City round-up: AJ Bell; GB Group; Real Good Food
Manchester investment platform, AJ Bell, reported an increase in total customer numbers for the year in a second quarter trading update today.
It revealed it now has 418,309 customers, a 21% increase on the previous year, with total net inflows in the second quarter, to March 31, 2022, of £1.5bn.
Total assets under administration (AUA) closed at £74.1bn, up 14% over the last year but down two per cent in the quarter due to adverse market and other movements of four per cent. During the quarter the FTSE All-Share Index fell by 0.5% while the MSCI World Index fell by 5.5%.
The customer growth and net inflows delivered in quarter two once again evidence the resilience of the AJ Bell business model across different market conditions, it said. The comparative quarter last year was exceptionally strong as consumers invested excess cash savings built up during COVID lockdowns, whereas this year they have been faced with increased market uncertainty caused by factors including inflationary pressure on the cost of living and the war in Ukraine.
Despite the challenging market backdrop, the AJ Bell platform has continued to attract and retain high quality customers, with more than three quarters of new accounts being tax-advantaged pensions or ISAs and platform customer retention remaining high at 95%.
In the Platform business, customer numbers increased by 20,109 in the quarter to close at 403,383, up 21% in the last year and five per cent in the quarter. AUA closed at £66.9bn, up 15% in the last year and down two per cent in the quarter. There were gross inflow in the quarter of £2.7bn (2021: £2.8bn). Net inflows in the quarter were £1.6bn (2021: £1.8bn)
In AJ Bell Investments, AUM closed at £2.3bn, up 64% over the last year and up 10% in the quarter. Net inflows in the quarter were £223m (2021: £311m).
Chief executive, Andy Bell, said: “Our dual-channel platform, serving the growing advised and D2C platform markets, attracted over 20,000 new customers and significant net inflows during Q2 despite weakened investor sentiment. In the last year we have grown platform customer numbers by 21% and platform AUA by 15%, demonstrating the strength of our business model across different market conditions.
“Although our D2C customers invested slightly less via our platform than in the comparative period as they assess the impact of the rising cost of living, net inflows to our advised platform remained on par with last year, which was a strong comparative. Net platform inflows of £1.6bn is an encouraging result given the uncertain market backdrop.
“Our in-house investment solutions remain popular across our platform propositions and continued to perform strongly, delivering net inflows of £223m during the quarter. Our first five multi-asset funds recently passed their fifth anniversary, an important performance milestone particularly for advisers. Performance of all five funds was in the top 30% when compared against their peer groups, with four being in the top quintile. Since launching these funds in 2017 we have shared the benefits of our increasing scale with customers, reducing the Ongoing Charges Figure from 50bps to 31bps during that time.”
He added: “This week we launched a new investing app called Dodl by AJ Bell which expands our offering to DIY investors. We believe it will be particularly attractive to the 8.6m adults in the UK who hold more than £10,000 of investible assets in cash, especially in the current climate of rising inflation where cash savings are being eroded in real terms due to the low interest rates available.”
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GB Group chief executive Chris Clark
Chester-based identity verification specialist GB Group, said it has had another year of strong trading across each of its reporting segments and has delivered group revenue and adjusted operating profit ahead of market expectations.
In a trading update for the year to March 31, 2022, it said it expects to report revenues of approximately £242m, including around £13m of initial revenue from the recent acquisitions of Acuant and Cloudcheck.
In its Identity division, second-half underlying growth was good across all regions driven by an increasing number of digital transformation projects requiring identity verification capabilities and further demand in the fintech sector. Location’s underlying growth was supported by the ongoing consumer shift to greater online activity and structural tailwinds as brands adopt direct-to-consumer strategies. As anticipated, Fraud experienced strong year-on-year growth with on-premise deployment activity resuming, enabling new contract wins and strong customer retention.
As a result of this strong revenue performance, GBG expects to deliver an adjusted operating profit margin at the upper end of expectations, of around 24%, resulting in adjusted operating profits of not less than £58m, ahead of market expectations.
Taking into account the Acuant and Cloudcheck acquisitions, completed at the end of November 2021 and January 2022, respectively, proforma enlarged group revenue was approximately £275m for the year ended March 31, 2022.
Cash generation has continued to be strong, enabling the group to repay $40m of the $210m of debt financing drawn in November 2021, to finance the acquisition of Acuant. GBG’s net debt at March 31, 2022 was £107m.
The group said it continues to monitor events in Eastern Europe closely, supporting a small number of team members with connections to Ukraine during this difficult time. GBG has no operations or active suppliers in Russia, Belarus or Ukraine and business has been suspended with the small number of customers who are incorporated in Russia. Exposure to Russian customers is limited with combined revenue in fiscal year 2022 of less than 0.5% of group revenue.
Chief executive, Chris Clark, said: “I am very proud of the growth we have delivered in FY22 and our achievements in delivering business-critical digital identity solutions to our customers. All GBG’s team members deserve a huge thank you for their continuing dedication in FY22.
“We carry momentum into our new financial year with real enthusiasm for what we can achieve, despite some significant macro uncertainties, including ongoing pandemic restrictions, geopolitical uncertainties and the backdrop of rising inflation.”
He added: “The acquisition of Acuant accelerates our product and market strategies and we are confident that, together, we have more resources and opportunities than ever before to achieve our significant potential.”
GBG expects to announce its full year results during the week commencing June 13.
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Real Good Food HQ
Real Good Food, the Liverpool-based baking ingredients group, announced today that Maribeth Keeling, its finance director and company secretary, will leave the group on September 30, 2022, to pursue other interests.
She was appointed to her current role in July 2019, having also served as finance director of the group’s cake decorations business. Real Good Food is seeking to appoint an interim finance director to ensure a smooth hand over of responsibilities.
Executive chairman, Mike Holt, said: “Maribeth has been a key part of our efforts to turnaround and improve the performance of the group over the last three years; this has included navigating the challenges of the pandemic, the successful disposal of the bulk of the group’s businesses and restructuring the group’s debt. We thank her for her significant contribution and wish her well in her future endeavours.”
