AJ Bell PLC (LSE:AJB) reported a 27% rise in assets under management (AUM) to £2.8bn for the year to end-September and plans to increase its dividend for the 18th consecutive year.
The UK’s third-largest investment platform said pretax profit rose 6% to £58.4mln as revenue grew 12% to £163.8mln.
However, platform assets under administration (AUA) shrank 2% to £64.1bn as strong net inflows were outweighed by adverse market movements of 11%, it said. Platform net inflows were £5.8bn versus £7.0bn the previous year.
The company plans to pay a final dividend of 4.59p per share, increasing the total payout for the year by 6% (excluding last year’s special dividend) to 7.37p.
"Our continued growth has underpinned another excellent set of financial results in a challenging year for markets,” said chief executive Michael Summersgill.
"Looking ahead, whilst market volatility is likely to persist in the short-term, our focus is very much on the long-term,” he said.
“The structural growth drivers for the UK investment platform market remain strong, and with around two-thirds of our estimated £3 trillion target market still held off platform, we have a significant growth opportunity ahead of us.”
Summersgill added that the company was well positioned heading into 2023.
“Our PBT [profit before tax] margins are expected to increase in FY23 as higher revenue margins and the operational gearing inherent in our business model outweigh the impact of inflationary pressures and our planned investment in our brand and products,” he said.
Regarding market developments, AJ Bell said it expects the rising cost of living to likely lead to lower investable income across the economy in the short term, with the UK household savings ratio falling back towards pre-pandemic levels.
It anticipates that this will have a bigger impact on the direct-to-consumer market, as these customers typically have lower levels of accumulated wealth and investable income than advised customers.