Boom for fund managers Hargreaves Lansdown

Sep 2 2010 by Iain Laing, The Journal

FUND manager Hargreaves Lansdown has toasted unprecedented levels of new business and recovering stock markets as it unveiled an 18% hike in pre-tax profits to £86.3m.

Thriftier Britons are looking for better returns on their savings with interest rates at record lows, helping the Bristol-based firm suck in a net £3.3bn in the year to June 30 – 65% ahead of the previous year.

The group, which also benefited from a 38% rise in the FTSE All-Share between July 2009 and last April, passed one million stockbroking deals for the year and attracted 48,000 customers to its Vantage fund supermarket, taking total numbers to 330,000.

Peter Hargreaves steps down today as chief executive of the business he co-founded almost 30 years ago. He and fellow founder Stephen Lansdown – who retired as an executive director last week – own more than half the business.

Mr Hargreaves said revenues and profits had reached record levels, adding: “Although these measures have been helped by a rise in stock markets across the year, the more significant contribution has been from record organic growth.”

The fund manager, which also cheered investors with an 18% hike in dividend payments, said total assets under management had risen 47% to £17.5bn.

The lion’s share of this was the £5.4bn increase in Vantage funds to £16.3bn. Mr Hargreaves added: “The increase in the UK’s savings ratio is a cause for optimism.

“While this ratio has been mainly affected by people paying down debt, eventually some of those increased savings are likely to end up with us.”

The chief executive was also slightly more cheerful over the outlook, saying that “the problems that we can foresee at the moment are less critical than the ones we envisaged a year ago.”