Hargreaves Lansdown plc (LON:HL) has published a trading update in respect of the three month period to 30 September 2020. The comparatives are for the period from 1 July 2019 to 30 September 2019.
Highlights
· Net new business of £0.8 billion in the period
· Net new clients of 31,000
· Assets under administration (“AUA”) of £106.9 billion as at 30 September 2020, up 3% since 30 June 2020
· Revenue for the period of £143.7 million (2019: £128.1 million), up 12%
Assets under administration and net new business
| £ billion | Three months to 30 September 2020 | Three months to 30 September 2019 | |
| Opening AUA | 104.0 | 99.3 | |
| Net new business | 0.8 | 1.7 | |
| Market movements | 2.1 | 0.8 | |
| Closing AUA | 106.9 | 101.8 |
Net new business was £0.8 billion during the period (2019: £1.7bn, £0.8bn excluding back book transfers). This is a pleasing result given the period has seen weakening investor sentiment arising from COVID-19 and the re-emergence of Brexit uncertainty. As noted, last year benefited from direct back book transfers from J.P. Morgan and Baillie Gifford of £0.9 billion.
During the quarter, flows into Active Savings were hampered by the market leading rates on offer from the government backed NS&I. However, since NS&I cut their interest rates in mid-September we have seen a marked impact on flows back into Hargreaves Lansdown’s Active Savings.
A positive market movement of £2.1 billion, combined with net new business has driven AUA to £106.9 billion as at 30 September 2020.
We welcomed 31,000 net new clients in the period (2019: 35,000, 17,000 excluding direct back book transfers), taking active client numbers to 1,443,000.
Revenue
Revenue for the period was £143.7 million, up 12% on last year despite, on average, the FTSE All Share being down versus the comparative period by 18%. Revenue, was in part, driven by strong stockbroking revenues from continued elevated share dealing volumes. Although down on the peak levels seen earlier this year share dealing volumes across the quarter remained high and averaged 980,000 deals per month.
Assets under administration
| Average AUA (£billion) | 3 months to 30 September 2020 | 2 months to 30 June 2020 | 4 months to 30 April 2020 | 3 months to 31 December 2019 | 3 months to 30 September 2019 |
| Funds | 52.4 | 51.1 | 49.4 | 54.6 | 54.6 |
| Shares | 37.6 | 35.8 | 32.5 | 35.4 | 34.6 |
| Cash | 13.5 | 13.6 | 13.2 | 11.3 | 11.1 |
| HL Funds | 7.9 | 8.0 | 8.2 | 9.2 | 9.3 |
| Active Savings | 2.2 | 2.2 | 1.9 | 1.5 | 1.2 |
| Double count1 | (7.8) | (7.9) | (8.1) | (9.1) | (9.2) |
| Total | 105.8 | 102.8 | 97.1 | 102.9 | 101.6 |
| AUA (£billion) | As at 30 September 2020 | As at 30 June 2020 | As at 30 April 2020 | As at 31 December 2019 | As at 30 September 2019 |
| Funds | 52.8 | 51.7 | 47.9 | 55.9 | 54.2 |
| Shares | 38.2 | 36.4 | 32.5 | 36.5 | 34.9 |
| Cash | 13.5 | 13.6 | 14.1 | 11.1 | 11.3 |
| HL Funds | 7.8 | 8.0 | 7.7 | 9.4 | 9.2 |
| Active Savings | 2.3 | 2.2 | 2.1 | 1.6 | 1.3 |
| Double count1 | (7.7) | (7.9) | (7.6) | (9.3) | (9.1) |
| Total | 106.9 | 104.0 | 96.7 | 105.2 | 101.8 |
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 (£billion) | 3 months to 30 September 2020 | 2 months to 30 June 2020 | 4 months to 30 April 2020 | 3 months to 31 December 2019 | 3 months to 30 September 2019 |
| Opening AUA | 104.0 | 96.7 | 105.2 | 101.8 | 99.3 |
| Net new business1 | 0.8 | 1.4 | 4.0 | 0.6 | 1.7 |
| Market movements | 2.1 | 5.9 | (12.4) | 2.8 | 0.8 |
| Founder transfer2 | – | – | (0.1) | – | – |
| Closing AUA | 106.9 | 104.0 | 96.7 | 105.2 | 101.8 |
1 Net new business in the 3 months to 30 September 2019 includes £0.9bn of flows acquired from J.P. Morgan and Baillie Gifford direct back books
2 Net new business excludes the withdrawal of £110 million of Hargreaves Lansdown plc placing proceeds during the period that were held by a founder.
Chris Hill, Hargreaves Lansdown Chief Executive Officer, commented:
“Today we report a good start to our financial year, with growth in clients, assets and revenue. These results are against the ongoing backdrop of market uncertainty and highlight the resilience of our business model and client proposition. We are confident that the strategy we have invested in, with our focus on the needs of UK investors and savers and delivering the highest level of client service, means that we continue to be well positioned to deliver continued attractive long-term growth.”
