AJ Bell dips despite posting a strong full-year

Online investment platform provider AJ Bell PLC (LON: AJB) saw its share price dip on Thursday, despite posting impressive results for the year ended 30 September 2019.

The Company’s profit before tax jumped 33% year-on-year to £37.7 million. This was led by a revenue bounce of 17%, up to £104.9 million, alongside a 17% rise in retail customers, to 232,066.

AJ Bell continued listing its successes, telling readers that its AUA rose 13% to £52.3 billion, while its balance sheet performed a £12.1 billion hike to £86.1 billion, and its customer retention rate increased by 0.3% to 95.4%.

It finished its summary by telling its shareholders that its total dividend for the year surged 31% to 4.83p per share, and that during the period, the Group had launched its Corporate Social Responsibility initiative, to help “provide the opportunity for charitable causes to share in the future success of AJ Bell”.

Elsewhere in asset and investment management news, Monks Investment Trust PLC (LON: MNKS) underperformed, Investec plc (LON: INVP) sells its asset management division, Personal Assets Trust PLC (LON: PNL) provides a cautious update and JLEN (LON: JLEN) introduces itself to the UK Investor Magazine.

AJ Bell comments

CEO of the Company, Andy Bell, added the following insights to the update:

“These results are a strong endorsement of the business model and growth strategy that we outlined in the run up to our IPO a year ago. Our focus on the needs of our customers and helping them to invest has enabled us to continue to add new customers to the platform and retain existing ones. This has resulted in assets under administration increasing to £52.3 billion and helped us to deliver another strong financial performance with revenue up 17% and profit before tax up 33%. Our balance sheet remains strong and the Board has proposed a final dividend of 3.33p which takes the total ordinary dividend for the year to 4.83p, an increase of 31%.”

“The structural growth drivers for investment platforms in the UK remain strong and if we continue to meet the needs of customers we are well placed to benefit from these over the coming years.”

“Alongside these results, we are announcing an innovative CSR initiative which will see charitable causes share in our success if we exceed our ambitious growth plans, subject to shareholder approval. A new share option plan will result in charitable causes benefiting from circa £10 million if we increase our earnings per share by at least 100% over three years and by at least 150% over five years, subject to certain other conditions. The share options will be granted in favour of the AJ Bell Trust, a charity that predominantly supports disadvantaged young people in the UK and our customers and staff will get the chance to nominate which underlying causes should benefit. This means that the alignment of interests between our community, our customers, our staff and our shareholders is further strengthened.”

Investor notes

Despite the positive update, the Company’s shares are down 4.68% or 19.09p, to 388.91p per share 05/12/19 12:42 GMT. Analysts from Liberum reiterated their ‘Sell’ stance on AJ Bell stock. The Group’s market cap is £1.59 billion, their dividend yield stands at 0.39%.

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Jamie Gordon
Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.