AJ Bell (AJB) H1 2025 Investor Call earnings summary

Executive summary

• Revenue increased 17% year-over-year to £153.2m, driven by higher D2C dealing activity, increased custody fees, and net interest income, with profit before tax up 12% to £68.8m and a PBT margin of 44.9%.

• Platform customers rose 9% to 593,000, with net inflows up 14% to £3.3bn and platform AUA reaching £90.4bn, up 5% from September 2024.

• Interim dividend increased 6% to 4.50p per share, and a new share buyback programme of up to £25m was announced, following a completed £30m buyback.

• Sale of Platinum SIPP & SSAS business agreed for up to £25m, simplifying operations and focusing on core platform growth.

• PBT margin increase was also supported by higher FX revenues, elevated dealing activity, and a shift towards overseas stocks, though a 4% move back to UK stocks was noted by year-end.

Financial highlights

• Revenue: £153.2m (+17% year-over-year); revenue margin stable at 32.4bps.

• Profit before tax: £68.8m (+12% year-over-year); diluted EPS 12.36p (+11%).

• Net cash from operations: £53m; closing cash balances: £175m.

• Interim dividend: 4.50p per share (+6%); total shareholder returns since year-end: £64m.

• 84% of revenues are recurring, supporting resilience.

Outlook and guidance

• Upgraded FY25 revenue margin guidance due to higher transactional revenue; expected revenue increase to offset higher costs from accelerated investment.

• Distribution and technology costs to grow 20% and 16% respectively, reflecting increased brand and proposition investment.

• PBT margin expected to remain above 42% for FY25, with management targeting around 40% longer term and flexibility to invest above that level if growth opportunities arise.

• Full-year revenue and PBT expected to exceed previous guidance, with strong growth momentum continuing into the second half.

• Anticipates positive impact on Stocks and shares ISA flows as interest rates decline, with further upside potential from ISA reform and targeted support initiatives.