The momentum with which Hargreaves Lansdown (HL.) has been gathering assets continued apace through FY2018, with the direct-to-consumer platform provider gaining £7.6bn in net new business inflows – up 10 per cent on the prior year. The good news for shareholders was that capital generation has also remained robust, with tangible capital rising almost a third. That meant – after scrapping last year’s special dividend on higher regulatory capital needs – management could declare a one-off 7.8p a share return.
Despite market growth being almost half what it was the prior year and one of the founders transferring £1.1bn in assets out of the platform, the rise in new business fed through to a 16 per cent surge in assets under administration to £91.6bn – around 137,000 new clients were added, taking the total past the 1m mark.
Net revenue from funds was up 17 per cent at £198m, reflecting a rise in new business and market performance. That net rate was replicated in the growth of stockbroking commission and equity holding charges, albeit on a slightly reduced 32 basis point margin, as higher equity dealing volumes were offset by lower growth in management fees – the latter capped once accounts reach a certain level of assets. However, management expects a boost to the margin on cash balances following this month’s base rate rise.
Analysts at Numis expect adjusted pre-tax profit of £334m for the year to June 2019, giving EPS of 57.2p (from £292mn and 49.8p in 2018).
HARGREAVES LANSDOWN (HL.) | ||||
ORD PRICE: | 2,046p | MARKET VALUE: | £9.7bn | |
TOUCH: | 2,045-2,047p | 12-MONTH HIGH: | 2,137p | LOW: 1,313p |
DIVIDEND YIELD: | 1.6% | PE RATIO: | 41 | |
NET ASSET VALUE: | 85p | NET CASH: | £344m |
Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 358 | 210 | 34.5 | 22.39 |
2015 | 395 | 199 | 33.2 | 21.6* |
2016 | 388 | 219 | 37.4 | 24.1* |
2017 | 386 | 266 | 44.7 | 29.0 |
2018 | 448 | 292 | 49.7 | 32.2* |
% change | +15 | +10 | +11 | +11 |
Ex-div: | 27 Sep | |||
Payment: | 19 Oct | |||
*Excludes special dividends of 11.4p a share in 2015, 9.9p in 2016 and 7.8p in 2018 |