Hargreaves Lansdown PLC Trading Statement (3345Y)

TIDMHL.

RNS Number : 3345Y

Hargreaves Lansdown PLC

04 May 2023

Trading update

4 May 2023

Hargreaves Lansdown plc today issues a trading update in respect of the three months ended 31 March 2023 ("Q3").

Highlights

   --       Net new business of GBP1.6 billion in the period, up 14% on Q3 FY22. 
   --       Closing Assets under Administration ("AUA") of GBP132.0 billion, up 4% in the quarter. 
   --       Revenue for the period of GBP188.1 million, up 28% on Q3 FY22. 
   --       Net client growth of 23,000 in the period, taking us to 1.8 million clients. 

Chris Hill, Chief Executive Officer, commented:

"We delivered net new business of GBP1.6 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."

Trading performance

-- Net new business of GBP1.6 billion in Q3 (Q3 FY22: GBP1.4bn), 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 GBP0.7 billion in the quarter (Q3 FY22: GBP0.1 billion) with lower flows than the previous quarter as clients favoured tax wrapped investments ahead of the tax year-end.

-- Active client growth of 23,000 in the quarter (Q3 FY22: 31,000) with c lient 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.

-- Closing AUA of GBP132.0 billion reflects GBP3.3 billion positive market movement, combined with GBP1.6 billion of net new business.

-- Total revenue in the quarter of GBP188.1 million (Q3 FY22: GBP146.9m) up 28%; year-to date revenue of GBP538.1 million (FY22: GBP438.0m) 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.

Financial calendar

A fourth quarter trading update will be issued on 19(th) July 2023 and then the full year results, including progress on our strategic initiatives will be issued on 19(th) September 2023. Our Annual General Meeting is set for 8(th) December 2023.

Contacts:

 
 Investors                       Media 
 James Found, Head of Investor   Danny Cox, Head of Communications 
  Relations                       [phone] 
  [phone]               Nick Cosgrove, Brunswick 
                                  0207 404 5959 
 

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, retention rates and share dealing volumes

 
 Key metrics           3 months        3 months           3 months        3 months       3 months 
                      to 31 March    to 31 December    to 30 September    to 30 June    to 31 March 
                         2023             2022              2022             2022          2022 
 Revenue (GBPm)         188.1            187.1             162.9            145.0         146.9 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Net new clients        23,000          14,000             17,000          13,000         31,000 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Total active 
  clients             1,791,000        1,768,000         1,754,000        1,737,000     1,724,000 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Client Retention 
  Rate (%)               92.0            92.6               92.2            91.3           91.7 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Asset Retention 
  Rate (%)               89.1            91.1               91.7            91.5           91.5 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Share dealing 
  volumes per 
  month                770,000          627,000           700,000          779,000       960,000 
                    -------------  ----------------  -----------------  ------------  ------------- 
 

Assets under administration

 
 AUA (GBPbillion)      3 months        3 months           3 months        3 months       3 months 
                      to 31 March    to 31 December    to 30 September    to 30 June    to 31 March 
                         2023             2022              2022             2022          2022 
 Opening AUA            127.1            122.7             123.8            134.7         141.2 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Net new business 
  - platform             0.9             (0.1)               -               1.1           1.3 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Net new business 
  - Active 
  Savings                0.7              1.0               0.7              0.7           0.1 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Total net 
  new business           1.6              0.9               0.7              1.8           1.4 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Market movements 
  and other              3.3              3.5              (1.8)           (12.7)         (7.9) 
                    -------------  ----------------  -----------------  ------------  ------------- 
 Closing AUA            132.0            127.1             122.7            123.8         134.7 
                    -------------  ----------------  -----------------  ------------  ------------- 
 
 
 Closing               As at 31     As at 31     As at 30     As at 30     As at 31 
  AUA (GBPbillion)     March 2023    December    September    June 2022    March 2022 
                                       2022        2022 
 Funds                   61.6         59.6         57.4         58.2         64.4 
                     ------------  ----------  -----------  -----------  ------------ 
 Shares                  49.8         47.1         45.2         45.9         52.1 
                     ------------  ----------  -----------  -----------  ------------ 
 Cash                    13.5         14.1         14.8         15.0         14.3 
                     ------------  ----------  -----------  -----------  ------------ 
 HL Funds                 8.6          8.3         7.8          8.0           8.6 
                     ------------  ----------  -----------  -----------  ------------ 
 Active Savings           7.0          6.3         5.3          4.6           3.9 
                     ------------  ----------  -----------  -----------  ------------ 
 Double count(1)         (8.5)        (8.3)       (7.8)        (7.9)         (8.6) 
                     ------------  ----------  -----------  -----------  ------------ 
 Total                   132.0        127.1       122.7        123.8         134.7 
                     ------------  ----------  -----------  -----------  ------------ 
 
 
 Average                3 months        3 months           3 months        3 months       3 months 
  AUA (GBPbillion)     to 31 March    to 31 December    to 30 September    to 30 June    to 31 March 
                          2023             2022              2022             2022          2022 
 Funds                    61.8            59.2               59.8            61.0           63.7 
                     -------------  ----------------  -----------------  ------------  ------------- 
 Shares                   50.1            47.3               47.5            48.7           51.7 
                     -------------  ----------------  -----------------  ------------  ------------- 
 Cash                     13.6            14.3               14.8            14.8           14.0 
                     -------------  ----------------  -----------------  ------------  ------------- 

 HL Funds                 8.6              8.2               8.1              8.3           8.6 
                     -------------  ----------------  -----------------  ------------  ------------- 
 Active Savings           6.8              6.0               5.1              4.3           3.9 
                     -------------  ----------------  -----------------  ------------  ------------- 
 Double count(1)         (8.5)            (8.1)             (8.1)            (8.3)         (8.5) 
                     -------------  ----------------  -----------------  ------------  ------------- 
 Total                   132.4            126.9             127.2            128.8         133.4 
                     -------------  ----------------  -----------------  ------------  ------------- 
 

(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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May 04, 2023 02:00 ET (06:00 GMT)