AJ Bell customers numbers grow but markets hit AUM

Investment platform AJ Bell reported a respectable start to trading as a listed company, with 4% growth in customer numbers and positive net flows.

Six weeks after completing its initial public offer on London's main market, the company revealed that headline assets under administration shrank 4% to £44.2bn in the three months to 31 December, the first quarter of its financial year. The decline in AUM was due to negative market movements of £2.7bn.

However, platform customer numbers increased 7,285 to 190,498 and underlying net flows were £0.8bn, consistent with last year though underlying net flows on the platform fell to £1.1bn due to lower defined benefit pension transfer volumes. This downward trend in DB pensions is expected to continue during the current year.

"Trading in the first quarter of our financial year continued in line with the growth story we outlined ahead of our IPO and remains on track," said chief executive Andy Bell, adding that increasing new customers and inflows "demonstrates the strength and resilience of our business model as we approach our busiest period of the year".

Despite the ongoing decline of DB transfers since their peak two years ago, and the current market volatility, he said the outlook for the platform market remains strong: "The FCA is due to deliver the final report of its Investment Platforms Market Study and based on its interim report this is expected to focus on value for money and easier transfers between platforms. Our competitive pricing model and service proposition means we are well positioned to benefit from anticipated developments in these areas."

Shares in AJ Bell, already up strongly since floating at 160p in mid December, were little moved on Wednesday.

Broker Peel Hunt saw a key positive being the continued growth in customer numbers, "which will ultimately drive future flows".

"No consensus forecasts available, although note that the market cap is now higher than IntegraFin despite lower levels of profitability."