Hargreaves Lansdown posts 28% Y/Y increase in revenue in Q3 FY23
UK direct-to-investor investment and online trading firm Hargreaves Lansdown PLC (LON:HL) today issued a trading update for the three months ended 31 March 2023 (“Q3”).
The company delivered net new business of £1.6 billion in Q3 (Q3 FY22: £1.4bn), despite moderated flows being seen across the market. This was 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 tax allowances.
Active Savings saw net inflows of £0.7 billion in the quarter (Q3 FY22: £0.1 billion) with lower flows than the previous quarter as clients favoured tax wrapped investments ahead of the tax year-end.
The company reported active client growth of 23,000 in the quarter (Q3 FY22: 31,000) with client retention at 92.0% broadly in line with last year (Q3 FY22: 91.7%); asset retention of 89.1%, lower than prior year (Q3 FY22: 91.5%) reflecting the continued need of certain clients for cash withdrawals.
Total revenue in the quarter amounted to £188.1 million (Q3 FY22: £146.9m) up 28%; year-to date revenue of £538.1 million (FY22: £438.0m) up 23% reflecting a continuation of the increase in net interest margin, which more than offset the impact from the reduction in share dealing volumes and lower average asset values during the period.
Share dealing volumes have averaged 770,000 per month in the quarter, up 23% versus the previous quarter but 20% lower than prior year, which saw a particularly elevated quarter for dealing volumes before investor confidence was hit hard by concerns over the conflict in Ukraine and cost of living issues.
Chris Hill, Chief Executive Officer, commented:
“We delivered net new business of £1.6 billion in the period, up 14% on last year as the combination of changes to the tax landscape, our marketing activity, and ongoing developments in our core propositions generated a call to action for clients in the run up to tax year end. Macroeconomic uncertainty continues but the improved activity demonstrates that as confidence returns, HL is well positioned to grow and support new and existing clients on their investment and savings journeys.
During the quarter, we launched a new cash ISA, three new Portfolio Funds and our enhanced Share Exchange service helping clients enable efficient use of their tax allowances. The targeted price reduction we have made to our LISA product and making our Junior ISA fee free demonstrates how we are thinking about specific improvements to help families manage wealth and to help those starting out on their investing journeys.”