Hello, and welcome to AJ Bell's 2026 interim results video. In just a moment, you'll hear from our CEO, Michael Summersgill, and CFO, Peter Birch. First, let's take a look at some of the key numbers from the first half. Platform customers increased by 79,000 in the first half to close at 723,000, increase of 12%. Platform assets under administration closed at GBP 108.7 billion, up 5% in the period. Platform net inflows were up 27% versus the prior year at a record GBP 4.2 billion. Revenue was up 19% to GBP 183 million, driven by strong recurring ad valorem and transactional revenues. Total costs, excluding exceptionals, increased by 21% to GBP 106.2 million. Overall, there was a 15% increase in underlying profit before tax to GBP 79 million and an underlying profit before tax margin of 43.2%.
On capital returns, the board has declared an interim dividend of GBP 0.05 per share, an 11% increase from the prior year. In addition, the board has approved a further share buyback program of up to GBP 15 million, in addition to the previously announced GBP 50 million program, 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. Let's hear from Michael and Peter and get their insight into what's behind these numbers and their expectations for the second half of the year and beyond.
When you consider everything that's been going on around us in the six-month period, it's actually been quite a chaotic environment. We started back in the autumn with another botched budget in the U.K., and then by the end of that six-month period, the market volatility from the tariff war was in full swing. If you look at our performance within that environment, it's been fantastic. We've seen record growth in customer numbers, we've seen our customers put more assets onto the platform than they ever have done in a six-month period before, and our staff have continued to deliver fantastic service to our customers. Really strong performance from the team in quite a chaotic environment. There's still a huge opportunity in the U.K. platform market. The market's grown about 11% a year since we listed the business.
If you look in recent years, that growth's actually accelerated, so it's still a very attractive space to be in. I think it'll carry on growing for years because there's still a huge amount of money in the financial services system that could be in the platform market, but is not in the platform market as we sit today. The growth opportunity is certainly there. We're gaining market share. Our inflows every year are far higher than our existing market share, and we're doing that by, yes, giving a great service to our customers day in, day out, yes, by having great products in the market, but by investing in the right areas. We're continuing to invest in our brand and continuing to invest in our products to make them the very best products that they can be.
The growing importance of AI has been a much-discussed topic in the industry over the last six-month period. We're big fans of the technology at AJ Bell. I think it's a hugely powerful technology, and we're deploying it in numerous areas. We're already using it at scale in our operations, and that is accelerating our operational gearing. It's becoming increasingly important in how we attract customers in the direct market, and we've been exploring lots of ways in which we will bring it to the fore in our product set, both the direct and the advised market. There's a couple of key things for me, though. Number one, it's not always the right tool for the job. It is one tool in the kit bag from a technology perspective. Two, it has to work alongside the important human relationships that exist in financial services.
Trust is key, and whether that's key moments in the customer service journey, whether it's people being delivered complex financial advice face-to-face, that will still need to happen going forward. It's how we mesh those two things together effectively that will be the key to getting the deployment of AI right in our industry. When we think about our product strategy, there are always four things at the forefront of our mind. First of all is building trust with customers, and second is giving them great service, and that reinforces and retains trust over time. We think about the design of the product. It's about making it as easy as possible to use and making sure that it's priced at the right point.
Because of our dual-channel model, we're in both the advised and the direct consumer market, and those things have different priority and mean slightly different things in the two different markets. It's always those same four focus areas. In the advised market, there are two key focus areas for us. The first is automation, and there we're focusing on automating the movement of cash on the platform, the instruction of investments on the platform, those everyday tasks for our advisors, making them as efficient as possible. The second area is the transfer of wealth through the generations. Whether that's being driven by demographic reasons, whether it's being driven by government tax policy, it means the same things ultimately for us as a platform business.
It's making sure that we've got bonds, we've got trusts available on the platform, and that the journeys between different tax wrappers and the technical support around them is as strong as possible. Those have been big areas of development for us in the period, and that will continue in the second half of the year as well. With both of those focus areas in mind, we're now changing our approach to AJ Bell Touch. We've had fantastic feedback from advisors on the customer journeys they've built and on the capabilities that we've developed for the Touch platform. They don't just want those capabilities for a small cohort of their clients, for their younger clients. They want it to apply across the client book.
We're taking the team that has developed Touch, we're redeploying them to a new challenge of taking those capabilities and putting them into the AJ Bell Investcentre platform, and we're retiring the AJ Bell Touch sub-brand. In the direct market, we have two key focus areas right now. The first is the development of an all-new mobile application. There, we'll be looking to serve customers with more personalized content, provide more intuitive journeys, and we'll also roll out our new brand identity, which will bring the feel-good brand promise to life. The second focus area is the development of the ready-made pension journey. What we see with new investors is that the decision to invest for the first time, what investment product they should pick, is a high area of dropout.
We're looking to use the new targeted support permissions to help customers more to guide them through that process and make the product easier to use. The investment in brand has been an area of real success for us over the last few years. It has helped to build trust in the AJ Bell name for new customers, and it's boosted our brand awareness in a sustained way through that three-year period. We said when we set out in this journey that ultimately we needed to be able to attract a whole load more customers, or we needed to be able to attract customers with a lower cost per new customer than we were doing at that point in time. One of the great successes of the investment that we've made is we've been able to do all of those things.
In the period, we've attracted a record number of new customers. The brand awareness has continued to increase, and we've actually seen the cost of acquiring customers reduce as you leverage that stronger brand awareness over time. It's been an area of real success for us, and we're going to carry on making that investment as we move forward into the second half of the year.
Our business model is highly scalable and is well set up to support our growth ambitions. We have a dual-channel, single operating model. We operate in both the advised and the D2C markets, which gives us bigger coverage of the target market opportunity. We serve those customers and advisors using a single technology stack. There's inherent scalability within that setup. In terms of the tech stack itself, that comprises three layers. There's an outsourced back office, there is proprietary user interface. We have an integration layer that sits between the two. The benefit that gives us is it means we've got a scalable platform, we've got full control over product development. We've got the ability to integrate new technologies such as AI and robotics into the operation of the platform. Importantly, the business and the model is already scaling.
We have GBP 100 billion of customer assets on the platform. We've got scale benefits coming through. We're reinvesting in the growth drivers of the business whilst also keeping the cost to serve a customer low. That low cost enables us to keep pricing at a competitive level, and that in itself also drives future growth. AI and automation have a significant impact on scalability. Both, however, do need to be deployed in a well-controlled, well-governed, and sensible way. From an AI perspective, we've built our own GenAI-as-a-Service platform, and that's enabling us to deploy AI into various areas of the business, including proposition development and into our operational activities. In terms of the latter, I'll give you a couple of examples there.
Within our customer services team, they have a number of AI-enabled tools that enable them to deal with customer calls and customer emails in a more efficient way than they have done in the past. They're dealing with about 150,000 of those sorts of interactions in a month. The other benefit of deploying AI in that way is that we get good sentiment analysis from customers. We can understand how they're feeling about things, any of the problems that they're having, and we can feed those back into either proactive customer engagement or future proposition development. The business is scaling really well, and there are some great examples from the first half of this year. We onboarded a record number of new customers, and there's a significant increase in activity on the platform year-on-year.
Whilst we're a digital-first platform, it is important that customers and advisors can speak to a human being or interact with a human being when they've got something that they particularly need to talk to us about. Despite the significant increase in activity, 94% of our calls were answered within 20 seconds. Actually in March itself, which is a really busy period leading up to tax year-end, the average time to answer a call was only eight seconds. Despite all of that increase in activity and inbound calls and interactions with customers, we retained our 4.9 market-leading Trustpilot score through the period, and we also became a Which? recommended provider for the eighth consecutive year.
I think if you take all of that in the round and you've got a substantial increase in activity, stable headcount in our operational teams, and market-leading service scores, I think that's good evidence that we're scaling effectively. We delivered record financial performance in the period with revenue up 19% and underlying profit before tax up 15%. The drivers of the increase in revenue were twofold. The transactional revenue was up 37%, driven by high levels of customer dealing activity, in particular overseas dealing activity, which impacts FX revenue. Within the recurring ad valorem revenue line, we saw higher market levels, which translated into higher custody fees and higher cash balances, which translated into higher net interest margin. Costs before exceptional items were up 21% in the year. Within costs, we have business-as-usual costs, we have business investment costs, and we have performance-related variable costs.
Just taking each one of those in turn. The business-as-usual costs remain well under control. They're increasing at a lower level than things like customer numbers. We're getting good operational gearing coming through there. Business investment costs were the bulk of the cost increase, and principally that was the distribution investment that we made and we signaled at the beginning of the year, and which has reaped significant rewards for us in terms of new customer acquisition and net inflows in the period. Performance-related variable costs will be slightly ahead of what we originally indicated, and again, that's for good reasons. We've got high levels of customer transaction activity and performance-related pay for our people will be higher than we originally planned because our performance is ahead of what we guided. We had net exceptional items of GBP 13.8 million in the period, and that comprised two items.
The first being the profit on disposal of the Platinum SIPP and SSAS business. We disposed of that in November, and the profit is in line with what we previously communicated. Separately, we have a GBP 7.6 million charge going through the exceptionals line in relation to the write-down of the Touch intangible asset following the decision to redeploy our capability there onto the Investcentre platform. That decision, from a capital allocation perspective, gives us a benefit in terms of being more efficient going forward with our deployment of resource into technology development and brand and marketing. The business remains highly profitable and highly cash generative, and we've seen really strong growth in the period. That growth has exceeded our original expectations. That sets the context for the shareholder returns that we're announcing today.
We've already distributed GBP 77.3 million to shareholders in the period, which is a combination of dividends and share buybacks. Today, we're announcing an additional GBP 15 million share buyback to sit alongside the GBP 50 million that we announced at the beginning of the year. We're also announcing an interim dividend of GBP 0.05 per share, which is an increase of 11% on the interim dividend last year.
Given the government's stated aim to increase participation in retail investing, you'd think that policy formation in our market would be in a good place. Sadly, I don't think that's the case at all. Attracting first-time investors is all about reducing complexity and helping to overcome that confidence barrier that they have. For me, any changes that are being made to policy should all be about simplifying rules, and if you can't achieve that, then just offer the stability of maintaining what you have. Sadly, what we're seeing is a whole load of complexity being introduced to the market and a whole load of uncertainty. We wanted to see ISAs simplified. We know that's not what we're getting. We're going to get complexity, so it's now about how we manage the introduction of that complexity in the best possible way.
We want to stay focused on first-time investors because stocks and shares ISAs are about the best products that a first-time investor can take out. There are some key features that we risk losing, namely the tax-free status and the ability to invest in low-risk assets like money market funds. We need to make sure that any of the anti-avoidance rules that the government bring in are considerate to those first-time investors and don't diminish the attractiveness of the stocks and shares ISAs to those customers that we all say that we want to attract into the market. We would like to see a public consultation to make sure that it's a very evidence-based approach that is taken. There's actually a lot to talk about with pensions policy at present, but that's not my main focus in the pension market.
It's the way that the U.K. budgets are being run and the impact that the long, drawn-out, rumor-filled build-up to those budgets is impacting on customer behavior. We've seen over the last two years the same pattern playing out, that in that period leading up to the budgets, people are worried about the tax treatment of their pensions changing, and they're withdrawing huge amounts of money that they otherwise wouldn't. We've seen over GBP 1 billion of excess withdrawals from pensions simply for that reason over the last two years, and that's a pattern that's been repeated across the industry, and it all comes down to the uncertainty around tax treatment. This is why we continue to call for a pensions tax lock to provide some certainty around that tax treatment, allowing people to make sensible, long-term financial decisions rather than knee-jerk reactions to rumors.
We're upgrading our guidance for FY 2026. That's because we're expecting revenue margin to be higher. The higher levels of transaction income and the higher levels of ad valorem income that we've seen in the first half, it will result in us delivering a revenue margin that's above what we guided at the start of the year. Alongside that, we've seen really strong returns from the investments we've made in brand and marketing. The economics of the customers that we're acquiring and the levels of growth that we're seeing, it's the right thing to do is to invest more than we originally planned in that area in the second half as well. However, overall, we do expect both profit before tax and profit before tax margin to be ahead of what we originally guided, with profit before tax margin being above 40%.
In terms of the sort of more medium term, beyond FY 2026, we would expect revenue margin to moderate over time. There are various reasons why that's the case. We will continue to reinvest in pricing. We've done that historically. We expect things like cash balances and overseas dealing levels to moderate and normalize over the future period. We will keep business as usual costs well under control. We do retain the flexibility to reinvest in growth drivers as we have done things like brand and marketing and proposition development. There is underlying an opportunity to increase margins over time. We do need to be forward-thinking in terms of where we deploy our investment spend.
The outlook for AJ Bell is hugely positive. Whilst I have my views on policy formation and there's some things there that I think could be significantly improved, actually what really drives the market is customer behavior, and people understand the need to invest, to take control of their finances. The market has grown, is continuing to grow, and that provides a huge opportunity for AJ Bell. As a business, we're in great shape. The results in this period speak for themselves. What's really important for me, though, is that, yes, we're continuing to invest in the areas that we've talked about, brands, technology, the products, but we're doing it with a great base. We've got a great team of people here. We give our customers great service day in, day out, and we've got a fantastic culture in the business.
It's that combination that makes me excited about the future.