(Alliance News) - Fund supermarket Hargreaves Lansdown on Friday said it delivered a strong annual performance, but warned "the road to recovery could be a long one" for the UK economy.
For the financial year that ended June 30, revenue was 5% higher to GBP550.9 million from GBP480.5 million last year, and pretax profit rose 24% to GBP378.3 million from GBP305.8 million.
Net new business inflows increased 7% to GBP7.7 billion from GBP7.3 billion, while total assets under administration came in 5% higher to GBP104 billion from GBP99.3 billion.
Following the strong performance, Hargreaves Lansdown raised its total dividend by 11% to 54.9 pence from 42p.
Chief Executive Chris Hill said: "In the near term the UK economy faces a period of uncertainty as we work through the many issues arising from Covid-19. Unemployment levels have increased significantly whilst economic growth has decreased. The government has borrowed vast amounts to help the economy and society, but the road to recovery could be a long one with various tax implications along the way. The impact on our clients and the wider investment community, as a result, is difficult to call. Interest rates are at all-time lows, which makes cash savings unappealing, but market uncertainty and volatility can equally deter people from investing and access to liquidity is a key part of building financial resilience.
"However, our focus on clients, the trusted relationships we have with them and the investment we have made to broaden and strengthen our proposition, means Hargreaves Lansdown is strongly positioned to help our clients navigate through these difficult times. We are clear in the structural growth opportunity, clear in our strategy and business model and these provide us with confidence in our ability to deliver sustainable and attractive growth and returns beyond the immediate uncertainties."
The stock was up 2.4% in early trading Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,035.78
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Hang Seng: down 1.9% at 24,456.36
Nikkei 225: closed down 0.4% at 22,329.94
DJIA: closed up 185.46 points, or 0.7%, at 27,386.98
S&P 500: closed up 0.6% at 3,349.16
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GBP: down at USD1.3124 (USD1.3137)
EUR: flat at USD1.1841 (USD1.1845)
Gold: up at USD2,061.73 per ounce (USD2,052.10)
Oil (Brent): down at USD45.05 a barrel (USD45.37)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
0830 BST UK Halifax house price index
0830 EDT US jobs report for July
1000 EDT US monthly wholesale trade
1500 EDT US consumer credit
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UK retail footfall remained sharply lower in July, but did stage a substantial improvement on the month before, according to the British Retail Consortium-Shoppertrak footfall monitor. Footfall tumbled 42% year-on-year in July, though this marked a "big improvement" on June's 63% slump. In April, footfall dived 85% annually. High Street footfall was down 50% in July against June's 65% fall. At retail parks, footfall was down 22% year-on-year, another improvement on June's showing, when traffic was down 34%. Shopping centre footfall was down 48% after June's 68% drop. "While retailers will welcome the improvement in footfall across all shopping destinations, it remains well down on pre-coronavirus levels," said Helen Dickinson, chief executive of the BRC.
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There was a promising bounce in German industrial production, though output still lagged behind pre-Covid-19 crisis levels, Destatis said. Separate data from Germany showed its trade surplus widened in June, helped by a 15% jump in exports. Industrial production in Germany rose 8.9% month-over-month in June, following a downwardly revised 7.4% rise in May. The annual decline also eased, coming in at 12% in June, improved from 20% in May. Germany's foreign trade surplus came in at EUR15.6 billion in June, more than doubled from EUR7.0 billion in May. Year-on-year, however, it dropped 5.5% from EUR16.5 billion.
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China's trade surplus surged in July ahead of expectations amid a 10% rise in exports. China's trade surplus in July was CNY442.23 billion, about USD63.49 billion, a 46% annual jump according to the General Administration of Customs. Consensus according to FXStreet predicted a trade surplus of CNY264.99 billion, so the July figure beat market expectations. Exports rose 10%, figures showed, while imports were up 1.6%.
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Japan's trade surplus slumped year-on-year in July, according to preliminary figures from the Ministry of Finance. In the first 20 days of July, the trade surplus slumped 61% to JPY136.07 billion from JPY344.62 billion. This came as exports fell 21% annually and imports dropped 24%.
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Ottawa will impose "dollar-for-dollar" tariffs on US goods in retaliation for President Donald Trump's decision to slap a 10% tariff on aluminium imports from Canada, Deputy Prime Minister Chrystia Freeland said. Trump had previously imposed increased tariffs on Canadian steel and aluminium in 2018 but then removed them last year. In a speech in Ohio at a factory, where he announced the plan on Thursday, Trump accused Canada of "taking advantage" of the US. A statement from the US Trade Representative Office said Canadian imports have "surged above historical levels," in justifying the measure, which has been on the cards since last June. The move comes just five weeks after a new North American free trade deal, known as USMCA, went into effect between Canada, Mexico and the US. Trump had pushed hard for the agreement, which replaced NAFTA from 1994. Freeland called the Trump administration's decision to reimpose tariffs on Canadian aluminium imports on national security grounds "unwarranted and unacceptable."
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BROKER RATING CHANGES
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JEFFERIES STARTS GREGGS WITH 'BUY' - PRICE TARGET 2175 PENCE
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BARCLAYS RESUMES TULLOW OIL WITH 'EQUAL WEIGHT' AND TARGET 32 PENCE
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COMPANIES - FTSE 100
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Standard Life Aberdeen swung to an interim loss with the asset manager pointing to the shutdowns of economic activity due to Covid-19 causing significant negative growth shocks across the world. For the half-year ended June 30, fee-based revenue fell 13% to GBP706 million from GBP815 million last year, which the fund manager said mainly reflects 2019 outflows, client preferences changing asset mix, and Lloyds Banking Group tranche withdrawals. In 2018, Lloyds decided to withdraw GBP109 billion of assets that were being managed by Standard Life Aberdeen. The company swung to a pretax loss of GBP498 million from a profit of GBP649 million last year, reflecting impairment charges relating to goodwill and intangible assets, it said. Net inflows for the first half of 2020 amounted to GBP0.1 billion, excluding Lloyds tranche withdrawals of GBP24.9 billion, compared to GBP15.9 billion in net outflows a year ago. Assets under management and administration as at June 30, was GBP511.8 billion, lower than GBP544.6 billion at year-end 2019 largely reflecting the Lloyds tranche withdrawals. However, the fund manager maintained its interim dividend at 7.3p. Outgoing CEO Keith Skroch said: "There is no question that the impact of Covid-19 has played a role on our results today, and across our industry, particularly in relation to lower revenue."
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Rightmove reported a drop in first-half profit and scrapped its dividend after the Covid-19 crisis prompted the property portal to offer discounts to its customers. For the half-year to June 30, pretax profit dropped to GBP61.6 million from GBP108.1 million last year, as revenue fell to GBP94.8 million from GBP143.9 million. Average revenue per advertiser was down by 34% to GBP712 per month from GBP1,077 last year. The company elected against paying an interim dividend, having paid out 2.8p last year. Rightmove said given uncertainties caused by Covid-19, it also had been prudent to cancel the proposed final dividend payment of 4.4p per share for 2019 in order to preserve cash and strengthen financial liquidity. CEO Peter Brooks-Johnson said: "The positive metrics in June and July allied to the stamp duty holidays give grounds for cautious optimism that housing transaction levels will increase from the low point in second quarter. Rightmove data suggests that the significant increase in activity is being driven not only from the pent up demand from the period of lock down, but an increased number of home hunters who have decided to move following the experience of lock down."
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COMPANIES - MAIN MARKET AND AIM
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Finablr-owned travel money firm Travelex has struck a deal to stay afloat, but with the loss of more than 1,300 jobs in the UK. Administrators PwC said the impact of a cyber-attack followed by the coronavirus crisis had "acutely" hit the company. It said that a complex restructuring deal completed on Thursday had delivered GBP84 million of new money through a "pre-pack administration sale" of certain entities and assets. The purchaser is Travelex Acquisitionco, a special purpose vehicle controlled by the noteholders to the global Travelex Group. A pre-pack administration sale is when a company arranges a deal to sell its assets to a buyer before appointing administrators to facilitate the sale. Toby Banfield, joint administrator at PwC, said the sale had saved 1,802 jobs in the UK, but 1,309 UK employees will be made redundant.
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Friday's Shareholder Meetings
Scapa Group
Manx Financial Group
Palace Capital
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
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