AJ Bell shares gained 4.9% to 267.8p in late morning trading on Thursday following a revenue growth of 2% to £75.5 million against £73.9 million year-on-year in its financial results for HY1 2022.
AJ Bell highlighted a pre-tax profit decline to £26.1 million from £31.6 million, despite swelling customer levels.
Meanwhile, the investment company saw an revenue per assets under administration slide of 3.7 basis points to 20.3 basis points compared to 24 basis points in HY1 2021.
The firm also noted a PBT decline of 17% to £26.1 million from £31.6 million, along with a PBT margin fall of 8.2% to 34.6% compared to 42.8%.
AJ Bell saw a growth in customer retention to 95.4% compared to 95% in 2021, alongside a continued organic growth rate, driven by platform propositions, with platform customers increasing by 35,555 to 418,309.
The company confirmed net inflows of £2.8 billion and assets under administration closing at £74.1 billion.
“The organic growth in customers and AUA helped to deliver an increase in revenue to £75.5 million and we remained highly profitable, with profit before tax of £26.1 million and a PBT margin of 34.6%,” said AJ Bell CEO Andy Bell.
“This is a very good result against a significantly more challenging market backdrop to that experienced in the first half of last year, when retail investor engagement and dealing activity was exceptionally high particularly in the direct-to-consumer market.”
Dodl and Touch
The company mentioned the launch of its Dodl investing app in April 2022, with its Touch app on track for a soft launch later in 2022.
The firm commented that the Dodl’s direct-to-consumer product offered platform for a significantly underserved market, with an estimated 8.6 million adults across the UK with approximately £10,000 investible assets in cash, which is currently being eroded by high rates of 9% inflation.
Meanwhile, Touch is reportedly the firm’s bid to launch a mobile-led platform for the advice market aimed at financial advisors to help them serve a wider base of clients.
FY 2022-2023 Prospects
AJ Bell mentioned that it expected FY 2022-2023 pre-tax profit to hit the minimum rate according to market consensus.
“Whilst market uncertainty is likely to persist in the short-term, our business model ensures we can continue to invest in our customer propositions whilst delivering strong financial performance and we expect profit before tax for the full year to be at least in line with consensus market expectations,” said Bell.
Dividend
The group confirmed a diluted EPS drop of 19% to 5p against 6.2p, and an interim dividend per share hike of 13% to 2.7p compared to 2.4p.