Hargreaves Lansdown Shares Hit 2.5 Month High on Earnings Beat

The Hargreaves Lansdown logo can be seen on a smartphone in front of the displayed logo in this image, taken Dec. 1, 2021. REUTERS/Dado Ruvic/Illustration

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  • Shares hit 2-1/2 month high
  • Underlying profit before tax down 19%
  • Assets under administration decreased by 9%

Aug 5 (Reuters) – Hargreaves Lansdown Plc (HRGV.L) beat annual earnings estimates on Friday, aided by better cost management, pushing shares in the UK investment platform to a 2-1/2 month high.

Last year, Hargreaves faced skyrocketing costs that hit underlying annual profits, prompting it to launch strategic initiatives to manage costs efficiently.

“Over the past year, our strategic execution has grown significantly…our focus in 2023 will be to continue these initiatives,” said CEO Chris Hill in a media appeal.

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The company reported annual underlying pre-tax profit of £297.5 million ($361.67 million), down 19% from a year earlier, but beating a company-assembled consensus by 5%, according to a note. from J.P. Morgan.

Hargreaves shares rose a whopping 5.07% against 0749 GMT, placing it at the top of the FTSE 100 index (.FTSE).

Hargreaves posted a 9% decline in assets under administration to £123.8 billion for the year ended June 30 as investors moved away from riskier assets, with major global markets succumbing to mounting political tensions and inflationary concerns.

The company said it expects uncertain economic and political conditions to continue throughout the year.

Global fund managers who saw their assets under management reach record levels during the pandemic are now witnessing increased outflows. Investors have become more cautious as UK inflation hits a four-decade high.

The British company also reported a slowdown in customer acquisition, with net new business at £5.5 billion from £8.7 billion a year earlier.

Hargreaves, which had benefited from record trading volumes amid the ‘GameStonk’ retail frenzy last year, saw its trading volumes plummet and expects muted volumes to continue.

($1 = 0.8235 pounds)

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Reporting by Sinchita Mitra in Bengaluru; adaptation by Saumyadeb Chakrabarty and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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