Hargreaves Lansdown: Cloudy, with a chance of Brexit

Shares in Hargreaves Lansdown are down 3.4% in early trading after the retail investment platform disappointed investors with a mixed bag of FY results.

Hargreaves Lansdown: Cloudy, with a chance of Brexit

Shares in Hargreaves Lansdown are down 3.4% in early trading after the retail investment platform disappointed investors with a mixed bag of FY results. Net revenues +16% YoY to £447.5m were at the top end of analyst expectations, pre-tax profit grew 10%, while the dividend increased 38%.

 

For trading platforms like Hargreaves Lansdown, however, it’s the business inflows that can make or break the results day reaction and while net new business increased 10% YoY, compared to the prior quarter Assets Under Administration increased only 3.1% from £88.8bn in their May trading statement to £91.6bn today. More importantly, this missed expectations of £92.28bn.

 

Hargreaves Lansdown CEO Chris Hill sounded positive notes on FY business outlook, in spite of continued uncertainty over post-Brexit UK/EU financial relationship.

 

With FCA seeking to eliminate investor exit fees (to improve platform switching), which is impacting Hargreaves Lansdown at home, while EU negotiators are pouring cold water on the most recent UK proposals for preserving cross-Channel financial services links, the outlook for longer-term Hargreaves Lansdown business growth might be shakier than the company is letting on.

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