REG - Hargreaves Lansdown - Trading Statement

Hargreaves LansdownAnnouncement

19/07/2023 07:00

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RNS Number : 4306G  Hargreaves Lansdown PLC  19 July 2023

Trading update

19 July 2023

 

Hargreaves Lansdown plc today issues a trading update in respect of the three
months ended 30 June 2023 ("Q4").

 

Highlights

 

·       Net new business of £1.7 billion in the period, up 6% on the
previous quarter.

·       Closing Assets under Administration ("AUA") of £134.0 billion,
up 2% in the quarter.

·       Net client growth of 13,000 in the period, taking us to
1,804,000 clients.

 

Chris Hill, Chief Executive Officer, commented:

 

"We delivered net new business of £1.7 billion in the period, up 6% on the
previous quarter. The tax year end season remains a critical time for our
clients and this year we focused on supporting them to navigate the changes to
the tax landscape, making the most of their allowances and delivering further
value to our overall client proposition.

 

The improvements in the previous quarter, including the launch of a new cash
ISA, three new Portfolio Funds and price reductions on our LISA and JISA
accounts, were further enhanced with the removal of fees for dividend
reinvestment and regular monthly investing along with the addition of new
partner banks to Active Savings.

 

The breadth of and continued investment into our client proposition, means we
remain well positioned to grow and support both new and existing clients with
their investment and savings needs."

 

Trading performance

 

·      Net new business of £1.7 billion in Q4 (Q4 FY22: £1.8bn),
despite moderated flows being seen across the market. This was 6% up on the
previous quarter to March with continued net flows on to the platform as
clients focused on utilising their ISA and SIPP tax allowances, particularly
in the final days of the 2023 tax year and the start of the 2024 tax year.

·      Active Savings saw net inflows of £0.8 billion in the quarter (Q4
FY22: £0.7 billion) as clients continue to manage their cash savings through
us and the broad access we provide to a range of rates and banks.

·      Active client growth of 13,000 in the quarter (Q4 FY22: 13,000)
with client retention at 92.0%, up on last year (Q4 FY22: 91.3%); asset
retention of 89.7%, lower than last year (Q4 FY22: 91.5%) as expected,
continuing the trend seen for much of this year, where across the market,
specific cohorts of clients are making cash withdrawals to fund cost-of-living
increases.

·      Closing AUA of £134.0 billion; £0.3 billion positive market
movement, combined with £1.7 billion of net new business in the quarter.

·      Share dealing volumes have averaged 685,000 per month in the
quarter, 11% lower than the previous quarter and 12% lower than prior year.
Investor confidence across the quarter has been low with cost-of-living
issues, rising interest rates and market volatility impacting deal volumes.

 

Financial calendar

 

Our full year results, including progress on our strategic initiatives will be
issued on 19 September 2023. Our Annual General Meeting is scheduled to be
held on 8 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

Clients, retention rates and share dealing volumes

 

 Key metrics                                               3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022
 Net new clients                                           13,000                    23,000                     14,000                        17,000                         13,000
 Total                   active clients                    1,804,000                 1,791,000                  1,768,000                     1,754,000                      1,737,000
 Client Retention Rate (%)                                 92.0                      92.0                       92.6                          92.2                           91.3
 Asset Retention Rate (%)                                  89.7                      89.1                       91.1                          91.7                           91.5
 Share dealing volumes per month                           685,000                   770,000                    627,000                       700,000                        779,000

 

Assets under administration (AUA)

 

 AUA (£billion)                     3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022
 Opening AUA                        132.0                     127.1                      122.7                         123.8                          134.7
 Net new business - platform        0.9                       0.9                        (0.1)                         -                              1.1
 Net new business - Active Savings  0.8                       0.7                        1.0                           0.7                            0.7
 Total net new business             1.7                       1.6                        0.9                           0.7                            1.8
 Market movements and other         0.3                       3.3                        3.5                           (1.8)                          (12.7)
 Closing AUA                        134.0                     132.0                      127.1                         122.7                          123.8

 

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

                                                                                    December 2022
 Funds                    62.2                61.6                                 59.6                57.4                                     58.2
 Shares                   50.8                49.8                                 47.1                45.2                                     45.9
 Cash                     13.1                13.5                                 14.1                14.8                                     15.0
 HL Funds                 8.7                 8.6                                  8.3                 7.8                                      8.0
 Active Savings           7.8                 7.0                                  6.3                 5.3                                      4.6
 Double count(1)          (8.6)               (8.5)                                (8.3)               (7.8)                                    (7.9)
 Total                    134.0               132.0                                127.1               122.7                                    123.8

 

 Average AUA (£billion)   3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022  3 months to 30 June 2022
 Funds                    62.1                      61.8                       59.2                          59.8                           61.0
 Shares                   50.4                      50.1                       47.3                          47.5                           48.7
 Cash                     13.4                      13.6                       14.3                          14.8                           14.8
 HL Funds                 8.7                       8.6                        8.2                           8.1                            8.3
 Active Savings           7.5                       6.8                        6.0                           5.1                            4.3
 Double count(1)          (8.6)                     (8.5)                      (8.1)                         (8.1)                          (8.3)
 Total                    133.5                     132.4                      126.9                         127.2                          128.8

 

(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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