Hargreaves Lansdown PLC (LON:HL.) said it will not change its dividend policy this year after the fund supermarket won bumper levels of new business and enjoyed record levels of stockbroking activity as savers and investors reacted to the coronavirus crisis.
Assets under administration shrank from £105.2bn at the end of December to £96.7bn by the end of April as £12.4bn of negative market movement was partly offset by £4bn of net new business.
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As well as 94,000 net new clients joining during ISA season, net new business includes existing clients putting more savings into their ISAs, ongoing transfers of pensions onto the platform from existing clients and flows into the Active Savings service.
Revenues generated by the FTSE 100-listed group of £190.2bn during the four-month period were up 19% on the same quarter last year, as a slow end to February and start of March from the collapse in stock markets, combined with a Bank of England rate cut, was more than offset by levels of dealing activity in March and April that were more than double any highs experienced by the group before.
Revenue for the 10 months of the group’s financial year of £448.1mln are so far 13% higher than last year but the company stressed that only time will tell if the elevated dealing volumes continue for much longer.
The company also said it has been notified of an increase in the Financial Services Compensation Scheme budget for 2020/21, which will give rise to a likely charge in this current year of between £12.5-13mln compared to £6.8mln last year.
On the dividend, the board said it “considers these to be strong trading results” and so with a robust capital and liquidity position, the current intention remains to operate its stated dividend policy for the 2020 financial year.
Shares in the company rose 7% in early trading on Thursday to 1,704.06p, where they are still down 13% since the start of the year.
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