Hello and welcome to AJ Bell's 2025 Interim Results video. We're shortly going to hear from Michael Summersgill and Peter Birch, CEO and CFO of AJ Bell. First, let's go through some of the key numbers from the first half. Starting with customers, AJ Bell's platform customers increased by 51,000 in the first half to close at 593,000, an increase of 9%. Platform assets under administration closed at GBP 90.4 billion, up 5% in the period. Platform net inflows were up 14% versus the prior year to GBP 3.3 billion, with GBP 0.8 billion attributable to the advised platform and GBP 2.5 billion being D2C. Moving on to the key numbers from the first half results announced today. Revenue was up 17% to GBP 153.2 million, driven by strong recurring ad valorem and transactional revenues. Total costs increased by 21% -GBP 87.7 million, whilst net finance income totaled GBP 3.8 million.
Taken together, this resulted in a 12% increase in profit before tax to GBP 68.8 million and a profit before tax margin of 44.9%. On capital returns, the board has declared an interim dividend of GBP 4.50 per share, a 6% increase on the prior year. In addition, the board has approved a further share buyback program of up to GBP 25 million, returning surplus capital to shareholders in line with the company's capital allocation framework. You can find full details about these results on our website. Now let's hear from Michael and Pete and get some insight into what's behind these numbers and their expectations for the second half of the year and beyond.
I think it's been quite an exciting six-month period. If you think of what's been going on in the market around us in this period, it all started with the budget back in October, so some big tax rises and lots of change to legislation, not necessarily positive for us or our customers, but lots to process, lots to deal with. For us and for customers, we saw lots of change in customer activity due to the uncertainty around the tax treatment of pensions. That theme repeated in a very different way at the end of the six-month period. We saw all the market volatility as a result of the tariff announcements coming out of the U.S. government. In the middle of all of that, we actually had our busiest ever tax year-end period. Plenty going on for us to deal with as a business.
The key thing in all that is that the customer service has been excellent through that period, and we've carried on growing the business successfully. We actually had a record number of new customers attracted to the platform, over 50,000 customers, and delivered strong net flows on both the advised and the D2C side of the business. A very, very strong performance for us all around, particularly considering what's been going on in the market. Customer service is one of the things that we pride ourselves on as a business, so we always try and keep a keen focus on it. It's been particularly pleasing to see how strong it's been through a very busy period. The business is operating to a reasonable scale now, and generally, people want to be able to self-serve on the platform.
We've processed over 5 million trades for our customers in that period and millions of other transactions besides. You can see that we're offering that reliable platform for customers. What is important to me is that we give them that human support around that tech solution where they need it. We're looking after people's life savings. There will be times along that journey that they want to confirm their understanding of something or an aspect of the platform doesn't work the way that they expect it to. That's something that I think we've always been good at. In this period, it was a very busy period with lots of different types of queries coming at our customer services team. They've done a very good job of handling those calls very quickly and very effectively.
We've had over 200,000 calls through that period from our customers and advisors, and over 96% have been answered within 20 seconds, which shows the speed of the response is there if people need that human touchpoint. The platform market is a very attractive market. It's one that's continuing to grow as a result of more people having to take control of their own finances and their retirement savings. At present, we size the market at approximately GBP 3 trillion in terms of total addressable market, and there's about GBP 1 trillion of that already on the platforms. We're trying to access as much of that growth opportunity as possible by being in both the D2C and the advised segments of the platform markets. In the way that we're operating, there's three things that we're trying to invest heavily in to drive the growth of our business.
The first is accelerating the pace of change delivery. The second is building our brand. The third is making sure that we continue to be a low-cost provider. We've been investing in change delivery for a number of years now, principally by strengthening the team. The product team and the tech team, we've been increasing resource there, and that has accelerated the pace of change delivery. The key thing for me there is focusing on what we're actually bringing to market as a result of that. Everything's been centered on ease of use, but ease of use means different things for our users on the advised side of the business or the D2C side of the business. For advisors, it's been around trying to improve the efficiency of the platform as much as possible.
To give an example from this six-month period, we've fully digitized the benefits process. If advisors are looking to draw any type of retirement income for their clients, it's a far more effective process now, far more efficient process. On the D2C side of the business, it's about the customer journey. We've completely overhauled the website in the period, and that will launch in the second half of the year. We've been focusing mainly on the navigation there, but also content delivery to the customers. From a business perspective, we've re-architected the site so that it gives us far better analytics, and it will help to improve the new customer conversion rates as well. The brand investment has been very important to me.
I think it's a key decision for customers when they're picking a platform, whether they trust the brand or they're aware of the brand. An important point to note is that the brand awareness itself is just a means to an end. It's never the end objective. Ultimately, I always thought that we had to either reduce the cost of acquiring a new customer in terms of direct marketing spend, or we had to be able to hold that at the same level and bring in a far greater number of customers than we were. What we've actually seen over the last 18 months is that both of those things have been true. It's definitely an investment that's paid back very well. What we've done to date has been very successful, but I do think there's more that we can do in that space.
Further investments to come, and that's where our focus is now and what comes next. It's very important to me that we are a low-cost provider. It's a key mechanism for delivering value to customers. We've always had this approach, and last year, for example, we made significant changes to pricing. That's one of the reasons that this year the profit has only gone up 12% despite the fact that the revenue has gone up 17%. It's also one of the reasons that we've delivered record customer growth in the period as well. It is something that we will continue to invest, and we do see the results from that. You get a virtuous cycle with it as well. The business scales very effectively.
As we continue to grow organically, there is an opportunity there to increase the profit margins so we can then again invest that in lower-cost pricing. It is not just about the benefits of the business model we have already got. We are constantly trying to improve the efficiency of the operation. That is a key focus for us as well. As long as we get those two things right, we carry on growing the business, and we carry on driving the operational efficiency, then we should be able to be a low-cost provider for years to come.
Financial performance has been very strong during the period. Both revenue and profit before tax are up significantly year on year. Revenue increased by 17%. In terms of the main drivers of that revenue increase, there are two factors there: the increase in the scale of the business and a normalization of customer dealing activity. In terms of the scale point, the AUA balances are higher, the levels of cash on the platform are higher, and those both impact ad valorem revenue, which has consequently increased during the period. From a customer dealing perspective, there has been a normalization of volumes, but also a higher weighting towards overseas transactional activity, particularly around the timing of the US election. That has driven, if anything, elevated levels of transactional revenue during the period. Taken together, those have all contributed to a very pleasing revenue result.
Costs increased by 21% during the period, which was slightly higher than we'd originally guided to. In terms of how we look at costs, we look at three different categories, really. We look at business-as-usual costs, those costs relating to just running the business. We have business investment costs, and then we have performance-related variable costs. If I take each of those in turn and I break down that 21% overall number, of that, 8% related to the business-as-usual costs. The main driver of that was increased headcount and pay rises. In the context of that, we've scaled customer numbers, and we've scaled the level of AUA, and revenue has increased by substantially more than that 8%. We're really generating good operational gearing in the business on that sort of business-as-usual underlying basis.
In terms of the business investment costs, those contributed 8% of the overall 21% increase in costs. There are two principal drivers of that. There's the investment we're making in brand and digital marketing, both of which are performing well to the extent that we actually chose to invest an additional amount around tax year-end, and that had a direct impact on net inflows into our D2C platform, which were at a record level in March. The second aspect of business investment cost is technology investment, developing our propositions. If you look at the pace of change that we're driving there, it's giving us the confidence to invest more than we originally planned in that area. If I look at the performance-related variable costs, those relate to things like bonuses and customer transactional costs.
Those are higher than we originally anticipated and contribute 5% of that overall 21% increase in costs. As I outlined previously, the level of customer dealing activity was higher, and because overall performance is better than we originally planned, bonuses will also be higher. Those are both a positive reflection of what's happened during the period. If I look at the overall impact of that on profitability, we've got a very pleasing increase in profit before tax and a profit before tax margin of 44.9%. Alongside the half-year results, we're announcing an increase in the interim dividend to GBP 4.50 per share, and we're also announcing a second share buyback program of up to GBP 25 million.
If you take both of those together, alongside the GBP 64 million that we've already distributed to shareholders through the final dividend and the first share buyback program, then by the end of the year, we expect to have distributed in excess of GBP 100 million to shareholders, which is a fantastic reflection of the financial position, but also the performance of the business.
There's actually a significant number of meaningful policy changes in the pipeline at present that affect the products that we provide on the platform. There are some really positive-looking changes in there and some that are not so positive. ISA simplification is something that we've been campaigning for a long time. The government have recently said that they want to use ISA reform to try and boost the culture of retail investing in the U.K. Now, while that's something that we've been very supportive of, there are lots of different views in the industry about what ISA reform should look like, and there are lots of vested interests at play here. Quite what version of ISA reform we end up with remains to be seen.
Our view is that we should try and combine cash ISAs and stocks and shares ISA into a single product to remove the firm barriers that exist between cash savers and investors in the ISA landscape. Whatever we end up with, the key for me is that the reforms are customer-focused, and we resist the temptation to tell people what to do through complicated rules and restrictions. As long as we can avoid that, I think there's a real opportunity to strengthen the ISA landscape. Targeted support is essentially guidance. The idea is that it will allow firms like AJ Bell to provide pieces of guidance and nudges to customers without ever straying into the world of full financial advice, which I think is always best provided by independent financial advisors. It's a piece of work that's been ongoing for some time.
We've been part of the working group in the industry, and we've recently been part of the policy sprint where we've actually researched and then developed a customer journey that would be compliant with the proposed targeted support rules. There's lots of potential in the idea. The bit that I'm hopeful to see is that we get this alongside a set of ISA reforms that will allow us to provide nudges to customers within an ISA to get the balance right between cash and stocks and shares. I think if we end up there, it'd be a very powerful combination of reforms that would really help us to give far more support to a far broader group of customers and get more people into the world of retail investing. Pensions are clearly still an excellent way for people to save for their retirement, second to none.
I think we have to accept that the October budget created a lot of uncertainty in a lot of people's minds around the tax treatment of pensions and how certain that tax treatment was. The proposal to bring unused pensions into the world of IHT probably only impacts a relatively small number of people, but it's a significant impact on those people, and the process for collecting the tax that's been proposed is awful. There's concern in the industry about just how painful that will be. There's concern around that topic. More generally, there was a lot of speculation around the budget, around the tax treatment of pension commencement lump sums, people drawing their what's commonly referred to as tax-free cash out of the pensions, and then the tax deferral that's allowed on the contributions made into a pension scheme.
We do think that there's—we saw the change in customers' behavior. We do think there's a real issue there and that government needs to give some more certainty to what are very long-term financial decisions that people are making when they defer that income and put it into a pension for decades at a time in lots of cases. We have been lobbying for a pensions tax lock to commit to the tax treatment of those two core aspects of the pension system to remain unchanged. I think that that will enhance customers' confidence in pensions and make sure that they remain the number one vehicle for people's retirement savings.
April's market volatility impacted the business and our customers in a positive way. We saw high levels of dealing activity during April. Many of our customers had just contributed their year-end tax contributions onto the platform and invested them pretty quickly, quicker than we would normally see them do so, into the market, taking advantage of the drop in overall market values that happened during those first two weeks. We saw around a net GBP 300 million being invested in the market in that period, with about 75% of the trades being buy trades. Good levels of activity on the platform. The other impact that we can see from market volatility is on AUA levels, but those recovered to a large extent during the course of April. We have issued updated FY2025 full-year guidance.
We're expecting revenue margins to be a bit higher than we've previously guided to, and we're going to take that opportunity to invest a bit more in business investment costs. As I've indicated, there'll also be slightly higher levels of performance-related variable costs. All of that should, on a sort of continuing operations basis, result in a higher than previously guided profit before tax margin. We're guiding now to a margin of 42% or more, having previously guided to a margin of 40% or more. We will, in addition to that, have a profit on disposal of our Platinum SIPP and SSAS business, which we announced to the market in March. As yet, we haven't decided what we're going to do with the proceeds from that sale.
We'll apply our capital allocation framework once the sale's completed, and we'll communicate more to the market about that during the second half of the year.
As ever, I'm hugely positive about the outlook for the business. There are always things that we want to improve and that we can see need to be better, and there's still a long list of those things. I think there always will be. I think it's my job to find those things and keep adding them to the list. There is a huge opportunity in the market for us. I think we're executing very well at present. I think I've got a great team of people. I've got a great board. We've got a great culture in the business. There's every reason that we should be successful in what's a very attractive market.