Woodford sold AJ Bell before float announcement

Neil Woodford sold out of AJ Bell just before the broker and platform provider confirmed plans to float on the London Stock Exchange.

AJ Bell profits jump 24% ahead of planned IPO

According to reports, Woodford Investment Management sold its 8% holding in the firm, worth £40m, to majority shareholders Invesco Perpetual and AJ Bell management in February.

Invesco Perpetual, Woodford’s former employer, now owns 44% of AJ Bell while Andy Bell (pictured), founder and chief executive of AJ Bell, owns 28%. The remainder is split between other AJ Bell management (25%) and Seneca Investment Managers (3%).

Woodford’s disposal of AJ Bell shares from his flagship Equity Income fund came when the manager was reaching the Ucits 10% hard limit on owning unquoted securities, which is enforced by the Financial Conduct Authority.

The Equity Income fund can invest a maximum of 10% in unquoted stocks but the percentage hit 9.69% at the end of January, up from 9.47% in December.

A Woodford Investment Management spokesperson said: “Neil has to make decisions about the allocation of capital all the time. It has always been our clearly defined strategy to nurture young technology-intensive businesses through the early stages of their development.”

AJ Bell was first rumoured to be eyeing a float last month but confirmed on Sunday it had hired advisory firm Numis Securities to explore an initial public offering on the London Stock Exchange by the end of the year or early 2019 latest.

The investment platform provider said a floatation would include a retail share offer available exclusively to AJ Bell customers.

The IPO is expected to value the firm at £500m.

AJ Bell said the group’s two largest shareholders, Bell and Invesco Perpetual, will retain cornerstone shareholdings post-IPO.

The group said it does not intend to raise new capital as part of the IPO “given its financial strength, highly profitable business model and debt-free balance sheet”.

Last year the firm reported revenue of £75.6m, up from £64.5m in 2016, and pre-tax profit of £21.7m in 2017 versus £16.8m in 2016. It increased its dividend by 10% to 28.25p over the year and customer numbers hit 172,000 with assets under administration of £42bn.

Bell said an IPO is a “natural next step in our journey” and will boost future growth through raising the company’s public profile.

He said: “We believe the outlook for our business is extremely positive. The need for people to save and invest for their future has never been stronger and we are making it easier for them to do that.

“We now have 172,000 customers and I want them to be able to share in our success by giving them exclusive access to the offer.”

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