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AJ Bell plc reports ‘solid’ interim results for the six months ended 31 March 2022

Investment platform provider AJ Bell has today announced its interim results for the six-month period ended 31 March 2022.

Highlights

Solid performance delivered across all metrics against very strong prior year comparatives
Investment in new propositions has progressed in line with expectations, with Dodl by AJ Bell launched in April 2022 and Touch by AJ Bell on track to soft launch later in the year
Continued organic growth driven by platform propositions, with total customers up by 35,555 to 418,309, net inflows of £2.8 billion and assets under administration (AUA) closing at £74.1 billion
Customer retention rate up to 95.4% (FY21: 95.0%)
Revenue up to £75.5 million (HY21: £73.9 million), profit before tax of £26.1 million (HY21: £31.6 million) and a PBT margin of 34.6% (HY21: 42.8%)
Diluted earnings per share of 5.08 pence (HY21: 6.26 pence)
Interim dividend of 2.78 pence per share in line with stated dividend policy
Revenue and profit margins are expected to increase in the second half, with PBT margin guidance for FY22 raised to c.35% (previous guidance 32-33%) and further improvement anticipated in FY23

Andy Bell, Chief Executive Officer at AJ Bell, commented:

“I’m pleased to announce another solid set of results for the first half of the year. Our dual-channel platform continues to attract and retain long-term customers in both the advised and direct-to-consumer markets, with our platform retention rate of 95.4% evidencing the quality of our propositions and our high customer service levels.

The organic growth in customers and AUA helped to deliver an increase in revenue to £75.5 million and we remained highly profitable, with profit before tax of £26.1 million and a PBT margin of 34.6%. This is a very good result against a significantly more challenging market backdrop to that experienced in the first half of last year, when retail investor engagement and dealing activity was exceptionally high particularly in the direct-to-consumer market.

The impact of normalised customer dealing activity and lower interest rates compared to the same period last year resulted in a lower revenue margin in this period. However, our diversified revenue model positions us well across all market conditions and we are now seeing the positive impact of recent interest rate rises on our revenue margins.

Our secure and scalable platform has been designed to both facilitate growth and drive operational gearing, enabling us to once again exercise strong control over our operational costs. We have also continued to invest in new customer propositions to broaden our reach in both the advised and direct-to-consumer markets. In April we launched Dodl by AJ Bell, a new commission-free investing app which we believe will appeal particularly to people who want an easy, low-cost way to get started with investing. We plan to follow this with Touch by AJ Bell, a simplified, mobile-led platform proposition for the advised market, which is on track to soft launch later this year.

As our business grows we are committed to sharing efficiency gains with our customers, whilst continuing to invest in new products and services for them. At a time when people are seeking to manage the impact of rising living costs, we have announced a number of reductions to our platform charges across both our advised and direct-to-consumer propositions which will deliver total annualised savings to our customers of around £5 million.

This follows consistent reductions to the charges on our AJ Bell funds as assets under management have grown. The annual charges on the first five multi-asset funds we launched five years ago have nearly halved from 0.50% to 0.31% during that time, again delivering significant savings to customers.

Our strong financial position and the Board’s confidence in the long-term prospects for the business support continuing returns to shareholders alongside ongoing investment in our customer propositions. We remain committed to our stated dividend policy and the Board has declared an interim dividend of 2.78 pence per share.

The long-term structural drivers of growth in the UK investment platform market remain strong with around two-thirds of our estimated £3 trillion target market not yet on a platform. We continue to see customers moving onto investment platforms to benefit from increased flexibility and lower costs and we are well positioned to attract an increasing market share with our leading propositions and established brand in both the advised and direct-to-consumer segments.

Whilst market uncertainty is likely to persist in the short-term, our business model ensures we can continue to invest in our customer propositions whilst delivering strong financial performance and we expect profit before tax for the full year to be at least in line with consensus market expectations.”

 

Financial highlights

 Six months ended 31 March 2022Six months ended 31 March 2021Change
Revenue£75.5m£73.9m2%
Revenue per £AUA*20.3bps24.0bps(3.7bps)
PBT£26.1m£31.6m(17%)
PBT margin34.6%42.8%(8.2ppts)
Diluted earnings per share5.08p6.26p(19%)
Interim dividend per share2.78p2.46p13%

 

Non-financial highlights

 Six months ended 31 March 2022Year ended

30 September 2021

Change
Number of retail customers418,309382,7549%
– Platform403,383367,96510%
– Non-platform14,92614,7891%
    
AUA*£74.1bn£72.8bn2%
– Platform£66.9bn£65.3bn2%
– Non-platform£7.2bn£7.5bn(4%)
    
AUM*£2.3bn£2.2bn5%
    
Customer retention rate95.4%95.0%0.4ppts

 

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