viewAJ Bell PLC

AJ Bell profits and dividend up in line with forecasts

“The structural growth drivers for investment platforms in the UK remain strong,” said founder Andy Bell

AJ Bell - stadium sponsorship
AJ Bell sponsors the stadium where Sale Sharks and Salford Red Devils play

AJ Bell PLC (LON:AJB) reported profits and the dividend up by more than 30% in its first year as a listed company and said it expects to “flourish” in an expanding market.

The consumer investment platform grew profit before tax and earnings per share 33% to £37.7mln and 7.47p respectively, both in line with analyst forecasts.

READ: Financial platforms trend up after bullish Berenberg initiation

A proposed final dividend of 3.33p takes the total ordinary dividend for the year to 4.83p, an increase of 31% on last year.

Assets under administration (AUA) swelled 13% to £52.3bn during the year to 30 September, with revenue up 17% to £104.9mln.

Retail customer numbers finished the year at 232,066, with platform customers up 19% but non-platform customers dropping 5% to below 14,000. This represented a customer retention rate of 95.4% compared to 95.1% the year before.

“The structural growth drivers for investment platforms in the UK remain strong and if we continue to meet the needs of customers we are well placed to benefit from these over the coming years,” said founder and chief executive Andy Bell, while noting the shorter-term macro uncertainties.

Having floated on London’s main market in December last year and now listed on the FTSE 250, the group has invested in a new website, expanded its tech development team and in the use of robotic process automation to take over labour-intensive back-office functions.

Amid a growing UK platform market, but where it is up against larger rival Hargreaves Lansdown (LON:HL.), Bell said the group was armed with “an increasingly recognisable brand, two award-winning platform propositions and a robust, efficient operating model on which to deliver our ambitious growth plans”.

Broker Peel Hunt noted the "very strong client retention", profit margins improving, lack of detail in the outlook and the shares "significant premium" in valuation compared to others at 36 times earnings versus Hargreaves and Integrafin (LON:IHP) on around 22 times.

Quick facts: AJ Bell PLC

Price: 411 GBX

Market: LSE
Market Cap: £1.69 billion

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