UK fund supermarket Hargreaves Lansdown pulls in record new business

UK fund supermarket Hargreaves Lansdown pulls in record new business

LONDON British financial services firm Hargreaves Lansdown was buoyed on Wednesday by a surge in full-year assets that more than offset forecast-lagging profit and revenue, sending its shares higher.

Hargreaves, the country’s biggest retail-focused investment platform, is developing new fund and pension services to diversify revenue and has been a big beneficiary of recent rule changes that free up how individuals invest for retirement.

Strong demand for its services saw client numbers rise by 84,000 in the year to end-June from the year earlier period, boosting assets under administration by 18 percent to a record 55.2 billion pounds ($84.91 billion).

“Our asset gathering abilities have meant that despite periods of low investor confidence during the year, we have delivered strong net new business flows underpinned by impressive numbers of net new clients,” Chairman Michael Evans said in a statement.

Shares in Hargreaves rose 4.8 percent to 1,169 pence a share in morning trade, against a 1.7 percent gain in the FTSE 100.

The positive demand outlook helped underpin a forecast-beating increase in its total dividend by 3 pence to 33 pence.

While assets hit to a new record, profits and revenue lagged forecasts, hit by a continuation of the impact of regulatory change and weak returns on client cash balances.

Pretax profit to the end of June was 199 million pounds, down 5 percent on the year, lagging a 204.3 million pounds consensus analyst forecast, Thomson Reuters data showed.

Weak stock markets and a reduction in income from foreign exchange trading, as well as an increase in its contribution to a government industry compensation scheme, also hurt.

While the impact of those challenges is expected to fade in 2016, the performance of the stock market would remain an important driver of the firm’s results.

“We believe markets are likely to continue to be influenced by the performance of Asian economies, particularly China, with the potential for occasional reprises of Eurozone issues and the influence of geopolitical events,” the company said.

“However we believe value exists in a number of key stock markets, particularly Europe and Japan.”

($1 = 0.6501 pounds)

(Reporting by Simon Jessop, editing by Louise Heavens)

UK fund supermarket Hargreaves Lansdown pulls in record new business