robin, do you wanna kick off?
Yeah, thank you. Yeah, I mean, it's I think it's fair to say, you know, it is, it's a, quite a hot employment market as it were, and there is, there's clearly demand for talent across, you know, across our industry and more broadly. We haven't seen over the period any particular issues on that front in terms of turnover in front office staff specifically. We're clearly aware of the overall market dynamic. However, one of the reasons why we've always had a firm belief in graduates and training our own, if you like, we're taking on a further series of grads in September this year. That's always useful to have that train of people coming through the business.
It's worked well for us in the past. In terms of the concerns around comp models, you know, the front office do have a part of their compensation is specifically linked to a profit contribution at a local level. Again, that focuses their minds or an individual performance on what they're doing and have some linking back to their comp structure. We haven't seen any specific concerns on that front.
I think in terms of in terms of variable comp as well, Rahim, I mean, it's a meritocratic organization. We make sure that we pay for performance is point A. Point B, I think, you know, in our calculations for the full year and our expectations to hit your expectations, we have already included a reasonable amount of variable to make sure that we can fulfill people's expectations as well. Cool. I'll carry on with regard to the acquisitions. A little bit more color. It's really important to us that we tick the four boxes that we talk through.
You know, whilst we might be able to get to a position where there's economic value, if we don't think that we're going to get the strategic value from these businesses or that we think that the economic value is weighted away from us, then we're going to be nervous. Frankly, if we're nervous, we don't see any reason to move forward with these. In addition, it depends upon the culture, clearly, because as we've seen in the marketplace, if you make the wrong acquisition from a culture perspective, it's just value destruction. Without going into too much detail because I don't want to point too pointedly at any particular company.
What's important to us is that we continue our journey towards 8%-10% net flows. Any businesses that we buy have to help us help us on that journey. Equally, we've got to pay a price where we're getting decent economic value, i.e., decent ROCE and, yeah, accretion. They have to add something to the business from a strategic perspective that's actually gonna drive us forward and not hold us back in the future. When you put all of those together, I said in the presentation it's a high bar. It is, there are consolidators out there who will maybe not have quite such a high bar, but, you know, we're not here for three years and a sale.
We're here for, we're here for the long term. We wanna build a sustainable business. Do you want to touch on use of capital, Ben?
Yeah, quickly. Hi, Rain. Good morning, everyone. I mean, we're a strong business now, as you can see. You know, we're thriving even in tougher times. We are generating decent capital surpluses, you know, every 12 months. We can now, you know, put that to use as we have done with the two acquisitions recently. We will continue to do that. Actually we can also do both. We can also grow the dividend at the same time. It's now, you know, 17 and a half years, soon to be 18 years that we've increased the dividend.
You know, we're very proud of that track record and, you know, it'll take a lot for us to deviate from that. I think we're in the fortunate position of being able to do both at the moment. As we've always said, if it's a bigger deal, clearly we'll have to look at other ways of financing it. For the types of deal we've done in H1, we can continue to do those out of our own resources. Okay. Thank you all.
Ladies and gentlemen, if you would like to ask a question, please press the star followed by one on your telephone. Ladies and gentlemen, I will now pass the floor over to management for any webcast questions. Thank you.
Thank you, Constantinos. We have three sets of questions on the webcast. First from Ben Williams from Shore Capital. Please, could you talk more about the meaning of pipeline in the context of your business, and how it can be possible for you to feel confident about 5%-6% organic growth at this time in the year?
Okay. Thanks, Ben. I think there's different areas of our services where you can be more or less confident, to be frank. The business to business work that we do, there's a clear pipeline of businesses that we've had conversations with that we're going through the process of putting them in a position where they can make the significant transfers of assets. That's not a one-month process.
That's a three or six-month process of preparation. When they press the button, then the money starts to flow in. We can see pretty clearly which firms are gonna be working with us over the coming period. Equally, MPS on platform that isn't through Investment Solutions, that's built and built and built over a period of time to get to a relatively predictable quantum coming through on a monthly basis. In those two areas, we can be pretty confident. BPS also tends to follow a trend. I mean, Robin's talked about it a bit there. You know, outflows have been pretty constant, actually constantly slightly improving, which is great. Inflows have slowed a bit.
We'll make an assumption that those inflows will remain at that level, but we'd expect, given the effects on distribution, that they'll start, they'll start improving. I think we've said 5-6. You know, we're aiming for the top end, obviously.
The second set of questions from Stuart Duncan at Peel Hunt. There are actually four questions. In the notes, you quote a statutory PBT figure for the two acquisitions. Is this stated after the amortization charge? Hi, Stuart. It's Ben. I think you're relating to the point 3 acquisition-related items. That's actually related to deal costs. The actual two acquisitions didn't really contribute much to profit in H1.
They are gonna meaningfully contribute in H2 with about GBP 2.5 million of additional financial planning income, and then a margin of about 30%. You know, GBP 700,000-GBP 800,000 of profit, depending where we end up. Which actually is a very good starting point for financial planning businesses. And actually, this, you know, in our mind is the low point. We've got a lot of ideas about how we can extract further value from those acquisitions, and we'd expect them to build in the months and years ahead.
You have answered Stuart's second question, which was on the margins from the businesses. Stuart's third question, how does the variable comp accrual move in relation to revenues or profits? Yeah?
It's very formulaic in terms of the actual supply pot that we generate. We obviously have a demand pot coming up from the individual contribution models and what we think the market needs us to deliver. In terms of supply, we look at pre-variable pay profit, which is effectively, you know, just a standard profit calculation. We X out interest income from that because we think that is essential. Then we take 31% of it, and that is our bonus accrual for the year. Within that, clearly, we also have to fund this year's cash, but also the deferred cost of deferred stock options from prior years. It is very formulaic. You know, it goes up and down as, you know... It's nicely geared.
Final question from Stuart. Has the repricing of the Cornelian funds had any positive impact to date in terms of flows?
I'll pick this one up again, unless there's any other takers. I think this is absolutely the right thing for us to do. We're really excited about the multi-asset segment. I think bringing Sarah on board in particular will absolutely supercharge, you know, what we're doing there. However, it's been really tough in the multi-asset market over the last year, six months. I think there's, you know, if you look at the whole market, there has been outflows. Actually we pretty much tread water in Chameleon, which, in terms of assets under management. I think that's actually not a bad result. We would have liked to have gained a bit, so we are slightly behind the business curve. Actually I'm not too worried about it at the moment.
That is costing us in terms of lost income at the moment, and we expect it to sort of come good within 18 months. I think it's probably more likely to be 24-30 at this point. It's still the right thing to do.
Final question on the webcast is from Kim Bergoz of Numis. How should we think about the competitive landscape in UK wealth management, especially new entrants and new types of companies, platforms, et cetera?
Yeah, okay. Thanks, Kim. I think there's a couple of points here. One is that the landscape changes pretty slowly in U.K. wealth management. Albeit over a decade or two decades till it moves on. I was really interested to see yesterday that Vanguard had pulled out of financial planning in the U.K., which really surprised me actually, 'cause I think if anybody's gonna go to the mass affluent marketplace, they're, they were probably one of the few firms with the profile to be able to do that properly. That surprised me. In the wealth management industry has changed. It's moved towards us.
You know, the idea of working with advisers, and the idea of building your own advice business are changes that have happened really in this period since RDR. I think, you know, There's a bit of first entry advantage around advisers but, you know, we've had to make sure that we stay on our mettle and change the proposition set to stay at the forefront. Very conscious of that. We sit down in our new business committee every two weeks and talk about, like, what's next? What do we need to think about? How do we stay ahead of the game? That's part of the reason why we've, you know, we're upping the skill set in the distribution part of the business.
The platform piece, is interesting in that, you know, there's an ability to white label, for companies. There's a, I think a better ability to go more mass market, which isn't actually our space. Our space is working with advisors, so building our platform to make us as easy to use as possible for advisors is absolutely key. Improving that client experience because it's personal relationships. Robin talks about culture that comes through the personal relationships that we have with clients and with the advisors who are recommending them to us. I think, I mean, it's an interesting landscape. It changes but slowly, and I think we're well positioned.
Thank you. We'll now pass back to Constantinos to see if there are further questions on the conference call.
As a reminder, if you wish to register for a question, please press star one on your telephone. This concludes our question and answer session. I would like to turn the conference back over to Andrew Shepherd for any closing remarks. Thank you.
Yeah. Thanks very much, and thank you very much for spending an hour with us this morning. As ever, you know, we're very comfortable having conversations outside of this environment. If you have got further questions, give either myself or Ben. Ben's gonna be here for a while yet, or indeed Robin. Thanks for coming on the call, and we'll speak soon.
Thank you.