Hargreaves Lansdown Share Discussion Threads

[ochs] 29/9/2023 16:42

Big 20p drop in the last 30 mins of trading today - seems to be stock specific to HL. Any ideas?

[dickbush] 29/9/2023 12:31

ADVFN shows HL's p/e as 17. They must have a big lag in changing eps. Even on the lower reported number it is only 11.7. For a beneficiary of the Fed's "higher for longer" (and the EU/BoE), that seems remarkably low.

[ochs] 27/9/2023 11:56

@PUGUGLY thanks for posting that Mail article - I think HL are lucky that there hasn't been the same clamour over "excess" profits from higher interest rates as the Oil & Gas industry suffer when they produce "excess" profits from higher oil & gas prices.

It's good to see that client retention has remained high at 92%.

HL currently holds £503M in cash with no debt - an amazing position for a FTSE 100 company to be in. It's worth noting that the "estimated surplus cash" above regulatory requirements has increased from £185M to £270M. You'd imagine an activist investor would look at that and think that a share buyback or special dividend ought to be considered.

All these factors still make HL look a very credible takeover target for a foreign competitor or private equity.

[dickbush] 25/9/2023 07:40

Jeremy Hunt plans Isa overhaul to boost share ownership

[pugugly] 21/9/2023 20:05

Suggest all using HL. read this Daily Mail article:-

Hargreaves' £269m haul from interest on customers' cash parked in its accounts

The sum – boosted by higher Bank of England interest rates – represented more than a third of the fund supermarket’s £735million revenue for the year to the end of June.

It helped Hargreaves report a 50 per cent rise in pre-tax profits to £403million. Shares rose 4.9 per cent, or 37.6p, to 802.6p.

[lomax99] 21/9/2023 10:46

I'd echo this comment, their accounts are relatively straightforward.

[ochs] 21/9/2023 10:27

No offence @jubber but if you "can't understand... where the money has come from" you clearly didn't read the results very closely!

[jubberjim] 21/9/2023 09:50

My personal opinion

The brokers need the Old Lady to do something anything to get the market moving

I think it highly unlikely at the moment as the economy and the general populace cannot wear another rise

The measures announced yesterday give the government some breathing space but will be the final nail in the coffin if we have a rate rise today

I still can t understand the Hargreaves results yesterday and where the money has come from

I would imagine the bean counters will be crawling all over those results

Shame as I ve always found the staff very courteous and friendly

The website and prices another matter

Will continue to avoid until at a level I consider appropriate

Of course I might be totally wrong but just not worth the risk at the moment

[thomstar] 20/9/2023 08:38

This is on for a triple peaker pattern , trending up

[lomax99] 19/9/2023 20:28

They clearly said last year that they would suspend special dividends during the Strategy/IT transformation period, indicating that specials would again feature in FY 25.

[smidge21] 19/9/2023 18:22

Re future dividends, "subject to market conditions and the Group’s
growth, investment and regulatory capital requirements, we expect to continue to grow the ordinary dividend at least 4% in the next financial year." This leaves the +11.6% for FY24 based on average forecasts in Sharepad data a little exposed perhaps

[adamb1978] 19/9/2023 15:54

Hi Bendipa

Not sure I agree at all with those points!

NNB: so yes it was down, but given this is new business, rather than overall business levels, it's not a shrinking company. The business was still attracting new money, just a bit less than last year which isn't massively surprising given macro conditions. If it was a decrease in AUM or revenue then I would agree with your reaction, however it's just a decrease in the rate which the main input is increasing at!

Divi increase: when I saw the 4.5% I just assumed that they were pegging it to where they expect inflation to end the year or something like that, such that for income investors it's broadly flat in real terms. I dont think they need to increase the overall yield more, or put another way, if they increased the yield I'm not sure HL. would attract any more investors. Rather than increase the divi more, I'd prefer to see them buying back shares whilst the price is at these levels.

Adam

[bend1pa] 19/9/2023 14:56

Although the headline figures appear strong, digging beneath the surface shows that net new business (NNB) declined 13% YoY. For me the most significant thing was a measly 4.5% increase in the div, when diluted eps increased by a not-insignificant 47%. That kind of tells me that taken with the decline in NNB, the management are not that confident about the business in the near future.

I'd expect the 'euphoria' to be short-lived, unfortunately. As the market has clearly shown it has it in for Hargreaves, (along with many others that appear to be doing well), within a few weeks I'd expect to see the price tumbling yet again.

[thomstar] 19/9/2023 14:32

Should be Back to 1000 plus soon

[lomax99] 19/9/2023 12:28

IC today:

Hargreaves Lansdown enjoys its most profitable year

A changing mix of earnings is vital for Hargreaves Lansdown as the business goes through transition

Times seemingly couldn’t be better for Hargreaves Lansdown (HL.) as the funds and share dealing platform enjoyed its most profitable year ever on the back of rising interest rates. However, the results raised more questions than answers as the company grapples with changing its direction of travel under its new chief executive, Dan Olley, who took over formally just ahead of these results.

Firstly, investors will need to assess whether the regulation around personalised advice is starting to move in Hargreaves’s direction, if the government is serious about addressing the “advice gap” that is an unintended consequence of “rigid rules” associated with EU regulation. This would allow HL to offer more personalised financial advice to its traditionally sticky client base – retention rates were again above 92 per cent this year.

Operationally, there was little to fault. Rising interest rates meant that Hargreaves was able to earn a considerable margin on clients’ uninvested cash; interest income during the year leapt from £50mn to £269mn, with the happy consequence that pre-tax profits rose by 50 per cent as a result. The number of active clients increased by 67,000 to top 1.8mn, with a £4.8bn inflow of new business added, which meant total assets under administration was 8 per cent higher at £134bn. Rising interest rates also meant that the active cash savings product proved popular with investors, and it attracted new business of £3.2bn. Meanwhile, underlying costs came in at £314mn, compared with £285mn last time.

Management was restrained in its outlook for the year ahead, with clients expected to subscribe to active savings, instead of generating net new investment flows because of the uncertain economic environment. Strategic spending in support of its personalised advice plan is also expected to rise, according to the chief financial officer. In these results, strategic spending was £51.5mn, with £15mn of this capitalised through the balance sheet.

Numis analysts said in a note that HL must counterbalance the lower yield it earns on active savings with the much higher margin available from personal financial advice – it is targeting 25 per cent of inflows to be generated by this segment.

The share price has been on a long losing streak and is not far from multi-year lows, although there were signs of share price recovery in the aftermath of these results. With Numis forecasting a forward price/earnings ratio of 10 for 2024, value is available if management can up the quality of earnings. Speculative buy.

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Unusual for IC to, almost, get of the fence.....

[thelongandtheshortandthetall] 19/9/2023 10:17

Market took a while to wake up this morning 👍😁

[cwa1] 19/9/2023 09:46

Volatile stuff...thankfully :-)

[lomax99] 19/9/2023 07:52

Normal service resumed, will be topping up in the very low 7's.

[thaiger] 19/9/2023 07:49

Why it losts the earlier gain?

[adamb1978] 19/9/2023 07:49

Yes, very good results. Ahead of market forecasts by a few %. Look very good value here IMO whether you look at it on a PE basis, FCF yield or are an income investor

[yf23_1] 19/9/2023 07:22

Should be at least the recent £9.

[cwa1] 19/9/2023 06:56

These results look pretty solid overall, I assume that means the share price will be cratered? ;-)

[dickbush] 19/9/2023 06:50

Who was it that said the p/e was way too high?

Cheap as chips.

[lomax99] 19/9/2023 06:49

Credit, where it is due, should go to Chris Hill and his team.

W, which pre-dates Chris, still hovers overhead. The Link saga is crawling to a conclusion, the last ambulance chaser just needs to make it's mind up what it is doing. IMO the W cloud should start to lift.

[jubberjim] 19/9/2023 06:38

Gob smacked
Can t believe I got it so wrong

Good luck holders