23rd May 2025 08:59
(Alliance News) - AJ Bell PLC on Friday reported double-digit profit growth during the first half of its current financial year, and it said it will "accelerate business investment" in the second half, promising that revenue will make up for the extra cost.
Shares in AJ Bell were up 9.5% to 500.50 pence each in London on Friday morning. The stock has risen 24% over the past year.
The Manchester-based retail investment platform provider said pretax profit in the six months that ended March 31 was GBP68.8 million, rising 12% from GBP61.4 million the year before.
This was largely driven by investment income growing 11% to GBP65.5 million from GBP58.9 million a year prior.
Revenue was up 17% to GBP153.2 million from GBP131.3 million, while administrative expenses increased 21% to GBP87.7 million from GBP72.3 million.
AJ Bell said assets under administration at March 31 amounted to GBP96.2 billion, an increase of 4.3% from GBP92.2 billion at the end of September. It reported net inflows of GBP3.2 billion, with its AUA also getting a GBP800 million boost from the market and other movement.
"Our dual-channel platform continued to deliver organic growth, adding over 50,000 customers in the period and net inflows of GBP3.3 billion, resulting in AuA surpassing GBP90 billion for the first time. This performance has been driven by our low-cost, easy-to-use propositions, excellent customer service and improved brand awareness, demonstrating the benefits of our continued investment in these areas," said Chief Executive Officer Michael Summersgill.
Diluted earnings per share rose 11% to 12.36 pence from 11.11p a year prior.
AJ Bell lifted its interim dividend by 5.9% to 4.50p per share from 4.25p.
In addition, it announced a GBP25 million share buyback, to be completed before the end of the financial year on September 30.
CEO Summersgill continued: "Our focus remains on delivering long-term organic growth and continuing to increase our market share. 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. 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."
AJ Bell said it is "confident in the outlook" and as a result, it has decided to boost business investment in the second half of the year.
"This has resulted in higher cost guidance, which is more than offset by increases to full-year revenue margin guidance," the company said.
AJ Bell expects its current "strong" momentum to continue, with both full-year revenue and pretax profit forecast to be higher than previously guided.
Shore Capital has forecast GBP120 million in operating profit for AJ Bell's financial 2025 on GBP297 million in revenue. This would be up 12% from GBP107.3 million and up 10% from GBP269.4 million, respectively, in financial 2024.
By Emily Parsons, Alliance News reporter
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