“There certainly is no rule-book guiding leaders and businesses on how they should react to the Covid-19 crisis,” notes AJ Bell (AJB) founder and chief executive Andy Bell in his round-up of half-year results.
While a spike in trading volumes and revenues might have been expected, another strong period for net flows suggests that clients of the investment platform provider have stuck to the rule of ‘buy the dip’ despite the dawn of a period of unprecedented economic uncertainty. One theory of Mr Bell’s – that lockdown has forced thousands of Brits to finally sort out their financial affairs and start investing – looks sensible.
Judging by AJ Bell’s customer numbers, which ticked up 13 per cent in the six-month period, this trend was already in motion prior to lockdown. More than two-thirds of these new clients joined in the first three months of 2020, and helped to push new client commitments up to £2.1bn. With the customer retention rate maintained at 95.4 per cent, investors have further evidence that the current mix of fixed and ad-valorem fees is well judged.
As for revenues from client transactional activity – which rose 45 per cent to £11.5m – Mr Bell concedes things are likely to “level out” in the second half. First-half margins could therefore soften.
Consensus forecasts are for earnings per share of 8.2p for the year to September, falling to 7.3p in FY2021.
| AJ Bell (AJB) | |||||
| ORD PRICE: | 445p | MARKET VALUE: | £1.8bn | ||
| TOUCH: | 448-449p | 12-MONTH HIGH: | 464p | LOW: | 229p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 54 | ||
| NET ASSET VALUE: | 22.9p | NET CASH: | £43.7m* | ||
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 50.1 | 17.7 | 3.52 | 1.5 |
| 2020 | 60.9 | 22.7 | 4.38 | 1.5 |
| % change | +22 | +28 | +24 | - |
| Ex Div: | 4 Jun | |||
| Payment: | 26 Jun | |||
| *Includes lease liabilities of £17m | ||||
