Aj Bell Plc · LSE:AJB
Aj Bell — FY2020 Earnings Presentation
25 slides from Aj Bell's earnings presentation, September 2020
Slide 1: Annual results for the year ended 30 September 2020
Annual results For the year ended 30 September 2020
Slide 2: Agenda
Agenda Title Page Presenters Business update 3 Financial update 13 Andy Bell Outlook 19 Chief Executive Officer Glossary 22 Michael Summersgill Chief Financial Officer AJ Bell | Annual results for the year ended 30 September 2020 2
Slide 3: Business update
YWAJBell Business update Andy Bell
Slide 4: FY20 highlights
FY20 highlights • Strong organic growth – We have continued to attract high levels of new customers and assets, with total customers up 27% to 295,305 and total AUA up 8% to £56.5 billion • Record financial performance – Revenue up 21% to £126.7 million and PBT up 29% to £48.6 million in the year •
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: FY20 update
FY20 update Key investment highlight Commentary • Our addressable market is estimated to be worth at least £2.5 trillion(1), of which only 30% is currently on platforms(2) Our market • The structural growth drivers for the platform market remain strong across the Advised and D2C sectors • COVID-19 h
Slide 7: Our market
Our market An attractive retail market within the UK savings and investment industry Growth Regulation Figure 1 • Investment Platform Market Study now closed with review UK platform market & AJ Bell AUA growth • Pension and net financial on exit fees abandoned – FCA struggled to define exit fees; 1,
Slide 8: Our proposition
Our proposition An award-winning platform operating in both advised and D2C market segments AJ Bell Investcentre AJ Bell Youinvest • Retirement Investment Account launched: • Cash savings hub launched: – A simplified pension offering with an all-in charge of 25bps – Offers customers a range of compe
Slide 9: Our customers
Our customers A growing base of loyal, high quality customers Figure 2 Figure 3 Advised D2C Customers Customers 108,911 (+11%) 172,183 (+43%) AUA AUA Average customer profile £36.3bn (+7%) Average customer profile £13.4bn (+21%) 56 years old Customer Retention 43 years old (-2 years) Customer Retent
Slide 10: D2C customers – a changing profile
Our customers D2C customers – a changing profile Record growth from a different type of customer Younger customers with a preference for mobile A higher propensity to use AJ Bell products Net new D2C customers (000s) Figure 4 Average customer age Figure 6 Figure 8 Customers who invested in the new A
Slide 11: Platform AUA and Customers
Our customers Platform AUA and Customers Figure 10 FY20 FY19 Commentary Advised D2C Total Advised D2C Total AUA (£ billion) platform Platform Platform platform Platform Platform • Another year of strong growth in customers and assets under administration, despite an uncertain backdrop: Opening AUA 3
Slide 12: Platform AUA – gross inflows from new and existing customers
Our customers Platform AUA – gross inflows from new and existing customers FY20 FY19 Gross inflows Gross inflows Commentary Figure 11 £4.3bn £4.4bn £1.0bn £1.1bn 23% 25% • No material change to the composition of inflows compared to FY19 £3.3bn £3.3bn 75% 77% Advised • High proportion of inflows fro
Slide 13: Financial update
Financial update Michael Summersgill
Slide 14: FY20 financial highlights
FY20 financial highlights Figure 13 FY20 FY19 +/- Commentary Revenue £126.7m £104.9m 21% • Strong growth in revenue and profitability driven by the continued success of our platform propositions Revenue margin 23.9bps 21.9bps 2.0bps • Total revenue margin increased by 2.0bps to 23.9bps in the year,
Slide 15: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins Figure 14 FY19 FY20 (£m) (£m) Commentary 64.8 59.6 +9% 60.0 5.2 5.3 High quality of earnings – 78% of revenue recurring in nature 40.0 42.0 Advised 37.7 19.2bps 19.0bps 20.0 16.7 17.5 Advised 0.0 • Increase driven
Slide 16: Cost Analysis
Cost Analysis Figure 15 FY19 FY20 (£m) (£m) Commentary 9.2 +11% 10.2 • Increased distribution costs driven primarily by additional headcount within Distribution platform marketing and business development teams 20.0 +12% 17.8 • Ongoing investment in technology to support the growth of the business,
Slide 17: PBT margin improvement
PBT margin improvement We operate a profitable and scalable platform with embedded growth and margin expansion opportunities Figure 16 FY20 change PBT margin Commentary FY19 35.9% • Resulting from scalability of the platform and operational efficiency improvements, Growth & operational gearing +0.9%
Slide 18: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend Figure 17 Figure 18 Regulatory capital position Dividend payments £ million FY20 FY19 Pence per share FY20 FY19 +/- Total shareholder funds 109.5 86.1 Interim 1.50 1.50 - Less: unregulated busines
Slide 19: Outlook
YAJBell Outlook
Slide 20: Financial outlook - guidance
Financial outlook - guidance Figure 19 FY21 previous guidance Updates to FY21 guidance Outlook Advised D2C Non- Advised D2C Non- Platform Platform platform Platform Platform platform • No material change to the rate of Underlying inflows or outflows anticipated inflows c.10% of opening AUA Underlyin
Slide 21: Outlook
Outlook • A ‘new normal’ – long-term impact of the pandemic on the global economy is hard to predict, though significant changes to the way we live, work and communicate are inevitable • Low interest rates to persist – will have an adverse impact on revenue and profitability, though we have a divers
Slide 22: Glossary
DYAJBell Glossary
Slide 23: Glossary
Glossary AUA Assets Under Administration BPS Basis Points CET1 Common Equity Tier 1 CRD Capital Requirements Directive D2C Direct to Consumer DB/DC pension Defined Benefit / Defined Contribution Pension DB transfer Pension Transfer from a Defined Benefit Scheme to a Defined Contribution Scheme DFM D
Slide 24: 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 25: 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.