Hargreaves Lansdown plc (LON:HL) has issued a trading update in respect of the three months ended 30 June 2023.
Highlights
· Net new business of £1.7 billion in the period, up 6% on the previous quarter.
· Closing Assets under Administration (“AUA”) of £134.0 billion, up 2% in the quarter.
· Net client growth of 13,000 in the period, taking us to 1,804,000 clients.
Chris Hill, Hargreaves Lansdown Chief Executive Officer, commented:
“We delivered net new business of £1.7 billion in the period, up 6% on the previous quarter. The tax year end season remains a critical time for our clients and this year we focused on supporting them to navigate the changes to the tax landscape, making the most of their allowances and delivering further value to our overall client proposition.
The improvements in the previous quarter, including the launch of a new cash ISA, three new Portfolio Funds and price reductions on our LISA and JISA accounts, were further enhanced with the removal of fees for dividend reinvestment and regular monthly investing along with the addition of new partner banks to Active Savings.
The breadth of and continued investment into our client proposition, means we remain well positioned to grow and support both new and existing clients with their investment and savings needs.”
Trading performance
· Net new business of £1.7 billion in Q4 (Q4 FY22: £1.8bn), despite moderated flows being seen across the market. This was 6% up on the previous quarter to March with continued net flows on to the platform as clients focused on utilising their ISA and SIPP tax allowances, particularly in the final days of the 2023 tax year and the start of the 2024 tax year.
· Active Savings saw net inflows of £0.8 billion in the quarter (Q4 FY22: £0.7 billion) as clients continue to manage their cash savings through us and the broad access we provide to a range of rates and banks.
· Active client growth of 13,000 in the quarter (Q4 FY22: 13,000) with client retention at 92.0%, up on last year (Q4 FY22: 91.3%); asset retention of 89.7%, lower than last year (Q4 FY22: 91.5%) as expected, continuing the trend seen for much of this year, where across the market, specific cohorts of clients are making cash withdrawals to fund cost-of-living increases.
· Closing AUA of £134.0 billion; £0.3 billion positive market movement, combined with £1.7 billion of net new business in the quarter.
· Share dealing volumes have averaged 685,000 per month in the quarter, 11% lower than the previous quarter and 12% lower than prior year. Investor confidence across the quarter has been low with cost-of-living issues, rising interest rates and market volatility impacting deal volumes.
Financial calendar
Our full year results, including progress on our strategic initiatives will be issued on 19 September 2023. Our Annual General Meeting is scheduled to be held on 8 December 2023.
Clients, retention rates and share dealing volumes
| Key metrics | 3 months to 30 June 2023 | 3 months to 31 March 2023 | 3 months to 31 December 2022 | 3 months to 30 September 2022 | 3 months to 30 June 2022 |
| Net new clients | 13,000 | 23,000 | 14,000 | 17,000 | 13,000 |
| Total active clients | 1,804,000 | 1,791,000 | 1,768,000 | 1,754,000 | 1,737,000 |
| Client Retention Rate (%) | 92.0 | 92.0 | 92.6 | 92.2 | 91.3 |
| Asset Retention Rate (%) | 89.7 | 89.1 | 91.1 | 91.7 | 91.5 |
| Share dealing volumes per month | 685,000 | 770,000 | 627,000 | 700,000 | 779,000 |
Assets under administration (AUA)
| AUA (£billion) | 3 months to 30 June 2023 | 3 months to 31 March 2023 | 3 months to 31 December 2022 | 3 months to 30 September 2022 | 3 months to 30 June 2022 |
| Opening AUA | 132.0 | 127.1 | 122.7 | 123.8 | 134.7 |
| Net new business – platform | 0.9 | 0.9 | (0.1) | – | 1.1 |
| Net new business – Active Savings | 0.8 | 0.7 | 1.0 | 0.7 | 0.7 |
| Total net new business | 1.7 | 1.6 | 0.9 | 0.7 | 1.8 |
| Market movements and other | 0.3 | 3.3 | 3.5 | (1.8) | (12.7) |
| Closing AUA | 134.0 | 132.0 | 127.1 | 122.7 | 123.8 |
| Closing AUA (£billion) | As at 30 June 2023 | As at 31 March 2023 | As at 31 December 2022 | As at 30 September 2022 | As at 30 June 2022 |
| Funds | 62.2 | 61.6 | 59.6 | 57.4 | 58.2 |
| Shares | 50.8 | 49.8 | 47.1 | 45.2 | 45.9 |
| Cash | 13.1 | 13.5 | 14.1 | 14.8 | 15.0 |
| HL Funds | 8.7 | 8.6 | 8.3 | 7.8 | 8.0 |
| Active Savings | 7.8 | 7.0 | 6.3 | 5.3 | 4.6 |
| Double count1 | (8.6) | (8.5) | (8.3) | (7.8) | (7.9) |
| Total | 134.0 | 132.0 | 127.1 | 122.7 | 123.8 |
| Average AUA (£billion) | 3 months to 30 June 2023 | 3 months to 31 March 2023 | 3 months to 31 December 2022 | 3 months to 30 September 2022 | 3 months to 30 June 2022 |
| Funds | 62.1 | 61.8 | 59.2 | 59.8 | 61.0 |
| Shares | 50.4 | 50.1 | 47.3 | 47.5 | 48.7 |
| Cash | 13.4 | 13.6 | 14.3 | 14.8 | 14.8 |
| HL Funds | 8.7 | 8.6 | 8.2 | 8.1 | 8.3 |
| Active Savings | 7.5 | 6.8 | 6.0 | 5.1 | 4.3 |
| Double count1 | (8.6) | (8.5) | (8.1) | (8.1) | (8.3) |
| Total | 133.5 | 132.4 | 126.9 | 127.2 | 128.8 |
1 All Hargreaves Lansdown 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.
