Hargreaves Lansdown registers drop in revenues in first four months of 2022
UK direct-to-investor investment and online trading firm Hargreaves Lansdown PLC (LON:HL) today issued a trading update in respect of the four months ended 30 April 2022.
Total revenue in the period was £196.5 million (2021: £233.2m), in line with expectations with the increase in net interest margin as a result of base rate rises offsetting the revenue impact of lower AUA.
The company reported client growth at 90,000 year to date is in line with pre-Covid levels (FY2019: 87,000) excluding direct book acquisitions; client retention was at 92.4% – it has remained broadly constant throughout the year (FY2021: 92.1%).
The net new business of £2.5 billion in the period, £4.8 billion year to date reflects moderated flows being seen across the market. 2021 flows benefited from improving market and investor confidence resulting from Covid vaccine roll-out, investment of excess cash built up during lock down and elevated interest in share trading.
Share dealing averaged 45,000 deals per day in the period, in line with expectations and guidance.
In terms of outlook, the company reiterated its FY2022 guidance whilst raising expected revenue margin on cash to 30-35bps for the full financial year as it sees the impact of base rate rises starting to come through.
Chris Hill, Chief Executive Officer, commented:
“We are off to an encouraging start on the strategic initiatives we set out at our Capital Markets Day, which will build our capability to innovate and scale and enable us to take advantage of the growth in the wealth management sector. Our initial focus is on driving efficiency and cost savings in our operations whilst ensuring we maintain the market leading service our clients expect from us particularly in these current uncertain times.
The challenging backdrop driven by unprecedented macro-economic and geo-political events has impacted markets and investor confidence, in turn leading to moderated flows and asset levels with net new business of £2.5 billion in this period. We saw a significant step up in flows in March and April from our tax year end campaign which focused on the benefits of long-term saving and investing, with £1.8 billion of tax wrapped inflows leading to a record 747,000 clients contributing to their ISAs and pensions this tax year.”