REG - Hargreaves Lansdown - Trading Statement

Hargreaves LansdownAnnouncement

19/10/2023 07:00

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RNS Number : 5911Q  Hargreaves Lansdown PLC  19 October 2023

Trading update

19 October 2023

 

Hargreaves Lansdown plc today issues a trading update in respect of its first
quarter ended 30 September 2023.

 

 

Highlights

 

·       Net new business of £0.6 billion in the period and closing
Assets under Administration ("AUA") of £134.8 billion.

·       Net new client growth of 8,000 in the period, taking us to
1,812,000 active clients, with client retention rate of 91.7%.

·       Revenue for the period of £183.8 million, up 13% (Q1 2023:
£162.9m).

 

 

Dan Olley, Chief Executive Officer, commented:

"We continue to see net client growth and positive net new business despite
the macroeconomic backdrop and its on-going impact on investor confidence and
client behaviour.

 

Clients are looking to invest more in cash than risk-based investments, from
our Active Savings offer, giving easy access to a range of banking partners,
to Money Market Funds and short-dated bonds. Combining this with informative
and relevant content provides our clients with a wide range of solutions to
meet their saving and investment needs."

 

Trading performance

 

·      Net new business of £0.6 billion in the quarter (Q1 2023:
£0.7bn), reflects moderated flows being seen across the market. Active
Savings continues to perform well and has been the key driver of net flows as
clients favour cash savings over risk based investments.

·      Net client growth of 8,000 in the quarter (Q1 2023: 17,000)
primarily driven by net new clients in the SIPP and Active Savings accounts.
Client retention at 91.7% (FY2023: 92.2%) and asset retention at 89.0%
(FY2023: 90.4%) reflects the muted macroeconomic backdrop and the need for
various cohorts of clients to make cash withdrawals.

·      Share dealing volumes averaged 634,000 per month in the quarter
(Q1 2023: 700,000) reflecting wider market trends.

·      Client cash balances were £12.4 billion at the end of the
quarter, 9.2% of total AUA, with heightened levels of cash withdrawals and an
increase in movement of cash into Active Savings in July and August before
stabilising in September.

·      Total revenue in the quarter of £183.8 million (Q1 2023:
£162.9m) with net interest margin growth more than offsetting the revenue
impact of the reduction in share dealing volumes.

 

Financial calendar

 

Our Annual General Meeting is scheduled to be held on 8 December 2023 and our
interim results will be issued on 22 February 2024.

 

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 and share dealing volumes

 

 Key metrics                                               3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022
 Revenue (£m)                                              183.8                          197.0                     188.1                      187.1                         162.9
 Net new clients                                           8,000                          13,000                    23,000                     14,000                        17,000
 Total                   active clients                    1,812,000                      1,804,000                 1,791,000                  1,768,000                     1,754,000
 Client Retention Rate (%)                                 91.7                           92.0                      92.0                       92.6                          92.2
 Asset Retention Rate (%)                                  89.0                           89.7                      89.1                       91.1                          91.9
 Share dealing volumes per month                           634,000                        685,000                   770,000                    627,000                       700,000

 

Assets under administration

 

 AUA (£billion)                     3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022
 Opening AUA                        134.0                          132.0                     127.1                      122.7                         123.8
 Net new business - platform        (0.1)                          0.9                       0.9                        (0.1)                         -
 Net new business - Active Savings  0.7                            0.8                       0.7                        1.0                           0.7
 Total net new business             0.6                            1.7                       1.6                        0.9                           0.7
 Market movements and other         0.2                            0.3                       3.3                        3.5                           (1.8)
 Closing AUA                        134.8                          134.0                     132.0                      127.1                         122.7

 

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

                                                                    June 2023
 Funds                    61.9                                     62.2                61.6                                 59.6                                    57.4
 Shares                   51.9                                     50.8                49.8                                 47.1                                    45.2
 Cash                     12.4                                     13.1                13.5                                 14.1                                    14.8
 HL Funds                 8.7                                      8.7                 8.6                                  8.3                                     7.8
 Active Savings           8.5                                      7.8                 7.0                                  6.3                                     5.3
 Double count(1)          (8.6)                                    (8.6)               (8.5)                                (8.3)                                   (7.8)
 Total                    134.8                                    134.0               132.0                                127.1                                   122.7

 

 Average AUA (£billion)   3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023  3 months to 31 December 2022  3 months to 30 September 2022
 Funds                    62.6                           62.1                      61.8                       59.2                          59.8
 Shares                   52.2                           50.4                      50.1                       47.3                          47.5
 Cash                     12.5                           13.4                      13.6                       14.3                          14.8
 HL Funds                 8.8                            8.7                       8.6                        8.2                           8.1
 Active Savings           8.3                            7.5                       6.8                        6.0                           5.1
 Double count(1)          (8.7)                          (8.6)                     (8.5)                      (8.1)                         (8.1)
 Total                    135.7                          133.5                     132.4                      126.9                         127.2

 

(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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