Hargreaves Lansdown affirms dividend as new business rises

Hargreaves Lansdown said it was sticking with its dividend policy as the investment platform reported £4bn of net new business for the four months to the end of April.

Net new business of £4bn exceeded the £2.9bn figure for a year earlier as Hargreaves Lansdown added 94,000 net new customers. Year to date net inflows were £6.3bn, up from £5.4bn in the same period a year earlier.

Revenue in the four-month period rose to £190.2m from £159.5m as assets under administration fell to £96.7bn from £105.2bn.

Early in 2020 higher assets benefited revenue but the Covid-19 crisis and interest rate cuts reduced this revenue from the start of March. But this weakness was more than offset by higher stockbroking activities driven by record customer dealing as markets became extremely volatile.

March and April dealing levels were more than double the previous highs for those months, Hargreaves said. Revenue for the year to date rose 13% to £448.1m.

The FTSE 100 company said the strong trading results and its sturdy financial position meant the board's current intention was to operate its stated dividend policy for the financial year to the end of June. Hargreaves said it was not seeking government help, furloughing or making staff redundant during the crisis.

Chief Executive Chris Hill said: "During this exceptionally volatile and challenging period, Hargreaves Lansdown has performed strongly … There remains much uncertainty in the coming months and hence, like many businesses, we cannot predict levels of new business or client activity. However, we are confident that the strategy we have invested in … means that we are well positioned to deliver continued attractive long-term growth."

Hill said the results showed a strong rebound from the difficult economic and political environment in the UK in the six months to the end of December, when Brexit uncertainty hung over markets. Hargreaves also suffered negative publicity in 2019 from its recommendation of Neil Woodford's stricken flagship investment fund.

Hargreaves said more clients, trading and card payments would increase its costs and that these would flow through during the second half. The charge for funding the Financial Services Compensation Scheme will also increase to between £12.5m and £13m from £6.8m last year, it said.