Investors trying to cash-in on the stock market slump during lockdown trigger a bumper rise in AJ Bell’s customer base as it rakes in 45% extra from trading fees
- AJ Bell’s customer numbers rose by over 30,000 in past six months
- Group’s revenue up over 20%, while cash from fees jumps sharply
- Shell, Lloyds and BP were the three most popular stocks among AJ Bell’s base
- Rivals Hargreaves and Interactive Investor says investors are ‘bargain-hunting’
Investing platform AJ Bell has seen a surge in demand from Britons looking to cash-in on the stock market slump caused by the coronavirus crisis, new figures suggest.
In a boost for its own shareholders, AJ Bell said its robust balance sheet meant it could continue investing in its business, and dish out dividends to shareholders.
While the group did draw up a list of staff who could be furloughed, it has opted not to follow this path, claiming the Government’s Job Retention scheme should be ‘preserved’ for businesses that need it the most.
In the six months to 31 March, AJ Bell’s revenue from transaction fees, comprising dealing fees and pension scheme activity fees, grew by 45 per cent to £11.5million.
He’s the boss: Andy Bell is the well-known chief executive of AJ Bell
This upturn in transaction fee revenue was driven by higher levels of customer dealing, particularly towards the end of the period when market volatility took hold and investor trading picked up, according to the company.
AJ Bell plans to pay its own shareholders a 1.5p a share interim dividend, but recognised that ‘some prudence is required given the current circumstances.’
It added: ‘The Board recognises the importance that our investors place on AJ Bell’s progressive dividend history and reaffirms our ongoing commitment to this and our stated dividend policy for future dividend distributions.’
Over the six month period to 31 March, AJ Bell enjoyed a record rise in its customer base, which grew by 30,113 in the period to 262,179, up 22 per cent over the last year. Many new recent customers have been investing via the company’s Isa ranges.
Since lockdown, the markets have been volatile, but, for some investors, this represents an opportunity to snap up stocks at a cut price in the hope they will prove fruitful and offer up a decent return in future.
Over the past month, the three most popular shares purchased by AJ Bell’s customers were, in rank order, those from Shell, Lloyds Banking Group and BP.
In the last six months, AJ Bell’s total revenues increased by 22 per cent to £60.9million, while pre-tax profits swelled by 28 per cent to £22.7million.
Andy Bell, AJ Bell’s chief executive, said: ‘This is a strong financial performance at a time when the country faces one of its most significant challenges in decades.
‘Our focus has been to keep our people safe while continuing to provide the vital services our customers need during times of market volatility and being here to service their needs.’
Total assets under administration rose one per cent over the past year, closing at £48.3billion, but in the six months to 31 March fell by 8 per cent.
Meanwhile, total net inflows of funds from the public came in at £2.1billion, against £1.8billion for the same period a year ago.
At present, shares in AJ Bell are down 0.22 per cent or 1p to 447p today. But, this marks a sizeable improvement on a month ago when the group’s share price stood at around the 298.00p mark. A year ago, the share price was around 428.00p.
FinnCap analyst Nik Lysiuk, said: ‘Shares have flown and are now approaching new highs.
‘The story has always been positive and remains to be so, but on an immediate term view the chart looks a little too excitable given the current market and economic backdrop.
‘On the other hand, on the long view, investors will probably ask why they didn’t buy it at 450p. I remembered yesterday how I used to think Amazon was expensive at $330.’