15th Feb 2023 08:55
(Alliance News) - Hargreaves Lansdown PLC on Wednesday reported a fall in managed assets over the course of its financial first half, but saw profit surge 31%.
It also promised to grow its ordinary dividend, in line with full-year outlook.
The retail investment platform reported that revenue in the six months ended December 31 jumped 20% to GBP350.0 million from GBP291.1 million a year ago. Pretax profit surged 31% to GBP197.6 million from GBP151.2 million.
In an investor call, Outgoing Chief Executive Chris Hill said: "We delivered a strong start to the year with record revenue...and profits also a record for a first half. The benefits of our diversified business model have been made very clear in the period."
The Bristol, England-based company had 1.768 million active clients on December 31, which it said was up 31,000 during the half-year. Hill noted that these additional clients "add to its already strong client base." He added that this "highlights the strong relationships it builds through the cycle and in all markets."
Hargreaves ended the six-month period with GBP127.1 billion in total assets under administration, sliding 10% from GBP141.2 billion at the same point the year prior. However, this marks a slight improvement from GBP123.8 billion at June 30, the end of financial year 2022.
The firm reported GBP1.6 billion in net new business inflows in the period, 30% behind the GBP2.3 billion recorded a year before.
Hargreaves explained that the Russia-Ukraine war, UK inflation climbing to 40-year highs, and central banks upping interest rates led to the "lowest six-month period on record for consumer confidence, while investor confidence also hit its lowest level ever."
Hargreaves also declared an interim dividend of 12.70 pence up 3.6% from 12.26p a year ago. For the full-year, the company expects to grow its dividend by 3%.
Looking ahead, Hargreaves expects "the current uncertain economic environment and market conditions" to continue to impact investor confidence and in turn, net new business and dealing volumes.
Hill said: "Our first half has been a period of strong performance, highlighting the resilience of our diversified business and revenue models. A year on from our capital markets day, our strategic execution is on track and I am very excited over what's to come over the rest of this year.
"The marco environment will continue to be challenging, but we are focused on what we can control and we are confident in our business model and our strategy and therefore our ability to drive growth through the cycle and deliver value to our shareholders. We look ahead to the rest of 2023 with confidence."
In December, the company appointed Dan Olley, the chief executive officer of customer data science firm Dunnhumby Ltd, as its new CEO and executive director. It said Olley will take up the role once released from current obligations in 2023.
Hill announces his intention to retire in October. He has spent six years in the role and will remain in place as CEO and will support Hargreaves Lansdown until November 2023.
By Sophie Rose, Alliance News reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
Hargreaves Lansdown