Aj Bell Plc · LSE:AJB
Aj Bell — H1 2021 Earnings Presentation
26 slides from Aj Bell's earnings presentation, May 2021
Slide 1: Interim results for the six months ended 31 March 2021
Interim results For the six months ended 31 March 2021
Slide 2: Agenda
Agenda Title Page Business update 3 Financial update 15 Outlook 20 Glossary 23 AJ Bell | Interim results for the six months ended 31 March 2021 2
Slide 3: Business update
DAJBell Business update
Slide 4: HY21 highlights
HY21 highlights • Strong organic growth – Record customer growth and high levels of inflows, with total customers up 17% to 346,797 and total AUA up 15% to £65.2 billion • Increased demand for AJ Bell investment solutions – Strong inflows into AJ Bell funds and MPS resulted in closing AUM of £1.4 bi
Slide 5: Key investment highlights
Key investment highlights Key investment highlight Description Our market An attractive retail market within the UK savings and investment industry Our proposition An award-winning platform operating in both advised and D2C market segments Our customers A growing base of loyal, high quality customer
Slide 6: HY21 update
HY21 update Key investment highlight Commentary • The UK platform market continues to grow, with total assets held on platforms now exceeding £800 billion(1) Our market • The structural growth drivers for the platform market remain strong across the Advised and D2C sectors, with individuals increasi
Slide 7: Our market: an attractive retail market within the UK savings and investment industry
Our market An attractive retail market within the UK savings and investment industry A reminder of the key attractions of the UK platform market Regulation Figure 1 Growth • Pension tax relief unchanged in 2021 budget – we believe that the UK platform market & AJ Bell platform AUA growth UK governme
Slide 8: Our proposition: an award-winning platform in advised and D2C segments
Our proposition An award-winning platform operating in both advised and D2C market segments AJ Bell Investcentre AJ Bell Youinvest • Retirement Investment Account has • Continued enhancements to the been extremely well received by “Firms increasingly tell platform in response to customer “AJ Bell Yo
Slide 9: Our proposition: Acquisition of Adalpha
Our proposition Acquisition of Adalpha Strategic vision The new proposition • Our aim is to ‘make investing easy’: – There is increasing demand from financial advisers for simpler, more efficient online propositions, accelerated by COVID-19 – We believe that offering a simplified, mobile-led investm
Slide 10: Our customers: a growing base of loyal, high quality customers
Our customers A growing base of loyal, high quality customers Figure 2 Figure 3 Advised D2C Customers Customers 118,509 (+9%) 213,767 (+24%) AUA AUA Average customer profile £41.1bn (+13%) Average customer profile £16.9bn (+26%) 56 years old Customer Retention 43 years old Customer Retention £347k o
Slide 11: Our customers: D2C customer profile
Our customers D2C customer profile Record growth driven by younger customers looking to save for the long term Commentary Figure 4 Figure 5 Net new D2C customers (000s) Average customer age • We have continued to attract record levels of new customers onto our D2C platform 38 New customers in HY21 •
Slide 12: Our customers: D2C customers – elevated dealing activity
Our customers D2C customers – elevated dealing activity A number of catalysts have driven elevated levels of D2C dealing activity since the start of FY20 Figure 8 December 2020 Deals per D2C customer account since October 2019 (rebased to 100) - Post-Brexit trade deal agreed November 2020 January/Fe
Slide 13: Our customers: Platform customers, AUA and AUM
Our customers Platform Customers, AUA and AUM Figure 9 HY21 HY20 Commentary Advised D2C Total Advised D2C Total Customers platform Platform Platform platform Platform Platform • Another period of strong growth in customers and assets under administration: Opening customers 108,911 172,183 281,094 98
Slide 14: Platform AUA – gross inflows from new and existing customers
Our customers Platform AUA – gross inflows from new and existing customers HY21 HY20 Gross inflows Gross inflows Commentary Figure 10 £2.8bn £2.4bn £0.9bn £0.6bn • Gross inflows from existing customers were up 32% 25% versus prior year, reflecting increased £1.9bn confidence following the uncertaint
Slide 15: Financial update
YAJBell Financial update
Slide 16: HY21 financial highlights
HY21 financial highlights Figure 12 HY21 HY20 +/- Commentary Revenue £73.9m £60.9m 21% • Strong growth in revenue and profitability driven by the continued success of our platform propositions Revenue margin 24.0bps 23.2bps 0.8bps • Total revenue margin increased by 0.8bps to 24.0bps, primarily due
Slide 17: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins Figure 13 HY20 HY21 (£m) (£m) Commentary 40.0 32.3 +7% 34.6 30.0 2.7 3.0 High quality of earnings – a well diversified revenue model with 70% of revenue recurring in nature, despite the significant increase in Adv
Slide 18: Cost and PBT Analysis
Cost and PBT Analysis Figure 14 HY20 HY21 (£m) (£m) Commentary • Certain brand, sponsorship and offline marketing activities undertaken in HY20 did Distribution 5.5 (2%) 5.4 not repeat due to COVID restrictions, resulting in a modest cost reduction • More D2C customers acquired by word of mouth and
Slide 19: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend Figure 15 Figure 16 Regulatory capital position Dividend payments £ million HY21 HY20 Pence per share FY21 FY20 +/- Total shareholder funds 117.9 93.3 Interim 2.46 1.50 64% Less: unregulated busin
Slide 20: Outlook
YAJBell Outlook
Slide 21: Financial outlook - guidance
Financial outlook - guidance Figure 17 FY21 updated guidance FY22 guidance Outlook beyond FY22 Advised D2C Non- Advised D2C Non- • Platform revenue margins expected Platform Platform platform Platform Platform platform to increase slightly from FY22 levels, Full-year Full-year Revenue Full-year Full
Slide 22: Outlook
Outlook • Continued market growth – the long-term growth drivers of the platform market remain strong with customers increasingly looking to take control of their savings with flexible, low- cost, online solutions • Low interest rates to persist – will have a short-term impact on revenue and profita
Slide 23: Glossary
YAJBell Glossary
Slide 24: Glossary
Glossary AUA Assets Under Administration AUM Assets Under Management BPS Basis Points CET1 Common Equity Tier 1 CRD Capital Requirements Directive D2C Direct to Consumer DB/DC pension Defined Benefit / Defined Contribution Pension DFM Discretionary Fund Manager FCA Financial Conduct Authority FY20/F
Slide 25: Our products
Our products Advised Platform D2C Platform AJ Bell Investcentre is an investment platform proposition for regulated financial • AJ Bell Youinvest is an investment platform proposition for execution-only advisers and wealth managers providing a suite of products, services, investment retail customers
Slide 26: Disclaimer
Disclaimer The information contained in this presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in it.