REG - Hargreaves Lansdown - Trading Statement

Hargreaves LansdownAnnouncement

04/05/2023 07:00

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RNS Number : 3345Y  Hargreaves Lansdown PLC  04 May 2023

Trading update

4 May 2023

 

Hargreaves Lansdown plc today issues a trading update in respect of the three
months ended 31 March 2023 ("Q3").

 

Highlights

 

·       Net new business of £1.6 billion in the period, up 14% on Q3
FY22.

·       Closing Assets under Administration ("AUA") of £132.0 billion,
up 4% in the quarter.

·       Revenue for the period of £188.1 million, up 28% on Q3 FY22.

·       Net client growth of 23,000 in the period, taking us to 1.8
million clients.

 

Chris Hill, Chief Executive Officer, commented:

 

"We delivered net new business of £1.6 billion in the period, up 14% on last
year as the combination of changes to the tax landscape, our marketing
activity, and ongoing developments in our core propositions generated a call
to action for clients in the run up to tax year end. Macroeconomic uncertainty
continues but the improved activity demonstrates that as confidence returns,
HL is well positioned to grow and support new and existing clients on their
investment and savings journeys.

 

During the quarter, we launched a new cash ISA, three new Portfolio Funds and
our enhanced Share Exchange service helping clients enable efficient use of
their tax allowances. The targeted price reduction we have made to our LISA
product and making our Junior ISA fee free demonstrates how we are thinking
about specific improvements to help families manage wealth and to help those
starting out on their investing journeys."

 

Trading performance

 

·      Net new business of £1.6 billion in Q3 (Q3 FY22: £1.4bn),
despite moderated flows being seen across the market. This was a significant
step up versus the first half of the year driven by net flows on to the
Platform as clients focused more on utilising their ISA and SIPP tax
allowances.

·      Active Savings saw net inflows of £0.7 billion in the quarter (Q3
FY22: £0.1 billion) with lower flows than the previous quarter as clients
favoured tax wrapped investments ahead of the tax year-end.

·      Active client growth of 23,000 in the quarter (Q3 FY22: 31,000)
with client retention at 92.0% broadly in line with last year (Q3 FY22:
91.7%); asset retention of 89.1%, lower than prior year (Q3 FY22: 91.5%)
reflecting the continued need of certain clients for cash withdrawals.

·      Closing AUA of £132.0 billion reflects £3.3 billion positive
market movement, combined with £1.6 billion of net new business.

·      Total revenue in the quarter of £188.1 million (Q3 FY22:
£146.9m) up 28%; year-to date revenue of £538.1 million (FY22: £438.0m) up
23% reflecting a continuation of the increase in net interest margin, which
more than offset the impact from the reduction in share dealing volumes and
lower average asset values during the period.

·      Share dealing volumes have averaged 770,000 per month in the
quarter, up 23% versus the previous quarter but 20% lower than prior year,
which saw a particularly elevated quarter for dealing volumes before investor
confidence was hit hard by concerns over the conflict in Ukraine and cost of
living issues.

 

Financial calendar

 

A fourth quarter trading update will be issued on 19(th) July 2023 and then
the full year results, including progress on our strategic initiatives will be
issued on 19(th) September 2023. Our Annual General Meeting is set for 8(th)
December 2023.

 

Contacts:

 

 Investors                                Media
 James Found, Head of Investor Relations  Danny Cox, Head of Communications

 +44(0)7970 066634                        +44(0)7989 672071

                                          Nick Cosgrove, Brunswick

                                          0207 404 5959

 

 

 

Forward looking statements

This announcement contains forward-looking statements with respect to the
financial condition, results and business of the Group. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events, and depend on circumstances, that will occur in the future. The
Group's actual results may differ materially from the results expressed or
implied in these forward-looking statements. Nothing in this announcement
should be construed as a profit forecast. This announcement is unaudited. This
statement should not be seen as a promotion or solicitation to buy Hargreaves
Lansdown plc shares. It should be remembered that the value of shares can fall
as well as rise and therefore you could get back less than you invested.

LEI Number: 2138008ZCE93ZDSESG90

Revenue, clients, retention rates and share dealing volumes

 

 Key metrics                                               3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022  3 months to 31 March 2022
 Revenue (£m)                                              188.1                      187.1                         162.9                          145.0                     146.9
 Net new clients                                           23,000                     14,000                        17,000                         13,000                    31,000
 Total                   active clients                    1,791,000                  1,768,000                     1,754,000                      1,737,000                 1,724,000
 Client Retention Rate (%)                                 92.0                       92.6                          92.2                           91.3                      91.7
 Asset Retention Rate (%)                                  89.1                       91.1                          91.7                           91.5                      91.5
 Share dealing volumes per month                           770,000                    627,000                       700,000                        779,000                   960,000

 

Assets under administration

 

 AUA (£billion)                     3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022  3 months to 31 March 2022
 Opening AUA                        127.1                      122.7                         123.8                          134.7                     141.2
 Net new business - platform        0.9                        (0.1)                         -                              1.1                       1.3
 Net new business - Active Savings  0.7                        1.0                           0.7                            0.7                       0.1
 Total net new business             1.6                        0.9                           0.7                            1.8                       1.4
 Market movements and other         3.3                        3.5                           (1.8)                          (12.7)                    (7.9)
 Closing AUA                        132.0                      127.1                         122.7                          123.8                     134.7

 

 Closing AUA (£billion)   As at 31         March 2023          As at 31            As at 30         September 2022          As at 30         June 2022          As at 31          March 2022

                                                                December 2022
 Funds                    61.6                                 59.6                57.4                                     58.2                                64.4
 Shares                   49.8                                 47.1                45.2                                     45.9                                52.1
 Cash                     13.5                                 14.1                14.8                                     15.0                                14.3
 HL Funds                 8.6                                  8.3                 7.8                                      8.0                                 8.6
 Active Savings           7.0                                  6.3                 5.3                                      4.6                                 3.9
 Double count(1)          (8.5)                                (8.3)               (7.8)                                    (7.9)                               (8.6)
 Total                    132.0                                127.1               122.7                                    123.8                               134.7

 

 Average AUA (£billion)   3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022  3 months to 31 March 2022
 Funds                    61.8                       59.2                          59.8                           61.0                      63.7
 Shares                   50.1                       47.3                          47.5                           48.7                      51.7
 Cash                     13.6                       14.3                          14.8                           14.8                      14.0
 HL Funds                 8.6                        8.2                           8.1                            8.3                       8.6
 Active Savings           6.8                        6.0                           5.1                            4.3                       3.9
 Double count(1)          (8.5)                      (8.1)                         (8.1)                          (8.3)                     (8.5)
 Total                    132.4                      126.9                         127.2                          128.8                     133.4

 

(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.

 

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