14th Oct 2014 06:52
LONDON (Alliance News) - Hargreaves Lansdown PLC Tuesday reported a GBP100.0 million increase in assets under administration over the course of the traditionally quiet first quarter, but said levels of net new business were lower than in the corresponding period last year amid uncertainty over the Scottish independence referendum, concern over Middle East and Ukrainian conflicts and unfavourable Eurozone economic data.
In a statement, Hargreaves Lansdown reported GBP970.0 million of net new business inflows in the quarter ended September 30, compared with GBP1.26 billion in the corresponding quarter last year.
Assets under administration and management increased to GBP47.0 billion at the end of September from GBP46.9 billion at the end of June. During the quarter, the value of assets held within Hargreaves Lansdown's Vantage direct-to-private investor platform increased marginally to GBP44.3 billion from GBP44.2 billion. Hargeaves Lansdown said the increase can be attributed to GBP950.0 million of net new business inflows and a GBP850 million drag to negative stock market movements during the period.
The value of assets held in Hargreaves Lansdown's portfolio management services and range of multi-manager funds increased by 3.3% to GBP4.71 billion over the course of the quarter, due to GBP123 million of net new business inflows and a GBP23 million lift from investment performance.
First-quarter net revenue increased to GBP70.8 million, from GBP70.1 million, with a higher level of Vantage assets under administration and increased stockbroking commission from higher dealing volumes more than offsetting the fall in interest revenue resulting from significantly lower rates on offer and the hiatus in placing term deposits.
Fixed term deposits could not be placed during the quarter due to industry-wide rule changes made by the Financial Conduct Authority. Hargreaves Lansdown said this will continue to affect revenue until the end of December, but it expects to have arrangements in place to recommence placing term deposits for self-invested personal pension client money from the start of 2015 or soon after.
"Accordingly, assuming a constant interest rate environment, we expect interest rate margin for the first half of 2015 to be circa 60 basis points with the full year margin to still be in the range of 50 basis points to 60 basis points. Overall revenue margin expectations remain unchanged, with no price changes planned," Hargreaves Lansdown said.
In addition, Hargreaves Lansdown said it sees no "current need" for a banking licence in order to develop a suite of new cash-related services for clients. It said work is now in train to develop those services.
"As ever, future stock market levels and investor confidence will have a significant part to play during the remainder of our financial year. However, we remain confident of growing the business further to the benefit of our clients and shareholders," Chief Executive Ian Gorham said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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