viewHargreaves Lansdown PLC

Hargreaves Lansdown posts 24% drop in new business amid market volatility, weak investor confidence

The FTSE 100-listed firm said its net new business inflow in the period was £2.5bn, down from £3.34bn a year earlier, while assets under administration at that date were £85.9bn

Piggy bank
However, it's first-half pre-tax profit rose by 4% to £153.4mln as net revenue increased 9% year-on-year to £236.4mln

Hargreaves Lansdown PLC (LON:HL.) saw a 24% year-on-year drop in net new business for the first half of its financial year, while its assets under administration declined by 6% over the six months amid market volatility and weak investor confidence.

Posting results for the six months ended 31 December 2018, the FTSE 100-listed firm said its net new business inflow in the period was £2.5bn, down from £3.34bn a year earlier, while assets under administration at that date were £85.9bn, down from £91.6bn as at 30 June 2018.

READ: Hargreaves Lansdown weak as Morgan Stanley cut its rating to ‘underweight’ from ‘equal-weight’

However, the savings platform operator managed to increase its first-half pre-tax profit by 4% to £153.4mln as net revenue rose 9% year-on-year to £236.4mln.

The group said it had 1,136,000 active clients at the end of the first half, an increase of 45,000 since its 30 June 2018 year-end.

Chris Hill, the firm’s chief executive officer, commented: "The diversified nature of Hargreaves Lansdown has enabled us to continue growing despite a period of geopolitical uncertainty, market volatility and weak investor confidence.

“We have a significant long-term market opportunity and our recent investment in service and developing our proposition are bringing real benefits to the business and our clients, both in difficult times such as the present and as and when conditions improve."

Hargreaves Lansdown raised its interim dividend by 2% to 10.3p per share, up from the 10.1p paid a year earlier.

In early morning trading, shares in Hargreaves Lansdown were 4.8% lower at 1,711.50p.

Wait for better opportunity to buy

In a note to clients, analysts at Shore Capital reiterated a ‘hold’ rating on the stock and said they “will provisionally tick down” their fair value estimate of 1,850p per share for Hargreaves Lansdown.

They said this is being done to “take account of the mark-to-market downgrade meaning that, much as we love the business, we would wait for a better opportunity before upgrading back to a Buy, and expect to see the shares weaker today.”

The analysts added: “We currently see better value in the battered share prices of certain discretionary managers such as Brewin Dolphin and Brooks Macdonald.”

 -- Adds share price, analyst comment --

Quick facts: Hargreaves Lansdown PLC

Price: 1528 GBX

Market: LSE
Market Cap: £7.25 billion

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