AJ Bell announces £30m share buyback amid record revenue and profit surge

AJ Bell has initiated a £30m share buyback programme this morning, coinciding with the announcement of record financial results. The investment platform's revenue soared by 23 per cent.

In its final results for the year ended 30 September 2024, the FTSE 250 company reported a pre-tax profit leap of 29 per cent to £113.3m, benefiting from increased activity on its platforms and an influx of new users, as reported by City AM.

The number of platform customers grew by 14 per cent over the year to 542,000, while assets under administration surged by 22 per cent to £86.5bn.

AJ Bell has also upped its dividend by 16 per cent, supported by the significant cash reserves it has built up, now reporting £196m in cash holdings, a substantial increase from £146m at the beginning of the year. "Backed by our strong profitability and highly cash-generative business model, we have accumulated significant surplus capital above our regulatory requirements," commented AJ Bell CEO Michael Summersgill.

AJ Bell Investments saw remarkable growth, with assets under management increasing by 45 per cent to £6.8bn. Despite these strong figures, the firm experienced a slight decrease in customer retention rate, which fell from 95.2 per cent to 94.2 per cent.

While the company has performed robustly on the stock exchange, with AJ Bell’s share price climbing 65 per cent since the start of the year, budget uncertainty casts a shadow on the outlook.

In October, the company noted a shift in investor behaviour due to uncertainty surrounding the Budget, with clients withdrawing pension funds from its platform and delaying contributions to their retirement savings. "Amidst increased press coverage ahead of the upcoming Budget, we have seen a noticeable change in both customer contributions to pensions and tax-free cash withdrawals," Summersgill commented at the time.

The CEO has since urged the government to foster confidence in the retail investment market by committing to long-term tax stability, which would encourage more individuals to invest for their future with certainty. "We will continue to campaign for stability and simplicity for retail investors, helping to make it easy for people to invest and plan for the long-term."