REG - AJ Bell PLC - Interim Results
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RNS Number : 8818J AJ Bell PLC 23 May 2025
23 May 2025
AJ Bell plc
Interim results for the six months ended 31 March 2025
AJ Bell plc ('AJ Bell' or the 'Company'), one of the UK's largest investment
platforms, today announces its interim results for the six-month period ended
31 March 2025.
Highlights
Financial performance
● Strong financial performance, with revenue up 17% to £153.2 million (HY24:
£131.3 million) and profit before tax (PBT) up 12% to £68.8 million (HY24:
£61.4 million)
● Revenue margin of 32.4bps (HY24: 32.3bps) reflects higher recurring ad valorem
and transactional revenues, moderated by the package of pricing reductions
made on 1 April 2024. PBT margin of 44.9% (HY24: 46.8%) reflects planned
investments in brand and propositions to drive long-term growth
● Diluted earnings per share up 11% to 12.36 pence (HY24: 11.11 pence)
Shareholder returns
● Returned a total of £64.0 million to shareholders, consisting of the final
dividend of £34.0 million and the completion of our £30.0 million share
buyback programme in April
· Interim dividend of 4.50 pence per share, up 6% versus prior year (HY24: 4.25
pence), alongside a further share buyback programme of up to £25 million,
reflecting AJ Bell's strong cash generation and ongoing commitment to return
surplus capital to shareholders
Operational performance
Platform business
● Strong growth in customer numbers, with 51,000 added in the period to close at
593,000, up 9%
● Platform AUA up 5% in the period to a record £90.4 billion, driven by net
inflows of £3.3 billion (HY24: £2.9 billion) and favourable market movements
of £0.6 billion (HY24: £6.5 billion)
● Consistently high customer service levels evidenced by AJ Bell's Trustpilot
rating of 4.8-stars and customer retention rate of 94% (FY24: 94%)
AJ Bell Investments
● AUM up 10% in the period to close at £7.5 billion
● Strong net inflows in the period of £0.7 billion (HY24: £0.8 billion)
Non-platform business
● Agreed to sell our Platinum SIPP and SSAS business to InvestAcc for
consideration of up to £25 million. The sale simplifies our business model,
enabling management to focus on the core platform market. On completion of the
sale, the disposal proceeds will flow through our capital allocation framework
Outlook
● Management are confident in the outlook and have decided to accelerate
business investment in the second half of the year to drive long-term growth.
This has resulted in higher cost guidance, which is more than offset by
increases to full-year revenue margin guidance
Michael Summersgill, Chief Executive Officer at AJ Bell, commented:
"I am pleased to report another strong set of first half results. Our
dual-channel platform continued to deliver organic growth, adding over 50,000
customers in the period and net inflows of £3.3 billion, resulting in AUA
surpassing £90 billion for the first time. This performance has been driven
by our low-cost, easy-to-use propositions, excellent customer service and
improved brand awareness, demonstrating the benefits of our continued
investment in these areas.
"The increase in customers and AUA delivered strong financial performance,
with revenue up 17% to £153.2 million and profit before tax up 12% to £68.8
million. Our strong financial position has enabled us to continue investing in
the business, whilst also returning £64.0 million to shareholders through
dividends and share buybacks since the year end. In accordance with our
capital allocation framework, we are pleased to declare an interim dividend of
4.50 pence per share, up 6% versus prior year, alongside the initiation of a
second share buyback programme of up to £25 million, reflecting our ongoing
commitment to return surplus capital to shareholders.
"We have repeatedly broken our own records for new customer applications
during the recent tax year end, seamlessly adding thousands of new customers
attracted to the AJ Bell brand and our simple, low-cost products. In March and
April there was also significant market volatility, resulting in heightened
levels of customer activity. During this period, we continued to provide great
service to our customers and advisers, illustrating the scalability and
resilience of our operations.
"Our focus remains on delivering long-term organic growth and continuing to
increase our market share. The structural drivers of growth in the platform
market remain strong, and the investments we are making in our brand and
propositions put us in a great position to capitalise on this significant
opportunity. Looking ahead, there is the potential for policy developments to
present further market growth opportunities. In particular, a customer-centred
approach to ISA simplification could remove the barriers that currently exist
between saving and long-term investing in the ISA system. Such a change to
ISAs would be supercharged by Targeted Support, which would allow firms to
provide personalised guidance, increasing the number of customers who feel
confident to invest for the first time.
"We are well positioned to continue to succeed and invest for long-term growth
across a range of different market conditions. We have started the second half
of the year well, with March's strong momentum continuing into April."
Financial highlights
Six months ended Six months ended Change
31 March 2025 31 March 2024
Revenue £153.2 million £131.3 million 17%
Revenue per £AUA* 32.4bps 32.3bps 0.1bps
PBT £68.8 million £61.4 million 12%
PBT margin 44.9% 46.8% (1.9ppts)
Diluted earnings per share 12.36 pence 11.11 pence 11%
Interim dividend per share 4.50 pence 4.25 pence 6%
Non-financial highlights
Six months ended Year ended Change
31 March 2025 30 September 2024
Number of retail customers 608,000 557,000 9%
- Platform 593,000 542,000 9%
- Non-platform 15,000 15,000 -
AUA* £96.2 billion £92.2 billion 4%
- Platform £90.4 billion £86.5 billion 5%
- Non-platform £5.8 billion £5.7 billion 2%
AUM* £7.5 billion £6.8 billion 10%
Customer retention rate 93.9% 94.2% (0.3ppts)
*see alternative performance measures
Contacts:
AJ Bell
● Mark Coxhead, Head of Investor Relations +44 (0) 7761 513 512
● Mike Glenister, Head of PR +44 (0) 7719 554 575
Results presentation details
A pre-recorded video with Michael Summersgill (CEO) and Peter Birch (CFO)
discussing these results will be available on our website
(ajbell.co.uk/investor-relations (http://www.ajbell.co.uk/investor-relations)
) along with an accompanying investor presentation from 07.00 BST today.
Management will be hosting a meeting for registered sell-side analysts at
09.30 BST today. Attendance is by invitation only.
Management will also be hosting a group call for investors today at 15.00 BST.
Please contact Kate Street at kstreet@jefferies.com for registration details.
Forward-looking statements
These results contain forward-looking statements that involve substantial
risks and uncertainties, and actual results and developments may differ
materially from those expressed or implied by these statements. These
forward-looking statements are statements regarding AJ Bell's intentions,
beliefs or current expectations concerning, among other things, its results of
operations, financial condition, prospects, growth, strategies, and the
industry in which it operates. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. These forward-looking
statements speak only as of the date of these results and AJ Bell does not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
of these results.
Chief Executive Officer's report
We have delivered strong performance with an increase in both revenue and PBT
during the first half of the year. The structural growth drivers within the UK
platform market remain robust, and our diversified revenue model enables us to
continue investing in our brand and technology to drive long-term growth.
Performance overview
The shift towards digital investment platforms, and the growing need for
individuals to take greater responsibility for their retirement savings,
presents a significant growth opportunity in the UK platform market. We
continue to invest in our platform with a focus on ease of use, trust and
low-cost propositions. With our dual-channel business model, this means we are
well positioned to capture assets from the entire addressable market,
currently estimated to be worth approximately £3 trillion.
We delivered further organic growth in the first half of the year, with record
customer numbers and strong net inflows increasing our share of this
fast-growing market.
Total platform customers increased from 542,000 at 30 September 2024 to
593,000 at 31 March 2025, an increase of 9%. We achieved net AUA platform
inflows of £3.3 billion over the six-month period (HY24: £2.9 billion)
leading to AUA closing at a record £90.4 billion on 31 March 2025, up 5% from
£86.5 billion as at 30 September 2024.
Our D2C platform delivered significant growth, with net inflows up 47% to a
record £2.5 billion (HY24: £1.7 billion), driven by our high-quality
propositions and the success of our multi-year marketing campaign. Our advised
platform recorded net inflows of £0.8 billion (HY24: £1.2 billion), with
increased gross inflows offset by the impact of elevated outflows from adviser
consolidation and from the pension products we provide. These pension outflows
were triggered by speculation over the tax treatment of pensions seen in the
run-up to the October 2024 UK Budget.
AJ Bell Investments sustained its strong growth, with our MPS products growing
in popularity among financial advisers. This resulted in total AUM increasing
10% from £6.8 billion as at 30 September 2024 to £7.5 billion as at 31 March
2025.
Our diversified revenue model has once again delivered strong financial
results. Revenue increased by 17% to £153.2 million (HY24: £131.3 million),
with all three of our main revenue lines (custody fees, interest income and
dealing commission) increasing. PBT increased 12% to £68.8 million (HY24:
£61.4 million), reflecting the investments we have made as we continue to
grow our business.
In March, we announced an agreement to sell our Platinum SIPP and SSAS
business (part of our non-platform business) to InvestAcc Group Limited for a
total consideration of up to £25 million. The sale is expected to complete in
the second half of FY25 and simplifies our business model, enabling us to
focus on growing our dual-channel platform business.
Shareholder returns and capital
Our strong performance in the period has further strengthened our capital
position. In accordance with our capital allocation framework introduced last
year, we are pleased to announce an increase in the interim dividend to 4.50
pence per share (HY24: 4.25 pence per share), alongside the initiation of a
second share buyback programme which will return up to £25 million of capital
to shareholders. This follows completion of the £30 million share buyback
programme announced in December 2024.
Business review
Investing with a focus on ease of use
As part of our focus on ease of use we seek to continuously improve our
propositions across both channels.
The independent advisers who use our platform value its efficiency, as it
allows them to maximise their focus on their clients. The introduction of the
Multi-pot GIA is an example of our continual process to improve efficiency, in
this case by enabling advisers to manage multiple investment strategies within
a centralised dashboard. We have also digitised the online benefits payment
process, making it seamless for advisers to request regular income payments
for their clients. Work also began on enhancements to improve cash management
and drawdown capabilities, bringing greater automation into the investment and
disinvestment processes for advisers.
During the year we have undertaken a comprehensive rebuild of our D2C website
which is currently in pilot phase and will go live in the second half of the
year. The new design offers improved navigation and enhanced content delivery,
all tailored to support a more intuitive and engaging investment journey for
our customers. The site's architecture will also enable us to react quicker to
customer needs and continuously improve application journeys, increasing new
business conversion.
We continually develop our product offering to enable customers and advisers
to leverage the broad range of investments available on our platform in
response to changing market dynamics. To meet evolving adviser needs, we
recently launched our AJ Bell Gilt MPS. This new range of portfolios is
designed to offer highly tax-efficient investments available across three
different maturity preferences. Advisers can now recommend gilts to their
clients with a very low investment management charge of just 0.10% per annum.
First-class service at the heart of our trusted brand
Our easy-to-use digital solutions are central to our service offering. During
the period, we have successfully executed over five million trades,
demonstrating the scalability of our platform, and whilst customers and
advisers executed over 99% of these trades online or via the app, we recognise
there are moments in the investment journey when they require a human
touchpoint. This is where the knowledge, experience and dedication of our
Customer Service Team shines through. In the last six months, our teams have
answered over 200,000 phone calls across both D2C and advised channels. Even
during peak volume periods in the run-up to the tax year end, 96% of all calls
received were answered within 20 seconds - a testament to the team's
commitment to delivering high service standards.
We provide a secure and reliable digital platform which, taken together with
our exceptional customer service, has earned us the title of Which?
Recommended Provider for a seventh consecutive year, the only investment
platform to achieve this. We have also maintained our market-leading
Trustpilot score of 4.8-stars, a clear reflection of the trust customers and
advisers place in our brand.
Brand awareness is a key factor in a customer's choice of investment platform.
We have continued to invest in our multi-channel advertising campaign in the
period, which has led to an all-time high in our prompted brand awareness. In
the run-up to the tax year end, additional investments were made into our
direct marketing activity, which contributed to record inflows on our D2C
platform in March. There remains a significant opportunity from further
investment in our brand and marketing. We are therefore delighted to welcome
our newly appointed Chief Marketing Officer, Stephen Vowles, to our Executive
Committee. Stephen brings extensive marketing expertise to the business, and I
look forward to working with him to maximise our opportunities in this area as
we make further improvements to our marketing capabilities.
Delivering low-cost propositions
Our commitment to being a low-cost provider remains fundamental to our
strategy, and we continue to share the benefits of scale with customers as we
grow. We are one of the most competitively priced platforms in the market, and
last year we introduced a package of price reductions and increased interest
rates paid on customer cash balances, which taken together delivered
annualised savings to customers of over £20 million.
As part of adopting this low-cost philosophy, we have to continually drive
operational gearing across the business. We do this by ensuring our platform
scales effectively, whilst also investing in technology that improves our
operational efficiency. Our hybrid technology model includes solutions that
facilitate straight-through processing, the integration of robotics in
back-office functions and increasingly the use of generative AI across our
operations. One such deployment in the period was the automatic generation of
our customer and adviser call summaries, which not only improves service
efficiency but also facilitates real-time sentiment analysis. These insights
are now helping us prioritise downstream operational processes and identify
marketing opportunities more effectively, allowing for more personalised and
timely customer engagement.
In December 2023, the FCA published its Dear CEO letter relating to the
retention of interest earned on customer cash balances. It clarified that fair
value should be assessed in the context of the overall costs and service
provided to customers. At AJ Bell, we aim to keep direct charges for our
services low whilst offering competitive rates of interest on cash balances.
As part of this approach, we retain some interest income which enables us to
reduce other direct charges. Since the letter was published, along with our
peers, we have submitted a sample of our product-level Fair Value Assessments,
in which we document the framework we have in place and the reasons why we
believe it delivers fair value for customers, to the FCA. Having received
firm-specific feedback we remain confident in our approach.
Market developments
Both the FCA and the Government have placed promoting retail investing
front-and-centre of their respective agendas, with various proposed reforms
having the potential to meaningfully impact on customers in our market. We
continue to engage positively with officials on behalf of investors,
campaigning for a range of measures which would help to foster a supportive
environment for long-term retail investors in the UK.
We have campaigned for ISA reform for over a decade, consistently arguing for
simplification of the landscape. Combining cash ISAs and stocks & shares
ISAs into a single main product would significantly simplify the journey for
people looking to hold cash and invest, removing a current barrier which
requires people to choose one or the other at the outset. This agenda appears
to be aligned with the intentions of the Government, which, in the Spring
Statement confirmed it is looking to "boost the culture of retail investment".
However, there are many conflicting views and vested interests in the
industry, so how the pending consultation will progress is uncertain. We will
continue to push for a customer-focused version of simplification, avoiding
the implementation of additional rules and restrictions.
The version of ISA simplification outlined above would combine powerfully with
proposed 'Targeted Support' reforms being pursued by the Treasury and the FCA.
Offering a single ISA wrapper in tandem with a service that enables financial
service firms to offer customers more personalised nudges (without risking
straying into regulated advice) would only increase the number of customers
who feel confident to make the transition from cash saving to investing. We
have actively engaged in this project, participating in the FCA's
'PolicySprint' exercise, developing and testing a compelling 'cash to
investing' customer journey over a six-week period. The learnings from this
process will prove invaluable as Targeted Support hopefully moves from theory
to reality. This would enable our platform to reach more investors who do not
currently have access to independent financial advisers, ensuring we are able
to target more of the total addressable market for platforms.
Less positively, the Government's proposal to bring unused pensions into
inheritance tax (IHT) from April 2027 risks causing significant delays when
paying funds to nominated beneficiaries and adding huge complexity to the
already cumbersome probate process. We, along with a number of our industry
peers, continue to push back on this issue, arguing for a simpler approach in
which income tax is charged at the marginal rate of the beneficiary inheriting
a pension. We will continue to press the Government to rethink its approach
and consider our pragmatic alternative.
The tax treatment of pensions risks becoming an area of significant
uncertainty for retail investors. The speculation about the future of tax-free
cash was a significant issue surrounding the Budget in October 2024 and the
current state of the public finances risk a re-run in the Autumn. We have
raised this issue repeatedly with the Chancellor, calling for a 'Pensions Tax
Lock' commitment to give retirement savers certainty that neither the tax
deferral allowed on pension contributions nor the tax-free allowance on funds
drawn for retirement income will be altered, at least for the rest of this
Parliament. We will continue to press this important issue.
Outlook
In the first half of the year we have delivered strong financial results. We
expect this momentum to continue with full-year revenue and PBT anticipated to
be higher than that previously guided at the start of the financial year.
The strong growth momentum seen at the end of the period has continued into
the second half of the year, despite significant market volatility as bond and
equity markets reacted to global trade tariffs. Our customers are generally
long-term investors and hold a range of assets on our platform and we have
seen increased trading activity as customers use the flexibility of our
platform to respond to changing market dynamics. Our D2C customers were
particularly active, with money added to pensions and ISAs around the tax year
end quickly being deployed into the market. Three-quarters of the trades made
on our D2C platform in April were buys and over £300 million was invested
into the market in only 10 trading days at the start of the month, with the
majority of these investments in equities and bonds.
Although market volatility may well persist in the short term, we have a
proven track record of delivering continued growth through periods of
challenging macroeconomic environments. We remain confident in the significant
structural growth opportunity in the UK platform market and, as such, we will
continue to invest in our propositions and our brand. Taken together with our
market-leading customer service levels, this means we are well placed to
deliver further organic growth and capture an increasing share of the growing
UK platform market.
Michael Summersgill
Chief Executive Officer
Financial review
Our scalable, dual-channel platform delivered another strong financial
performance in the first half of the year, driven by the strength of our
diversified revenue model. Revenue increased by 17% to £153.2 million,
enabling further investments in strategic initiatives to achieve our long-term
growth ambitions, whilst also delivering a 12% increase in PBT to £68.8
million.
Business performance
Customers
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
'000 '000 '000
Advised platform 177 165 171
D2C platform 416 338 371
Total platform 593 503 542
Non-platform 15 15 15
Total 608 518 557
Customer numbers increased by 51,000 during the period to a total of 608,000
(FY24: 557,000). This growth was driven by our platform propositions, with
advised and D2C customers increasing by 4% and 12% respectively. In addition,
our customer retention rate reduced slightly to 93.9% (FY24: 94.2%),
reflecting adviser consolidation and low-value customer account exits.
Assets under administration
Six months ended 31 March 2025 D2C platform Total platform Non-platform Total
Advised platform
£bn £bn £bn £bn £bn
As at 1 October 2024 56.1 30.4 86.5 5.7 92.2
Inflows 3.5 4.1 7.6 0.1 7.7
Outflows (2.7) (1.6) (4.3) (0.2) (4.5)
Net inflows / (outflows) 0.8 2.5 3.3 (0.1) 3.2
Market and other movements 0.2 0.4 0.6 0.2 0.8
As at 31 March 2025 57.1 33.3 90.4 5.8 96.2
Six months ended 31 March 2024 D2C platform Total platform Non-platform Total
Advised platform
£bn £bn £bn £bn £bn
As at 1 October 2023 48.2 22.7 70.9 5.2 76.1
Inflows 3.2 2.9 6.1 0.1 6.2
Outflows (2.0) (1.2) (3.2) (0.1) (3.3)
Net inflows 1.2 1.7 2.9 - 2.9
Market and other movements 4.0 2.5 6.5 0.3 6.8
As at 31 March 2024 53.4 26.9 80.3 5.5 85.8
We achieved strong gross AUA inflows in the period across both our advised and
D2C propositions, with advised gross inflows increasing by 9% to £3.5 billion
(HY24: £3.2 billion) and D2C gross inflows up significantly by 41% to £4.1
billion (HY24: £2.9 billion). This growth reflects our increased brand
awareness and highly-competitive pricing model.
Outflows in the first half of the year increased to £4.3 billion (HY24: £3.2
billion), with our advised platform impacted by elevated levels of pre-Budget
pension withdrawals following widespread speculation around the tax treatment
of pensions. This led to a temporary change in retail investor behaviour,
which normalised quickly once details of the Budget were announced. Advised
outflows were also impacted by recent adviser consolidation, though to a
lesser extent.
Favourable market movements reduced to £0.6 billion in the period (HY24:
£6.5 billion) as speculation over the US 'Liberation Day' tariff
announcements introduced uncertainty across global equity markets towards the
end of March. Taken together, we achieved closing platform AUA of £90.4
billion as at 31 March 2025, up 5% from £86.5 billion as at 30 September
2024.
Non-platform AUA remained consistent with the prior period and in line with
our expectation, closing at £5.8 billion (FY24: £5.7 billion). In March
2025, we announced an agreement to sell our Platinum SIPP and SSAS business to
InvestAcc Group Limited, with the sale expected to transfer approximately
£3.2 billion of non-platform AUA in the second half of the year. As part of
our strategy to simplify the business model and focus on the core platform
market, we are currently in the process of exiting a third-party arrangement
where we provide white label SIPP administration, and as such, expect a
further reduction in non-platform customers.
Assets under management
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£bn £bn £bn
Advised 3.8 3.2 3.5
D2C 2.0 1.5 1.9
Non-platform 1 (#_ftn1) 1.7 1.1 1.4
Total 7.5 5.8 6.8
We continue to see high levels of demand across D2C, advised and third-party
adviser platforms for our simple, low-cost investment solutions, driven by a
growing preference from financial advisers for our MPS products. Net inflows
of £0.7 billion were recorded in the period (HY24: £0.8 billion), resulting
in total AUM of £7.5 billion as at 31 March 2025, a 10% increase from year
end (FY24: £6.8 billion). The consistently strong growth of our investments
business illustrates the success of our philosophy to share the benefits of
scale with our customers and advisers through cost-effective funds and MPS.
Financial performance
Revenue
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£000 £000 £000
Recurring fixed 16,372 16,039 32,078
Recurring ad valorem 111,678 97,855 202,040
Transactional 25,187 17,360 35,317
Total 153,237 131,254 269,435
Our diversified revenue model continues to deliver strong results, with
revenue increasing by 17% to £153.2 million (HY24: £131.3 million). This
growth was primarily driven by robust ad valorem revenues and elevated
transactional dealing volumes.
Revenue from recurring fixed fees increased by 3% to £16.4 million (HY24:
£16.0 million) due to higher pension administration revenue from our advised
platform, driven by the increase in customer numbers.
Recurring ad valorem revenue grew by 14% to £111.7 million (HY24: £97.9
million), due to higher average platform AUA balances which led to increased
custody fees. In addition, net interest income rose in the period as a result
of higher levels of customer cash balances held on the platform.
Revenue from transactional fees increased by 45% to £25.2 million (HY24:
£17.4 million) due to increased foreign exchange (FX) revenue as a result of
elevated customer dealing activity, particularly from US investments in the
lead up to, and following, the US election.
Our overall revenue margin for the half year remained stable at 32.4 bps
(HY24: 32.3 bps). This reflects the upside impact of increasing FX trading
volumes, as well as higher customer cash balances on the platform, moderated
by the full-year impact of pricing reductions effective from 1 April 2024 as
we continue to share the benefits of scale with our customers. We expect our
full-year revenue margin to be higher than that previously guided at the start
of the financial year.
Administrative expenses
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 2025 31 March 2024 30 September 2024
£000 £000 £000
Distribution 17,460 14,518 29,592
Technology 27,106 22,526 49,873
Operational and support - underlying 43,165 35,281 76,453
Operational and support - exceptional - - 6,239
Total 87,731 72,325 162,157
Administrative expenses increased by 21% to £87.7 million (HY24: £72.3
million), as we delivered planned investment in our brand, technology and
people. Total staff costs represent a significant portion of our total
administrative expenses and increased by £8.7 million across the business as
we made further enhancements to our pay and benefits package, reflecting our
commitment to reward our people fairly. We continue to have a disciplined
focus on cost control and efficiency in order to maximise the resources
available for investment in our strategic priorities.
Distribution costs increased by 21% to £17.5 million (HY24: £14.5
million). We continue to invest in the delivery of our multi-channel
advertising campaign, which has resulted in brand awareness reaching an
all-time high in the period. In the run-up to the tax year end we invested in
additional advertising and direct marketing opportunities, which drove record
gross inflows to the D2C platform in March as customers took advantage of
their annual pension and ISA allowances.
Technology costs increased by 20% to £27.1 million (HY24: £22.5 million).
This was driven by our continued investment and expanded resource in our
change teams. These teams are focused on delivering continuous improvement to
our propositions, as well as automating manual processes in order to drive
long-term operational efficiencies. We are efficiently scaling our change
delivery processes, with the deployment of changes exceeding the growth in our
technology headcount.
Operational and support costs increased by 22% to £43.2 million (HY24: £35.3
million), primarily driven by higher transactional costs due to elevated
customer dealing activity, in addition to increased performance-related
variable pay. Taken together this accounts for 10% of the cost growth. The
additional transactional costs were more than offset by the increase in
transactional revenue.
Exceptional operational and support costs in the prior year relates to a
provision recognised in respect of potential customer redress resulting from
historical SIPP operator due-diligence issues.
Total administrative expenses are expected to be higher than the guidance
provided in December as we have taken the decision to invest more in our brand
and marketing, as well as accelerate planned proposition development in the
second half of the year. The anticipated increase in costs will be more than
offset by the forecasted increase in revenue.
Profit and earnings
Investment income increased to £3.8 million (HY24: £2.9 million) as we
benefitted from the interest earned on higher average corporate cash balances
compared to the prior half year.
PBT increased 12% to £68.8 million (HY24: £61.4 million), with a PBT margin
of 44.9% (HY24: 46.8%). This margin reflects our additional investment in the
growth of our business, including the continuous improvement to our advised
propositions and multi-year marketing campaign. Full-year PBT margin is
anticipated to be higher than we previously guided in December, reflecting the
higher-than-expected revenue margin.
Our effective rate of tax for the period was 25.7% (HY24: 25.2%), which is
broadly in line with the standard rate of UK corporation tax of 25.0%.
Basic earnings per share increased to 12.41 pence (HY24: 11.16 pence), up by
11%. Diluted earnings per share (DEPS), which accounts for the dilutive impact
of outstanding share awards, increased by 11% to 12.36 pence (HY24: 11.11
pence).
Financial position
Capital and liquidity
The Group's financial position remains strong, with net assets totalling
£199.0 million at 31 March 2025 (FY24: £204.0 million) and a return on
assets of 26% (HY24: 25%). We have continued to maintain a healthy surplus
over our regulatory capital requirement throughout the period.
We operate a highly cash-generative business, with a short working-capital
cycle that ensures profits are quickly converted into cash. We generated cash
from operations of £52.7 million during the six-month period and held cash
balances of £174.5 million as at 31 March 2025 (FY24: £196.7 million). The
reduction in cash balances from 30 September 2024 is primarily due to our
share buyback programme which completed in April 2025.
The sale of our Platinum SIPP and SSAS business to InvestAcc Group Limited is
expected to complete in the second half of the year, at which point a profit
on disposal of up to £25 million less associated transaction costs will be
recognised. The disposal proceeds will further strengthen our capital
position, which will be applied in accordance with the Group's capital
allocation framework.
Shareholder capital returns
The Board has declared an interim dividend of 4.50 pence per share, a 6%
increase from prior year (HY24: 4.25 pence per share), in line with our
capital allocation framework.
We remain committed to delivering enhanced shareholder returns. During the
first half of the year we completed our first share buyback programme,
returning £30 million to shareholders. Following continued strong financial
results in the period, and given the surplus capital held in excess of
regulatory requirements, we are pleased to announce the Board has approved a
second share buyback programme of up to £25 million, to be completed before
the end of the financial year to 30 September 2025.
Peter Birch
Chief Financial Officer
Responsibility statement
Directors' responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK; and
(b) the Interim management report includes a fair review of the
information required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties facing
the Group for the remaining six months of the financial year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related-party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related-party transactions described in the last annual report that could
do so.
By order of the Board:
Kina Sinclair
Company Secretary
22 May 2025
Independent review report to AJ Bell plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed AJ Bell plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Interim results of AJ
Bell plc for the 6 month period ended 31 March 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the condensed consolidated statement of financial position as at 31
March 2025;
· the condensed consolidated income statement for the period then
ended;
· the condensed consolidated statement of cash flows for the period
then ended;
· the condensed consolidated statement of changes in equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim results of AJ Bell
plc have been prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Interim results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Interim results, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Manchester
22 May 2025
Condensed consolidated income statement
For the six months ended 31 March 2025
Notes Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 £000 Audited Year ended 30 September 2024
£000
£000
Revenue 6 153,237 131,254 269,435
Administrative expenses (87,731) (72,325) (162,157)
Operating profit 7 65,506 58,929 107,278
Investment income 3,804 2,903 6,909
Finance costs (477) (436) (904)
Profit before tax 68,833 61,396 113,283
Tax expense 8 (17,672) (15,446) (28,988)
Profit for the period attributable to:
Equity holders of the parent company 51,161 45,950 84,295
Earnings per ordinary share:
Basic (pence) 9 12.41 11.16 20.46
Diluted (pence) 9 12.36 11.11 20.34
There were no other components of recognised income or expense in any of the
periods presented and consequently no statement of other comprehensive income
has been presented.
Condensed consolidated statement of financial position
As at 31 March 2025
Assets Notes Unaudited 31 March 2025 £000 Unaudited 31 March 2024 £000 Audited 30 September 2024
£000
Non-current assets
Goodwill 6,991 6,991 6,991
Other intangible assets 10 8,109 7,020 7,540
Property, plant and equipment 11 3,560 3,327 3,777
Right-of-use assets 11 10,766 9,992 11,762
Deferred tax asset 1,390 408 1,546
30,816 27,738 31,616
Current assets
Trade and other receivables 69,087 63,351 59,545
Current tax receivable 1,480 - 1,069
Cash and cash equivalents 174,500 161,844 196,651
245,067 225,195 257,265
Assets held for sale 18 1,891 - -
Total current assets 246,958 225,195 257,265
Total assets 277,774 252,933 288,881
Liabilities
Current liabilities
Trade and other payables (57,004) (54,831) (61,921)
Current tax liability - (2,631) -
Lease liabilities (1,799) (1,425) (1,453)
Provisions 12 (6,886) (1,109) (7,421)
(65,689) (59,996) (70,795)
Non-current liabilities
Lease liabilities (10,754) (10,197) (11,724)
Provisions 12 (2,372) (2,165) (2,372)
(13,126) (12,362) (14,096)
Total liabilities (78,815) (72,358) (84,891)
Net assets 198,959 180,575 203,990
Equity
Share capital 13 51 52 52
Share premium 9,078 8,963 8,963
Own shares (1,047) (2,072) (2,049)
Retained earnings 190,877 173,632 197,024
Total equity 198,959 180,575 203,990
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2025
Share capital Share premium Retained earnings Own shares Total equity
£000
£000 £000 £000 £000
Balance at 1 October 2024 52 8,963 197,024 (2,049) 203,990
Total comprehensive income for the period:
Profit for the period - - 51,161 - 51,161
Transactions with owners, recorded directly in equity:
Issue of shares (note 13) - 115 - - 115
Dividends paid (note 14) - - (34,019) - (34,019)
Equity-settled share-based payment transactions - - 2,220 - 2,220
Deferred tax effect of share-based payment transactions (note 8) - - (186) - (186)
Tax relief on exercise of share options (note 8) - - 146 - 146
Share transfer relating to share options exercised (note 13) - - (1,002) 1,002 -
Purchase of own shares (note 13) (1) - (24,467) - (24,468)
Total transactions with owners (1) 115 (57,308) 1,002 (56,192)
Balance at 31 March 2025 51 9,078 190,877 (1,047) 198,959
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2025
Share premium Retained earnings Own shares Total equity
£000
Share capital £000 £000 £000
£000
Balance at 1 October 2023 52 8,963 159,399 (2,377) 166,037
Total comprehensive income for the period:
Profit for the period - - 45,950 - 45,950
Transactions with owners, recorded directly in equity:
Issue of shares - - - - -
Dividends paid - - (29,891) - (29,891)
Equity-settled share-based payment transactions - - (1,530) - (1,530)
Deferred tax effect of share-based payment transactions - - 9 - 9
Tax relief on exercise of share options - - - - -
Share transfer relating to share options exercised - - (305) 305 -
Purchase of own shares - - - - -
Total transactions with owners - - (31,717) 305 (31,412)
Balance at 31 March 2024 52 8,963 173,632 (2,072) 180,575
Condensed consolidated statement of cash flows
For the six months ended 31 March 2025
Cash flows from operating activities Notes Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Profit for the period 51,161 45,950 84,295
Adjustments for:
Investment income (3,804) (2,903) (6,909)
Finance costs 477 436 904
Income tax expense 8 17,672 15,446 28,988
Depreciation and amortisation 1,847 1,690 3,432
Share-based payment expense/(credit) 15 2,174 (595) 1,502
(Decrease)/increase in provisions 12 (535) (17) 6,061
Loss on disposal of intangible assets; property, plant and equipment, and 11 15 318 340
right-of-use assets
Increase in trade and other receivables (11,433) (4,850) (1,044)
(Decrease)/increase in trade and other payables (4,917) 2,394 9,484
Cash generated from operations 52,657 57,869 127,053
Income tax paid (17,985) (12,883) (30,763)
Net cash flows from operating activities 34,672 44,986 96,290
Cash flows from investing activities
Purchase of other intangible assets 10 (727) (769) (1,473)
Purchase of property, plant and equipment 11 (428) (431) (1,476)
Interest received 3,804 2,903 6,909
Net cash from investing activities 2,649 1,703 3,960
Cash flows from financing activities
Payments of principal in relation to lease liabilities (624) (822) (1,583)
Payments of interest on lease liabilities (477) (436) (904)
Proceeds from issue of share capital 13 115 - -
Purchase of own shares 13 (24,467) - -
Dividends paid 14 (34,019) (29,891) (47,416)
Net cash used in financing activities (59,472) (31,149) (49,903)
Net (decrease)/increase in cash and cash equivalents (22,151) 15,540 50,347
Cash and cash equivalents at beginning of period 196,651 146,304 146,304
Cash and cash equivalents at end of period 174,500 161,844 196,651
Notes to the condensed consolidated interim financial statements
For the six months ended 31 March 2025
1 General information
AJ Bell plc ('the Company') is the Parent Company of the AJ Bell group of
companies (together 'the Group'). The Group provides investment
administration, dealing and custody services. The Company is a public limited
company which is listed on the Main Market of the London Stock Exchange and
incorporated and domiciled in the United Kingdom. The Company's number is
04503206 and the registered office is 4 Exchange Quay, Salford Quays,
Manchester, M5 3EE.
2 Basis of preparation
The condensed consolidated interim financial statements ('interim financial
statements') have been prepared in accordance with IAS 34 'Interim Financial
Reporting' as issued by the IASB and adopted for use in the UK. They do not
include all of the information and disclosures required for full annual
financial statements and therefore should be read in conjunction with the AJ
Bell plc Annual Report and Financial Statements for the year ended 30
September 2024, which were prepared under UK-adopted International Financial
Reporting Standards.
The interim financial statements have been prepared on the historical cost
basis and are presented in sterling, which is the currency of the primary
economic environment in which the Group operates. All amounts have been
rounded to the nearest thousand, unless otherwise stated.
The financial information contained in the interim financial statements does
not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial information for the year ended 30 September
2024 has been derived from the audited financial statements of AJ Bell plc for
that year, which have been reported on by the Company's auditor at the time
(BDO LLP) and delivered to the registrar of companies. The report of the
auditor was:
(i) unqualified; and
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report; and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The consolidated financial statements of the Group for the year ended 30
September 2024 are available to view online at
ajbell.co.uk/group/investor-relations.
(https://www.ajbell.co.uk/group/investor-relations)
Going concern
The Group's forecasts and objectives, considering a number of potential
changes in trading conditions, show that the Group should be able to operate
at adequate levels of both liquidity and capital for at least 12 months from
the date of signing this report. The Directors have performed a number of
stress tests, covering a significant reduction in equity market values and a
reduction in interest income with a further Group-specific, idiosyncratic
stress relating to a scenario whereby prolonged IT issues cause a reduction in
customers. These provide assurance that the Group has sufficient capital and
liquidity to operate under stressed conditions.
Consequently, after making reasonable enquiries, the Directors are satisfied
that the Group has sufficient financial resources to continue in business for
at least 12 months from the date of signing the interim report and therefore
have continued to adopt the going concern basis in preparing the interim
financial statements.
Changes in accounting policies
The accounting policies adopted by the Group in these interim financial
statements are consistent with those applied by the Group in its consolidated
financial statements for the year ended 30 September 2024, except for:
· the inclusion of the Assets held for sale policy .
The following amendments and interpretations became effective during the
period. Their adoption has not had any significant impact on the Group.
Effective from
IAS 1 Non-current Liabilities with Covenants (Amendments) 1 January 2024
IAS 1 Classification of Liabilities as Current or Non-current (Amendments) 1 January 2024
IAS 7 / IFRS 7 Supplier Finance Arrangements (Amendments) 1 January 2024
IFRS 16 Lease Liability in a Sale and Leaseback 1 January 2024
The Group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
The Assets held for sale accounting policy has been introduced during the
period, further details can be found in note 18.
Assets held for sale
The Company classifies assets as held for sale if their carrying amounts will
be recovered principally through a sale transaction rather than through
continuing use. Assets classified as held for sale are measured at the lower
of their carrying amount and fair value.
The criteria for the held for sale classification is regarded as met only when
the sale is highly probable, and the asset is available for immediate sale in
its present condition. Actions required to complete the sale should indicate
that it is unlikely that significant changes to the sale will be made or that
the decision to sell will be withdrawn. Management must be committed to the
plan to sell the asset and the sale expected to be completed within one year
from the date of classification.
Assets classified as held for sale are presented separately as current assets
in the statement of financial position.
3 Critical accounting judgements and key sources of estimation uncertainty
In the preparation of the interim financial statements, the Directors are
required to make judgements, estimates and assumptions to determine the
carrying amounts of certain assets and liabilities. The estimates and
associated assumptions are based on the Group's historical experience and
other relevant factors. Actual results may differ from the estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
There are no judgements made, in applying the accounting policies, about the
future, or any other major sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within the
financial year.
4 Seasonality of operations
There is a peak in the Group's operational activity around the tax year end.
This impacts the financial results primarily in March and April, either side
of the interim period end. As such, no significant seasonal fluctuations
affect the first or second half of the Group's financial year in isolation.
5 Segmental reporting
It is the view of the Directors that the Group has a single operating segment
being investment services in the advised and D2C space administering
investments in SIPPs, ISAs and General Investment / Dealing Accounts. Details
of the Group's revenue, results and assets and liabilities for the reportable
segment are shown within the condensed consolidated income statement and
condensed consolidated statement of financial position.
The Group operates in one geographical segment, being the UK.
Due to the nature of its activities, the Group is not reliant on any one
customer or group of customers for the generation of revenues.
6 Revenue
The analysis of the consolidated revenue is disclosed within the Financial
Review. The total revenue for the Group has been derived from its principal
activities undertaken in the UK.
7 Operating profit
Profit per the condensed consolidated income statement has been arrived at
after charging:
Unaudited Six months ended 31 March 2025 Audited Year ended 30 September 2024
£000
£000
Unaudited Six months ended 31 March 2024
£000
Amortisation of intangible assets (note 10) 211 245 430
Depreciation of property, plant and equipment 627 599 1,170
Depreciation of right-of-use assets 1,009 846 1,832
Loss on the disposal of property, plant and equipment (note 11) 15 318 340
Auditor's remuneration 531 584 1,101
Provision for redress (note 12) (265) - 6,239
Staff costs 46,584 37,879 80,340
8 Taxation
Tax charged in the condensed consolidated income statement:
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Current taxation
UK corporation tax 17,708 15,360 29,564
Adjustment to current tax in respect of prior periods (6) - (12)
17,702 15,360 29,552
Deferred taxation
Origination and reversal of temporary (38) 86 (537)
differences
Adjustment to deferred tax in respect of prior periods 8 - (27)
(30) 86 (564)
Total tax expense 17,672 15,446 28,988
Corporation tax for the six months ended 31 March 2025 has been calculated at
25% (six months ended 31 March 2024: 25%; year ended 30 September 2024: 25%),
representing the average annual effective tax rate expected for the full year,
applied to the estimated assessable profit for the six-month period.
In addition to the amount charged to the income statement, certain tax amounts
have been recognised directly in equity as follows:
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Deferred tax charge/(credit) relating to share-based payments 186 (9) (498)
Current tax relief on exercise of share options (146) - (9)
40 (9) (507)
The charge for the period can be reconciled to the profit per the condensed
consolidated income statement as follows:
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Profit before tax 68,833 61,396 113,283
UK corporation tax at 25% (six months ended 31 March 2024: 25%; year ended 30 17,208 15,349 28,321
September 2024: 25%)
-
Effects of:
Expenses not deductible for tax purposes 122 (268) 363
Income not taxable in determining taxable profit - - (461)
Amounts not recognised 340 365 804
Adjustments to current and deferred tax in respect of prior periods 2 - (39)
Total tax expense 17,672 15,446 28,988
Effective tax rate 25.7% 25.2% 25.6%
Deferred tax has been recognised at 25% being the rate expected to be in force
at the time of the reversal of the temporary difference (six months ended 31
March 2024: 25%; year ended 30 September 2024: 25%). A deferred tax asset in
respect of future share option deductions has been recognised based on the
Company's share price at 31 March 2025.
9 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
the owners of the parent company by the weighted average number of ordinary
shares, excluding own shares, in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of shares to assume exercise of all potentially dilutive share options.
The calculation of basic and diluted earnings per share is based on the
following data:
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Earnings
Earnings for the purposes of basic and diluted EPS being profit attributable 51,161 45,950 84,295
to equity holders of the parent company
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
Number
Number
Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic EPS in 412,168,984 411,731,332 412,040,137
issue during the period
Effect of potentially dilutive share options 1,824,537 1,911,955 2,313,011
Weighted average number of ordinary shares for the purposes of fully diluted 413,993,521 413,643,287 414,353,148
EPS
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 March 31 March 30 September
2025 2024 2024
Earnings per share
Basic (pence) 12.41 11.16 20.46
Diluted (pence) 12.36 11.11 20.34
10 Other intangible assets
Key operating systems Computer Total
software
£000 £000 £000
Carrying amount as at 1 October 2023 7,271 162 7,433
Additions 769 - 769
Share-based payments (937) - (937)
Amortisation charge (197) (48) (245)
Carrying amount as at 31 March 2024 6,906 114 7,020
Additions 705 1 706
Amortisation charge (141) (44) (185)
Net book value of disposals - (1) (1)
Carrying amount as at 30 September 2024 7,470 70 7,540
Additions 727 - 727
Share-based payments 53 - 53
Amortisation charge (168) (43) (211)
Carrying amount as at 31 March 2025 8,082 27 8,109
Additions and share-based payments capitalised as key operating systems relate
to internally generated assets.
The capitalised share-based payment reversal recognised in the comparative
period is due to the lapse of previously issued equity instruments under the
earn-out arrangement (note 15).
11 Changes in capital expenditure
During the six months ended 31 March 2025, the Group acquired equipment with a
cost of £428,000 (six months ended 31 March 2024: £431,000; year ended 30
September 2024: £1,476,000).
Disposals of equipment in the six months ended 31 March 2025 had a net book
value of £15,000 (six months ended 31 March 2024: £318,000; year ended 30
September 2024: £338,000).
Additions to the cost of right-of-use assets were £1,000 in the six months
ended 31 March 2025 (six months ended 31 March 2024: £36,000; year ended 30
September 2024: £2,795,000).
12 Provisions
Office Redress Other Total
dilapidations provision provisions £000
£000 £000 £000
As at 1 October 2023 2,165 778 348 3,291
Unused provisions reversed - - (17) (17)
As at 31 March 2024 2,165 778 331 3,274
Additional provisions 441 6,239 - 6,680
Provisions used - - (161) (161)
As at 1 October 2024 2,606 7,017 170 9,793
Provisions used (130) (265) (36) (431)
Unused provision reversed (104) - - (104)
As at 31 March 2025 2,372 6,752 134 9,258
Current liabilities - 6,752 134 6,886
Non-current liabilities 2,372 - - 2,372
Office dilapidations
The Group is contractually obliged to reinstate its leased properties to their
original state and layout at the end of the lease terms. The office
dilapidations provision represents management's best estimate of the costs
which will ultimately be incurred in settling these obligations.
Redress provision
The provision has been recognised in relation to costs for potential customer
redress. The redress relates to potential liability for historical SIPP
operator due diligence issues in respect of non-mainstream investments, which
subsequently became distressed, made by customers who had regulated financial
advisers acting for them between April 2007 and 2014 and does not relate to
ongoing business operations. Based on published Financial Ombudsman Service
decisions, we believe that future complaints would be time-limited.
The figure represents our current most reliable estimate of the present
obligation, accepting that there is still some uncertainty regarding the
amounts required to settle the obligations as work is ongoing. The estimate
has been made by assessing a range of different outcomes based on key
assumptions, including the calculation of investment loss, application of
limitation, customer response rates, and customers having already received
compensation from other sources. Sensitivity analysis of these key assumptions
would be unlikely to have a material impact on the interim financial
statements.
Although the timings of the outflows are not determined, we expect payment to
be made within 12 months of the date of the condensed consolidated statement
of financial position.
Other provisions
The other provisions relate to the costs associated with defending a legal
case.
The timing of the outflow is uncertain and could be paid within 12 months of
the date of the condensed consolidated statement of financial position.
13 Share capital
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£
£
£
Issued, fully-called and paid:
Ordinary shares of 0.0125p each 51,012 51,626 51,631
Issued, fully-called and paid: Number Number Number
Number of ordinary shares of 0.0125p each 408,098,659 413,009,978 413,044,826
All ordinary shares have full voting and dividend rights.
The following share transactions have taken place during the period:
Transaction type Share class Number of shares Share premium £000
Exercise of EIP options Ordinary shares of 0.0125p each 111,103 -
Exercise of CSOP options Ordinary shares of 0.0125p each 29,064 115
Free shares issue Ordinary shares of 0.0125p each 455,722 -
Share buyback Ordinary shares of 0.0125p each (5,542,056) -
(4,946,167) 115
Own shares
As at 31 March 2025, the Group held 330,285 own shares in an employee benefit
trust (31 March 2024: 718,027; 30 September 2024: 689,728).
During the period 359,443 options with a value of £1,002,000 were exercised
and issued from the employee benefit trust.
Share buybacks
In December 2024, AJ Bell announced a share buyback programme for up to a
maximum aggregate consideration of £30,000,000 which commenced on 5 December
2024.
In the six months ended 31 March 2025, 5,542,056 ordinary shares were
repurchased under the share buyback programme, at a total cost (including
transaction costs) of £24,467,000.
All ordinary shares acquired have been subsequently cancelled, with the
nominal value of ordinary shares cancelled deducted from share capital against
the capital redemption reserve.
14 Dividends
The following dividends were declared and paid by the Company during the
period:
Unaudited Six months ended 31 March 2025 Unaudited Six months ended 31 March 2024 Audited Year ended 30 September 2024
£000
£000
£000
Final dividend for the year ended 30 September 2023 of 7.25p per share - 29,891 29,891
Interim dividend for the year ended 30 September 2024 of 4.25p per share - - 17,525
Final dividend for the year ended 30 September 2024 of 8.25p per share 34,019 - -
Ordinary dividends paid on equity shares 34,019 29,891 47,416
An interim dividend of 4.50 pence per share was approved by the Board on 22
May 2025 and is payable on 27 June 2025 to shareholders on the register at the
close of business on 6 June 2025. The ex-dividend date will be 5 June 2025.
This dividend has not been included as a liability as at 31 March 2025.
The employee benefit trust, which held 330,285 ordinary shares in AJ Bell plc
at 31 March 2025 (31 March 2024: 718,027; 30 September 2024: 689,728), has
agreed to waive all dividends.
15 Share-based payments
During the period the Group recognised a total share-based payment expense in
the condensed consolidated income statement of £2,174,000 (six months ended
31 March 2024 a credit of: £595,000; year ended 30 September 2024 an expense
of: £1,502,000).
The Group capitalised share-based payment costs of £53,000 (six months ended
31 March 2024: reversed £937,000; year ended 30 September 2024: reversed
£935,000) within the condensed consolidated statement of financial position.
The reversal recognised in the comparative periods is due to the lapse of
previously issued equity instruments under the earn-out arrangement. The costs
of these instruments had been recognised over the vesting period, but, as they
have now lapsed, the previously recognised costs have been reversed.
The Group operates the same equity-settled share-based payment arrangements as
reported at 30 September 2024 with the exception of the below new scheme
introduced during the period.
Touch Incentive Scheme (TIS)
The TIS is a performance plan introduced in FY25 in which the Board grants
options to employees to obtain ordinary shares at nil cost. The TIS is
exclusively available for individuals working on the development of AJ Bell
Touch. The development roadmap is split into several features, with options
being awarded to members of the scheme at the commencement of each feature.
The expense for share-based payments under TIS is recognised over the
respective period of each award.
16 Principal risks and uncertainties
We continually review the principal risks and uncertainties facing the Group
which could pose a threat to the delivery of our strategic objectives. The
Board believes that the nature of the principal risks and uncertainties that
may have a material effect on the Group's performance over the remainder of
the financial year remain unchanged from those presented within the 2024
Annual Report and Accounts.
17 Related-party transactions
There were no changes to the related-party relationships or significant
transactions during the financial period that would materially affect the
financial position or performance of the Group. All other transactions are
consistent in nature with the disclosure in note 28 of the consolidated
financial statements for the year ended 30 September 2024.
18 Assets held for sale
On 27 March 2025, the Group announced it has agreed to sell its Platinum SIPP
and SSAS business, part of its non-platform business, for a total
consideration of up to £25 million. This will comprise consideration on
completion of £17.5 million in cash and £1 million in shares and deferred
consideration of up to £6.5 million in cash, subject to certain conditions.
On completion of the deal, a profit on disposal of up to £25 million less
associated transaction costs will be recognised. The deal is expected to
complete in the second half of 2025. As a result, management determined the
sale to be highly probable and the criteria to reclassify the related assets
as held for resale were met.
The Platinum SIPP and SSAS business is not considered a major line of business
for the Group and therefore is classified as a disposal group and not a
discontinued operation under IFRS 5. Accordingly, assets held for sale have
been disclosed separately within the condensed consolidated statement of
financial position, the major classes of assets are shown below.
Unaudited Six months ended 31 March 2025
£000
Trade receivables 943
Accrued income 948
Assets held for sale 1,891
No impairment losses were recognised upon remeasurement of the assets prior to
classification as held for sale.
19 Subsequent events
On 23 April 2025, the Group announced that it had successfully completed the
£30 million share buyback programme. 1,421,768 shares for a total cost of
£5,742,000 were purchased and subsequently cancelled between the end of the
reporting period and the cessation of the share buyback programme. The total
shares bought back through the programme was 6,963,824.
20 Cautionary statement
The interim results for the six months ended 31 March 2025 contain
forward-looking statements that involve substantial risks and uncertainties,
and actual results and developments may differ materially from those expressed
or implied by these statements. These forward-looking statements are
statements regarding AJ Bell's intentions, beliefs or current expectations
concerning, among other things, its results of operations, financial
condition, prospects, growth, strategies, and the industry in which it
operates. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future. These forward-looking statements speak
only as of the date of these interim results and AJ Bell does not undertake
any obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date of these interim
results.
Alternative performance measures
Within the interim report and condensed consolidated interim financial
statements, various Alternative Performance Measures (APM) are referred to.
APMs are not defined by International Financial Reporting Standards and should
be considered together with the Group's IFRS measurements of performance. We
believe APMs assist in providing greater insight into the underlying
performance of the Group and enhance comparability of information between
reporting periods. The table below states those which have been used, how they
have been calculated and why they have been used.
APMs How they have been calculated Why they have been used
Assets Under Administration (AUA) AUA is the value of assets for which AJ Bell provides either an AUA is a measurement of the growth of the business and is the primary driver
administrative, custodial, or transactional service. of ad valorem revenue, which is the largest component of Group revenue.
Assets Under Management (AUM) AUM is the value of assets for which AJ Bell provides a management service. AUM is a measurement of the growth of the business and is a driver of ad
valorem revenue.
Profit before tax (PBT) margin PBT margin is calculated as the net profit generated during the year expressed PBT margin provides a simple measurement to facilitate comparison of our
as a percentage of the total revenue for the year. performance with our competitors.
Return on assets Return on assets is calculated as net profit generated during the year Return on assets is a measurement of how the business uses assets to generate
expressed as a percentage of the total net assets. profit.
Revenue margin (Revenue per £AUA) Revenue margin is the total revenue generated during the year expressed as a Revenue margin provides a simple measurement to facilitate comparison of our
percentage of the average AUA in the year. charges with our competitors.
Definitions
AUA Assets Under Administration
AUM Assets Under Management
Ad Valorem According to Value
Board, Directors The Board of Directors of AJ Bell plc
Bps Basis points
Company AJ Bell plc
CSOP Company Share Option Plan
Customer retention rate Relates to platform customers
DEPS Diluted earnings per share
D2C Direct-to-Consumer
Earn-out arrangement Relates to shares awarded in connection with the development of AJ Bell Touch,
a simplified advised proposition
EIP Executive Incentive Plan
EPS Earnings per share
ExCo Executive Committee
FCA Financial Conduct Authority
FTSE Financial Times Stock Exchange
GIA General Investment Account
HMRC His Majesty's Revenue and Customs
IAS International Accounting Standard
IFRS International Financial Reporting Standards
ISA Individual Savings Account
MPS Managed Portfolio Services
NCO Nil Cost Option
OCF Ongoing Charges Figure
Own Shares Shares held by the Group to satisfy future incentive plans
PBT Profit before tax
Plc Public Limited Company
Ppts Percentage points
SIPP Self-Invested Personal Pension
SSAS Small Self-Administered Scheme
SMIP Senior Manager Incentive Plan
TIS Touch Incentive Scheme
UK United Kingdom
VAT Value Added Tax
Company information
Executive Directors Michael Summersgill
Peter Birch
Non-Executive Directors Fiona Clutterbuck
Evelyn Bourke
Eamonn Flanagan
Fiona Fry
Julie Chakraverty
Leslie Platts
Margaret Hassall
Company Secretary Kina Sinclair
Company number 04503206
Registered office 4 Exchange Quay
Salford Quays
Manchester
M5 3EE
Auditor PricewaterhouseCoopers LLP
1 Hardman Square
Manchester
M3 3EB
Principal banker Bank of Scotland plc
The Mound
Edinburgh
EH1 1YZ
1 Non-platform AUM relates to AJ Bell Funds and MPS held on third-party
platforms.
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