Hargreaves Lansdown shares plummet on £36.7m revenue slide

Hargreaves Lansdown shares plummeted 9.2% after the group reported a revenue decrease to £196.5 million against £233.2 million in the four months to 30 April year-on-year, in line with management expectations.

The firm saw a dramatic fall in net new clients to 42,000 compared to 126,000 on 30 April 2021, with a net new business decline to £2.5 billion against £4.6 billion in the four months to 30 April 2021.

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The group said increased investor confidence on the back of the vaccine rollout grew customer inflows in 2021, with the investment of excess cash saved during lockdown boosting investment levels, in contrast to the current turbulent market environment.

Hargreaves Lansdown confirmed a total number of 1.7 million active clients from 1.6 million the last year, alongside 90,000 new clients a 92.4% client retention rate year-to-date.

The company also reported a slight decline in net closing assets under administration to £132.3 billion from £132.9 billion year-on-year.

“We are off to an encouraging start on the strategic initiatives we set out at our Capital Markets Day, which will build our capability to innovate and scale and enable us to take advantage of the growth in the wealth management sector,” said Hargreaves Lansdown CEO Chris Hill.

“Our initial focus is on driving efficiency and cost savings in our operations whilst ensuring we maintain the market leading service our clients expect from us particularly in these current uncertain times.”

Hargreaves Lansdown attributed its disappointing slate of results to the geopolitical uncertainty and unforeseen macro-economic environment, which reportedly dented investor confidence and shook up markets over the recent months.

“The challenging backdrop driven by unprecedented macro-economic and geo-political events has impacted markets and investor confidence, in turn leading to moderated flows and asset levels with net new business of £2.5 billion in this period,” said Hill.

However, Hargreaves Lansdown added that its tax year end campaign “Switch your money on” brought an extra £1.8 billion of inflows, including £600 million in the first five days of April.

The firm reported a record number of 747,000 clients contributing their ISAs and pensions into the company.

“We saw a significant step up in flows in March and April from our tax year end campaign which focused on the benefits of long-term saving and investing, with £1.8 billion of tax wrapped inflows leading to a record 747,000 clients contributing to their ISAs and pensions this tax year,” said Hill.

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