Hargreaves Lansdown delivered another year of strong growth, pushing profits and assets under administration to record levels. The pension and investment planning specialist prides itself on delivering an exceptional service and the 45,000 rise in customer numbers using its Vantage investment platform to a record 425,000 attests to this. However, given the heady earnings multiple, the shares remain fairly valued even though an increased special dividend of 6.84p a share, taking the total payout to 22.59p, will be well received.
Assets under administration (AUA) rose by 7 per cent to £26.3bn - that's against a 7 per cent fall in equities over the same period - and were boosted by £3.2bn of new client money. Once again, the Vantage trading platform was the key revenue driver. Vantage gives clients the administrative convenience of holding and managing their assets - mainly Isas and Sipps - in one place, with a single dealing service and instant online access. Reflecting the increase in AUA, fee income from Vantage rose 16 per cent to £186m.
Management remains relaxed about initial implementation of the Retail Distribution Review, pointing out that it already charges a fee for advice and its financial advisers already meet regulatory training requirements.
Peel Hunt is forecasting current year adjusted pre-tax profits of £183m and EPS of 29.2p (from £153m and 24.1p in 2012).
| HARGREAVES LANSDOWN (HL.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 633p | MARKET VALUE: | £3bn | |
| TOUCH: | 633-634p | 12-MONTH HIGH: | 640p | LOW: 409p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 33p | NET CASH: | £145m** | |
| Year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p*) |
|---|---|---|---|
| 2008 | 61 | 9.1 | 5.5 |
| 2009 | 73 | 11.2 | 7.3 |
| 2010 | 86 | 13.2 | 8.6 |
| 2011 | 126 | 19.8 | 12.9 |
| 2012 | 153 | 24.2 | 15.8 |
| % change | +21 | +22 | +22 |
Ex-div: 12 Sep Payment: 28 Sep *Excludes special dividends: 2.324p in 2008, 2.807p in 2009, 3.3p in 2010, 5.96p in 2011 and 6.84p in 2012 **Excludes £12.6m of restricted cash | |||
