Hargreaves Lansdown PLC (LSE:HL.) shares rose 3.1% to 788.8p on Tuesday morning as the company beat expectations for full-year profits despite market conditions continuing to be challenging.
The investment platform operator lifted the dividend 4.5% to 41.5p as underlying profits rose 47% to £439 million in the year to June, beating the average analyst forecast of £416 million.
Revenues rose 26% to £735.1 million as net new business declined 13% to £4.8 billion and assets under administration increased 8% to £134 billion.
Interest income from the Active Savings business is now the biggest revenue stream, at £269 million compared to £50 million the prior year.
New chief executive Dan Olley, who joined from Tesco’s data arm Dunnhumby in August, called it a “robust financial performance for our full year in what continues to be a challenging broader economic environment”.
He said investor confidence is likely to continue being hit by this economic climate in the new financial year, which he said will provide a continued tailwind for flows into the company’s Active Savings accounts, but a potential constraint on net new investment flows and dealing volumes.
“Against this backdrop, we have already started to take initial actions on cost and will continue to carefully manage all operating costs and efficiency improvements whilst balancing with the importance of providing the high level of service and support that our ever-growing client base demands.”
Profits beat consensus forecasts as revenues were higher than expected and costs slightly lower, said broker Peel Hunt.
Analysts noted that guidance was updated on margins – cash upgraded to 180-200 basis points (bps), offset by a slightly weaker outlook for funds (36.5bps-38.5bps, consensus is at top end of this range).