Strong annual performance from AJ Bell

Financial services group AJ Bell has seen pre-tax profits grow by 50% in the final results for the year ended 30 September 2023 released to the stock market this morning.

The Manchester-headquartered business has posted revenues rising by 33% to £218.2 million (FY22: £163.8 million) and profit before tax (PBT) up 50% to £87.7 million (FY22: £58.4 million).

The strong financial performance comes on the back of a growth in customers of 50,880 to 476,532 and the amount of client money it has under management platform rising to £4.2 billion (FY22: £5.8 billion).

The company also boasts record assets under administration (AUA) of £70.9 billion (FY22: £64.1 billion), up 11% driven by the net inflows across the platform and favourable market movements of £2.6 billion.

Michael Summersgill, chief executive said: “As we approach half a million platform customers, we remain focused on providing a great value proposition, with a philosophy of sharing our scale benefits with customers. Having reduced several fees across the platform in 2022, this year we have increased the interest rates paid to customers several times and will soon be increasing them further, with a particular focus on pension drawdown where there is a customer need to hold cash to fund income payments.

“We continue to invest in our customer proposition with a focus on making it easy for people to invest. In the D2C market we have recently added the option to purchase bonds and gilts online in response to increased demand for these investments in the higher interest rate environment. Our free pension finding service has proved popular with customers trying to track down and consolidate lost pension pots and next year we will be expanding this into a low-cost pension consolidation service. This will enable people to find and automatically consolidate their existing pensions into one simple pension with ready-made investment options and a single annual charge of between 0.45% and 0.60%.  

“Maintaining a strong culture and motivated workforce is essential to facilitating our continued business growth. We made several enhancements to our pay and benefits package in the year, including a new free share award scheme for all employees which encourages our staff to think and act like business owners. The success of our business is down to the quality of work and commitment of our people, and I would like to thank them for their outstanding contribution during the year.”

The company has also announced it has changed auditors, with PwC set to take over from BDO.

Analysts at Panmure Gordon recommended investors BUY the shares which they say are undervalued and that AJ Bell should make over £90m next year. Shares opened at 267p this morning and at midday were trading close to 295p. Though for context, this time last year the share price was 361p.

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