Aj Bell Plc · LSE:AJB
Aj Bell — FY2023 Earnings Presentation
31 slides from Aj Bell's earnings presentation, Dec 7, 2023
Slide 1: Annual results for the year ended 30 September 2023
Annual results For the year ended 30 September 2023 Issued on 7 December 2023
Slide 2: Agenda
Agenda Title Page Business update 3 Financial update 15 Outlook 20 Appendices 24 Glossary 29 AJ Bell | Annual results for the year ended 30 September 2023 2
Slide 3: Business update
YAJBell Business update
Slide 4: FY23 key messages
FY23 key messages We continue to capitalise on the structural We remain focused on providing an easy to growth opportunity in the platform market, use, trusted platform to our customers, with transfers from non-platform market offering a broad range of low-cost products providers driving significant
Slide 5: Key investment highlights
Key investment highlights An update on the seven pillars of the AJ Bell investment case Key investment highlight FY23 update » The investment platform market continues to benefit from structural growth drivers which will support long-term growth Our market » We have delivered on our organic growth s
Slide 6: Our market: a significant long-term growth opportunity
Our market A significant long-term growth opportunity for the platform market A huge addressable market Dual-channel model maximises our growth opportunity Advised Annual platform net inflows vs peers(3) D2C ~£3tn » 7% share of the platform market Cash savings % of opening AUA Total addressable mark
Slide 7: Our market: well positioned to continue winning market share
Our market We are well positioned to continue winning market share Delivering on the organic growth strategy set out at IPO in 2018 We have the right strategy to drive continued growth Figure 3 Figure 4 » Organic growth focus – the structural transfer of assets from non- Platform customers Platform
Slide 8: Our platform propositions
Our platform propositions An easy-to-use platform underpinned by great service Advised » Several enhancements to Investcentre including improved reporting and new dealing functionality for model portfolios. Streamlined customer onboarding journey to follow in FY24 » Money market portfolio added to o
Slide 9: AJ Bell Investments: £1.7 billion of net inflows in FY23
Our platform propositions – AJ Bell Investments Our investment solutions are an increasingly important part of AJ Bell’s platform offering £1.7 billion of net inflows in FY23 drove AUM up 68% to £4.7 billion Momentum across both advised and D2C channels Gaining wider recognition Figure 6 AJ Bell Inv
Slide 10: Our customers: a growing base of loyal customers
Our customers A growing base of loyal, high quality customers Advised D2C Customers Customers Average customer profile +10% in FY23 to 159,256 Average customer profile +13% in FY23 to 317,276 56 years old (FY22: 56) 44 years old (FY22: 43) AUA AUA £303k of AUA (FY22: £308k) £72k of AUA (FY22: £69k)
Slide 11: Platform AUA – gross inflows from new and existing customers
Our customers Platform AUA – gross inflows from new and existing customers FY23 Commentary FY22 Figure 9 Gross inflows Gross inflows £5.0bn £6.2bn £1.7bn £1.8bn 34% 29% £3.3bn 66% £4.4bn 71% Average inflows per new customer £151k £172k Average inflows per existing customer £12k £14k Figure 10 Gross
Slide 12: Cash held on investment platforms
Our customers Cash held on investment platforms Reasons for holding » Cash balances are a by-product of the core investment service cash in AJ Bell » From a customer perspective, cash is often transitory in nature – cash paid in, investment returns, sale proceeds and liquidity (to buy new investment
Slide 13: Cash held on investment platforms: FCA focus areas
Our customers Cash held on investment platforms FCA focus areas » Fair value and transparency of charges and interest rates (refer to Appendix IV for detail) How AJ Bell is positioned on these key focus areas » We assess fair value holistically, considering the overall cost to customers and the brea
Slide 14: Our people
Our people Our success is built on delivering a high-quality service through the skills and passion of our people We have a highly engaged workforce Our people provide a great service to our customers » Consistently rated as one of the UK’s top companies to work for, with world class employee engage
Slide 15: Financial update
YAJBell Financial update
Slide 16: FY23 financial highlights
FY23 financial highlights FY23 FY22 +/- Figure 13 Commentary Revenue £218.2m £163.8m 33% » Revenue up 33% due to a significant increase in revenue margin to 29.8bps (FY22: 22.6bps) Revenue margin 29.8bps 22.6bps 7.2bps » Revenue margin improvement driven by increased average interest rate on custome
Slide 17: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins FY22 FY23 Figure 14 (£m) (£m) Commentary 104.8 A well diversified revenue model – mix of fixed, ad valorem and 100.0 83.2 +26% 4.8 transactional revenues provides resilience across different market 5.4 Advised 79.
Slide 18: Cost and PBT Analysis
Cost and PBT Analysis FY22 FY23 Figure 15 (£m) (£m) Cost growth in line withBusiness expectations, as usual up 26% including ‘excess’ drivers inflationary impact as we delivered our planned investments in our 25.9 people, technology and brand Distribution +73% 15.0 » Total staff costs increased by £9
Slide 19: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend Regulatory capital position Dividend payments £ million FY23 FY22 Pence per share FY23 FY22 +/- Total shareholder funds 166.0 133.4 Interim 3.50 2.78 26% Less: unregulated business capital (3.7) (
Slide 20: Outlook
YAJBell Outlook
Slide 21: Financial outlook - guidance
Financial outlook - guidance FY24 previous guidance Updates to FY24 guidance Outlook beyond FY24 Advised D2C Non- Advised D2C Non- » Revenue margins - compression over Platform Platform platform Platform Platform platform time: Revenue margins expected to reduce No explicit Revenue - Pricing optiona
Slide 22: Financial outlook – net interest income sensitivity
Financial outlook – net interest income sensitivity Impact of interest rate cuts Commentary Estimated revenue margin impact » Impact of any future rate cuts will be gradual - Treasury management capability gives us time to react to Base rate of: FY24 FY25 interest rate changes and provides degree of
Slide 23: Outlook
Outlook » Short-term headwinds remain, but a significant long-term opportunity remains - The macroeconomic environment will continue to present some headwinds with increased competition from cash savings products and household savings remaining under pressure - However, the platform market continues
Slide 24: Appendices
YAJBell Appendices
Slide 25: Appendix I: The seven pillars of AJ Bell's investment case
Appendix I The seven pillars of AJ Bell’s investment case Key investment highlight Description Our market An attractive retail market within the UK retail savings and investment industry An award-winning platform operating in both advised and D2C market segments, with in-house Our proposition invest
Slide 26: Appendix II: Our platform propositions
Appendix II Our platform propositions Advised D2C Full-service Established platform propositions offering a wide range of investment choice and functionality Simplified Digital-only platform propositions offering an easy to use, streamlined investment service in the advised and D2C markets Investmen
Slide 27: Appendix III: Platform Customers, AUA and AUM
Appendix III Platform Customers, AUA and AUM FY23 Commentary FY22 Advised D2C Total Advised D2C Total Customers platform Platform Platform platform Platform Platform Opening customers 145,371 280,281 425,652 126,920 241,045 367,965 Net new customers 13,885 36,995 50,880 18,451 39,236 57,687 Closing
Slide 28: Appendix IV: FCA statements
Appendix IV FCA statements Consumer Duty Customer cash balances and net interest income Outcomes » 2018 Investment Platform Market Study - “Most of the potential harm from money held in cash - lost interest and lower returns - comes from cash held in pension wrappers” Products and - “For non-pension
Slide 29: Glossary
YAJBell Glossary
Slide 30: Glossary
Glossary AER Annual Equivalent Rate AMC Annual Management Charge AUA Assets Under Administration AUM Assets Under Management BPS Basis Points CAGR Compound Annual Growth Rate D2C Direct to Consumer FCA Financial Conduct Authority FX Foreign Exchange FY22/FY23/FY24 Year Ended/Ending 30 September 2022
Slide 31: 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.