Aj Bell Plc · LSE:AJB
Aj Bell — FY2019 Earnings Presentation
32 slides from Aj Bell's earnings presentation, Sep 30, 2019
Slide 1: Annual results for the year ended 30 September 2019
Annual results For the year ended 30 September 2019
Slide 2: Agenda
Agenda Title Page Business update 3 Financial update 13 Outlook 22 Q&A 25 Glossary 26 Appendices 29 AJ Bell | Annual results for the year ended 30 September 2019 2
Slide 3: Business update
DAJBell Business update
Slide 4: FY19 highlights
FY19 highlights • Successful completion of our IPO in December 2018 • Strong financial performance in maiden annual results as a listed business - significant increase in revenue and profit • Financial performance driven by success of platform propositions which continued to attract high levels of n
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: FY19 update
FY19 update Key investment highlight Commentary • UK platform market remains an attractive, growing market despite recent headwinds • Regulatory change continues at pace – we are well positioned 1. Our market • Platform technology continues to evolve for both AJ Bell and the wider market • Significa
Slide 7: Our market
Our market An attractive retail market within the UK savings and investment industry Growth Regulation Other market dynamics • Growth of the UK investment platform market • Investment Platform Market Study • Fintech new entrants: continued to outpace the growth of the wider UK – Concluded that the p
Slide 8: Our proposition
Our proposition An award-winning platform operating in both advised and D2C market segments AJ Bell Investcentre AJ Bell Youinvest • Improved mobile and website functionality, including enhanced adviser • New website launched, delivering a modern design and improved mobile reporting capabilities res
Slide 9: Advised platform charges
Advised platform charges Revenue margin RIA – the lang cat view(1) “Our analysis shows that adding the RIA positions AJ Bell firmly at the front of the market in terms of pricing, 19.2bps before any bespoke deals other providers may offer. That’s the case looking at both the pension in isolation (in
Slide 10: D2C platform charges
D2C platform charges Revenue margin AJ Bell Youinvest charges compared to wider D2C market – Platforum analysis(1) Key 33.2bps Figure 2 Smaller portfolios(2) • We have one of the lowest revenue margins in the D2C platform market and we have a significant pricing Larger portfolios(3) advantage over o
Slide 11: Our customers
Our customers A growing base of loyal, high quality customers Figure 3 Figure 4 Advised D2C Customers Customers 98,056 (+11%) 120,113 (+27%) AUA AUA Average customer profile £33.8bn (+13%) Average customer profile £11.1bn (+28%) 56 years old Customer Retention 45 years old Customer Retention £345k o
Slide 12: Platform AUA and Customers
Our customers Platform AUA and Customers Figure 5 FY19 FY18 Commentary Advised D2C Total Advised D2C Total AUA (£ billion) platform Platform Platform platform Platform Platform • Despite unsettled markets, we have continued to add and retain AUA on the platform Opening AUA 29.9 8.7 38.6 24.3 6.6 30.
Slide 13: Financial update
DAJBell Financial update
Slide 14: FY19 update
FY19 update Key investment highlight Commentary • Hybrid technology model – we develop our platform user interfaces in-house, whilst outsourcing the back office functionality 5. Our business model • Expansion of IT department to provide greater capacity to deliver change • Operational gearing contri
Slide 15: Our hybrid platform technology model
Our hybrid platform technology model We develop our platform user interfaces in-house, whilst outsourcing the back office functionality to industry expert software providers Figure 6 Advantages of a hybrid technology model AJ Bell technology model – key components • Proprietary user interfaces - ada
Slide 16: FY19 financial highlights
FY19 financial highlights Figure 7 FY19 FY18 +/- Commentary Revenue £104.9m £89.7m 17% • Strong financial performance delivered in our first full year following our IPO • Revenue and profit growth driven by continued success of platform propositions Revenue margin 21.9bps 21.0bps 0.9bps • Improved P
Slide 17: Revenue analysis
Revenue analysis Revenue breakdown by proposition and nature of revenue streams Figure 8 FY18 FY19 (£m) (£m) Commentary +17% 104.9 100 89.7 16.4 • Increase in revenue driven by continued success of platform propositions 16.6 Total 47.8 63.1 • High quality of earnings – proportion of recurring revenu
Slide 18: Revenue margin
Revenue margin Revenue earned per £ of AUA for each of our propositions Figure 9 FY18 FY19 (bps) (bps) Commentary 30.0 21.0bps 21.9bps • Total revenue margin increase was a result of: Total 20.0 – increasing revenue margins for both platform propositions 10.0 – faster growth of our higher margin D2C
Slide 19: Cost Analysis and Profit Before Tax
Cost Analysis and Profit Before Tax Figure 10 FY18 FY19 (£m) (£m) Commentary • Increased marketing activity led to higher total distribution costs – this activity was a key driver Distribution +19% 9.2 of customer and AUA growth 7.7 • Continual investment required. Not expected to contribute to marg
Slide 20: PBT margin improvement
PBT margin improvement We operate a profitable and scalable platform with embedded growth and margin expansion opportunities Figure 11 FY19 change PBT margin Commentary FY18 31.6% • Resulting from scalability of the platform and operational efficiency improvements Growth & operational • Relocation o
Slide 21: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend policy Progressive dividend policy The Board has adopted a dividend policy based on an expected 65% payout ratio Interim dividend payments will equate to approximately 40% of the total ordinary di
Slide 22: Outlook
DAJBell Outlook
Slide 23: Outlook
Outlook • Ongoing uncertainty surrounding the timing and nature of the UK’s anticipated departure from the European Union and the outcome of the UK General Election likely to result in short- term market volatility • However, the UK platform market continues to grow and we are well placed to capital
Slide 24: Corporate governance
Corporate governance An update on key governance topics for AJ Bell New CSR initiative Executive Incentive Plan (EIP) • Scheme designed to enable charitable causes to benefit from our future success • Designed to promote and reward long-term, sustainable company performance • Options valued at £10m
Slide 25: Q&A
DAJBell Q&A
Slide 26: Glossary
DAJBell Glossary
Slide 27: Glossary
Glossary AUA Assets Under Administration BPS Basis Points D2C Direct to Consumer DB transfer Pension Transfer from a Defined Benefit Scheme to a Defined Contribution Scheme FCA Financial Conduct Authority FY18/FY19 Year Ended 30 September 2018/2019 GIA General Investment Account IPO AJ Bell plc’s In
Slide 28: 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 retail advisers and wealth managers providing a suite of products, services, investment customers w
Slide 29: Appendices
DAJBell Appendices
Slide 30: Business sensitivities
Business sensitivities Our estimated financial impact of economic and market fluctuations in FY20 Key risk Economic and capital markets fluctuation risk The risk that a significant and prolonged capital market or economic downturn has an adverse effect on customer confidence, asset values and intere
Slide 31: AJ Bell timeline
AJ Bell timeline 2000 AJ Bell launches 2002 2005 2007 1995 Sippdeal - the AJ Bell launches AJ Bell welcomes AJ Bell acquires Andy Bell and UK’s first online Sippcentre - a low- its first Lawshare Limited Nicholas Littlefair SIPP for cost SIPP for institutional and rebrands it as set up AJ Bell execu
Slide 32: 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.