Aj Bell Plc · LSE:AJB
Aj Bell — H1 2024 Earnings Presentation
30 slides from Aj Bell's earnings presentation, May 23, 2024
Slide 1: Interim results for the six months ended 31 March 2024
Interim results For the six months ended 31 March 2024 Issued on 23 May 2024
Slide 2: Agenda
Agenda Title Page Business update 3 Financial update 14 Outlook 20 Appendices 24 Glossary 28 AJ Bell | Interim results for the six months ended 31 March 2024 2
Slide 3: Business update
YAJBell Business update
Slide 4: HY24 key messages
HY24 key messages Our dual-channel platform continued to We continue to invest to support our long- deliver strong organic growth with platform term growth ambitions – AJ Bell’s brand customers surpassing half a million and awareness has improved, and our Ready- net inflows up 45% to £2.9 billion ma
Slide 5: Key investment highlights
Key investment highlights An update on the seven pillars of the AJ Bell investment case Key investment highlight HY24 update Our market » Strong growth drivers for both the advised and D2C markets – we continue to take market share in both Pages 6-7 » Consumer Duty strongly embedded in our business
Slide 6: Our market: a significant long-term growth opportunity
Our market A significant long-term growth opportunity for the platform market A large addressable market Dual-channel model maximises our growth opportunity Platform net inflows vs peers(3) Advised D2C ~£3tn » Total addressable market Cash savings Total addressable market(1) estimated to be worth at
Slide 7: Our market: key emerging themes in the UK platform market
Our market Key emerging themes in the UK platform market Health of the UK capital markets Advice / guidance boundary review consultation » Challenges well documented – positive that this is on the political agenda » There is a significant advice gap in the UK, with many people who would benefit from
Slide 8: Our platform propositions
Our platform propositions An easy-to-use platform underpinned by great service Advised D2C (moving to full beta in H2) » Reduced customer charges and increased interest rates paid on » Reduced customer charges and increased interest rates paid on cash balances from 1 April cash balances from 1 April
Slide 9: AJ Bell Investments: £0.8 billion of net inflows drove AUM up 23%
Our platform propositions – AJ Bell Investments Our investment solutions are an increasingly important part of AJ Bell’s offering £0.8 billion of net inflows in HY24 drove AUM up 23% to £5.8 billion Strong momentum in advised channel Long-term performance driving wider recognition Figure 3 AJ Bell I
Slide 10: Advised customer insights
Our customers Advised customer insights Growth – six months ended 31 March 2024 Gross inflows from new and existing customers Figure 4 HY24 HY23 Customers Gross inflows Gross inflows +4% in HY24 to 165,000 £3.2bn £2.6bn £1.2bn £0.9bn 35% £2.0bn 37% AUA 63% £1.7bn 65% Total AUA +11% in HY24 to £53.4b
Slide 11: Advised customer insights: outflows
Our customers Advised customer insights Higher outflows across sector since start of 2023… ...AJ Bell less impacted than most platforms… …with only a modest increase in transfers out Advised platform market outflows(1) Outflows as a percentage of opening AUA(1) AJ Bell outflows analysis Figure 7 HY2
Slide 12: D2C customer insights
Our customers D2C customer insights Growth – six months ended 31 March 2024 Gross inflows from new and existing customers Figure 8 HY24 HY23 Customers Gross inflows Gross inflows +7% in HY24 to 338,000 £2.9bn £1.8bn £0.6bn £1.3bn 33% AUA 45% £1.6bn 55% £1.2bn 67% Total AUA +19% in HY24 to £26.9bn Ne
Slide 13: D2C customer insights: tax wrappers and dealing activity
Our customers D2C customer insights Tax wrappers continue to dominate new funded accounts – sticky, long-term customers with high lifetime values Figure 9 New accounts: tax-wrapped vs. unwrapped 22% 29% 23% Unwrapped Tax-wrapped 78% 71% 77% HY22 HY23 HY24 Customer dealing activity increased in HY24
Slide 14: Financial update
YAJBell Financial update
Slide 15: HY24 financial highlights
HY24 financial highlights HY24 HY23 +/- Figure 11 Commentary Revenue £131.3m £103.6m 27% » An improved revenue margin of 32.3bps drove a 27% increase in revenue to £131.3m, primarily due to: - Increased custody fee income as a result of higher average Revenue margin 32.3bps 29.0bps 3.3bps platform A
Slide 16: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins HY23 HY24 Figure 12 (£m) (£m) Commentary A well diversified revenue model – mix of fixed, ad valorem and 61.6 60.0 50.1 +23% 2.6 transactional revenues enables us to deliver sustainable profit across different mar
Slide 17: Cost and PBT Analysis
Cost and PBT Analysis HY23 HY24 Figure 13 (£m) (£m) Business as usual drivers Total cost growth of 17% in line with expectations as we delivered our planned investment in our brand, technology and people Distribution 12.4 +17% 14.5 Distribution costs » 17% increase driven primarily by the delivery o
Slide 18: Capital and dividend
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend Regulatory capital position Dividend payments £ million HY24 FY23 Pence per share HY24 FY23 +/- Total shareholder funds 180.6 166.0 Interim 4.25 3.50 21% Less: unregulated business capital (4.1) (
Slide 19: Capital and dividend: new capital allocation framework
Capital and dividend Our highly cash generative and capital light model supports a progressive dividend New capital allocation framework Commentary Financial strength » This new capital allocation framework Maintain an appropriate level of regulatory capital and liquidity formalises the way we alrea
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 margin Revenue margin Revenue margin Revenue margin Revenue expe
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 Base rate of: FY24 FY25 - Treasury management capability gives us time to react to interest rate changes and provides degree of
Slide 23: Outlook
Outlook » Significant long-term growth opportunity in the UK platform market - Societal need for individuals to take control of their long-term finances - £3 trillion addressable market, of which only one-third is currently held on platform » Improving macroeconomic environment - Early signs of reco
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 A growing 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 investment soluti
Slide 26: Appendix II: Our platform propositions
Appendix II Our platform propositions Figure 15 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
Slide 27: Appendix III: Platform Customers, AUA and AUM
Appendix III Platform Customers, AUA and AUM HY24 Commentary HY23 Advised D2C Total Advised D2C Total Customers platform Platform Platform platform Platform Platform Opening customers 159,000 317,000 476,000 145,000 281,000 426,000 Net new customers 6,000 21,000 27,000 8,000 21,000 29,000 Closing cu
Slide 28: Glossary
YAJBell Glossary
Slide 29: Glossary
Glossary AUA Assets Under Administration AUM Assets Under Management BPS Basis Points D2C Direct to Consumer FCA Financial Conduct Authority FX Foreign Exchange FY23/FY24/FY25 Year Ended/Ending 30 September 2023/2024/2025 HY23/HY24 Six Months Ended 31 March 2023/2024 ISA Individual Savings Account O
Slide 30: 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.