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AJ Bell Profits Rise in First Results

Profit up 27% in the investment platform's first results as a listed company

James Gard 23 May, 2019 | 11:07AM

AJ Bell's Andy Bell

Shares in AJ Bell (AJB) slid today despite the investment platform posting a 27% rise in pre-tax profits in the first half of its financial year and the first results published since it floated in December.

The FTSE 250 firm said the number of retail customers had increased by 9% to 214,853 during the period. The number of Youinvest platform users rose 10% in the six months but the number of customers not using the platform dropped 5%. Assets under administration (AUA) rose 3% in in the period to £47.7 billion, of which £40.6 billion is held on the investment platform.

Shares floated at 160p in an oversubscribed IPO in December and have since more than doubled to 410p. Founder and chief executive Andy Bell said the improvement in the firm's financial position “enables us to continue to invest in the platform to achieve our ambition of becoming the easiest platform to use”.

The company started in 1995 and made its name as a provider of self-invested personal pensions (Sipps). The Manchester-based firm is the top holding in four-star rated Seneca Diversified Growth fund, which invested directly in the firm in 2005. Seneca sold down its holdings when the firm floated last year but AJ Bell remains its biggest listed stock.

Morningstar data shows that AJ Bell makes up 5.81% of Seneca’s Diversified Growth fund and 5.35% of the Seneca Diversified Income fund. In terms of closed-end funds, AJ Bell is 2.73% of Aberdeen Smaller Companies (ASCI), which has a five-star rating from Morningstar.

One of the largest investors in the company is Mark Barnett, manager of the Bronze-rated Invesco Income and High Income funds and the three-star rated Perpetual Income & Growth Investment Trust (PLI). The funds have 5.2%, 2.3% and 2.4% of their assets invested in the business. 

These stakes are a legacy of Neil Woodford, who previously ran the funds and invested in AJ Bell in 2007. Barnett took over the running of the funds after Woodford left Invesco to set up his own firm in 2014. 

In March 2018, Barnett bought the 8% stake in AJ Bell owned by the Woodford Equity Income fund, bringing Invesco's total stake in the business to around 45% - it reduced this to 25% when the firm floated in December. Barnett agreed to a 180-day lock-in period after AJ Bell floated, meaning he would not sell his shares for at least six months. Seneca was also subject to this lock-in period. 

One of AJ Bell’s biggest competitors in the investment platform space, Hargreaves Lansdown (HL.) published a trading update in the middle of this month. It also posted a rise in customers and assets under administration. At the end of April 2019, AUA stood at £97.8 billion, boosted by £2.9 billion of net new business and £9 billion attributable to stock market movements. The FTSE 100 firm boasted 1.18 million clients at the end of the period.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Aberdeen Smaller Companies Inc Ord287.02 GBP0.89
AJ Bell PLC397.00 GBP0.00
Hargreaves Lansdown PLC1,803.00 GBP0.00
Invesco High Income UK Z Acc300.52 GBP-0.66
Invesco Income UK Z Acc300.77 GBP-0.60
LF Woodford Equity Income C Sterling Acc80.76 GBP-0.97
Perpetual Income & Growth Ord316.00 GBP0.32
VT Seneca Diversified Growth B Acc180.04 GBP-0.18

About Author

James Gard  is content editor for Morningstar.co.uk

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