AJ Bell (AJB) H2 2024 earnings summary

Executive summary

• Platform customers increased by 66,000 to 542,000, up 14% year-over-year, with net inflows up 45% to £6.1bn and AUA reaching £86.5bn, up 22%.

• Revenue rose 23% to £269.4m, driven by ad valorem and transactional revenues, with profit before tax up 29% to £113.3m and a PBT margin of 42%.

• Continued investment in brand, technology, and pricing to support long-term growth and market share gains.

• Announced a 16% increase in total ordinary dividend and a new £30m share buyback programme, reflecting high cash generation and a strong capital position.

• Both advised and D2C channels contributed to strong net inflows, with new products and features launched for both segments.

Financial highlights

• Ad valorem revenue up 25% to £202m, transactional fees up 34% to £35.3m, and FX revenue strong, especially from US share dealing.

• Revenue margin improved to 31.6bps, with 87% of revenues recurring in nature.

• Net cash from operations was £96m; closing cash balances stood at £197m.

• Total costs increased 23% to £162.2m; underlying costs up 19% to £156m.

• Surplus regulatory capital of £63.2m, with 206% of capital resource requirement held.

Outlook and guidance

• Revenue margins expected to moderate in FY25 due to price changes, with platform revenue margin expected at ~44bps and PBT margin to remain over 40%.

• Cost growth to moderate but will exceed previous guidance due to National Insurance changes and increased investment in product, brand, and senior management.

• No exceptional costs anticipated in FY25; annual cost growth expected to slow further beyond FY25.

• Optimism for continued growth in the platform market, leveraging both advised and D2C channels.