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Equity highs support Hargreaves Lansdown, feed nerves

The self-investment giant's Vantage platform grew its assets thanks to equity and exposure and currency effects
February 13, 2017

Like other asset gatherers, Hargreaves Lansdown (HL.) witnessed some circumspection from retail investors post-referendum. Organic net new business inflows of £2.3bn during the six months to December were 16 per cent lower than in the previous comparable period. This was primarily as a result of withdrawals from fund and share accounts on its Vantage platform, said chief executive Ian Gorham.

IC TIP: Hold at 1364p

Nevertheless assets under administration still hit the £70bn mark, thanks to positive market movements. Vantage generated the lion's share of the gains, across the aforementioned accounts, self-invested personal pensions (Sipps) and individual savings accounts (Isas). Just under a third of Vantage's assets are invested in overseas funds and equities and so benefited from the weakness of sterling, while domestic equity indices were boosted by dollar earnings and the commodities revival.

Another upside of equity market volatility was a jump in equity deals, which meant stock broking revenue grew by half to £28m. The discretionary and managed funds business launched another two multi-manager funds, which combined with growth in assets in its existing products pushed revenue for this business up 14 per cent.

Analysts at Peel Hunt expect adjusted pre-tax profit of £236m for the 12 months to June 2017, giving EPS of 39.4p (from £219m and 37.3p in FY2016).

HARGREAVES LANDSDOWN (HL.)

ORD PRICE:1,364pMARKET VALUE:£6.47bn
TOUCH:1,364-1,365p12-MONTH HIGH:1,421pLOW: 1,048p
DIVIDEND YIELD:1.8%PE RATIO:33
NET ASSET VALUE: 50pNET CASH:£193m

Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201520110818.37.8
201618513122.48.6
% change-8+21+22+10

Ex-div: 9 Mar

Payment: 30 Mar