31st Jan 2020 08:47
(Alliance News) - Hargreaves Lansdown PLC on Friday reported a rise in assets under administration over the first half of financial 2020, but saw a decline in new business.
Shares in Hargreaves were down 5.0% in London on Friday morning at 1,785.00 pence.
At December 31, the fund supermarket had GBP105.2 billion in total assets under administration, up 5.9% from the GBP99.3 billion recorded at the end of June and 22% higher than at the same point last year.
Hargreaves recorded GBP2.31 billion in net new business in the six-month period, down sharply from the GBP7.3 billion seen in the most previous six-month period, ending June 30, and down 8.7% compared to the final six months of 2018.
New business in the period, particularly in the second quarter, was hurt by weak investor sentiment, the company said.
"The external market was challenging in the second half of 2019, with political uncertainty, a general election in the UK, Brexit and world trade tariffs all raising concerns. As we have seen in previous unpredictable periods, client confidence and retail investment flows were affected. The Investment Association reported weak retail fund flows throughout and the suspension of the two Woodford funds also contributed to the general unease," Hargreaves added.
Market movements added GBP3.6 billion to total assets.
The company has added 50,000 new clients in the six-month period, ending calendar 2019 with 1.3 million active clients.
"The first half of our financial year was another period of growth. Despite market challenges, the resilience of our business, continued execution of our strategy and our focus on ensuring the right outcomes for clients, means we have seen growth and increased market share through the period," said Hargreaves Chief Executive Chris Hill.
Pretax profit was up 12% year on year to GBP171.1 million, with revenue growing 9.1% to GBP257.9 million.
The company's revenue from its Funds platform rose 6.2% year on year to GBP109.6 million, driven by the rise in AuA. The rate of growth for its Funds platform was behind the rate of AuA growth due to the company waiving its fees on any Woodford funds.
Hargreaves upped its interim dividend by 8.7% to 11.2p.
Hill added: "We are confident that the diversified nature of Hargreaves Lansdown, our continued investment where we see opportunity and market leading client offering, mean that we are well placed to help our clients prosper, whilst delivering strong and sustainable returns for shareholders."
By Paul McGowan; [email protected]
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