23rd Jul 2020 09:55
(Alliance News) - AJ Bell PLC on Thursday said it expects to report strong annual profit, following record levels of dealing activity and with customer growth going through the roof in the past 12 months.
The DIY investment platform said it expects pretax profit for the financial year ending September 30 to be at least GBP2.5 million above the current market consensus, which AJ Bell put at GBP43.4 million.
This is the result of stock market volatility which caused record levels of dealing activity by direct-to-consumer customers in the first half of the financial year. D2C customers increased by 41% over the past 12 months and 12% in the third quarter, which ended June 30.
AJ Bell's customer base increased 26% over the past year and 8% in the quarter. This has been driven by the platform business, according to the company.
The group's platform underlying net inflows, which represent organic growth, increased 30% in the quarter to GBP1.3 billion compared to last year's GBP1.0 billion. D2C underlying net inflows in the quarter were up 60%, or GBP800 million, year on year.
Assets under administration saw a 7% increase over the last 12 months year on year to GBP54.3 billion. AUA increased 12% in the quarter.
Chief Executive Andy Bell said: "Markets have rebounded from the lows seen in the previous quarter but remain volatile and this has helped increase the value of assets under administration and customer trading volumes."
The company said it expects customer dealing activity to normalise in the fourth quarter.
AJ Bell is planning to move into the GBP1.5 trillion retail cash savings market with the launch of its savings hub through the D2C platform. This will make it easier for customers to invest, giving them access to a range of fixed-term savings accounts with UK authorised banks. These accounts will be covered up to GBP85,000 per bank by the financial services compensation scheme.
"The long-term growth drivers of the platform market remain undiminished and we are well positioned within the market to benefit," Bell said.
AJ Bell shares were down 0.6% at 430.50 pence each on Thursday morning in London.
By Greg Roxburgh; [email protected]
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