AJ Bell hikes dividend as profits climb higher than expected

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AJ Bell PLC (LON:AJB) hiked its dividend 28% and said it is well-positioned to benefit from supportive trends in the market.


The pensions and investment platform reported revenue of GBP126.7mln for the year to end-September 2020, up 21% on the prior year as customer numbers and assets under administration both rose strongly, as detailed in a recent pre-close statement.


Profit before tax jumped 29% to GBP48.6mln as costs rose less fast than sales, which was higher than the GBP46mln average of City analyst forecasts.


With GBP51.5mln of cash generated from operations, up from almost GBP38mln a year ago, the board declared a final dividend of 4.66p per share, taking the total dividend for the year to 6.16p per share.


“The long-term growth drivers of the platform market remain strong, with customers increasingly looking for good value, online solutions and we are well positioned to benefit from those trends,” said chief executive Andy Bell.


He said the group had managed the initial difficulties caused by the crisis and “in doing so laid foundations for the future operating model”.


“The long-term impact of the pandemic on the global economy is hard to predict, but we do expect interest rates to remain low for the foreseeable future. Whilst this will have an impact on revenue, we have a diversified revenue model and have operated in a low interest environment successfully for several years.”


Broker Peel Hunt said the dividend was higher than expected, with a consensus forecast of 5.6p, and noted that profit margin improved to 38.4% from 35.9%.

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