Profits spark at AJ Bell despite 'challenging' conditions

The investment platform said revenues in the year to 30 September rose 12% to £163.8m, while pre-tax profits were ahead 6% at £58.4m.

The pre-tax profit margin eased, however, to 35.6% from 37.8%, because of investment in new offerings and the impact of customer price reductions.

Diluted earnings per share rose 6% to 11.35p, with the proposed final dividend also ahead 6% at 7.37p per share.

Customer numbers increased by 57,687 to 425,652, but platform net inflows fell to £5.8bn from £7.0bn and platform assets under administration declined 2% to £64.1bn. AJ Bell said "strong" inflows had been offset by adverse market movements of 11%.

Michael Summersgill, chief executive - who took over from founder Andy Bell in October - said: "Our continued growth has underpinned another excellent set of financial results in a challenging year for markets.

"Our profitable, sustainable business model and strong financial position has supported continued investment in our customer propositions and our people while enable us to again increase our ordinary dividend."

Looking ahead, Summersgill warned that market volatility was likely to persist in the short term.

But he noted: "While no business is immune to inflationary pressures, the rise in UK base rates provides an opportunity to combat this, by rebuilding our revenue margins that suffered in an exceptionally low interest rate environment.

"Our pre-tax profit margins are expected to increase in the 2023 full year, as higher revenue margins and the operational gearing inherent in our business model outweigh the impact of inflationary pressures and planned investment."