# AJ Bell plc See customer numbers increase by 17%

- Link: https://www.directorstalkinterviews.com/aj-bell-plc-see-customer-numbers-increase-by-17/412796188
- Published: 2019-10-24T07:22:26+01:00
- Author: Giles Arbor

**AJ Bell plc** (LON: AJB), one of the UK’s largest investment platforms, has today
issued a trading update in respect of its financial year ended 30th September 2019.

**Performance overview**

Total customer numbers increased by 17% in the year to 232,066, with total assets
under administration up 13% to £52.3 billion. In comparison, the FTSE All-Share 
index decreased by 2% over the year.

AJ Bell’s growth during the year was driven by the platform business:

· Platform customers increased by 34,956 to 218,169, up 19% in the year

· Platform AUA increased by 16% over the year to £44.9 billion

o Advised Platform AUA up 13% to £33.8 billion

o D2C Platform AUA up 28% to £11.1 billion

· Underlying platform inflows, representing organic growth in the year, increased
to £5.4 billion (2018: £5.2 billion)

**Andy Bell, Chief Executive Officer at AJ Bell, commented:**

> “Our first full year trading update since the IPO demonstrates the resilience 
> of our business model. During periods of unsettled markets and political uncertainty
> customers have a greater need for established, trustworthy businesses offering
> high quality service, at low cost to meet their evolving investment needs. This
> has enabled us to continue to add customers and assets to the platform.
> “Platform customer numbers continued to grow strongly, up 19% over the year and
> platform assets under administration increased 16%, despite a 2% fall in the FTSE
> All-Share. Underlying platform inflows remained robust at £5.4 billion and transfers
> from defined benefit pensions added a further £0.9 billion.
> “The long-term growth drivers of the platform market remain strong with customers
> increasingly looking to take control of their long-term savings with flexible,
> low-cost, online solutions. This, coupled with our strong customer retention rate,
> positions us well to achieve our organic growth ambitions.”

Notice of annual results

AJ Bell will be announcing its full results for the year ended 30 September 2019
on 5 December 2019.

**finnCap Group plc financials analyst Nik Lysiuk wrote:**

**AJ Bell, 371p, market cap. £1516m **

One of the largest UK platforms for both advisers and individual investors

**Continued strong flows – don’t be short**

**News. **Trading update for financial year ended 30 September 2019 states customer
numbers up 17% with AUA up 13% to £52.3bn. Advised platform AUA grew 13% to £33.8bn
and D2C was up 28% to £11.1bn. Platform net flows amounted to c.14% of opening platform
AUA.

**Estimates. **Consensus PBT to September 2019E expected to reach £37.4m on revenues
of £104.3m, up 32% and 16% respectively over September 2018A. AUA comes in as expected,
and is set to grow 9.7% into September 2020E, resulting in PBT growth of 17%.

**Valuation. **EV/AUM of 2.8%. Shares trade on an 2020E P/E multiple of 42x with
a dividend yield of 1.6%. An almost £2bn company that is destined for continued 
growth.

**What’s interesting? **Close your eyes if you like value, but on a long-term horizon,
it’s still a buy. I’ve spoken to some investors that have considered shorting this
stock on valuation alone. Such a view completely misunderstands the strength of 
the underlying drivers in this sector and besides, people were saying the same about
Hargreaves at 10p. If you want a platform that is yet to achieve scale and trades
on c.1% EV/AUA then look at Nucleus which is where the potentially larger longer
term growth opportunity is. Tatton also gives very similar exposures and is totally
undervalued.

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