REG - Hargreaves Lansdown - Trading Statement

Hargreaves LansdownAnnouncement

30/04/2024 07:00

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RNS Number : 4860M  Hargreaves Lansdown PLC  30 April 2024

Trading update

30 April 2024

 

Hargreaves Lansdown plc today issues a trading update in respect of the three
months ended 31 March 2024.

 

Highlights

 

·       Good momentum into tax year end with increased gross inflows,
net new clients and share dealing volumes.

·       Net new business of £1.6 billion in the period and closing
Assets under Administration ("AUA") a record £149.7 billion.

·       Net new clients of 34,000 in the period, up 48% year on year,
taking us to 1,858,000 active clients.

·       Revenue for the period of £199.7 million, up 6% (Q3 2023:
£188.1m).

 

Dan Olley, Chief Executive Officer, commented:

 

"On joining the business, one of the highest priorities I set was to recapture
our service excellence, so I am delighted that we delivered a great service
experience for our clients over tax year end despite receiving record volumes
in calls and emails. We saw a significant rise in the service Net Promoter
Score, up to +48 from +33.

 

"Our relentless focus on client service, making it easy to save and invest to
ensure that we meet our clients' needs has delivered clear results this
quarter. We built good momentum into tax year end, and as a result have seen
year-on-year increases of gross inflows and share dealing volumes in the
quarter and net new business on a par with last year.

 

"We welcomed 34,000 net new clients in the quarter, reflecting the increasing
popularity of our newer products such as ready-made pensions, our cash ISA
offerings and Active Savings. A record number of clients contributed to their
pensions in the tax year, with the average amount subscribed up by c22% and
270,000 of our clients now have an Active Savings account, resulting in Active
Savings reaching the significant milestone of £10 billion in AUA since the
end of the quarter."

 

Trading performance

 

·      Net new business of £1.6 billion in the quarter (Q3 2023:
£1.6bn), reflects a significant step up versus the first half of the year
driven by net flows on to the Platform as clients focused more on utilising
their ISA and SIPP allowances. Active Savings continues to perform well and
benefited from the launch of the first of its kind multi-bank cash ISA which
provides clients with the full suite of Cash ISA products (fixed-term, easy
access and limited access) from multiple banks.

·      Net client growth of 34,000 in the quarter (Q3 2023: 23,000)
driven by net new clients in the SIPP, ISA and Active Savings accounts. Client
retention at 91.4% (Q3 2023: 92.0%) and asset retention at 88.0% (Q3 2023:
89.1%) continues to reflect the macroeconomic backdrop for those of our
clients who need to make cash withdrawals.

·      Share dealing volumes averaged 794,000 per month in the quarter
(Q3 2023: 770,000) and an increase in volumes seen since the first half of the
year, with overseas deal volumes representing 23.6% of total deals in the
quarter (Q3 2023: 16.8%).

·      As expected, client cash balances increased during the quarter as
clients contributed to their tax wrapped accounts ahead of the tax year-end
deadline to £12.4 billion (Q3 2023: £13.5bn)

·      Total revenue in the quarter of £199.7 million (Q3 2023:
£188.1m) benefits from increased dealing volumes and higher platform revenue
from higher AUA levels, more than offsetting the year on year reduction in
revenue on cash from lower NIM and cash balances.

 

Looking ahead to the remainder of the financial year, we are pleased to see
momentum continue into April as clients take advantage of the benefits of
investing at the start of the tax year.

 

We continue to make good progress against our priorities for the year -
improving our client proposition, controlling our costs and increasing our
execution pace so that we can capitalise on the significant growth
opportunities that lie ahead and create value for all our stakeholders.

 

Financial calendar

 

A fourth quarter trading update will be issued on 19(th) July 2024 and then
the full year results will be issued on 9(th) August 2024. Our Annual General
Meeting is set for 22(nd) October 2024.

 

 

Contacts:

 Investors                                Media
 James Found, Head of Investor Relations  Danny Cox, Head of Communications

 +44(0)7970 066634                        +44(0)7989 672071

                                          Lucy Thomas, Corporate Affairs Director

                                          +44 (0)777 9639460

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 31 March 2024  3 months to 31 December 2023  3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023
 Revenue (£m)                                              199.7                      184.4                         183.8                          197.0                     188.1
 Net new clients                                           34,000                     12,000                        8,000                          13,000                    23,000
 Total                   active clients                    1,858,000                  1,824,000                     1,812,000                      1,804,000                 1,791,000
 Client Retention Rate (%)                                 91.4                       91.6                          91.7                           92.0                      92.0
 Asset Retention Rate (%)                                  88.0                       89.3                          89.0                           89.7                      89.1
 Share dealing volumes per month                           794,000                    672,000                       634,000                        685,000                   770,000

 

Assets under administration

 

 AUA (£billion)                     3 months to 31 March 2024  3 months to 31 December 2023  3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023
 Opening AUA                        142.2                      134.8                         134.0                          132.0                     127.1
 Net new business - platform        0.9                        (0.2)                         (0.1)                          0.9                       0.9
 Net new business - Active Savings  0.7                        0.6                           0.7                            0.8                       0.7
 Total net new business             1.6                        0.4                           0.6                            1.7                       1.6
 Market movements and other         5.9                        7.0                           0.2                            0.3                       3.3
 Closing AUA                        149.7                      142.2                         134.8                          134.0                     132.0

 

 Closing AUA (£billion)   As at 31      March 2024       As at 31         December 2023          As at 30            As at 30         June 2023          As at 31         March 2023

                                                                                                  September 2023
 Funds                    68.8                           65.1                                    61.9                62.2                                61.6
 Shares                   58.5                           55.8                                    51.9                50.8                                49.8
 Cash                     12.4                           12.1                                    12.4                13.1                                13.5
 HL Funds                 9.8                            9.2                                     8.7                 8.7                                 8.6
 Active Savings           9.9                            9.1                                     8.5                 7.8                                 7.0
 Double count(1)          (9.7)                          (9.1)                                   (8.6)               (8.6)                               (8.5)
 Total                    149.7                          142.2                                   134.8               134.0                               132.0

 

 Average AUA (£billion)   3 months to 31 March 2024  3 months to 31 December 2023  3 months to 30 September 2023  3 months to 30 June 2023  3 months to 31 March 2023
 Funds                    66.9                       62.3                          62.6                           62.1                      61.8
 Shares                   56.4                       52.9                          52.2                           50.4                      50.1
 Cash                     12.2                       12.1                          12.5                           13.4                      13.6
 HL Funds                 9.5                        8.8                           8.8                            8.7                       8.6
 Active Savings           9.6                        8.9                           8.3                            7.5                       6.8
 Double count(1)          (9.4)                      (8.7)                         (8.7)                          (8.6)                     (8.5)
 Total                    145.2                      136.3                         135.7                          133.5                     132.4

 

 

(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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