City round-up: AJ Bell; GB Group; Speedy Hire; Rathbones; Manx Financial Group

AJ Bell has enjoyed “another successful year” with assets under administration (AUA) and customer numbers increasing to record highs.

However chief executive Michael Summersgill complained that the Budget has “introduced unhelpful uncertainty” and the investment platform had seen “a noticeable change in both customer contributions to pensions and tax-free cash withdrawals”.

In the year to September, platform AUA was up 22% to £86.5bn while customer numbers increased by 14% to 542,000.

Summersgill added: “Our strategy is centred on our dual-channel platform which serves both the advised and D2C platform markets using a single technology platform and single operating model. This maximises our growth opportunity within the platform market, whilst being highly efficient to operate.”

*****

Dev Dhiman

The new chief executive believes “encouraging progress” has been made in key areas at data specialist GB Group.

Adjusted operating profit grew by 21% to £29m in the six months to September, while revenues were up 4.5% to £137m.

Dev Dhiman, who became chief executive in January, said: “On becoming CEO, I outlined four initial focus areas – removing complexity; being globally aligned; driving a performance culture; and accelerating the pace of innovation to ensure the business capitalises on its potential as well as the significant market opportunity.

“We have made encouraging progress in each of these areas, and this is translating into our performance – with strong pipeline execution, ramp-up with a number of important customers, and some significant customer win-backs reinforcing our market leadership position in identity fraud and location software.”

The first-half performance and positive momentum means the business is confident it will “deliver mid-single-digit revenue growth on a constant currency basis, leading to high single-digit growth in adjusted operating profit”.

*****

Speedy Hire electric truck

Tool hire company Speedy Hire is confident that Government support for major infrastructure projects will help to boost markets that have been affected by “challenging conditions”.

The Newton-le-Willows-based company had a “satisfactory” performance in the six months to September, although group revenue was marginally down on the previous year.

This was mostly caused by a 5% drop in lower-margin services revenue, which was ultimately a result of the fall in wholesale fuel prices.

Its joint venture in Kazakhstan has performed below expectations in the period. This was due to some delays in major project opportunities, although the company expects this “to be a matter of timing”.

Despite these challenges, Speedy Hire told shareholders that its pipeline of new opportunities “continues to grow” and it remains on track to meet expectations.

Investment bank, Panmure Liberum, maintained its Buy call on Speedy shares after today’s announcement.

A note said: “The trading update guides to satisfactory trading against challenging conditions. We expect revenues to fall three per cent, largely due to zero margin fuel.

“We expect that net debt (excl leases) increases from £102m at the FY to £112m at H1, with a small negative FCFe due to the investment. We expect a very high H2 weighting for FD EPS but there are good grounds for a stronger H2.

“We make four key points: 1 We remain upbeat about the outlook; 2 Operational gearing should start to work in Speedy’s favour and medium term 9.2p of FD EPS should be achievable; 3 Green energy initiatives should accelerate growth; and 4 The TIC business is growing fast at high margins.

“We maintain our Buy recommendation and TP of 47p; a CY 25 P/E of 8.1x is attractive given the recovery potential.”

*****

Paul Stockton

Private wealth manager, Rathbones, said the potential for tax changes in the forthcoming Budget is expected to create a heightened opportunity for the firm, which has a major base at the Port of Liverpool Building.

Announcing a trading update for the three months to September 30, 2024, group CEO, Paul Stockton, said: “The integration of Investec Wealth & Investment (IW&I) has progressed at pace throughout the summer, and we remain focused on actions that support the delivery of the financial goals we set ourselves at the outset.

“Over 80% of clients have been asked for their consent to move their accounts to Rathbones Investment Management from IW&I and response rates are very positive.

“Run-rate synergy realisation grew to £25.5m at the end of the third quarter, significantly ahead of the first year post-combination objective of £15m.”

He added: “Net flows in the quarter reflected the resilience of gross inflows despite the impacts of managing a significant client consent process.

“Gross outflows have been impacted by the completion of Saunderson House migration, alongside some of the macroeconomic and specific factors we have seen, and which have impacted the industry this year.

“The potential for taxation changes in the forthcoming autumn budget has created a heightened opportunity for us to engage positively with our clients and Rathbones remains well positioned to support clients to make the decisions needed to achieve their financial goals.”

Investment bank, Panmure Liberum, issued a Hold call on Rathbone shares this morning.

It said: “To a litany of issues for the industry Rathbones has added a few of its own in the quarter, leaving an outcome which is just a bit soggy compared with our estimates.

“The specific issues should not repeat, but challenges remain as Investec is integrated. Cost savings are running ahead of plan but are needed given the pressure on revenues.

“In a sector where the secular opportunity is centred on growth, Rathbones still needs to prove that it can.”

Panmure Liberum’s share target price is 1980p per share, against the publication price of 1842p.

*****

Douglas Grant, Manx Financial

Manx Financial Group, the holding company providing a range of diversified financial services to the Isle of Man and the UK, said its wholly-owned subsidiary, Conister Bank, has started accepting UK retail deposits.

Conister’s web-based deposit system is entirely automated and allows customers to be onboarded within a matter of minutes, it said.

Following the grant of a UK Branch Bank licence late last year, Conister has successfully completed testing its UK deposit-taking governance and infrastructure.

This development is a key component of Conister’s technology drive to build competitive advantage.

Group CEO, Douglas Grant, said: “Strategically, this milestone is significant in that it provides an alternative source of liquidity to support Conister’s UK lending growth.

“Further, as the deposit process is fully automated, it will not only drive operational efficiencies and cost savings, but it will also allow Conister to scale safely.”