HARGREAVES Lansdown hailed its record results as evidence that reputable firms can pay their taxes in full and add "genuine benefit" to the UK economy.
The Bristol-based company, which serves retail investors through its Vantage fund supermarket, reported a 30% rise in half-year profits to £93.7m as revenues jumped 24% to £140.3m in the six months to December 31.
Assets now stand at more than £30bn, up £7bn from a year ago, after the company added a net figure of 21,000 new clients in the six months – a bigger-than-expected 31% increase on the same period a year ago.
Shares jumped 9% as the FTSE 100 firm also announced a 24% rise in its half-year dividend to 6.3p a share, triggering another big windfall for founders Peter Hargreaves and Stephen Lansdown, who are still major shareholders.
Chief executive Ian Gorham said that by focusing on its clients, his company was helping retail investors to build their personal wealth.
He added: “Hargreaves Lansdown’s results demonstrate that a reputable company can, even in this climate, add genuine benefit to the UK economy and public, whilst paying its taxes in full.”
The company, which is the UK’s largest investment supermarket with an estimated 28% UK market share, said improved stock market conditions aided the record performance, but that its fund sales were still stronger than the wider market, where demand remained subdued.
Hargreaves expects to benefit from new rules introduced last month preventing independent financial advisers (IFAs) from taking commission as payment. It said more than 1,200 IFAs or 4% of the industry had gone in the 18 months to December 31, fuelling a trend towards DIY investing that is “likely to be beneficial to our cause“.
Gorham also highlighted the negative impact that the Treasury and Bank of England’s funding for lending scheme is having on interest rates paid to UK savers.
He said: “This fiasco now makes equity investment even more attractive, as the yields available on equities and bonds far outstrip those available on cash.
“If this scenario persists, we consider the long-term effect on asset gathering likely to be beneficial.
“However, in the short term, it will also reduce revenue from cash margin across the savings and investment industry, including that received by Hargreaves Lansdown.”
