TIDMHL.
RNS Number : 1880L
Hargreaves Lansdown PLC
12 May 2022
Trading update
12 May 2022
Hargreaves Lansdown plc today issues a trading update in respect
of the four months ended 30 April 2022.
Highlights
-- Encouraging start on strategic initiatives launched at the
February Capital Markets Day, with early focus on cost savings and
efficiency.
-- Client growth of 90,000 year to date; client retention rate 92.4% for the year to date.
-- Net new business of GBP2.5 billion in the period, GBP4.8
billion year to date, closing Assets under administration ("AUA")
of GBP132.3 billion.
-- Revenue for the period of GBP196.5 million (FY2021: GBP233.2m) in line with expectations.
-- Reiterating FY2022 guidance whilst raising revenue margin on cash to 30-35bps for FY22.
Chris Hill, Chief Executive Officer, commented:
"We are off to an encouraging start on the strategic initiatives
we set out at our Capital Markets Day, which will build our
capability to innovate and scale and enable us to take advantage of
the growth in the wealth management sector. Our initial focus is on
driving efficiency and cost savings in our operations whilst
ensuring we maintain the market leading service our clients expect
from us particularly in these current uncertain times.
The challenging backdrop driven by unprecedented macro-economic
and geo-political events has impacted markets and investor
confidence, in turn leading to moderated flows and asset levels
with net new business of GBP2.5 billion in this period. We saw a
significant step up in flows in March and April from our tax year
end campaign which focused on the benefits of long-term saving and
investing, with GBP1.8 billion of tax wrapped inflows leading to a
record 747,000 clients contributing to their ISAs and pensions this
tax year."
Trading performance
-- Client growth at 90,000 year to date is in line with
pre-Covid levels (FY2019: 87,000) excluding direct book
acquisitions; client retention at 92.4% has remained broadly
constant throughout the year (FY2021: 92.1%).
-- Net new business of GBP2.5 billion in the period, GBP4.8
billion year to date reflects moderated flows being seen across the
market. 2021 flows benefited from improving market and investor
confidence resulting from Covid vaccine roll-out, investment of
excess cash built up during lock down and elevated interest in
share trading.
-- Closing AUA of GBP132.3 billion incorporates adverse market
movement throughout the period driven partly by exposure to global
equity markets, particularly US technology stocks with the Nasdaq
down 21% over the period.
-- Share dealing averaged 45,000 deals per day in the period, in
line with expectations and guidance.
-- Our tax year end campaign "Switch your money on" focused on
the benefits of long-term saving and investing and helped clients
maximise the benefit of tax efficient investing despite the market
environment. Across the campaign period we saw GBP1.8 billion of
inflows including GBP0.6 billion in the first 5 days of April.
Across tax year ending 5 April 2022, we have seen a record 747,000
clients contributing to their ISAs and pensions.
-- Total revenue in the period of GBP196.5 million (2021:
GBP233.2m) was in line with expectations with the increase in net
interest margin as a result of base rate rises offsetting the
revenue impact of lower AUA.
Strategic Progress
We have made an encouraging start against all strategic
initiatives set out at our Capital Markets Day, with our early
focus on client service and efficiency, which will deliver cost
savings whilst improving our client experience.
-- Pension transfer times (recorded by industry index Origo)
reduced from 43.3 days in April 21 to 21.2 days in April 22 -
driving efficiency and significantly improving the client
experience.
-- Client Service NPS over our busiest period of the year, tax
year end, hit 54% - our highest score since early 2019.
-- 65.2% of digitally active clients used the HL mobile app
between Jan and March (2021: 59.4%).
-- Our Trustpilot score reached 4.3, confirming our 'Excellent' rating (2021: 3.7).
-- Active Savings offered 6 market leading rates over the second
half of April and added Santander International, bringing the
number of partner banks up to 15.
Outlook
As we head toward the end of our financial year, given the
uncertain economic environment and market conditions, we are
focused on cost control and investment discipline. We are
reiterating our FY2022 guidance whilst raising expected revenue
margin on cash to 30-35bps for the full financial year as we see
the impact of base rate rises starting to come through.
We look forward to sharing more on our progress against our
strategic initiatives as part of our full year update on 5(th)
August 2022.
Contacts:
Investors Media
James Found, Head of Investor Danny Cox, Head of Communications
Relations +44(0)7989 672071
+44(0)7970 066634 Nick Cosgrove / Caroline Daniel,
Amy Stirling, Chief Financial Brunswick
Officer 0207 404 5959
Forward looking statements
This announcement contains forward-looking statements with
respect to the financial condition, results and business of the
Group. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events, and depend on
circumstances, that will occur in the future. The Group's actual
results may differ materially from the results expressed or implied
in these forward-looking statements. Nothing in this announcement
should be construed as a profit forecast. This announcement is
unaudited. This statement should not be seen as a promotion or
solicitation to buy Hargreaves Lansdown plc shares. It should be
remembered that the value of shares can fall as well as rise and
therefore you could get back less than you invested.
LEI Number: 2138008ZCE93ZDSESG90
Revenue and clients
Key metrics 4 months 10 months 4 months 10 months
to 30 April to 30 April to 30 April to 30 April
2022 2022 2021 2021
Revenue (GBPm) 196.5 487.6 233.2 532.7
------------- ------------- ------------- -------------
Net new clients 42,000 90,000 126,000 210,000
------------- ------------- ------------- -------------
Total active clients 1,734,000 1,734,000 1,622,000 1,622,000
------------- ------------- ------------- -------------
Assets under administration
Average 4 months 3 months 3 months 2 months 4 months
AUA (GBPbillion) to 30 April to 31 December to 30 September to 30 June to 30 April
2022 2021 2021 2021 2021
Funds 63.5 68.3 68.0 65.7 61.3
------------- ---------------- ----------------- ------------ -------------
Shares 51.5 55.2 53.9 52.6 49.0
------------- ---------------- ----------------- ------------ -------------
Cash 14.1 13.0 12.6 12.7 12.9
------------- ---------------- ----------------- ------------ -------------
HL Funds 8.6 9.1 9.1 9.0 8.6
------------- ---------------- ----------------- ------------ -------------
Active Savings 3.9 3.7 3.4 3.1 3.0
------------- ---------------- ----------------- ------------ -------------
Double count(1) (8.5) (9.0) (9.1) (8.9) (8.5)
------------- ---------------- ----------------- ------------ -------------
Total 133.1 140.3 137.9 134.2 126.3
------------- ---------------- ----------------- ------------ -------------
Closing As at 30 As at 31 As at 30 As at 30 As at 30
AUA (GBPbillion) April 2022 December September June 2021 April 2021
2021 2021
Funds 62.9 69.0 67.8 66.6 64.6
------------ ---------- ----------- ----------- ------------
Shares 50.7 55.2 53.7 53.1 52.3
------------ ---------- ----------- ----------- ------------
Cash 14.6 13.1 12.9 12.6 12.9
------------ ---------- ----------- ----------- ------------
HL Funds 8.5 9.1 9.1 9.0 8.9
------------ ---------- ----------- ----------- ------------
Active Savings 4.0 3.8 3.5 3.1 3.0
------------ ---------- ----------- ----------- ------------
Double count(1) (8.4) (9.0) (9.0) (8.9) (8.8)
------------ ---------- ----------- ----------- ------------
Total 132.3 141.2 138.0 135.5 132.9
------------ ---------- ----------- ----------- ------------
Average 10 months 10 months
AUA (GBPbillion) to 30 April to 30 April
2022 2021
Funds 66.3 57.0
------------- -------------
Shares 53.3 43.6
------------- -------------
Cash 13.3 13.1
------------- -------------
HL Funds 8.9 8.3
------------- -------------
Active Savings 3.7 2.7
------------- -------------
Double count(1) (8.8) (8.2)
------------- -------------
Total 136.7 116.5
------------- -------------
(1) All HL Funds are held in Vantage or the Portfolio Management
Service (PMS) and are included in the Funds category of the table
with the exception of a small balance held off platform by third
parties. To avoid double counting the amount held in Vantage or PMS
has been deducted.
AUA (GBPbillion) 4 months 3 months 3 months 2 months 4 months
to 30 April to 31 December to 30 September to 30 June to 30 April
2022 2021 2021 2021 2021
Opening AUA 141.2 138.0 135.5 132.9 120.6
------------- ---------------- ----------------- ------------ -------------
Net new business 2.5 1.0 1.3 0.9 4.6
------------- ---------------- ----------------- ------------ -------------
Market movements (11.4) 2.2 1.2 1.7 7.9
------------- ---------------- ----------------- ------------ -------------
Founder transfer* - - - - (0.2)
------------- ---------------- ----------------- ------------ -------------
Closing AUA 132.3 141.2 138.0 135.5 132.9
------------- ---------------- ----------------- ------------ -------------
(*) Represents cash withdrawals from the disposal proceeds of a
placement of Hargreaves Lansdown plc shares by a founder during the
period.
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