AJ Bell to invest in user experience as profits rise

Market cap has nearly tripled to £1.7bn

AJ Bell

AJ Bell has reported a 27% rise in profits for the six months to the end of March in its first set of results since listing last year.

The platform group’s market cap has almost tripled since it listed on the London Stock Exchange last December, ballooning from £675m to its current £1.66bn.

Commenting on the maiden results Andy Bell (pictured), chief executive officer at AJ Bell, said: “This robust financial performance enables us to continue to invest in the platform to achieve our ambition of becoming the easiest platform to use, underpinning our principal purpose of helping people to invest.

“This core focus on meeting the needs of advisers and customers, alongside our competitive pricing and high quality service model, means we are well positioned to capitalise on the growing market for investment platforms in the coming years.”

In an RNS update today, AJ Bell reported £17.7m in profits, compared to £13.9m during the same period last year. Revenue was also up 17% to £50.1m from £42.9m last year.

AJ Bell said customer numbers increased 9% by 16,941 in the period from 214,853, while assets under administration (AUA) were up 3% to £47.7bn from £46.1bn, largely driven by total net inflows reaching £1.8bn.

However, the FTSE 250 platform said it suffered slowing growth in new business and a decline in defined benefit (DB) pension transfers.

AJ Bell said this was in line with industry trends and expectations, though still accounted for £500m of inflows during the period, compared with £1.1bn in the prior year.

Online experience not frictionless yet

Simon Bussy, director at Altus, said AJ Bell used to be accused of being overly-technical and not particularly user-friendly.

“That said, in recent times they have put a great deal of effort into becoming far more accessible to less confident or inexperienced investors,” he continued. “They’ve delivered a much-improved online experience, a good range of wrappers, all at competitive cost, albeit there are still a few little niggles in the customer experience – it’s not quite frictionless yet.

“An interesting development is their broadening routes to market, for example the deal struck with digital wealth manager Scalable Capital, which has an average pension portfolio size of £90k through pension pot consolidation. More deals of this nature will contribute well to the bottom line. Their results demonstrate the strong progress they are making.”

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