AJ Bell saw its pre-tax profit rise in the year to the end of September, and has announced a dividend hike for shareholders.
The DIY investing group, which also offers insitutional services to financial adviser’s customers, saw customer numbers climb 15 per cent in the year that it also launched a new low-cost investment app Dodl.
AJ Bell’s pre-tax profit increased by 6 per cent to £58.4million over the period, up from £55.1million a year ago. Revenue jumped 12 per cent to £163.8million.
Annual results: AJ Bell saw its pre-tax profit rise in the year to the end of September
A final dividend of 4.59p a share has been proposed by the company’s board of directors.
This will bolster the total ordinary dividend for the year by 6 per cent to 7.37p per share, against 6.96p a share a year ago.
But, the group’s net inflows slipped, coming in at £5.8billion by the end of the period, down from £7billion a year ago.
Platform assets under management closed the year at £64.1billion, down 2 per cent, ‘as the strong net inflows in the year were offset by adverse market movements of 11 per cent’, the company said.
The group saw customer numbers rise by 57,687 to 425,652 in the year to the end of September.
AJ Bell shares rose today and were up 1.15 per cent or 4.20p to 368p in early morning trading, having fallen over 5 per cent in the last year.
On customer numbers growth, the firm said: ‘This growth has been driven by our platform propositions, with our advised and D2C (direct to consumer) propositions delivering growth of 15 per cent and 16 per cent respectively.
‘In addition, our platform customer retention rate remained high at 95.5 per cent.’
The retail investment platform attributed its growth to its ‘high-quality products’, with the firm launching simplified platform products, including Dodl, this year. Next year, the group is launching Touch for the advised market.
‘This will broaden our offering to financial advisers, helping them serve a wider base of clients’, AJ Bell said.
New chief executive Michael Summersgill said it had been a ‘challenging year’ for markets, but that the firm was well placed for growth in the months ahead.
He added ‘Looking ahead, whilst market volatility is likely to persist in the short-term, our focus is very much on the long-term.
‘The structural growth drivers for the UK investment platform market remain strong, and with around two-thirds of our estimated £3trillion target market still held off platform, we have a significant growth opportunity ahead of us.’
Earlier this month AJ Bell shared were downgraded to ‘hold’ from ‘buy’ by broker Shore Capital ahead of today’s results. Shore Capital analysts said: ‘We love the business, but think valuation is now enough’.
Andy Bell stepped down as AJ Bell’s chief executive in October, having founded the investment platform business around 27 years ago.
Bell was succeeded by Mr Summersgill, who was previously the group’s chief financial officer and became the firm’s deputy chief executive last year. Mr Bell has moved into a consultancy role at the firm.
Neil Shah, executive director of research at Edison Group, said: ‘Looking ahead, the rising cost of living is likely to impact AJ Bell, with lower investable income across the economy.
‘However, the firm’s investments in low-cost solutions should appeal to those looking for value and its investment into further retail investor products should help broaden its customer base.
‘Championing diversity in investments, the platform expects to continue to fare well in different macroeconomic conditions.
‘In addition, the rise in UK base rates is an opportunity for AJ Bell to rebuild its revenue margins that suffered in the low interest rate environment. With heavy investments in technology to improve the customer experience already paying dividends, AJ Bell is entering the new financial year with confidence.’
This post first appeared on Dailymail.co.uk
