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AJ Bell profits rocket after debut delivers great returns

5 December 2019

AJ Bell, the stock broker and funds supermarket whose 60% share price rise has helped fund manager Mark Barnett through a challenging 2019, records 33% leap in profits.

AJ Bell (AJBA), the stock broker and funds supermarket whose strong share price has helped fund manager Mark Barnett through a challenging 2019, has recorded record profits.

In its first annual results since listing on the London Stock Exchange a year ago, AJ Bell’s profit before tax jumped 33% to £37.7 million for the 12 months to 30 September, up from £28.4 million for the previous 12 months.

This was on revenues 17% higher at £104.9 million from £89.7 million. A full-year dividend of 4.83p per shares was declared, 31% more than last year.

Meanwhile assets under administration broke the £50 billion mark over the year and have now reached £52.3 billion, up from £46.1 billion at the same period in 2018.

Growth in its direct to consumer platform was strong with DIY investor assets rising 28% to £11.1 billion.

Shore Capital analyst Paul McGinnis said the results were 'robust' and slightly ahead of consensus forecasts.

In a flat market, the shares dropped over 4% or 17.5p to 390.5p on what could be profit taking by investors after a 60% advance in the stock  this year.

The shares listed at 160p last December  and their rise has been a rare bright spot in the underperforming portfolios of Invesco's Barnett, who holds the stock in the big Invesco Income and High Income funds and the Perpetual Income & Growth (PLI) investment trust. 

Invesco was AJ  Bell's biggest backer when it was a private company and it reduced its stake to 25% at its flotation. The group has continued to take profits but retains 11.7%, according to Refinitiv data, to place it second behind chief executive and founder Andy Bell. 

Other Invesco fund managers to benefit include James Goldstone of Keystone (KIT) investment trust and Jonathan Brown and Robin West on Invesco Perpetual UK Smaller Companies (IPU).

Outside Invesco, Seneca Investment Managers were also early investors before the intial public offer (IPO) with its Seneca Global Income & Growth (SIGT) trust enjoying the good returns.

Alongside its financial statements published, AJ Bell announced a new charity scheme which will see £10 million donated to various causes if the platform increases its earnings per share by 100% over the next three and 150% over the next five years.

‘If we exceed our ambitious growth plans, our shareholders will benefit and we want to ensure some of that success is shared with the less fortunate in society,’ Bell (above) said. ‘Here we have an example of capitalism and socialism working hand in hand as a combined force for good.  

Investment company news brought to you by Citywire Financial Publishers Limited.


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