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(Alliance News) - Hargreaves Lansdown said Monday it delivered a record performance and exceptional growth during an "extraordinary and challenging year", as the fund supermarket brought in a record 233,000 net new clients in the year.
However, HL warned of higher costs in the year ahead amid new investments. The shares were down 9.6% early Monday in London, the worst FTSE 100 performer.
During the recent 12 months, Hargreaves said it benefited from market volatility that has been the "inevitable outcome" of a challenging year.
"Investor confidence started the year at a low but swung dramatically on the positive news of Covid vaccines and the political certainty provided by the US election and Brexit," said Chief Executive Officer Chris Hill.
For the financial year that ended June 30, revenue rose 15% to GBP631.0 million from GBP550.9 million last year, but pretax profit was GBP366.0 million, down 3.0% from GBP378.3 million.
The Bristol-based wealth management platform reported strong growth in assets under administration, which were up 30% to GBP135.5 billion from GBP104.0 billion. Net new business inflows were up 13% to GBP8.7 billion from GBP7.7 billion.
Hargreaves Lansdown declared a total dividend of 50.5 pence per share, down from 54.9p paid out in financial 2020. It also declared a special dividend of 12.0p.
The company said it is seeing a change in the demographic mix of its clients, with 83% of new clients under the age of 55. Further, it said it saw high levels of engagement from the "trading phenomenon around GameStop and so-called meme stocks".
Looking ahead, CEO Hill said: "With this continued investment in our people, proposition, service and technology as well as the cost of servicing an enlarged and growing client base, we expect 2022 costs to reflect this investment and continue to be broadly aligned to client growth.
"The impact of Covid on individuals, businesses and the economy still provides an uncertain backdrop to the current year. As we have eased out of lockdown and entered the summer months, we have seen a slowdown in dealing volumes and client activity versus the elevated levels this time last year, which is also normal for this time of year and in line with management expectations. However, given our enlarged client base, we would still expect to see stronger client activity in 2022 versus 2020 (which also included a few months of elevated activity during the peak of the pandemic period) and the breadth of proposition and client focus gives us confidence that as the year progresses, we will continue to win in this growing market."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.2% at 7,106.90
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Hang Seng: up 0.4% at 26,290.24
Nikkei 225: Tokyo market closed for holiday.
DJIA: closed up 144.26 points, or 0.4%, at 35,208.51
S&P 500: closed up 7.42 points, or 0.2%, at 4,436.52
Nasdaq Composite: closed down 59.35 points, or 0.4%, at 14,835.76
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EUR: firm at USD1.1766 (USD1.1760)
GBP: up at USD1.3885 (USD1.3862)
USD: down at JPY110.12 (JPY110.30)
GOLD: down at USD1,746.42 per ounce (USD1,764.55)
OIL (Brent): down at USD69.04 a barrel (USD70.92)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
Japan Mountain Day holiday observed. Financial markets closed.
1100 BST Ireland industrial production
1000 EDT US employment trends index
1000 EDT US job openings
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A big investment plan aimed at modernizing America's infrastructure overcame a key legislative hurdle in the US Senate on Sunday, with legislation described as "historic" by President Joe Biden now almost certain to become law. The bill, months in the making, calls for USD550 billion in new federal spending on the nation's ageing infrastructure, including funds to slow the effects of climate change. The total USD1.2 trillion price tag includes some funds previously approved but not yet spent. Sunday evening saw the bill largely overcome several procedural votes in the Senate, with the slim Democratic majority bolstered by support from over a third of Republicans. It now goes to a final vote, with lawmakers primed to approve it as early as Monday if an agreement can be reached. But while there is now little doubt that the Senate will approve the almost 2,700-page text, its future is less certain in the House of Representatives, where left-wing and centrist factions have clashed over the size of the spending.
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BROKER RATING CHANGES
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MORGAN STANLEY REINITIATES ASTRAZENECA WITH 'OVERWEIGHT' - PRICE TARGET 9,800 PENCE
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RBC CUTS CONVATEC TO 'UNDERPERFORM' ('SECTOR PERFORM') - TARGET 213 (230) PENCE
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Liberum starts coverage on Made.com with Buy rating, 250p price target
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COMPANIES - FTSE 100
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Halma said it has completed three acquisitions for a total of GBP48.8 million and sold electronic security systems provider Texecom for GBP65 million. In the Safety sector, Halma acquired the Ramtech Group for GBP15.5 million in cash. In the Environmental & Analysis sector, Halma's pipeline inspection systems business, Mini-Cam, acquired Dancutter, a Danish designer and manufacturer of trenchless pipeline rehabilitation equipment for EUR18 million. Halma also bought Sensitron, a gas detection company based in Milan, Italy, for EUR21 million in cash. CEO
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BT Group is set to poach ASOS Chair Adam Crozier to be its own chair, the Sunday Times reported over the weekend. According to the newspaper, Crozier will resign from the online fashion retailer to focus on the telecoms firm, although he will stay on as chair of Whitbread and private data analytics business Kantar. Crozier beat three other candidates for the BT role, the newspaper reported, without saying where it got the information from. The 57-year-old was formerly chief executive of Royal Mail, ITV and the Football Association. At BT, he will be expected to stabilise the board after the resignation of previous chair Jan du Plessis, whose relationship with Chief Executive Philip Jansen broke down.
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COMPANIES - FTSE 250
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Philip Morris International raised its bid for asthma treatment firm Vectura to 165 pence per share, besting the 155p offer from private equity firm Carlyle to which Vectura had agreed on Friday. The new offer values Vectura at GBP1.02 billion. PMI previously had offered 150p per Vectura share.
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Shipping services firm Clarkson reported a robust set of interim earnings with strong trading across all areas of the business. For the six months to June 30, revenue was GBP190.1 million, up 5.4%, GBP180.4 million last year, and pretax profit rose 31% to GBP27.3 million from GBP20.9 million. The company declared an interim dividend of 27p, up 8% from 25p paid out at the halfway stage last year. CEO Andi Case said: "The company generated significantly increased profits in the first half of the year, aided by a robust performance in our Broking division and a strong recovery from our Financial division. I am also excited by the progress and momentum that our Sea/ platform is building. "We are confident in the outlook for Clarksons, which is well placed to capitalise on an improving demand-supply dynamic within shipping, offshore and renewables and from the wider global economic recovery."
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COMPANIES - MAIN MARKET AND AIM
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Germany's Delivery Hero has built a 5.1% stake in UK rival Deliveroo, crossing the 5% threshold on Friday, according to a regulatory release on Monday.
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Virgin Atlantic Airways is planning to list on the London Stock Exchange to take advantage of investors expectations of a quick economic recovery in international travel, the Financial Times reported on Sunday. The Crawley, West Sussex-based long-haul carrier has been talking to fund managers about a listing as early as this autumn, the newspaper reported, citing "a person familiar with the matter". The initial public offering will be led by bankers from Citigroup and Barclays, the FT said, noting this was first reported by Sky News. Virgin boss Richard Branson would likely lose his majority stake, it noted.
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COMPANIES - GLOBAL
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China Telecom could raise more than USD8 billion in a Shanghai initial public offering that would be the biggest this year, months after it was delisted in the US amid Washington's stand-off with Beijing. The firm said it had priced its offer at 4.53 yuan per share, which would be worth CNY47.1 billion, about USD7.3 billion, according to a filing with the Shanghai Stock Exchange on Friday. However, if an over-allotment option was exercised that would jump to CNY54 billion, or USD8.4 billion, Bloomberg News said. China Telecom was delisted by the New York Stock Exchange in January along with fellow state-owned telecoms firms China Mobile and China Unicom following an executive order by former president Donald Trump.
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Monday's Shareholder Meetings
NextEnergy Solar Fund Ltd - AGM
Shefa Gems Ltd - GM re mining unit sale and share consolidation
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By Tom Waite; thomaslwaite@alliancenews.com
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