Salford-based investment giant AJ Bell said on Thursday its revenue rose 12% to £163.8 million and profit before tax was up 6% to £58.4 million in the year to September 30, 2022.
Total ordinary dividend for the year will rise by 6% to 7.37p per share.
Total assets under administration fell 5% to £69.2 billion, with platform assets down 2% to £64.1 billion “as the strong net inflows in the year were offset by adverse market movements of 11%.”
Platform customers increased by 57,687 to 425,652 and platform net inflows were £5.8 billion, down from £7 billion. Customer retention rate increased to 95.5% from 95%.
The AJ Bell Investments division saw assets under management increase 27% to £2.8 billion.
AJ Bell CEO Michael Summersgill said: “2022 has been another successful year for AJ Bell.
“Our trusted, dual-channel platform, serving both the advised and D2C markets, drove organic customer growth of 16% to over 425,000 and delivered £5.8 billion of net inflows across the platform …
“As we grow, the efficiency of our business model enables us to share the benefits of our scale with customers whilst still delivering strong financial returns for shareholders.
“Earlier this year we announced several pricing reductions across our platform which delivered total annualised savings to customers of around £5 million.
“We will look for further opportunities to cut costs for customers in future as we continue to grow the business.
“Our investment in new simplified customer propositions supports our long-term growth ambitions by increasing our footprint in both the advised and direct-to-consumer markets.
“Dodl, our new commission-free investing appcomplements AJ Bell, our full-service D2C proposition which has recently been renamed from AJ Bell Youinvest, enabling us to capture more retail investors earlier in their investing journey.
“Next year we will be launching Touch for the advised market, a simplified platform proposition that complements our full-service AJ Bell Investcentre proposition. This will broaden our offering to financial advisers, helping them serve a wider base of clients.
“The success of AJ Bell would not be possible without our staff, who continue to drive the business forward, delivering award-winning propositions and great service to our customers.
“We continue to invest in our people and have recently enhanced our pay and benefits package for all employees.
“In particular I am delighted to have introduced a new annual free share award worth £2,000 per year for all employees outside of the senior management team, ensuring that everyone shares in the future success of the business.
“This will further strengthen the sense of ownership amongst our people which is already a hugely important part of our culture.
“This strong culture had been built over many years under the leadership of our co-founder, Andy Bell.
“It was a huge privilege to take over as CEO from Andy in October, having worked alongside him on the Board for 11 years.
“We have also implemented our succession plans for other executive roles during the year with a good blend of internal promotions and external recruits and I am confident we have the right team in place to take the business forward.
“Looking ahead, whilst market volatility is likely to persist in the short-term, our focus is very much on the long-term.
“The structural growth drivers for the UK investment platform market remain strong, and with around two-thirds of our estimated £3 trillion target market still held off platform, we have a significant growth opportunity ahead of us.
“To ensure we capitalise on this, we will be investing more in our brand to improve awareness of AJ Bell and support our long-term growth ambitions.
“Our diversified revenue streams and efficient operating model ensure we can continue investing in our propositions, our people and our brand whilst continuing to deliver strong financial performance, and we are well positioned heading into 2023.”
REACTION:
Neil Shah, Executive Director of Research at Edison Group: “AJ Bell has reported a resilient set of results …
“The retail investment platform attributes its growth to its high quality products, with the firm launching simplified platform products including Dodl this year, and Touch next year, to broaden its range of customers.
“Taking advantage of the rising interest rate environment, AJ Bell’s cash saving hub has become more attractive to customers, which provides access to a number of competitive notice and fixed-term savings accounts from UK banks.
“Looking ahead, the rising cost of living is likely to impact AJ Bell, with lower investable income across the economy.
“However, the firm’s investments in low-cost solutions should appeal to those looking for value and its investment into further retail investor products should help broaden its customer base.
“Championing diversity in investments, the platform expects to continue to fare well in different macroeconomic conditions.
“In addition, the rise in UK base rates is an opportunity for AJ Bell to rebuild its revenue margins that suffered in the low interest rate environment.
“With heavy investments in technology to improve the customer experience already paying dividends, AJ Bell is entering the new financial year with confidence.”