Slide 1: Annual results
Annual results For the year ended 30 September 2024 Issued on 5 December 2024 FY24 annual results
Slide 2: We help people to invest
We help people to invest AJ Bell is one of the UK’s largest investment platforms ~£3 trillion We are investing To deliver long- TAM in 3 key areas term growth majority held off-platform, providing enabled by our scale, profitability and via our dual-channel platform, serving a significant growth opp
Slide 3: FY24 key messages
FY24 key messages Our ongoing Our dual-channel Record financial High cash generation investments, focused platform once again performance, with our and healthy capital on our strategic delivered excellent diversified revenue position supports drivers of trust, ease organic growth, with model deliver
Slide 4: Contents
Contents Business update 5 Appendices 26 Financial update 16 Glossary 30 Outlook 22 4 AJ Bell plc FY24 annual results
Slide 5: Business update
Business update 5 AJ Bell plc FY24 annual results
Slide 6: Key investment highlights
Key investment highlights An update on the seven pillars of the AJ Bell investment case Key investment highlight FY24 update • The long-term growth opportunity in the UK platform market remains intact under the new Government, with a continuation of the long- Our market standing support for the core
Slide 7: Our market
Our market A significant long-term growth opportunity for the platform market A large addressable market Dual-channel model maximises our growth opportunity Net inflows vs peers 12 months ended 30 September 2024(3) ~£3tn • Total addressable market estimated Total addressable to be worth at least £3
Slide 8: Our market: key themes in the UK platform market
Our market Key themes in the UK platform market Pensions ISAs Targeted support • Firmly established as the primary vehicle for • Government, industry and regulators all see • Many people who would benefit from UK retirement savings the importance of getting more people financial advice are unable to
Slide 9: Our propositions
Our propositions We are benefiting from the investments we are making to support our growth ambitions Accelerating the pace of change Strengthening the AJ Bell brand Lowering costs for customers 5-year change in technology headcount versus changes deployed Prompted brand Pricing reductions and 4.2x
Slide 10: Our propositions: easy-to-use platform for advised and D2C
Our propositions An easy-to-use platform serving the advised and D2C markets Advised D2C (Full launch planned in 2025) • Reduced customer charges and increased rates paid on cash • Reduced customer charges and increased interest rates paid on balances from 1 April cash balances from 1 April • New cl
Slide 11: Our propositions: market-leading service and low-cost solutions
Our propositions Platform supported by market-leading service and low-cost, simple investment solutions Platform is underpinned by market-leading service levels to customers and advisers • Only UK platform to be recognised as a Which? Recommended investment platform provider for six years in a row •
Slide 12: Our customers: advised customer insights
Our customers Advised customer insights Growth in FY24 Gross inflows from new and existing customers FY24 FY23 Customers Average inflows • Increased by 12,000 to close 8% higher at 171,000 per new customer £183k £151k Average inflows Assets under administration per existing customer £14k £12k • Net
Slide 13: Our customers: advised customer insights (outflows)
Our customers Advised customer insights Higher outflows across sector ...AJ Bell Investcentre less impacted …with outflows broadly equal between since start of 2023… than most platforms… withdrawals and transfers Advised platform market outflows(1) Outflows as a percentage of opening AUA(1) AJ Bell
Slide 14: Our customers: D2C customer insights
Our customers D2C customer insights Growth in FY24 Gross inflows from new and existing customers FY24 FY23 Customers Average inflows • Increased by 54,000 to close 17% higher at 371,000 per new customer £43k £36k Average inflows Assets under administration per existing customer £11k £9k • Net inflow
Slide 15: Our customers: D2C customer insights (behaviour)
Our customers D2C customer insights D2C customers display the characteristics of long-term investors, with a strong weighting to the UK… Tax wrappers dominate new accounts Customers trade less than once a month Over 40% of invested AUA allocated to UK(1) 15 27% 25% 24% 10 5 73% 75% 76% UK 43% Non-UK
Slide 16: Financial update
Financial update 16 AJ Bell plc FY24 annual results
Slide 17: FY24 Financial highlights
FY24 Financial highlights Figure 17 FY24 FY23 +/- Revenue £269.4m £218.2m 23% • An improved revenue margin of 31.6bps drove a 23% increase in revenue to £269.4 million, primarily due to: ‒ Increased custody fees driven by higher average platform AUA Revenue margin 31.6bps 29.8bps 1.8bps ‒ Higher int
Slide 18: Revenue analysis
Revenue analysis Revenue by proposition, nature of revenue streams and revenue margins FY23 FY24 Figure 18 (£m) (£m) 126.0 A well-diversified revenue model +23% 5.3 104.8 4.8 • Mix of fixed, ad valorem and transactional revenues enables us 98.3 to deliver sustainable profits across different market
Slide 19: Costs analysis
Underlying administrative expenses increased by 19% as we Costs analysis delivered our planned investments in our people, brand and technology • Staff costs were up 24% to £80.3 million due to pay rises reflecting high inflation at the start of FY24, enhancements to non-salary FY23 FY24 Figure 19 be
Slide 20: Capital position and shareholder returns
Capital position and shareholder returns Our highly cash generative and capital light model supports regular shareholder returns Regulatory capital position Dividend payments £ million FY24 FY23 Pence per share FY24 FY23 +/- Total shareholder funds 204.0 166.0 Interim 4.25 3.50 21% Less: unregulated
Slide 21: Capital allocation
Capital allocation A holistic approach that strikes a balance between capital returns and long-term value creation AJ Bell capital allocation framework FY24 outcomes Financial strength Significant capital surplus and cash balances of £197 million Maintain an appropriate level of regulatory capital a
Slide 22: Outlook
Outlook 22 AJ Bell plc FY24 annual results
Slide 23: Financial outlook – guidance
Financial outlook – guidance FY25 guidance Outlook beyond FY25 Advised D2C Non- Revenue margins – slight compression Platform Platform platform over time: Revenue margin expected to be Revenue margin expected to be Revenue ~23bps ~44bps Revenue expected to be ~£16m • Pricing optionality – we will co
Slide 24: 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: FY25 FY26 • Treasury management capability gives us time to react to No material No material interest rate changes
Slide 25: Outlook
Outlook Significant long-term growth opportunity in the UK platform market • Structural growth drivers of the platform market remain strong • £3 trillion addressable market, of which only one-third is currently held on platform • Government continue to support pensions and ISAs, but risk of addition
Slide 26: Appendices
Appendices 26 AJ Bell plc FY24 annual results
Slide 27: 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, Our propositions with in-house investment solut
Slide 28: 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 29: Appendix III: Platform customers, AUA and AUM
Appendix III Platform Customers, AUA and AUM FY24 FY23 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 12,000 54,000 66,000 13,000 36,000 50,000 Closing customers 1
Slide 30: Glossary
Glossary 30 AJ Bell plc FY24 annual results
Slide 31: Glossary
Glossary AUA Assets Under Administration AUM Assets Under Management BPS Basis Points D2C Direct to Consumer FOS Financial Ombudsman Service FX Foreign Exchange FY23/FY24/FY25 Year Ended/Ending 30 September 2023/2024/2025 IFA Independent Financial Adviser IHT Inheritance Tax ISA Individual Savings A
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.