In its interim half-year results published today (May 25), AJ Bell has reported a 61 per cent increase in its profit before tax.
The six months to March 2023 saw the firm earn £41.9mn in pre-tax profits, up from £26.1mn in the previous six months.
During the period, its revenue increased by 37 per cent to £103.6mn.
AJ Bell chief executive, Michael Summersgill said the results demonstrate the strength of the AJ Bell business model and how its diversified revenue streams allow it to perform well in a range of different market conditions.
The company’s platform and investment businesses both posted positive results for the period, with the platform business growing its customers by 7 per cent to 455,008.
Assets under administration on its platform was also up by 7 per cent in the first half of the year to March 2023, rising to £68.6bn.
This growth was driven by net inflows of £2bn and “favourable market movements” of £2.5bn.
Its platform customer retention rate for the period was 95.5 per cent, unchanged from the previous half year.
On the investment side of the business, assets under management grew by 39 per cent in the first half of the year to £3.9bn, with record net inflows for the period of £0.9bn.
This was up from £0.4bn in the previous half year.
Summersgill said the growth means that AJ Bell can continue to invest in its "customer offering, our people and our brand, whilst simultaneously increasing our interim dividend to shareholders".
Commenting on wider market issues during the period, Summersill noted that AJ Bell’s pension offering stands to benefit from the removal of the pension lifetime allowance charge and increases to pension annual allowances that were announced in April.
“We have campaigned for pension simplification for many years and believe these welcome changes will give customers the freedom to invest more in their pensions without having to worry about tax penalties as their investments grow over time,” he said.
"We have recently called for similarly bold action from the government in the Isa market in order to further simplify investing for consumers,” Summersgill added.
He noted that the multiple versions of Isas that now exist make it difficult for people to know which one best suits their needs.
“We believe there only needs to be one Isa that condenses the multiple variants back into a single product that is easy to understand and more likely to encourage investment,” he said.
Elsewhere in today’s update, AJ Bell reported that the development of its adviser app ‘Touch’ continues, having completed a beta launch in the first half of this year.
The app, a product of AJ Bell’s acquisition of Adalpha in March 2021, was first meant to be soft-launched in 2021 but was then changed to a “phased launch” starting later in 2022.
Looking ahead, Summersgill said he expects full-year revenue margins to be similar to those achieved in the first half.
However, beyond 2023 he said a slight compression in revenue margins is expected due to recent moderation in customer cash balances and AJ Bell’s intention to “continue sharing some of the benefits of our scale with customers through pricing”.
Summersgill added: “Whilst the macroeconomic environment remains challenging for retail investors in the short term, the UK platform market continues to benefit from the long-term structural drivers of growth.”
jane.matthews@ft.com
