Crisis? What Crisis? Hargreaves Lansdown (HL.) felt able to more than double its special dividend to 17.4p for its June year-end, in addition to raising its regular annual payout by 11 per cent. That equates to a 31 per cent aggregate increase, effectively providing a respectable yield of around 3 per cent.
It is all down to cash generation, up 14 per cent at the operating level. Although the investment platform had to part with an additional £40.7m in income tax through FY2020, there was a £56.6m net increase in cash and cash equivalents.
Underlying profit – excluding a £38.8m gain on the disposal of FundsLibrary – was 11 per cent to the good at £340m, but the most eye-catching metrics were partly bound up with the impact of the pandemic – and clients’ concerns over their equity positions.
Digital visits increased by 41 per cent to 249m through the year, in addition to “unprecedented volumes of emails into the Helpdesk between April and June”. The group maintained its direct-to-consumer platform market share at 41.1 per cent, while registering a significant increase in the share of the execution only stockbroking market. That is in addition to 188,000 new clients through the period, bringing the total to 1.4m, and feeding though to record new business volumes.
Consensus estimates give adjusted EPS of 48.81p, rising to 51.71p in 2022.
| HARGREAVES LANSDOWN (HL.) | ||||
| ORD PRICE: | 1,917p | MARKET VALUE: | £ 9.09bn | |
| TOUCH: | 1,916.5-1,919.5p | 12-MONTH HIGH: | 2,186p | LOW: 1,147p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 118p | NET CASH: | £216m | |
| Year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 388 | 219 | 37.4 | 24.1 |
| 2017 | 386 | 266 | 44.7 | 29.0 |
| 2018 | 448 | 292 | 49.7 | 32.2 |
| 2019 | 481 | 306 | 52.1 | 33.7 |
| 2020 | 551 | 378 | 66.1 | 37.5 |
| % change | +15 | +24 | +27 | +11 |
| Ex-div: | 24 Sep | |||
| Payment: | 16 Oct | |||
| NB: Excludes special dividends of 9.9p in 2016, 7.8p in 2018, 8.3p in 2019, and 17.4p in 2020. | ||||
