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AJ Bell trading platform posts record year of growth

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·Business Reporter, Yahoo Finance UK
·2 min read
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BRAZIL - 2020/01/04: In this photo illustration the stock market data of the FTSE 100 is viewed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
AJ Bell's customer retention rate remained high at 95% after an increase in the number of investors signing up to its platform during the coronavirus pandemic. Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Trading platform AJ Bell (AJB.L) revealed a record year of growth on Thursday, with total customers up by more than 87,000 to 382,754.

The FTSE 250 company said it saw net inflows of £6.4bn ($8.5bn) in the 12 months to the end of September, and assets under administration closing at an all-time high of £72.8bn.

Its customer retention rate also remained high at 95% after an increase in the number of investors signing up to its platform during the coronavirus pandemic.

Revenues during the period rose 15% to £145.8m, while pre-tax profits climbed 13% to £55.1m ahead of City analyst forecasts, which had been expecting profits of £57m and a top line of £146.7m.

AJ Bell also announced it was handing nearly £40m in cash back to its investors. It declared a final dividend of 4.5p per share, increasing the total ordinary dividend for the year by 13% to 6.96p per share.

Andy Bell, chief executive and co-founder of AJ Bell, will receive almost £9m from the dividends announced on Thursday.

Separately it also appointed Peter Birch as its new chief financial officer, starting from July next year, replacing Michael Summersgill, who took the deputy chief executive officer role in October.

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“We continue to see significant long-term opportunities in the investment platform market,” Bell said. “The pandemic has highlighted the need for people to take more control of their financial future, with increasing numbers of people investing for the first time.”

He added: “We believe there is increasing demand for simplified, app-based investment propositions in both the direct-to-consumer and advised markets, so we are investing in two which we will soon bring to market.”

It comes as the online broker is attempting to entice a new generation of traders into the stock market with a commission-free service similar to Robinhood.

AJ Bell also said earlier this week that its new “Dodl” app will allow investors to buy a range of stocks on their smartphones as it seeks to attract more first-time traders.

Dodl will also offer “themed investments”, including funds focusing on areas such as technology, robotics, healthcare and ethical investing.

Its second direct-to-consumer platform is called “Touch”, which is a new mobile-led investment platform for financial advisers. Touch enables them to provide an entirely digital service to clients who want that form of relationship and expand the range of client profiles they can serve.

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