AJ Bell is riding a stock market wave that has seen thousands of a new breed of investor race to open accounts in lockdown.
The investment platform, whose closest rival Hargreaves Lansdown is also booming, saw half-year profit jump 39% to £31.6 million.
The profit margin is a fairly astonishing 42.8%, something unmatched in almost any other industry.
That does suggest there is plenty of room for rivals to undercut the established players with cheaper deals.
The company is paying a divi of 2.46p a share, up sharply from last time when AJ Bell along with most other companies moved to retain cash.
That divi is worth £2.3 million to founder Andy Bell – he owns 23% of the business.
Total customers increased 51,492 in the period, up 32% over the last 12 months and 17% in the first half of the year.
The average age of AJ Bell’s new customers is 38, five years younger than those already on the books.
“We are not seeing the crypto investors, the meme stock investors, that is not really our market,” said Bell. “They are not here for gambling. The question for us is, that younger generation’s dalliance with crypto, does that get them engaged in investment or will it scare them off?”
AJ Bell’s own shares rose 1p to 437p, which values the business at £1.8 billion.
Numis said: “The interim dividend was increased 64% to 2.5p, and we now expect a full year ordinary dividend of 7.1p, as well as a special dividend of 4.0p, providing a 3.5% yield for 2021.”
