Hargreaves Lansdown Regulatory News (HL.)

29 Jun 2009 07:00



Hargreaves Lansdown plc ("Hargreaves Lansdown" or "the Group") announces pre-close update on trading ahead of expectations

Trading update

At the time of the third quarter Interim Management Statement on 16 April 2009, Hargreaves Lansdown reported that revenues for the first nine months of the year were £98.4 million, 12% ahead of revenues for the nine months ended 31 March 2008 (£87.5 million). 

The fourth quarter of the 2009 financial year is also proving to be strong on the back of high stockbroking dealing volumes and the positive impact of the market. Revenues for the eleven months to 31 May 2009 are approximately 10% ahead of revenues for the same period in the previous year. As a result, the Group expects to announce pre-tax profits for the full year which are slightly ahead of the top end of market expectations (currently at £69.1 million).

The value of assets held within the Vantage service, the Group's direct-to-private investor fund supermarket and wrap platform, increased by 15% from £9.2 billion as at 31 March 2009 to £10.6 billion as at 31 May 2009 compared to the FTSE All-Share index increase of 13.5% during the same period.

Retail distribution review

On 25 June 2009 our regulator, the Financial Services Authority ("FSA"), published a detailed consultation paper setting out draft rules for how the retail investment industry will work from December 2012. From an initial review of the draft rules, we are comfortable that the Hargreaves Lansdown business model is well placed to deal with the changes. We can see nothing in the draft rules that will be overtly damaging to our business model. We can see no significant threats or costs to the Group resulting from the proposals. There will be no retrospective changes to existing business in 2012 resulting from the new rules.

The FSA are currently only planning to apply the new rules to advised sales of products, not to execution-only business. The bulk of our Vantage business is execution-only and so will be unaffected by the new rules. In the second half of 2009 the FSA will be conducting a 'thematic review' of the fund supermarket/platform marketplace to determine whether to change from the current position by including platforms in the new rules.

A one page briefing note is available on our website at www.h-l.co.uk/investor-relations. The note includes a summary of the key rule changes proposed by the FSA and how they are likely to impact Hargreaves Lansdown.

Commenting on the trading update, Peter Hargreaves, Chief Executive Officer of Hargreaves Lansdown, said: "The business has again demonstrated its ability to gather assets and improve revenues even in adverse conditions."

Further details will be provided within the preliminary results announcement for the twelve months ended 30 June 2009, on 2 September 2009.

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29 June 2009