AJ Bell PLC (AJB)

[barchid]

Very encouraging year end update from Bell, AUA well up, about 17% more platform customers etc etc,i have not dug into the numbers as that is best at year end but intuitively I feel they must be well positioned to pick up disgruntled HL customers,of which there are a few ! Personally I use Bell & am very happy with their service, it does strike me that this has to be a very scalable company and they seem to know exactly which niche they wish to occupy. Certainly moved up a lot from their opening offer but I suspect there is long term value here.
The real interest to me is what their final dividend will be, the interim was a skimpy 1.5P.

[PinkDalek]

The real interest to me is what their final dividend will be, the interim was a skimpy 1.5P.

You'll have seen the note in the interims (and elsewhere) https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/AJB/14084360.html which includes:

Dividends

The Board continues to adopt a progressive dividend policy, which is supported by our capital-light and highly cash-generative business model as reflected in the strength of our balance sheet. The Board has declared an interim dividend of 1.50 pence per share, in accordance with its stated policy, which is designed to ensure that we retain sufficient funds for continued investment in the business and to meet our regulatory capital requirements.

[supremetwo]

This will halt their price rise for now:-

17 December 2019

Andy Bell, Chief Executive Officer of the Company (the "Selling Shareholder"), has today indicated his intention to sell up to approximately 5.0 million ordinary shares of AJ Bell (the "Placing Shares"), representing up to approximately 1.2% of the Company's existing issued ordinary share capital.

The Placing Shares will be offered to institutional investors through an accelerated bookbuild (the "Placing"). Numis Securities Limited ("Numis"), acting as sole bookrunner, has entered into a placing agreement with Lawshare Nominees Limited (in their capacity as nominee on behalf of the Selling Shareholder). The books for the Placing will open with immediate effect. AJ Bell will not receive any proceeds from the Placing.
https://www.ajbell.co.uk/investor-relat ... bell-plc-1

[InTheDarkYetAgain]

Re Vanguard proposed SIPP offereing (and comments elsewhere)

Not sure how much of a risk Vanguard will be. Yes, 15bp p.a. is seen as inexpensive by some but you will only be allowed Vanguard stuff, nothing else - the correct charge should be zero! OK zero for you Vanguard holdings, 15bp for other stuff but they are not going to support other stuff. AJ Bell would charge 0bp for holding Vanguard ETFs - yes the SIPP does have an admin charge but it's only(?) £25 per quarter maximum. ETFs and ITs are just shares. OEICs attract a platform fee but ETFs and ITs, it's zero. I don't see the new Vanguard proposal as any serious threat here - the 25bp p.a. fund (Units/OEIC) holding fee, that's an issue but pretty much everyone else charges more. It does have to go at some point, it's completely unjustifiable and competition will eliminate it in the end but....

I am a shareholder and I do have a sizeable SIPP with them FWLIW

[InTheDarkYetAgain]

Not completely a new member but couldn't login so had to start again. Sorry. Hope it's not a negative.
Regards.

[supremetwo]

Not completely a new member but couldn't login so had to start again. Sorry. Hope it's not a negative.
Regards.

Could be your own internet connection - lots of intermittent issues UK-wide due to the storms/wet/floods.

[barchid]

Inthedark
I think you are spot on.
Vanguard only products are restrictive, to say the least, for any sipp and to charge for holding their own product is hardly enticing.
I have had excellent service from Bell at what I consider to be a very reasonable cost for some years.
It will be interesting to see if/how many, HL customers decide to leave HL post Woodford debacle, as Bell could very easily be one of the largest beneficiaries of that move should it occur.

[InTheDarkYetAgain]

LE:AJB

@supremetwo. Thank you for the reply. No, not a weather issue, just me. Completely forgot my original login ID. Password they will send a reminder but not if you have forgotten your ID. Use my standard email but Lemon said 'already in use' so had to set up a new one and start from scratch. My fault but.... I've been contributing member to Interactive Investor boards since 2000 so tried sticking with that but it's getting hard; just so many people have stopped commenting. Post a comment and zero reply? It's easy to start losing interest! Someone over there said LemonFool and I clearly did but then didn't follow up so everything forgotten - it's written down this time so I'll 'endeavour to persevere' a bit longer this time.

@barchid. Cheers. Good to know I'm not wholly alone! Huge business is Vanguard and it will attract lots. Big threat to HL, much, much less to AJB in the immediate future IMO.... but then HL will have to respond to Vanguard and, depending on how they respond, that could be a threat here.

My opinion? AJB at £4 is fully priced. Yes, business growth all but certain but it's already priced in. HL, well I never short shares but I would if I had to. Definite seller, not a buyer there. On balance.... I have 0 HL, I have 5000 AJB. I'm sitting tight with a 335 stop on the AJB.

Regards,
ITDYA

[terminal7]

Trying to sort out the timeline regarding Invesco dumping virtually all their 7% holding in AJ Bell on 22/5 at £4 per share and the hefty sales by some senior AJ Bell personnel et al @ £4.38 per share prior to the Invesco placing. The shares finished the day on £3.78.

This does not look good - have I got this right?

T7

[Dod101]

That is how it is reported in The Times this morning.

Dod

[dealtn]

Trying to sort out the timeline regarding Invesco dumping virtually all their 7% holding in AJ Bell on 22/5 at £4 per share and the hefty sales by some senior AJ Bell personnel et al @ £4.38 per share prior to the Invesco placing. The shares finished the day on £3.78.

This does not look good - have I got this right?

T7

There are 2 things here, so can I ask for clarity on what "does not look good".

The selling by Invesco, or the selling by "senior AJ Bell personnel et al". I assume it is the latter you feel is wrong?

[supremetwo]

Trying to sort out the timeline regarding Invesco dumping virtually all their 7% holding in AJ Bell on 22/5 at £4 per share and the hefty sales by some senior AJ Bell personnel et al @ £4.38 per share prior to the Invesco placing. The shares finished the day on £3.78.

This does not look good - have I got this right?

T7

Post coronavirus, it is probable that AJB was one of a minority of Invesco holdings with any significant gain.

https://citywire.co.uk/funds-insider/ne ... +Afternoon

The placing represented nearly all of Invesco’s shares in the online stock broker, leaving the fund group with a remaining stake worth £5m. It nets the fund group a substantial profit on an investment first made in 2007 long before AJ Bell listed on the stock market, with the unquoted shares having been steadily revalued higher, then soaring 150% from 160p at flotation to the 400p placing price.

The sale the first major move by Ciaran Mallon and James Goldstone since taking on the Invesco Income and High Income funds from Mark Barnett, following the former manager’s exit from Invesco under mutual agreement last week.

As for 'not looking good' if institutions are prepared to snap up large tranches at 400p, is that not a firm price floor?

[terminal7]

The selling by Invesco, or the selling by "senior AJ Bell personnel et al". I assume it is the latter you feel is wrong?

Very much the latter - Invesco can sell what they want. What concerns me is AJB senior personnel selling just before a large placing and hence giving the appearance that they may have had an inkling of the impending sale. As I said - I may have completely misunderstood the timing or that the AJB personally just got lucky with their timing.

T7

[supremetwo]

The selling by Invesco, or the selling by "senior AJ Bell personnel et al". I assume it is the latter you feel is wrong?

Very much the latter - Invesco can sell what they want. What concerns me is AJB senior personnel selling just before a large placing and hence giving the appearance that they may have had an inkling of the impending sale. As I said - I may have completely misunderstood the timing or that the AJB personally just got lucky with their timing.

T7

The AJB interim financial statement was published on 21st May, so the AJB seniors had to wait for its publication.

https://www.ajbell.co.uk/investor-relations/reports

Perhaps it's Invesco that got it wrong - their placing must have been in the pipeline long before the AJB report.

[dealtn]

The selling by Invesco, or the selling by "senior AJ Bell personnel et al". I assume it is the latter you feel is wrong?

Very much the latter - Invesco can sell what they want. What concerns me is AJB senior personnel selling just before a large placing and hence giving the appearance that they may have had an inkling of the impending sale. As I said - I may have completely misunderstood the timing or that the AJB personally just got lucky with their timing.

T7

I haven't read the piece (or any other on this) so don't know what is claimed.

It would appear that AJ Bell personnel would have been in a closed period until release of their Interim Results on May 21st which I would presume came out at 8am, or shortly before, after which they are able to buy, or sell, shares in the company, unless they held additional "inside information". (In fact I think they can make an instruction to do so before, but the order must be executed after).

Invesco can buy/sell whenever they like, although they too are restricted by the insider information rules. As a large shareholder they may have had insight on the Interim results (although I doubt) which would have precluded a sale before 21st May. For whatever reason they decided to wait until after the interim results.

They could have sold directly into the secondary market, but judged by the volume they wished to shift there might be an alternative and approached their advisor Numis, I believe. It was agreed to arrange a placing. As you said Invesco can "sell what they want", and presumably when they want too. They don't need the permission of AJ Bell, nor need to tell them.

The RNS about the Proposed Placing went out at 16:51 on 21st May, issued by Numis, on behalf of its client Invesco, which is after the market closed on May 21st. My understanding is that the sales in question by senior personnel at AJ Bell had already happened by this stage, although not reported until the 22nd by which time the book build for the placing was in progress.

On these facts alone there is nothing suspicious or evidence of insider trading going on. Is there allegation, or evidence, that anyone at AJ Bell was aware of Invesco's intentions?

[johnhemming]

7% of a company is a big slug to place. In the end some people thought £4 was a good price to pay.

[terminal7]

1. I believe it fair to assume that most experienced investors would believe that the placing of some 7% of a top company stock at a discount of some 6%/7% of the closing market price would lead to significant downward pressure on the opening price the following day. Indeed, the SP fell some 13% on Friday. This followed a reasonable set of results as mentioned.

2. Therefore shareholders who sold on 21/5 were either (I) selling as a result of their views of the results (ii) felt that the market's reaction to the results was wrong, (iii) felt that the SP was frothy, (iv) lucky, (v) being 'forced' to sell or (vi) had an 'inkling' that Invesco was about to dump a large holding.

Clearly some institutions felt that spending over £120m for some 7% of AJB was a good investment. On the day, they made a paper loss of £5/6m.

Having followed AJB for some time, I just feel that I am missing something - but the selling of some 1.85m shares on 21/5 by senior personnel needs an explanation.

T7

[dealtn]

1. I believe it fair to assume that most experienced investors would believe that the placing of some 7% of a top company stock at a discount of some 6%/7% of the closing market price would lead to significant downward pressure on the opening price the following day. Indeed, the SP fell some 13% on Friday. This followed a reasonable set of results as mentioned.

2. Therefore shareholders who sold on 21/5 were either (I) selling as a result of their views of the results (ii) felt that the market's reaction to the results was wrong, (iii) felt that the SP was frothy, (iv) lucky, (v) being 'forced' to sell or (vi) had an 'inkling' that Invesco was about to dump a large holding.

Clearly some institutions felt that spending over £120m for some 7% of AJB was a good investment. On the day, they made a paper loss of £5/6m.

Having followed AJB for some time, I just feel that I am missing something - but the selling of some 1.85m shares on 21/5 by senior personnel needs an explanation.

T7

Well the explanation may well be that they wanted to sell and were prohibited from doing so until the 21st May. Looking back at the finals, and previous Interims, you don't see such sales, but the company was I believe floated in Nov 18, with restrictions on Director selling in the first year as part of the listing rules. This likely explains why nothing similar happened in May, or November 19.

I have no axe to grind here either way, but if you (or the media) think a further explanation is necessary then the FCA is the route I think.

[Steveam]

Final results for year ended 30-Sept-2021

https://www.ajbell.co.uk/sites/ajbell.c ... cement.pdf

● Final dividend of 4.50 pence per share proposed, increasing the total ordinary dividend for the year by 13% to 6.96 pence per share (FY20: 6.16 pence per share)
● Special dividend of 5.00 pence per share proposed (FY20: nil), taking the total dividend for the year to 11.96 pence per share (FY20: 6.16 pence per share)

Best wishes,

Steve