Investment platform AJ Bell is considering a stock market flotation either in late 2018 or early 2019. Retail investors will be allowed to take part in the IPO (initial public offering) offer as long as they are AJ Bell customers.
This exclusivity is very different to how most retail share offers work. Traditionally retail offers would be available on most of the major stockbroking platforms. AJ Bell says it is restricting access in order to reward its 172,000 customers.
‘It is important for me that our customers are able to participate in our IPO,’ says Andy Bell, chief executive at AJ Bell.
‘They are the reason we are here and I want them to have the opportunity to share in our success by ensuring a proportion of the share offer is ring-fenced exclusively for AJ Bell customers.
‘That is why we are announcing our intentions earlier than would normally be expected. It gives people time to join us on the journey through our interim and then full year results before making a decision whether to invest.
‘The terms of the retail offer have not yet been finalised, but we want to be as inclusive as is possible,’ he adds. Further details of the IPO will be announced in due course.
The company is considering a stock market listing in order to raise its profile. It doesn’t plan to raise any new money at the IPO as the business is already in a strong financial position.
AJ Bell Youinvest is the company’s consumer-facing operation. It offers ISAs, SIPPs (self-invested personal pensions) and dealing accounts so individuals can invest in a wide range of assets including stocks, funds and bonds.
The company’s other interests include AJ Bell Investcentre which is an investment platform for financial advisers. AJ Bell is also a fund provider and owns Shares magazine.
The largest shareholder pre-IPO is asset manager Invesco Perpetual with a 44% stake. Chief executive Andy Bell owns 28%, Seneca Investment Managers owns 3%; and the remaining 25% is held by management and former members of staff.
Woodford Investment Management recently sold its 8% stake in the business for an undisclosed amount. It originally invested £21m in AJ Bell in June 2015; approximately two thirds was held by its CF Woodford Equity Income Fund (GB00BLRZQ737) and the rest by Woodford Patient Capital Trust (WPCT).
AJ Bell is profitable, pays a dividend, has a debt-free balance sheet and has enjoyed consistent growth in earnings and new customers for many years.
Pre-tax profit increased by 29% to £21.7m for the year to 30 September. Assets under administration grew by 25% in the financial year to £39.8bn; and it lifted the dividend by 10% to 28.25p per share.