Hargreaves Lansdown : posts profit jump even as asset growth slows

Marco Green
August 10, 2020

The Bristol- based company saw a 5% development in its properties under administration. Its trading platform, consequently, registered thousand of new clients.

Shares of the business leapt about 2% in premarket trading on Friday and acquired another 3% on market open.

Peter Hargreaves and Stephen Lansdown will be paid £63.4m and £18.6m respectively by the company, which they founded in a bedroom in 1981.

Hargreaves weathered a tough 2019 when Neil Woodford's flagship fund, which it had long championed, collapsed.

Hill said: "The acute challenges of this year have reinforced the importance of resilience for us all and we will continue to have a key role in helping our clients build resilience into their savings and investments to enable themselves to be confident to manage through hard periods and events". On that issue it said: "It was essential that we learnt from the experience surrounding the Woodford issue last year".

"Post the (UK) general election result in December 2019 and into the COVID-19 period, dealing volumes increased to record levels on our platform at a time when the average AUA (assets under administration) was impacted by significant market falls", Hargreaves said.

While total assets under administration climbed 5% to 104 billion pounds, it marked a slowdown from an 8% rise recorded a year earlier. But in the previous year, Hargreaves had actually tape-recorded a much faster 8% development in AUA. It valued its net new business at £7.7 billion.

Revenues over the year ending on 30 June grew by 15% to £550.9m (consensus: £531m), driving an 11% jump in underlying profits before tax to £339.5m.

The total dividend payout meanwhile was 31% higher than in 2019 at 54.9p per share (consensus: 45.4p) with Hargreaves's board having declared a final dividend of 26.3p and a special payout of 17.4p.

At the time of writing, the British financial services firm has a market cap of £9.05 billion and a price to earnings ratio of 34.57.

Other reports by Click Lancashire

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