Hargreaves Lansdown reports rise in revenues in first four months of 2021
UK direct-to-investor investment and online trading firm Hargreaves Lansdown PLC (LON:HL) today published a trading update in respect of the four month period to 30 April 2021.
Revenue for the period was £233.2 million (2020: £190.2m). The key driver for the year-on-year increase has been the record dealing volumes including elevated trading in international equities, driven by interest in US stocks from existing clients. Total share deals for the period were 6.0 million (2020: 4.0m).
The recovery in stock markets has also helped drive platform fees higher with the FTSE All Share on average being 9% higher this period compared to last year. These positive impacts were partly offset by the continued fall in net interest margins as the emergency cuts to the UK base rate in March 2020 are still playing through.
Overall, this has resulted in year to date revenue of £532.7 million (2020: £448.1m), 19% higher than last year.
Elevated levels of client acquisition, trading volumes and debit card payments onto the platform boost revenues but also come with associated costs. These activity-related and associated client servicing costs will flow into the second half of Hargreaves Lansdown’s financial year, together with the costs of its brand marketing campaign. In addition, there has been a notified increase in the FSCS budget for 2021/22, which will give rise to a likely charge this current year of approximately £15.8 million compared to £13.7 million last year.
Net new business was £4.6 billion during the period (2020: £4.0 billion), taking year to date net inflows to £7.9 billion (2020: £6.3 billion). Net new business growth was driven by the usual factors of existing clients using their tax allowances during the ISA season and ongoing wealth consolidation onto the company’s platform from existing clients.
Net new clients for the period were 126,000, taking total active client numbers to 1,622,000.
Chris Hill, Chief Executive Officer, commented:
“This was a period of very strong growth with record net new business, record ISA subscriptions, record client growth, and record share dealing volumes, reflecting the benefits of the investment we have undertaken in recent years in our digital platform and the diversity and strength of our client proposition”.