Aj Bell Plc · LSE:AJB
Aj Bell — H1 2020 Earnings Presentation
28 slides from Aj Bell's earnings presentation, Mar 31, 2020
Slide 1: Interim results for the six months ended 31 March 2020
Interim results For the six months ended 31 March 2020
Slide 2: Agenda
Agenda Title Page Business update 3 Financial update 14 Outlook 20 Q&A 24 Glossary 25 AJ Bell | Interim results for the six months ended 31 March 2020 2
Slide 3: Business update
DAJBell Business update Andy Bell
Slide 4: HY20 highlights
HY20 highlights • Strong organic growth – We have continued to attract high levels of new customers and assets across both our Advised and D2C platform propositions • COVID-19 response – We moved quickly to keep our people safe in response to the COVID-19 pandemic and have successfully adapted to ne
Slide 5: COVID-19: An update on AJ Bell's response
COVID-19 An update on AJ Bell’s response to COVID-19 Supporting our people Supporting our customers Supporting the community • We successfully transitioned the vast • We provide an essential service, with many • AJ Bell Wage War on COVID Fund launched majority of our people to work from home custome
Slide 6: COVID-19: Customer insights during the pandemic
COVID-19 Customer insights during the pandemic Advised platform D2C platform Supporting the community • Advisers are embracing new and existing technologies to • Increased customer engagement on AJ Bell Youinvest in March 2020, with continue supporting their clients customers logins up 55% and longe
Slide 7: 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 8: HY20 update
HY20 update Key investment highlight Commentary • The structural growth drivers in the market remain strong across the Advised and D2C sectors 1. Our market • Our addressable market is estimated to be worth at least £2.5 trillion, of which we have a 1.7% share • The FCA has delayed a numbers of init
Slide 9: Our market
Our market An attractive retail market within the UK savings and investment industry Addressable market Growth Figure 4 • The addressable market for the investment platforms in the UK is currently estimated to be worth at least UK platform market & AJ Bell AUA growth £2.5 trillion, of which 31% is c
Slide 10: Our proposition
Our proposition An award-winning platform operating in both advised and D2C market segments AJ Bell Investcentre AJ Bell Youinvest • RIA launched in mid-January • Investment trust ‘select list’ launched, selected by our investment – A simplified pension offering with an all-in charge of 25bps specia
Slide 11: Our customers
Our customers A growing base of loyal, high quality customers Figure 5 Figure 6 Advised D2C Customers Customers 103,974 (+6%) 144,100 (+20%) AUA AUA Average customer profile £31.4bn (-7%) Average customer profile £10.6bn (-5%) 56 years old Customer Retention 44 years old (-1 year) Customer Retention
Slide 12: Our customers: changing customer profile
Our customers changing customer profile Figure 7 Commentary New D2C customers and new account types by age group • A gradual shift towards younger customers New customers in age range (LHS) All customers in age range (RHS) We are acquiring slightly younger new customers, 7,000 7,000 30,000 30,000 re
Slide 13: Our customers: Platform AUA and Customers
Our customers Platform AUA and Customers Figure 8 HY20 HY19 Commentary Advised D2C Total Advised D2C Total AUA (£ billion) platform Platform Platform platform Platform Platform • Total platform AUA increased by 3% compared Opening AUA 33.8 11.1 44.9 29.9 8.7 38.6 to the prior year, although the impa
Slide 14: Financial update
Financial update Michael Summersgill
Slide 15: HY20 financial highlights
HY20 financial highlights Figure 9 HY20 HY19 +/- Commentary • Strong growth in revenue (up 22%) and PBT (up 28%), driven by our platform Revenue £60.9m £50.1m 22% propositions Revenue margin 23.2bps 22.0bps 1.2bps • Increased transactional revenue outweighed the impact of adverse market movements du
Slide 16: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins Figure 10 100 HY19 HY20 (£m) (£m) Commentary 80 60.9 60 +22% 50.1 7.9 11.5 • Increase in revenue driven by the continued success of our platform Total 40 29.4 36.0 propositions 22.0bps 23.2bps 20 12.8 13.4 • High
Slide 17: Cost Analysis and Profit Before Tax
Cost Analysis and Profit Before Tax Figure 11 HY19 HY20 (£m) (£m) Commentary Distribution 5.2 +7% 5.5 • Prior year included an additional £0.5m of direct marketing spend 9.8 8.2 +19% • Additional staff to help implement technology changes at a faster rate as we Technology continue to develop our pla
Slide 18: PBT margin improvement
PBT margin improvement We operate a profitable and scalable platform with embedded growth and margin expansion opportunities Figure 12 HY20 change PBT margin Commentary HY19 35.3% Growth & operational +1.1% • Resulting from scalability of the platform and operational efficiency improvements gearing
Slide 19: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend Dividend policy Application of our dividend policy in 2020 • An expected 65% payout ratio • HY20 interim dividend of 1.50 pence per share equates to 31% of the FY19 total dividend. • Interim divid
Slide 20: Outlook
DAJBell Outlook
Slide 21: Financial outlook – factors influencing platform revenue
Financial outlook – factors influencing platform revenue HY20 revenue margins 1 Interest rate environment FY20/21 expected revenue margins • Changes in the interest rate earned and value of customer cash balances impacts Figure 14 the amount of interest income generated, which is dependent on: Figur
Slide 22: Financial outlook - guidance
Financial outlook - guidance FY20 previous guidance Updates to FY20 guidance Outlook for FY21 D2C Non- Advised D2C Non- Advised D2C Non- Advised Platform Platform platform Platform Platform platform Platform Platform platform Underlying inflows c.10% Underlying Expected to No material No material of
Slide 23: Market outlook
Market outlook • Significant long-term uncertainty – COVID-19 will continue to impact market volatility, investor sentiment and policy decision making, whilst creating potential M&A opportunities • New working practices – Behaviours, working environments and products will need to adapt but we will c
Slide 24: Q&A
DAJBell Q&A
Slide 25: Glossary
DAJBell Glossary
Slide 26: Glossary
Glossary AUA Assets Under Administration BPS Basis Points COVID-19 An infectious Disease Caused by a Coronavirus D2C Direct to Consumer DB pension Defined Benefit Pension Scheme DC pension Defined Contribution Pension Scheme FCA Financial Conduct Authority HY19/HY20 Six Months Ended 31 March 2019/20
Slide 27: Our products
Our products Advised Platform D2C Platform AJ Bell Investcentre is an investment platform proposition for regulated AJ Bell Youinvest is an investment platform proposition for execution-only financial advisers and wealth managers providing a suite of products, retail customers which includes the pro
Slide 28: 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.