Good morning, welcome to Brooks Macdonald's Half-Year Results for 2026. I'm delighted to say we've made great progress in achieving our strategic priorities. Demand for our services has been high because trusted financial advice is what clients need most. We're reigniting growth, and we've returned to positive net flows, but that's just the beginning. For the first time, we've exceeded 20 billion in FUMA, and revenue has increased by 12%, thanks to recent acquisitions and improved flows. Our investment performance remains strong, exactly where our clients need it to be. We've established Brooks Financial and completed the integration of our three recent acquisitions, creating a high-quality, scalable, whole-of-market financial planning capability. We've made deliberate investments in the business, which are enabling this growth. We're moving fast, delivering results, and we've got plenty of runway ahead. Now, our CFO, Catherine Jones, will take us through the details.
Thank you, Andrea, and good morning. Let me start with the financial highlights, which include positive net flows, the financial planning business is performing well, and we've maintained strict cost discipline. As a reminder, the prior period results are presented on a continuing basis and include the results of the acquired businesses since their respective acquisition dates. Total FUMA was up 5% in the period, reaching over GBP 20 billion for the first time. Revenue increased by 12% to GBP 58.2 million. Underlying costs increased by 3%, and reflecting this, underlying profit before tax was GBP 13.6 million, equivalent to a margin of 23.4%.
The board has recommended an interim dividend of GBP 0.31 per share, up 3% on the prior period, in line with our progressive dividend policy and demonstrating the board's confidence in the strategy and outlook for the business. Let me cover the FUMA and our product mix in more detail. The GBP 20.1 billion of FUMA includes funds under management of GBP 17.8 billion, up 8% in the first half, including a 15% increase in Platform MPS assets, and pleasingly, also 4% growth across our BPS assets. As you can see on the left-hand side of the slide here, I've highlighted the advised assets of GBP 5.3 billion. Of this, GBP 2.3 billion is advised only, and the remainder is advised and managed. I will cover this in more detail shortly.
Strong market and investment performance of GBP 1.3 billion demonstrates the benefits of our centralized investment proposition, which continues to deliver strong, sustainable, risk-adjusted returns consistently over the long term. We were pleased to deliver net inflows of GBP 2 million in H1. That compares to outflows this time last year of GBP 262 million. It is the first half of positive net flows since H2 2023. You can see this in more detail on the next slide. We have delivered consistent improvements in net flows, with the first half returning to positive territory and improving materially versus recent reporting periods. This improvement reflects our significant focus on client engagement, distribution, and brand and marketing in the last 12 months, as well as strong investment returns for our clients.
As a result, Platform MPS grew strongly with net inflows of GBP 0.4 billion, equivalent to an annualized growth rate of 12%. Net outflows across BPS improved by around 50% to GBP 0.2 billion, driven by higher gross inflows across our core BPS offering. Turning to look at revenue. Total revenue grew 12% to GBP 58.2 million. The now integrated financial planning businesses are performing well under the Brooks Financial brand, with revenue increasing to GBP 13.6 million in the first half, and fee income benefited from higher average FUM levels in the period. This was partly offset by a reduction in transaction and FX income compared to the prior period due to lower trading volumes and by lower interest income following reductions in prevailing interest rates.
I'll go through the underlying revenue drivers in more detail, starting with our Bespoke Portfolio Service. BPS FUM increased to GBP 8.9 billion, supported by strong market and investment performance. The nearly 50% reduction in net outflows has been driven by the step change in client engagement, distribution momentum, and expansion into new regions over the last year. The BPS fee income yield reduced only marginally in the period, reflecting the valuable service we provide to higher net worth clients. The overall yield reduced by 5.9 basis points to 69.5 basis points due to the lower transaction income I mentioned earlier. As a result, BPS revenue was GBP 30 million in the first half. Moving on to our Managed Portfolio Service. Total MPS FUM grew 13% to GBP 7.8 billion.
This was driven by continued strong net inflows into our Platform MPS offering, as well as market and investment performance. Overall revenue increased 22% to GBP 8.2 million, with higher average Platform MPS FUM, including advised and managed assets added by the acquisitions, driving the increase and more than offsetting the lower average yield due to product mix. Platform MPS remains a key growth engine for the group, supported by a well-defined distribution focus and scalable operations. It now represents nearly 40% of our FUM. Turning now to financial planning. We have total advised assets of GBP 5.3 billion, comprising advised only assets of GBP 2.3 billion and assets that we both advise and manage of GBP 3 billion.
I'm pleased to see that we now manage 56% of our advised assets, up from 51% six months ago, illustrating the attractiveness of our propositions to our financial planning clients. Consistent with our previous expectations, the average revenue yield on advised assets increased to 50.8 basis points. This reflects the higher yield generated across the recent acquisitions, with a yield of 50 basis points remaining a good rule of thumb and a level that continues to represent good value to our clients. It's worth noting that total revenues generated from our recent acquisitions were around GBP 9.5 million in the first half. As an addition to the financial planning revenue, the acquisitions brought advised and managed assets that contributed GBP 1 million of MPS fee income, as you saw on the previous slide. Overall, financial planning revenues increased to GBP 13.6 million.
On the next slide, I will look at underlying costs. I wanted to illustrate the like-for-like movements over the past six months, I have added the costs from the acquired businesses of GBP 6.4 million to show a comparable starting point. Underlying costs before net finance income increased by 3% in H1. The movements in the period include salary inflation and the changes to national insurance contributions of GBP 0.5 million. Cost savings delivered during the period of GBP 1.3 million, including GBP 0.6 million of integration synergies through staff exits, system migrations, and supplier rationalization. GBP 0.5 million of savings through organizational restructuring implemented in November, a further GBP 0.2 million from the renegotiation of key contracts, and consolidating our third-party supplier base.
Finally, we invested GBP 2 million to support business growth, primarily through expanded front office capabilities with new leaders across distribution and investment management, and we enhanced our marketing footprint, growing our brand awareness and profile through key sponsorship partnerships and increasing client engagement through nationwide events. The efficiency actions that we took towards the end of the first half focused on reshaping the cost base, prioritizing revenue-generating parts of the business, and ensuring efficiency within our support functions, putting us in an even stronger position for the future and generating annualized savings of GBP 3 million. The benefits of these actions will come through more fully in H2. As I look ahead, these savings will help to offset our investment in capacity and capability. I therefore expect H2 underlying costs before the FSCS levy to be broadly in line with H1.
Turning to look at the cash position. At the end of December, we had cash and liquid assets of GBP 27 million. We generated GBP 13.3 million of operating cash from underlying performance in the 6 months and returned over GBP 10 million to shareholders through dividends and share buybacks. You'll remember that I said 6 months ago that this year we would invest in initiatives aligned to our strategic priorities, and it is pleasing to see that through this, we are driving improvements in flows, we are meeting client needs with new products and services. We have expanded our financial planning business through M&A, and we are identifying ways to do this efficiently and achieve ongoing savings. We expensed GBP 5.2 million in H1 in respect of these initiatives.
Around half of this relates to organizational restructuring costs to deliver the GBP 3 million of annualized savings I mentioned earlier, the remainder relates to reviewing our products and propositions to meet client needs and investing in digital capabilities, including AI. We also capitalized GBP 9.3 million. Half of this relates to property fit-out costs. The remainder includes continued improvements to our operating model, ensuring we are well-placed to service clients efficiently, which Andrea will cover in more detail shortly. We are improving front office workflow processes and back-office systems to enhance efficiency and automation. The GBP 6.5 million M&A charge comprises earn-out payments on the recent acquisitions and the costs of integration incurred in the period, which have delivered synergy savings.
We also recognized GBP 8.3 million of other items, which mainly comprises the impact of differences between the timing of accruals and cash payments, offset by insurance recoveries from legacy litigation matters. We now see greater opportunities to support distribution, modernize and innovate our products, and deliver further organizational restructuring to drive cost savings. We therefore expect to continue to invest in strategic initiatives through H2, albeit at a lower level, given that the office move, which was a significant investment in H1, is now complete. On the next slide, I've shown how the capital position is impacted by the same movements. We have a robust balance sheet, and we remain well capitalized, with GBP 39.6 million of capital resources at 31 December and an excess over our regulatory requirements and internal buffers of GBP 12 million before allowing for the payment of the interim dividend in April.
To conclude, we returned to positive net flows, and we grew the firm of both BPS and MPS through strong investment returns. We are pleased with the performance of the financial planning business, which is now integrated and performing well under the Brooks Financial brand. We have taken a series of actions to reduce costs and become more efficient. We are investing in the business to increase client engagement, grow brand awareness, and modernize and innovate our product suite to meet client needs. We maintained healthy cash and capital balances, returned over GBP 10 million to shareholders, and increased the interim dividend in line with our progressive dividend policy. We expect H1 revenue trends to continue into H2, H2 costs before the FSCS levy to be broadly in line with H1, and full year '26 financial performance to be in line with market expectations.
Finally, we remain confident in delivering our medium-term targets of achieving annualized net flows of 5% and keeping BAU cost growth below 5%. Thank you for your attention, and with that, I will hand you back to Andrea.
Let me now remind you of our investment case. We're a relatively simple business serving an attractive growth market. We offer a broad, well-structured product range, anchored by our centralized investment proposition that has outperformed the benchmark and has market-leading consistency. Our revenues are healthy, our margins attractive, and we deliver strong returns on capital. Our strategy is delivering better flows and better revenues. It's as simple as that. I'm particularly pleased that we've seen a 50% increase in gross BPS inflows and a substantial improvement in net BPS outflows, along with a consistent year-on-year double-digit MPS growth. Revenue is up 12% in the first half year. BPS assets increased 4%, and we've added 8% more high-net-worth clients. This is more than green shoots. This is real momentum.
Over the last six months, we've established Brooks Financial, a whole of market offering built on independent, trusted advice, serving 9,500 clients. There's clearly room to grow. We've secured over GBP 1 million in annualized cost synergies. Assets under advice and management have increased from 51%-56%. We've maintained 98% client retention. The feedback is consistent. We're a great home for IFA acquisitions. We're advisor-led. We understand the IFA mindset. We have a proven integration blueprint. We continue to evaluate further M&A opportunities. You will be familiar with our strategy to reignite growth. Six months on from our full-year financial results, I'm pleased we've made significant progress across our three priorities. Let me give you a flavor of some of the actions behind it. Starting with delivering excellent client service.
Our new Brooks Macdonald app offers secure, on-demand portfolio access. We've launched dynamic product information, improving the online experience, and we're digitizing onboarding across all our services, and we're using AI to simplify our admin and free up advisors to spend more time with clients. Let's now look at how we've been broadening and deepening client reach. Our autumn advisor roadshows reached 330 advisors across 26 locations, an increase in attendance of more than 30%. We've enhanced brand visibility through investment in marketing to build our brand, reach our existing clients, and importantly, target new customers. We've strengthened our leadership with key hires, embedded a new investment team in Scotland, and integrated our investment management and distribution teams.
Product innovation continues, including a new lending partnership with Firenze, and we're improving our offer to high-net-worth individuals, making it easier to access the best of our expertise across Brooks. This builds on last year's launch of Global MPS and our Retirement Strategies offering. Finally, to drive scale and efficiencies. AI is helping us simplify MPS portfolio monitoring and enhance investment research. Platform investment is delivering increased automation, real-time data, and improved analytics, all of which enable our teams to spend more time with our clients. For the rest of 2026, we'll continue to focus on developing new products, exploring M&A opportunities, and making the most of our investment management and distribution team strengths. You'll have seen a few weeks ago that we combined investment management and distribution teams. Let me give you the thinking behind this. We're being more targeted with nationals and network firms.
This segment aligns well with our business model. They're at lower risk of consolidation and have around GBP 500 billion of assets. We're initially focusing on those firms where we already have relationships. However, we believe these can be much stronger. BMIS is our outsourced investment service for firms that want sophisticated investment capability without giving up control of their advice model or their client relationships. We're enhancing this proposition by introducing two levels of service. I look forward to telling you more about this as we progress. We're actively targeting the new model adviser segment that provides holistic advice at scale. Together, these firms have over GBP 500 billion in assets and 82% of the platform market. By targeting these firms alongside the nationals and networks, we're looking to develop wholesale distribution so we can be as efficient and as effective as possible.
Finally, the combined strength of our investment management and distribution team will enable us to maximize the opportunities as we launch new products. Overall, what's our target here? To increase the number of IFAs we service by 20% over the next three years. The growth we're seeing in BPS reflects an increase in client engagement. We've seen an 8% rise in high-net-worth clients, and advisors are using more than one BPS service. These metrics demonstrate that BPS is highly relevant for those clients with larger investment pots and often also more complex needs. This is where the future potential of BPS lies, and it's a vital contribution to our success. Our MPS is delivering consistent year-on-year double-digit growth. It offers risk-aligned outcomes for clients while giving advisors a scalable solution targeted at the mass affluent market with investments under GBP 500,000.
Last year, we added Global MPS to our core offering. As one of the fastest-growing MPS providers in the UK, our MPS assets now stand at GBP 6.9 billion, and Platform MPS FUMA has increased fourfold since 2021. Performance remains strong. Our MPS medium to high-risk portfolio has outperformed the benchmark over one, three, five, and 10 years. We expect further strong growth supported by new MPS propositions coming soon. Our Retirement Strategies bring clarity, choice, and confidence to clients in retirement. This market is significant and growing fast. Income drawdown is expected to increase by 20% over the next five years, a material opportunity for Brooks. We've added two new strategies, a tailored one for clients with GBP 250,000 and above who want to set their own income level and a new model for those with GBP 50,000 and above.
We've scaled this to nine platforms and have a material pipeline. This set of results reflects the disciplined execution of our strategy and shows we're on the right path. We've made the deliberate investment in the business to enable growth. We've achieved positive net flows. We've also achieved consistent double-digit growth in MPS, and our BPS core offering is attracting more high-net-worth clients. Brooks Financial now provides an integrated and scalable whole of market capability, offering independent and quality advice of the highest standard. I'd like to thank our clients for their ongoing support and the Brooks team for their contribution. There's no doubt we've achieved a lot in the past six months as we invest in our business and our people, and as you all know, there's a real opportunity ahead, and we're in a strong position to capture it.