AJ Bell PLC (LSE:AJB) has reported net inflows in its fourth quarter but saw a fall in assets under administration (AuA) for the past year, as declines in markets offset the inflows and growing customer numbers.
The UK’s third largest investment platform reported £1.2bn of net inflows for the fourth quarter, or a 7.2% annualised growth rate from net new money, according to analysts, but that was countered by a £0.6bn market performance impact.
New chief executive Michael Summersgill said AJ Bell's direct-to-consumer (D2C) platform saw £0.3bn of net inflows in the past quarter amid “a slowdown in new contributions from customers impacted by the rising cost of living”.
Group AuA finished the September year-end at £69.2bn, down from £72.8mln 12 months earlier.
The direct-to-consumer platform ended the year with £19.3bn - £19.5bn a year earlier - and the advised platform was at £44.8bn (2021: £45.8bn), with market movements more than wiping out net inflows of £2.5mln and £3.3mln respectively.
Total platform customer numbers rose to 425,652 from just under 368,000 over the year.
The FTSE 250-listed group described the inflows as “resilient against a volatile market backdrop”, noting that while net inflows were lower than the prior year comparatives, they were up 18% from two years ago.
Shares in the company fell 1% to 293.6p in early trading on Thursday.
Analysts at broker Shore Capital said the net flows were better than expected, while still falling in the D2C business on the previous quarter.
The mark-to-market was "half as bad as we expected, as client assets have become lower beta over the year".
"In the other direction, we note expectations of further rate rises. It seems very likely that there is upside, even at current base rates, from the guidance given at the half year, though we would expect a company in growth mode to give back some of the extra return, at least on the advised platform.
"Cash levels in portfolios are likely to be running higher than normal, which would further boost returns. Our numbers have a revenue yield in FY24F flat on FY23F, which is likely to be too low.
"Earnings will be flattish this year, but the net new money remains at a level to drive a c. 15-20% EPS CAGR thereafter," the ShoreCap analysts said.