Hargreaves Lansdown records slump in profits as pandemic investment surge settles
Retail investment platform Hargreaves Lansdown recorded a fall in profits for the first half of its financial year as the pandemic boom in trading volumes began to settle.
The London-listed retail investment platform posted pretax profits of £151.2m compared with £188.4m a year before, when performance was lifted by a surge in retail trading activity through lockdowns.
Revenues fell to £291.9m, down from £299.5m a year prior, which bosses said had been further dragged by lower share trading volumes and record-low interest rates, while costs also rose as the firm pumped cash back into strategic capabilities, technology and compliance as it looks to roll out new-look support functions for post-pandemic trading.
Investors in the firm got the jitters this morning with the share price plunging as much as 15 per cent before recovering some ground.
But bosses have looked to ease concerns and said the firm was now well placed to ramp up growth after recording a jump in active clients of 48,000 to 1,693,000 and a 17 per cent jump in assets under administration to £135.5bn.
Chris Hill, Chief Executive, said: In the first half of this financial year, we saw a gradual return to the office and calmer markets which led to more normalised share trading levels, albeit still higher than before the pandemic. Our assets under administration have reached record levels, and we now have a record 1.7 million customers.
“As the market leader, with a stronger than ever 43.3% market share, now is the right time to target the broader wealth management market and set a new standard for how the UK saves and invests.”
Hill said he would now set out a clear plan for HL’s next phase of growth to investors at the firm’s capital markets day today.
Investors are set to see a rise in payouts as HL lifted its dividend 3 per cent to 12.26 pence per share.