AJ Bell reports strong first half, raises revenue margin outlook

(Sharecast News) - AJ Bell shares were popping on Friday morning, after it reported a strong set of interim results for the six months ended 31 March and raised its revenue margin guidance. Revenue rose 17% year-on-year to £153.2m and profit before tax increased 12% to £68.8m.

The company saw a record platform AUA of £90.4bn, driven by £3.3bn in net inflows and favourable market movements, while customer numbers grew by 51,000 to 593,000.

AJ Bell declared an interim dividend of 4.5p per share, up 6%, and announced a new £25 million share buyback programme, underlining its strong cash generation and commitment to shareholder returns.

Despite pricing cuts introduced in April last year, revenue margins held steady at 32.4bps, supported by higher recurring and transactional revenues.

Profit margins narrowed slightly to 44.9%, reflecting planned investments in brand and propositions.

Diluted earnings per share rose 11% to 12.36p, while the firm returned £64m to shareholders through a final dividend and the completion of a prior £30m buyback.

The group also saw 10% growth in AJ Bell Investments assets under management to £7.5bn and agreed to divest its Platinum SIPP and SSAS business for up to £25m, simplifying its model.

Looking ahead, AJ Bell said it expected higher costs in the second half due to accelerated investment, but that was offset by stronger revenue margin guidance, with management expressing confidence in the company's long-term growth trajectory.

"Our focus remains on delivering long-term organic growth and continuing to increase our market share," said chief executive officer Michael Summersgill.

"The structural drivers of growth in the platform market remain strong, and the investments we are making in our brand and propositions put us in a great position to capitalise on this significant opportunity.

"Looking ahead, there is the potential for policy developments to present further market growth opportunities."

Summersgill said that in particular, a customer-centred approach to ISA simplification could remove the barriers that currently exist between saving and long-term investing in the ISA system.

"Such a change to ISAs would be supercharged by Targeted Support, which would allow firms to provide personalised guidance, increasing the number of customers who feel confident to invest for the first time.

"We are well positioned to continue to succeed and invest for long-term growth across a range of different market conditions.

"We have started the second half of the year well, with March's strong momentum continuing into April."

At 0843 BST, shares in AJ Bell were up 10.45% at 505p.

Reporting by Josh White for Shaercast.com.