TIDMHL.
RNS Number : 4487N
Hargreaves Lansdown PLC
01 February 2021
Hargreaves Lansdown plc
Interim results for the six months ended 31 December 2020
Hargreaves Lansdown plc ("HL" or "the Group") today announces
interim results for the six month period ended 31 December
2020.
Highlights
-- Net new business of GBP3.2 billion.
-- Assets under administration up 16% since 31 December 2019 to GBP120.6 billion.
-- 1,496,000 active clients, an increase of 84,000 since 30 June 2020.
-- Profit before tax increase of 10% to GBP188.4 million (H1 2020: GBP171.1m).
-- Interim dividend up 6% to 11.9 pence per share (H1 2020: 11.2p)
Chris Hill, Chief Executive Officer, commented:
"I wish to thank my colleagues for their hard work throughout
this incredibly difficult time. Their dedication has delivered a
period of very strong growth with record new clients and increased
market share against the backdrop of the pandemic and the political
uncertainty of the US elections and Brexit.
As our client numbers continue to grow, we are finding that
younger people are taking a greater interest in investing for the
future, with the average age of our clients continuing to fall.
COVID-19 has underpinned the importance of financial resilience and
Hargreaves Lansdown is well placed to support clients with their
saving and investment needs across their lifetimes."
Financial highlights 6 months 6 months Change Year ended
ended 31 ended 31 % 30 June
December December 2020
2020 2019
(H1 2021) (H1 2020) (FY 2020)
=================================== ============= =========== ======= ===========
Net new business GBP3.24bn GBP2.31bn +40% GBP7.7bn
=================================== ============= =========== ======= ===========
Total assets under administration GBP120.6bn GBP105.2bn +15% GBP104.0bn
(AUA)
=================================== ============= =========== ======= ===========
Revenue GBP299.5m GBP257.9m +16% GBP550.9m
=================================== ============= =========== ======= ===========
Underlying profit before GBP188.4m GBP171.1m +10% GBP339.5m
tax*
=================================== ============= =========== ======= ===========
Profit before tax GBP188.4m GBP171.1m +10% GBP378.3m
=================================== ============= =========== ======= ===========
Diluted earnings per share 32.1p 29.3p +10% 65.9p
=================================== ============= =========== ======= ===========
Interim dividend per share 11.9p 11.2p +6% 11.2p
=================================== ============= =========== ======= ===========
*Underlying profit before tax excludes a one-off gain of
GBP38.8m on the disposal of Funds Library in the year ended 30 June
2020.
Contacts:
Hargreaves Lansdown
For media enquiries: For analyst enquiries:
Danny Cox, Head of Communications James Found, Head of Investor
Relations
+44(0)7989 672071 +44(0)7970 066634
Nick Cosgrove / Caroline Daniel Philip Johnson, Chief Financial
Officer
Brunswick +44(0)207 404 5959
Analyst presentation
Hargreaves Lansdown will be hosting an analyst presentation at
9.00am on 1 February 2021 following the release of these results
for the half year ended 31 December 2020. Attendance is by
invitation only. A conference call facility will be in place with
the following participant dial-in numbers - UK (toll free) 0800 640
6441, UK (local) 020 3936 2999 and all other locations +44 20 3936
2999. The participant access code is 603745. Slides accompanying
the analyst presentation will be available at
www.hl.co.uk/investor-relations and an audio recording of the
analyst presentation will be available by close of business on the
day.
The Interim Results contain forward-looking statements which
have been made in good faith based on the information available to
us at the time of the approval of this report and should be treated
with caution due to the inherent risks and uncertainties, including
both economic and business risk factors some of which were set out
in the 2020 Annual Report, underlying such forward-looking
information.
Unless otherwise stated, all figures below refer to the six
months ended 31 December 2020 ("H1 2021"). Comparative figures are
for the six months ended 31 December 2019 ("H1 2020"). Certain
figures contained in this document, including financial
information, have been subject to rounding adjustments.
Accordingly, in certain instances the sum of the numbers in a
column or a row in tables contained in this document may not
conform exactly to the total figure given for that column or
row.
LEI Number: 2138008ZCE93ZDSESG90
Chief Executive's Statement
Growth in challenging market conditions
The first half of our financial year, and particularly the
second quarter, has been a period of very strong growth in the
context of some difficult external conditions. The COVID-19
pandemic presented a significant challenge for all in 2020 and
that, alongside political uncertainty around both the US election
and the conclusion of the Brexit deal, led to a volatile period for
markets in the second half of the year. Throughout this time, we
have continued our client-focused strategy, driving growth through
the cycle and further deepening the lifelong relationship we have
built with clients.
We provide a market leading client experience underpinned by a
proposition and service that is built around client need, and it is
through this that we continued to engage greater numbers of clients
throughout the period, welcoming a record 84,000 net new clients.
We have also seen our AUA reach GBP120.6 billion, a 16% increase
over the last six months, driven by GBP3.2 billion net new business
and the market recovery which contributed GBP13.4 billion.
Investor confidence fluctuated over the period under the
influence of the broad uncertainty in markets, falling over the
summer but picking up into Q2 and on through to December post the
US election and positive news of the COVID-19 vaccine. These trends
have led to strong equity trading volumes, up 123% on prior year,
driving strong growth in Profit Before Tax, where we have delivered
an increase of 10% on prior year at GBP188.4 million.
Whilst consumer sentiment leads to cyclicality of flow, what
this period has showed us is that Hargreaves Lansdown and the
broader wealth management industry is experiencing structural
growth and that our client focused strategy has positioned us to be
a key beneficiary of these trends. We recognise the need to work
with stakeholders to continue to develop our wealth management
platform to ensure we meet the needs of our growing and
increasingly diversified client base and have continued to invest
through the period to support this. We are focused on driving long
term relationships that will build our business sustainably into
the future and our investment decisions support this effort.
Market Dynamics
The COVID-19 pandemic has not only reinforced the importance of
saving and investing and the need for individuals to be financially
resilient but also the need for wealth managers such as Hargreaves
Lansdown to support the lifetime savings and investment journey of
these individuals. When combined with the increasingly complex
savings environment, persistent low interest rates and transfer of
responsibility to individuals to manage their financial futures,
the opportunity for Hargreaves Lansdown to provide the help and
support that people need is very clear.
Over the course of the pandemic, many have found the time and
seen the need to prioritise household savings which has enabled and
led them to invest for the first time. This event is extending a
trend we have seen over several years now where investing has
become not just a task for those approaching retirement but is now
an important tool for individuals to support themselves across
their entire lifetime.
In turn, this change in behaviour is leading to a dynamic shift
in the broader investment and wealth market. Younger people are
taking a greater interest in investing for the future, recording an
increased appetite for investment, and prioritising financial
resilience and saving. In 2012, 46% of clients were aged between 55
and 80. That proportion is now 34%. Since 2012, we have seen the
average age of new clients decrease from 45 to 37. This was
reflected in the first half of this year where 47% of clients
joining were in the 30-54 age bracket. Clients in this segment have
money, are engaging with saving for the future and want help to put
their money to work. By getting clients onto the platform earlier,
we are able to support them for longer as they grow their wealth
over time, and this enhances the lifetime value opportunity.
We can see that clients, including the recent cohorts we have
welcomed during the pandemic, follow consistent growth patterns as
they continue to save and invest and make use of their and their
household's allowances over time. Therefore, by building a
relationship with a client over a lifetime, those who are currently
in the 35-44 age group, when they come to represent tomorrow's over
65's, will have an average ISA portfolio that is almost three times
as large as what they have today.
Client engagement
Whilst the dynamics of the market may shift, our focus on
understanding what these groups of clients want and need in order
to help them to save and invest does not. Clients require
information that builds their knowledge and confidence and helps
them to understand the decisions they have to make to meet their
individual needs. They value a simple and intuitive experience that
is supported by a range of channels, including mobile apps, website
access and over the telephone. With our comprehensive proposition
and easy to use digital offering, combined with the extensive
expert insight and research we provide to support clients in their
investment journey, we can provide this experience.
We focus on understanding and delivering what our clients want
and ensure that we have the "distribution", particularly through
digital channels of how to get it in front of them in the simple
and easy to use ways that they value most. Over H1 our mobile app
has seen 57% growth in clients logging in compared to prior year,
checking their investments on average 10 times a week. We have
supported 6.5m equity trades, 113 million client log-ins and 25
million minutes spent reading our insightful articles. We offer a
diversified and extensive service that clients rely on and we are
here for them when they need, answering 676,000 calls, responding
to 275,000 emails, and seeing over 153m digital visits in H1. All
of this engagement helps us to provide the proposition, service and
insight that clients need and underpins the strong and
differentiated relationship we build with them. This understanding
also helps us to ensure that we continue to maintain a market
leading client experience for all of our clients, no matter what
their demographic or need and enables us to maintain consistently
high client retention at around 93.0%.
We understand clients' need for a secure, stable and trusted
digital wealth provider. The importance of providing such support
has been very well illustrated during COVID-19 where our clients
have been interacting with us more than ever. On November 9(th) the
very high levels of volume associated with market volatility led to
a brief outage of our system. This was managed swiftly by our
technical teams with lessons being identified and actions taken
forward to avoid future events of this type, and to ensure we are
able to maintain our client service over the long term. Our
experience here has only reinforced the necessity and benefits of
the historical and ongoing investment in our systems and processes
to ensure appropriate capacity and upgrades to meet the demands of
an ever-growing client base.
Developing client experience
Providing the right products and services, underpinned by a
simple and intuitive experience, helps us to build client
relationships that last a lifetime. By attracting clients whilst
they are building their savings and starting to invest, we have an
opportunity to engage them with the right offering, meet their
needs as they evolve, and retain them over the long term, creating
lifelong value.
Consequently, it is crucial that we continue to invest to
improve our offering and to meet clients' needs as they evolve.
Over the first half of the financial year we further developed our
capabilities in building solutions that will help clients across a
number of different life stages. This included launching our Wealth
Shortlist, which offers additional tools and greater insight to
help clients make their investment decisions. We also delivered
significant improvement to our retirement proposition with a new
online drawdown application that personalises the experience for
the client, educates them on the risks and nudges them towards
better outcomes. This has led to a dramatic improvement in straight
through applications and has seen an increase from 30% to 50% for
clients taking partial drawdown. Clients are only taking the
tax-free cash that they need and leaving the rest to grow
efficiently in their pension. Alongside this we have developed new
investment pathways which launched this month, which have been
built with client needs and outcomes at the core.
Meanwhile, we also continue to evolve our Active Savings
service, which continues to play a vital role in the savings market
where the rates clients can achieve are so important. Active
Savings had a record half, generating GBP0.7 billion net new
business to reach an AUA of GBP2.9 billion. Despite our expectation
of subdued flows due to the market-leading NS&I rates on offer
over the summer we saw a strong performance over the second quarter
when their rate reductions were announced in late September. At the
end of December, we launched our new Cash ISA which should help
drive continued momentum over the second half. We look forward to
seeing how our clients use this new product to help them diversify
their savings in 2021.
We continue to develop and innovate our technology and digital
offering. Client interaction with our app continues to grow and we
expect this trend to increase in line with the development in our
client demographics. We are investing in the development of digital
and connected technology to support and evolve our service and
client experience. Along with the continued development of our
proposition and delivering the right outcomes for clients we are
well placed to meet their evolving needs over a lifetime and
ensuring that they consolidate their savings with Hargreaves
Lansdown over the long term. The scale of our platform allows us to
have the capacity to invest in our client proposition to remain a
market leader not just for today but for the long term whilst
continuing to deliver sustainable and attractive value for our
shareholders as well as our clients, the tangible results of which
can be seen in the results we have announced today.
Dividend
The Board believes the Group has strong profitability, liquidity
and a capital position to execute its strategy without financial
constraint and to operate a sustainable and progressive ordinary
dividend policy. We remain confident in our business model and the
Board has declared a 6% rise in the interim dividend to 11.9 pence
per share. The Board remains committed to paying special dividends
when sufficient excess cash and capital exist after taking account
of the Group's growth, investment and regulatory capital
requirements at the time.
Outloo k
I wish to highlight and thank my colleagues for their continued
hard work throughout this incredibly difficult time. I continue to
be inspired by their dedication to delivering for our clients and
the ongoing resilience that they have and continue to demonstrate
throughout the COVID-19 pandemic.
We remain excited by the structural growth opportunity in the UK
savings and investments market and confident in our ability to
deliver sustainable growth through the cycle. The COVID-19 pandemic
has underpinned the importance of financial resilience and we are
well placed to support clients with their saving and investment
needs across their lifetimes.
Whilst events at the end of 2020 provided further stability to
the external environment, with the conclusion of the Brexit deal
and the completion of the US election, the COVID-19 pandemic and
the resulting economic consequences will continue to impact markets
and businesses over the remainder of this financial year and
beyond. Nonetheless, we remain confident in our ability to continue
to help more clients to save and invest, and to support them with
achieving their financial goals in the lead up to and beyond the
tax year-end.
Trading in January has been similar to other lockdown periods
with strong dealing volumes, significant client engagement and
robust net new business and net new client numbers. The UK's tax
year-end should as ever provide us with a great opportunity to
engage with existing and new clients, helping them to make the most
of their tax allowances and build up their wealth. Beyond this,
things become less certain but we remain committed to our client
led strategy and will continue to invest to improve and
increasingly personalise the client experience and our
proposition.
Chris Hill
Chief Executive Officer
Financial Review
Assets Under Administration (AUA) and Net New Business (NNB)
Unaudited Unaudited Unaudited
3 months to 3 months to 6 months ended
30 September 31 December 31 December
2020 2020 2020
GBPbn GBPbn GBPbn
================= ============== ============= ================
Opening AUA 104.0 106.9 104.0
Net New Business 0.8 2.4 3.2
Market growth
& other 2.1 11.3 13.4
Closing AUA 106.9 120.6 120.6
================= ============== ============= ================
Hargreaves Lansdown provides the leading direct wealth
management service in the UK. The strength of our brand and
diversified offering, by asset class and wrapper, the quality of
our customer engagement and service and the strength of our
marketing capabilities has allowed us to deliver strong net new
customer and net new business growth in the period. These are
unprecedented times, but the Group has performed exceptionally
through them. The additional scale we have gained in 2020 and our
relentless focus on client service positions us well for the
structural growth opportunity in the UK savings and investments
market.
Net new business for the first half totalled GBP3.2 billion.
This was driven by increased client numbers, continued wealth
consolidation onto our platform and strong gross inflows
particularly in the second quarter. Throughout this period we have
been focused on colleague welfare and have remained open for
business. As seen in the initial months of COVID-19 we have
continued to see strong growth in net new clients, particularly
amongst a younger demographic who were particularly engaged with
share dealing.
We introduced 84,000 net new clients to our services in the six
months to 31 December 2020 (H1 2020: 50,000, or 32,000 excluding
direct book acquisitions), growing our active client base by 6% to
1,496,000. During the 2020 calendar year, this is an increase of
222,000 clients. The average age of new clients is consistent with
recent periods, albeit greater in scale, and they are behaving
similarly to recent equivalent cohorts in terms of growing their
AUA on the platform over time. We are encouraged by this and the
additional lifetime value they have brought to the Group as a
result.
This increased client population underpins future growth as
clients add new money to their accounts, particularly through the
use of annual tax free allowances in the SIPP and ISA products.
Over a period of time, clients also typically consolidate their
investments through transfers onto our platform. This growth was
supported by our continued high retention rate 92.9% (H1 2020:
93.3%).
Total AUA increased by 16% to GBP120.6 billion as at 31 December
2020 (GBP104.0bn as at 30 June 2020). This was driven by GBP3.2
billion of net new business (H1 2020: GBP2.3bn) plus significant
positive stock market movements impacting asset values.
Income Statement
Unaudited Unaudited Audited
6 months ended 6 months ended Year to
31 December 2020 31 December 30 June 2020
GBPm 2019 GBPm
GBPm
==================== =================== ================= ===============
Revenue 299.5 257.9 550.9
Operating costs (112.0) (89.2) (214.9)
Fair value gains on
derivatives 0.6 1.0 1.7
Finance income 0.8 1.6 2.8
Finance costs (0.5) (0.2) (1.0)
==================== =================== ================= ===============
Underlying profit
before tax 188.4 171.1 339.5
Gain on disposal - - 38.8
==================== =================== ================= ===============
Profit before tax 188.4 171.1 378.3
Tax (36.4) (31.8) (65.1)
==================== =================== ================= ===============
Profit after tax 152.0 139.3 313.2
==================== =================== ================= ===============
Revenue
Revenue for the period was up 16% to GBP299.5 million (H1 2020:
GBP257.9m), driven by higher average asset levels and higher share
dealing volumes. This increase compares to a decline in the average
FTSE All Share of 17%, showing the strength of the Group's net new
business performance over the past year and diversified revenue
stream. This more than offset a fall in interest on client money as
the net interest margin was impacted by the emergency cuts in the
base rate of interest in March 2020 and the fall in annual
management charges on the HL Funds which fell in line with their
lower average asset values. In addition, we no longer have the
revenue derived from our FundsLibrary business, which was GBP4.8
million in the prior period, as it was sold in February 2020.
The table below breaks down revenue, average AUA and margins
earned across the main asset classes which our clients hold with
us:
6 months ended 6 months ended Year ended 30 June
31 December 2020 31 December 2019 2020
================= ============================= ============================= =============================
Revenue Average Revenue Revenue Average Revenue Revenue Average Revenue
GBPm AUA margin GBPm AUA margin GBPm AUA margin
GBPbn bps GBPbn bps GBPbn bps
================= ======== ========= ======== ======== ========= ======== ======== ========= ========
Funds(1) 109.7 54.2(7) 40 109.6 54.6(7) 40 210.6 52.3(7) 40
Shares(2) 113.2 39.9 56 45.7 35.0 26 148.5 34.3 43
Cash(3) 32.8 13.2 50 46.0 11.2 82 91.1 12.3 74
HL Funds(4) 29.4 8.0(7) 73 33.9 9.2(7) 73 63.6 8.7(7) 73
Other(5) 14.4 2.5(6) - 22.7 1.3(6) - 37.1 1.7(6) -
Double-count(7) - (8.0)(7) - - (9.1)(7) - - (8.6)(7) -
================= ======== ========= ======== ======== ========= ======== ======== ========= ========
Total 299.5 109.8(7) - 257.9 102.2(7) - 550.9 100.6(7) -
================= ======== ========= ======== ======== ========= ======== ======== ========= ========
1 Platform fees and renewal commission.
2 Stockbroking commission and equity holding charges.
3 Net interest earned on client money.
4 Annual management charge on HL Funds, i.e. excluding the
platform fee, which is included in revenue on Funds.
5 Advisory fees, Funds Library revenues, Active Savings and
ancillary services (e.g. annuity broking, distribution of VCTs and
HL Currency and Market Services).
6 Average cash held via Active Savings.
7 HL Funds AUM included in Funds AUA for platform fee and in HL
Funds for annual management charge. Total average AUA excludes HL
Fund AUM to avoid double-counting.
Revenue on Funds increased marginally to GBP109.7m (H1 2020:
GBP109.6m) despite the average AUA falling slightly. Funds remain
our largest client asset class at 49% of average AUA (H1 2020:
53%), and the revenue margin earned in the period was in line with
our expectations at 40bps (H1 2020: 40bps). Revenue margins on
Funds have been broadly stable following the completion of the
Retail Distribution Review and we continue to expect them to remain
at similar levels over the remainder of the financial year. Funds
AUA at the end of the period was GBP59.2 billion (31 December 2019:
GBP55.9bn) due to increased market levels towards the end of the
period.
Revenue on Shares increased by 148% to GBP113.2m (H1 2020:
GBP45.7m) and the revenue margin of 56bps (H1 2020: 26bps) was
ahead of the upper end of our expected range. This margin is
primarily a result of the ratio of dealing volumes to AUA, and in
the period deal volumes have grown 123% whereas the average Shares
AUA has grown by 14%. Hargreaves Lansdown is the leading retail
stockbroking business in the UK, with a 40.3% share (source:
Compeer Limited XO Quarterly Benchmarking Report Q3 2020). This has
enabled us to benefit from the growth in share trading across the
industry in 2020, amongst both new and existing clients. This trend
goes back to December 2019 post the General Election result and
which picked up further in light of the COVID-19 pandemic and the
associated market falls and lockdown periods. Our guidance for the
full year is 45 bps to 60 bps. Whether such elevated dealing
volumes continue once lockdowns end, and life returns more to
normal is difficult to say. Our focus, however, on engaging with
clients, helping to build their financial knowledge and confidence,
the breadth of shares available and the ease to invest via our
platform may well see a higher base level of dealing volumes than
pre COVID-19. Shares AUA at the end of the period was GBP45.9
billion (31 December 2019: GBP36.5bn).
Revenue on Cash decreased by 29% to GBP32.8m (H1 2020: GBP46.0m)
as increased AUA levels were more than offset with a decrease in
the net interest margin to 50bps (H1 2020: 82bps). Our communicated
expectations at the start of the year were that margins would be
within a 40bps to 50bps range for the year. We also highlighted
that the margin would fall across the year as the impact of the
March 2020 emergency base rate reductions take greater effect.
Initially, following the emergency base rate cuts, term rates
offered by the banks held up well but in more recent months they
have fallen significantly. As a result, guidance for the full year
is now in the range of 34bps to 40bps. Given the duration of our
term deposits, which can be up to a maximum of 13 months, the
impact of falling term deposit rates will be felt more in the year
to 30 June 2022. Assuming there are no further rate changes, our
initial guidance for that year is 10bps to 15bps. Cash AUA at the
end of the period was GBP12.5 billion (31 December 2019:
GBP11.1bn).
HL Funds consist of ten Multi-Manager funds, on which the
management fee is 75bps per annum, and three Select equity funds,
on which the management fee is 60bps. Revenue from HL Funds has
fallen by 13% this year to GBP29.4m (H1 2020: GBP33.9m) due to the
average funds under management being 13% lower as a result of
market falls and modest net outflows. The fees are collected on a
daily basis whereas the Group calculates average AUM on a month end
basis, resulting in a headline margin for the period of 73bps (H1
2020: 73bps). Earlier this month we issued the annual Value for
Money report on our own fund range. In the report we announced the
decision to lower the annual management charge on some of our
Multi-Manager funds and introduce further price reductions linked
to economies of scale. These price changes are expected to take
effect in the last quarter of our financial year. Based on the
current fund values, the annualised current loss of revenue is
estimated at GBP3.5 million and hence the margin for this year is
now expected to be in the range of 70bps to 74bps and in the
following year, where there will be a full-year impact, we
anticipate the margin will be in the range of 66bps to 70bps.
Please note that the platform fees on these assets are included in
the Funds line and hence total average AUA of GBP109.8 billion (H1
2020: GBP102.2bn) excludes HL Funds AUM to avoid double-counting.
HL Funds AUM at the end of the period was GBP8.5 billion (31
December 2019: GBP9.4bn).
Other revenues are made up of advisory fees, Active Savings and
ancillary services such as annuity broking, distribution of VCTs
and the Hargreaves Lansdown Currency and Market Services. These
revenues are primarily transactional and not impacted by market
growth. They declined by 37% in the period mainly because of the
disposal of FundsLibrary, our data services provider, which made up
GBP4.8 million of the revenue in the comparative period. In
addition, advice fees were lower as COVID-19 made it more difficult
to engage with existing and prospective new clients. Assets held
within Active Savings on the platform and the related revenue are
not yet broken out into a separate category in the table above. As
highlighted previously we believe it is strategically imperative to
capture the scale advantage of being a first mover. Consequently,
our focus remains on growing AUA at present. Our chosen route for
achieving this in the current low interest rate environment is via
reducing our revenue margins to ensure the rates offered on Active
Savings are highly competitive. This will attract the new clients
and assets into the service that we need to capitalise on the
opportunity. As at 31 December 2020 the AUA was GBP2.9 billion (31
December 2019: GBP1.6bn).
Unaudited Unaudited Audited
6 months ended 6 months ended Year to
31 December 31 December 30 June 2020
2020 2019 GBPm
GBPm GBPm
====================== ================= ================= ===============
Recurring revenue 193.8 209.9 404.3
Transactional revenue 105.7 43.2 140.1
Other revenue - 4.8 6.5
Total revenue 299.5 257.9 550.9
====================== ================= ================= ===============
The Group's revenues are largely recurring in nature, as shown
in the table above. The proportion of recurring revenues has
decreased to 65% in the period (H1 2020: 81%) as the transactional
stockbroking commission increased significantly versus last year.
Recurring revenue is primarily comprised of platform fees on funds
and equities, Hargreaves Lansdown fund management fees, interest on
client money and ongoing advisory fees. This fell by 8% to GBP193.8
million (H1 2020: GBP209.9m) driven by lower interest rates earned
on client money, which more than offset the higher platform fees
and management fees from higher average AUA levels. Recurring
revenues provide greater profit resilience and hence we believe
they are of higher quality than non-recurring revenues.
Transactional revenue is primarily made up of stockbroking
commission and advisory event-driven fees. This increased by 145%
to GBP105.7 million (H1 2020: GBP43.2m) with a 162% increase in
client driven equity dealing volumes being the key driver.
Other revenue was derived from the provision of funds data
services and research to external parties through FundsLibrary,
however, this business was sold on 28 February 2020 and hence there
is no revenue for this period.
Operating costs
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 December 31 December 30 June
2020 2019 2020
GBPm GBPm GBPm
=========================== ================= ================= =============
Staff costs 55.5 50.5 101.2
Marketing and distribution
costs 10.5 6.0 23.9
Depreciation, amortisation
& financial costs 9.5 8.4 17.6
Other costs 36.1 22.6 58.5
--------------------------- ----------------- ----------------- -------------
111.6 87.5 201.2
Total FSCS levy 0.4 1.7 13.7
=========================== ================= ================= =============
Total operating costs 112.0 89.2 214.9
=========================== ================= ================= =============
Operating costs increased by 27% to GBP111.6 million (H1 2020:
GBP87.5m) to support higher client activity levels, maintain client
service and invest in the significant growth opportunities we see
ahead for Hargreaves Lansdown. Focusing on these areas and
controlling costs elsewhere has resulted in costs before the FSCS
levy being slightly below their H2 2020 equivalent.
Over the past three years we have deliberately invested into our
service, marketing capabilities, technology, scalability and
efficiency as the Group's focus on client service is core to our
success and necessary to capture the structural growth opportunity
in the UK savings and investments market. This investment has been
validated across the 2020 calendar year by record NNB, record
levels of net new clients, increased market shares, attractive
client retention rates, the continued development of our product
set and growth capabilities and the resilience of our platform
through COVID-19.
Key drivers of the cost growth were marketing and distribution.
These rose by GBP4.5 million this period as we capitalised on the
opportunity to accelerate new client acquisition. At current
revenue margins and activity levels, the GBP8.6 billion of NNB we
have added across 2020 is equivalent to circa GBP46 million of
future annual revenues.
Activity based costs also rose by GBP6.5 million. These are
primarily dealing costs linked to the additional GBP67 million of
Shares revenue and debit card fees linked to elevated levels of
cash paid onto the platform.
Looking forward we would anticipate that costs will grow broadly
in line with the growth of client numbers. Cost growth in 2020 was
marginally ahead of this due to the unusual marketing opportunity
to acquire new clients and exceptional dealing volume costs.
Staff costs rose by 10% to GBP55.5 million (H1 2020: GBP50.5m).
This was predominantly within the service functions of helpdesk and
operations, driven by the need to support our increased levels of
client activity and contact whilst working in a COVID-19
configuration. Average staff numbers increased by 6% from 1,588 in
H1 20 to 1,691 in H1.
Marketing and distribution costs rose by 75% to GBP10.5 million
(H1 2020: GBP6.0m). This was due to enhanced levels of new client
acquisition and higher levels of engagement with our existing
client base, key to their ongoing net new business contributions
and client retention. As usual, we expect marketing activity to
increase in the second half and through the tax year-end, including
a brand marketing campaign as per last year.
Depreciation, amortisation and financial costs increased by
GBP1.1 million as a result of higher capital spend in recent years,
primarily on our core in-house IT systems, hardware and software
for increased employee numbers and the Active Savings platform.
Total capitalised expenditure in the period was GBP7.9 million
(H1 2020: GBP4.7m). The majority of this expenditure was for
cyclical replacement of IT hardware, the continued project to
enhance the capacity and capability of our key administration
systems and the ongoing development of Active Savings.
Other costs rose by GBP13.5 million to GBP36.1 million (H1 2020:
GBP22.6m). The key drivers of this were increased dealing costs of
GBP5.6 million relating to the record dealing volumes and computer
maintenance driven by higher employee numbers and enabling so many
employees to work from home throughout the period.
The Financial Services Compensation Scheme (FSCS) levy is
typically charged in the second half of the year so ordinarily
there is no charge in the first half, however, in November 2020 an
interim levy of GBP0.4 million was charged by the FSCS. By
comparison, in the prior year, there was an interim levy of GBP1.5
million and an additional charge of GBP0.2 million relating to an
under accrual of the previous year's levy. The FSCS is the
compensation fund of last resort for customers of authorised
financial services firms. All authorised firms are required to
contribute to the running of the scheme and the levy reflects the
cost of compensation payments paid by the industry in proportion to
the amount of each participant's relevant eligible income. As
usual, the second half of the year will be impacted by the FSCS
levy, which for last year resulted in a final net charge of GBP13.7
million.
Profit before tax
Hargreaves Lansdown's success is built around delivering high
service standards, efficiently dealing with ever growing volumes of
business and investing in further growth opportunities. This
investment is key to driving future growth and ensuring we have a
scalable operating platform which we believe will be to the benefit
of both clients and shareholders across the market cycle. As a
result, the Group has grown profit before tax by 10% to GBP188.4
million (H1 2020: GBP171.1m).
Tax
The effective tax rate for the period was 19.3% (H1 2020:
18.6%), in line with the standard rate of UK corporation tax. The
Group's tax strategy is published on our website at
http://www.hl.co.uk
Earnings per share
Unaudited Unaudited Audited
6 months 6 months ended Year to
ended 31 December 30 June 2020
31 December 2019 GBPm
2020 GBPm
GBPm
================================ ============= ================ ==============
Operating profit 188.1 169.7 337.7
Finance income 0.8 1.6 2.8
Finance costs (0.5) (0.2) (1.0)
================================ ============= ================ ==============
Underlying profit before
tax 188.4 171.1 339.5
Gain on disposal - - 38.8
Profit before tax 188.4 171.1 378.3
Tax (36.4) (31.8) (65.1)
================================ ============= ================ ==============
Profit after tax 152.0 139.3 313.2
================================ ============= ================ ==============
Weighted average number
of shares for the calculation
of diluted EPS 474.5 475.6 474.8
================================ ============= ================ ==============
Diluted EPS (pence per
share) 32.1 29.3 65.9
Underlying diluted EPS
(pence per share) 32.1 29.3 57.8
================================ ============= ================ ==============
Diluted EPS increased by 9% from 29.3 pence to 32.1 pence,
reflecting the Group's positive trading performance. The Group's
basic EPS was 32.1 pence, compared with 29.3 pence in H1 2020.
Capital and liquidity management
Hargreaves Lansdown looks to create long-term value for
shareholders by balancing our desire to deliver profit growth,
capital appreciation and an attractive dividend stream to
shareholders with the need to maintain a market-leading offering
and high service standards for our clients.
The Group seeks to maintain a strong net cash position and a
robust balance sheet with sufficient capital and liquidity to fund
ongoing trading and future growth, in line with our strategy of
offering a lifelong, secure home for people's savings and
investments. The Group has a high conversion rate of operating
profits to cash and its net cash position at 31 December 2020 was
GBP390.7 million (H1 2020: GBP317.6 million) as cash generated
through trading offset the payments of the 2020 final and special
dividends. This includes cash on longer-term deposit and is before
funding the 2021 interim dividend of GBP56.4 million
.
The Group has a Revolving Credit Facility agreement with
Barclays Bank to provide access to a further GBP75 million of
liquidity. This is currently undrawn and was put in place to
further strengthen the Group's liquidity position and increase our
cash management flexibility. The Group also funds a share purchase
programme to ensure we avoid any dilution from operating our
share-based compensation schemes.
Total attributable shareholders' equity, as at 31 December 2020,
made up of share capital, share premium, retained earnings and
other reserves increased to GBP500.7 million (H1 2020: GBP442.5
million) as continued profitability more than offset dividend
payments. Included within shareholders' equity are distributable
reserves of GBP500.7 million (H1 2020: GBP441.0 million).
The Group has four subsidiary companies authorised and regulated
by the Financial Conduct Authority ("FCA"). These firms have
capital resources at a level which satisfies both their regulatory
capital requirements and their working capital requirements and, as
a group, we maintain a robust balance sheet retaining a capital
base over and above regulatory capital requirements. Further
disclosures are published in the Pillar 3 document on the Group's
website www.hl.co.uk/investor-relations/key-financial-data .
Dividend
Hargreaves Lansdown has a progressive ordinary dividend policy.
The Board considers the dividend on a total basis, with the
intention of maintaining the ordinary payout ratio at around 65%
across the market cycle and looking to return excess cash to
shareholders in the form of a special dividend after the year-end.
Any such return will be determined according to market conditions
and after taking account of the Group's growth, investment and
regulatory capital requirements at the time. The Board is confident
that Hargreaves Lansdown has sufficiently strong financial,
liquidity and capital positions to execute its strategy without
constraints and can operate a sustainable and progressive ordinary
dividend policy going forward.
Given the Group's dividend policy, the Board has declared an
increased interim dividend of 11.9 pence per share (H1 2020: 11.2
pence per share). The interim dividend will be paid on 8 March 2021
to all shareholders on the register at 12 February 2021.
Directors Responsibility Statement
The Directors confirm that this consolidated interim financial
information has been prepared in accordance with IAS 34 as adopted
by the European Union and that the interim report includes a fair
review of the information required by DTR 4.2.7R and DTR 4.2.8R,
namely:
-- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of consolidated financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- material related-party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
The Directors of Hargreaves Lansdown plc are listed on page 26
of the Interim Report and Condensed Consolidated Financial
Statements 6 months ended 31 December 2020.
By order of the Board:
Philip Johnson
Chief Financial Officer
31 January 2021
Independent review report of Hargreaves Lansdown plc
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Hargreaves Lansdown plc's consolidated interim
financial statements (the "interim financial statements") in the
Interim results for the six months ended 31 December 2020 of
Hargreaves Lansdown plc for the 6 month period ended 31 December
2020 (the "period"). Based on our review, nothing has come to our
attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the Condensed Consolidated Statement of Financial Position as at 31 December 2020;
-- the Condensed Consolidated Income Statement and Condensed
Consolidated Statement of Comprehensive Income for the period then
ended;
-- the Condensed Consolidated Statement of Cash Flows for the period then ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim results
for the six months ended 31 December 2020 of Hargreaves Lansdown
plc have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
As disclosed in note 5.1 to the interim financial statements,
the financial reporting framework that has been applied in the
preparation of the full annual financial statements of the group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Interim results for the six months ended 31 December 2020,
including the interim financial statements, is the responsibility
of, and has been approved by the directors. The directors are
responsible for preparing the Interim results for the six months
ended 31 December 2020 in accordance with the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the Interim results for the six months
ended 31 December 2020 based on our review. This report, including
the conclusion, has been prepared for and only for the company for
the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Interim
results for the six months ended 31 December 2020 and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial
statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
Section 1: Results for the period
Condensed Consolidated Income Statement
for the period ended 31 December 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended 31 ended 31 to
December December 30 June
2020 2019 2020
Note GBPm GBPm GBPm
Revenue 1.1 299.5 257.9 550.9
Fair value gains on
derivatives 0.6 1.0 1.7
Operating costs 1.3 (112.0) (89.2) (214.9)
Operating profit 188.1 169.7 337.7
Finance income 0.8 1.6 2.8
Finance costs 1.5 (0.5) (0.2) (1.0)
Other gains 1.4 - - 38.8
Profit before tax 188.4 171.1 378.3
Tax 1.6 (36.4) (31.8) (65.1)
Profit for the period 152.0 139.3 313.2
Attributable to:
Owners of the parent 152.2 139.2 313.1
Non-controlling interest (0.2) 0.1 0.1
152.0 139.3 313.2
Earnings per share
(pence)
Basic earnings per
share 1.7 32.1 29.3 66.1
Diluted earnings per
share 32.1 29.3 65.9
Underlying basic earnings
per share 32.1 29.3 57.9
Underlying diluted
earnings per share 32.1 29.3 57.8
The results relate entirely to continuing operations.
After the balance sheet date, the Directors declared an
ordinary interim dividend of 11.9 pence per share payable
on 8 March 2021 to shareholders on the register at 12 February
2021.
Condensed Consolidated Statement of Comprehensive Income
for the period ended 31 December 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended ended to
31 December 31 December 30 June
2020 2019 2020
GBPm GBPm GBPm
Profit for the period 152.0 139.3 313.2
Total comprehensive income for the
financial period 152.0 139.3 313.2
Attributable to:
Owners of the parent 152.2 139.2 313.1
Non-controlling interest (0.2) 0.1 0.1
152.0 139.3 313.2
Notes to the Condensed Consolidated Statement of Comprehensive
Income
for the period ended 31 December 2020
1.1 Revenue
Revenue represents fees receivable from financial services
provided to clients, net interest income on client money and
management fees charged to clients. It relates to services provided
in the UK and is stated net of value added tax.
The largest source of revenue for the Group encompasses ongoing
revenue, which includes platform fees, fund management fees,
interest on client money and ongoing advisory fees.
The second largest source is revenue earned at the point of sale
on individual transactions and is primarily made up of stockbroking
commission and advisory event-driven fees. The price is determined
in relation to the specific transaction type and are frequently
flat fees.
Other revenue was made up entirely of the provision of funds
data services and research to external parties through
FundsLibrary, which is no longer part of the Group - see note 2.5
for further details.
Unaudited Unaudited Audited
6 months 6 months Year
ended 31 ended to
December 31 December 30 June
2020 2019 2020
Revenue GBPm GBPm GBPm
Platform fees 124.0 121.5 234.4
Fund management fees 29.4 33.9 63.6
Ongoing adviser fees 4.5 5.5 10.2
Interest earned on client
money 33.4 46.3 91.2
Renewal commission 2.5 2.7 4.9
Stockbroking commission 101.1 34.7 127.3
Advisory event driven fees 2.3 5.9 8.6
Other transactional income 2.3 2.6 4.2
Other revenue - 4.8 6.5
------------------------------ --------- ------------- --------
Revenue 299.5 257.9 550.9
1.2 Segment information
Under IFRS 8, operating segments are required to be determined
based upon the way the Group generates revenue and incurs expenses
and the primary way in which the Chief Operating Decision Maker
(CODM) is provided with financial information. In the case of the
Group, the CODM is considered to be the Executive Committee.
It is the view of the Board and of the Executive Committee that
there is only one segment, being the Group - a direct-to-investor
investment service administering investments in ISA, SIPP and Fund
& Share accounts, providing services for individuals and
corporates. Given that only one segment exists, no additional
information is presented in relation to it, as it is disclosed
throughout these financial statements.
The Group does not rely on any individual customer and so no
additional customer information is reported.
1.3 Operating costs
Unaudited Unaudited Audited
6 months 6 months Year
ended 31 ended to
December 31 December 30 June
2020 2019 2020
Operating costs GBPm GBPm GBPm
Depreciation 4.3 4.2 8.4
Amortisation 3.1 2.6 5.2
Marketing and distribution
costs 10.6 6.0 23.9
Operating lease payables 0.3 0.1 0.1
Office running costs - excluding
operating lease payables 0.8 1.7 4.3
FSCS costs 0.4 1.7 13.7
Dealing costs 9.9 4.4 12.8
Other costs 27.1 18.0 45.3
Staff costs 55.5 50.5 101.2
Operating costs 112.0 89.2 214.9
In the current period operating lease payables include only
short term leases due to the adoption of IFRS 16. See note 5.1 for
further details. Other costs include data costs, computer
maintenance, legal and professional fees, as well as irrecoverable
VAT.
1.4 Other gains
Unaudited Unaudited
6 months 6 months Audited
ended 31 ended 31 Year to
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Gain on disposal of subsidiary - - 38.8
--------------------------------------- --------- ------------ --------
- - 38.8
1.5 Finance costs
Unaudited Unaudited
6 months 6 months Audited
ended 31 ended 31 Year to
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Commitment fees 0.2 0.2 0.3
Interest incurred on lease
payables 0.3 - 0.7
----------------------------------- --------- ------------ --------
0.5 0.2 1.0
1.6 Tax
Unaudited Unaudited Audited
6 months 6 months Year
ended 31 ended 31 to
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
The tax charge for the period is based on the prevailing
standard rate of tax for the year to 30 June 2021 of
19.0% (30 June 2020: 19.0%).
Current tax - on profits for
the period 36.2 32.1 64.9
Current tax - adjustments in respect
of prior years (0.1) - 0.3
Deferred tax 0.2 (0.3) 0.4
Deferred tax - adjustments in respect
of prior years 0.1 - (0.5)
36.4 31.8 65.1
In addition to the amount charged to the income statement,
certain tax amounts have been charged / (credited) directly to
equity as follows:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended to
31 December 31 December 30 June
2020 2019 2020
GBPm GBPm GBPm
Deferred tax relating to share-based
payments 0.4 0.1 0.7
Current tax relating to share-based
payments (0.4) (0.3) (0.9)
- (0.2) (0.2)
1.7 Earnings per share (EPS)
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in free issue during the period,
including ordinary shares held in the EBT reserve which have vested
unconditionally with employees.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding by assuming
the conversion of all dilutive potential ordinary shares.
The weighted average number of anti-dilutive share options and
awards excluded from the calculation of diluted earnings per share
was nil as at 31 December 2020 (nil at 31 December 2019 and nil at
30 June 2020).
Unaudited Unaudited
6 months 6 months Audited
ended 31 ended 31 Year to
December December 30 June
2020 2019 2020
Earnings (all from continuing GBPm GBPm GBPm
operations)
Earnings for the purposes of
basic and diluted EPS being net
profit attributable to equity
holders of the parent Company 152.2 139.2 313.1
Number of shares Number Number Number
Weighted average number of ordinary
shares
Weighted average number of shares
held by HL EBT 474,318,625 474,318,625 474,318,625
(528,413) (122,231) (527,322)
Weighted average number of share
options held in relation to shares
held by HL EBT which have vested
unconditionally with employees 7,868 369,192 44,555
-------------------------------------- ----------- ----------- -----------
Weighted average number of shares
for the purposes of basic EPS 473,798,080 474,565,586 473,835,858
Weighted average number of dilutive
share options held in relation
to shares held by HL EBT that
have not vested unconditionally
with employees 671,254 1,002,809 989,475
Weighted average number of shares
for the purpose of diluted EPS 474,469,334 475,568,395 474,825,333
-------------------------------------- ----------- ----------- -----------
Earnings per share Pence Pence Pence
Basic EPS 32.1 29.3 66.1
Diluted EPS 32.1 29.3 65.9
Underlying basic EPS(1) 32.1 29.3 57.9
Underlying diluted EPS(1) 32.1 29.3 57.8
Underlying earnings are defined as the net profit attributable
to equity holders of the parent company allowing for deduction of
one-off items. For the year ended 30 June 2020 the one-off items
deducted are the gains on disposal of Funds Library and the related
costs.
Section 2: Assets & Liabilities
Condensed Consolidated Statement of Financial Position
for the period ended 31 December 2020
Unaudited Unaudited Audited
at 31 at 31 at 30
December December June
2020 2019 2020
Note GBPm GBPm GBPm
ASSETS:
Non-current assets
Goodwill 1.3 1.3 1.3
Other intangible assets 2.1 31.8 22.9 28.0
Property, plant and equipment 2.1 29.5 34.0 33.2
Deferred tax assets 2.5 3.8 3.1
65.1 62.0 65.6
Current assets
Trade and other receivables 2.3 1,094.3 795.2 973.2
Cash and cash equivalents 2.4 281.9 184.8 235.9
Investments 2.2 1.0 0.9 0.6
Derivative financial instruments 0.1 0.1 0.1
Current tax assets 0.3 - 0.7
Assets classified as held for sale 2.5 - 13.9 -
1,377.6 994.9 1,210.5
Total assets 1,442.7 1,056.9 1,276.1
LIABILITIES:
Current liabilities
Trade and other payables 2.6 924.7 588.8 696.7
Derivative financial instruments 0.1 - 0.1
Current tax liabilities - 0.1 -
Liabilities associated with assets
classified as held for sale 2.5 - 2.9 -
924.8 591.8 696.8
Net current assets 452.8 403.1 513.7
Non-current liabilities
Provisions 0.8 0.7 0.8
Non-current liabilities - - 1.0
Lease liabilities 16.4 21.9 19.9
Total liabilities 942.0 614.4 718.5
Net assets 500.7 442.5 557.6
EQUITY:
Share capital 3.1 1.9 1.9 1.9
Shares held by Employee Benefit
Trust (6.2) (5.0) (6.3)
EBT reserve (3.1) (0.1) (1.9)
Retained earnings 509.0 444.2 564.6
Total equity, attributable to the
owners of the parent 501.6 441.0 558.3
Non-controlling interest (0.9) 1.5 (0.7)
Total equity 500.7 442.5 557.6
The principal statements for prior periods have not been
restated upon the adoption of IFRS 16 - see note 5.1 for further
details.
After the end of the prior period the Group entered into an
arrangement that impacted the accounting and presentation for the
Groups financial position. See note 2.5 for further details
Section 2: Assets & Liabilities
Notes to the Condensed Consolidated Statement of Financial
Position
for the period ended 31 December 2020
2.1 Changes in capital expenditure since the last annual balance sheet date
Capital expenditure
During the six months ended 31 December 2020, the Group acquired
fixtures, fittings, plant, equipment and software assets and
internally generated intangibles with a cost of GBP7.9 million (H1
2020: GBP4.7million, year to 30 June 2020: GBP15.6 million).
2.2 Investments
Audited
Unaudited Unaudited at
at 31 December at 31 December 30 June
2020 2019 2020
GBPm GBPm GBPm
At beginning of period 0.6 1.1 1.1
Sales - (0.2) (0.5)
Purchases 0.4 - -
At end of period 1.0 0.9 0.6
Comprising:
Current asset investment - UK
listed securities valued at quoted
market price 1.0 0.9 0.6
GBP0.9 million (31 December 2019: GBP0.9 million, 30 June 2020:
GBP0.6 million) of investments are classified as held at fair value
through profit and loss. These investments are all level 1
financial instruments in line with the fair value hierarchy under
IFRS 7 and there have been no transfers between levels in the
period.
2.3 Trade and other receivables
Unaudited Unaudited Audited
at 31 at 31 at
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Financial assets:
Trade receivables 915.2 578.0 663.8
Term deposits 110.0 135.0 230.0
Other receivables 3.7 4.4 2.6
Accrued income 55.5 69.6 64.6
1,084.4 787.0 961.0
Non-financial assets:
Prepayments 9.9 8.2 12.2
1,094.3 795.2 973.2
Trade and other receivables are measured at initial recognition
at amortised cost in accordance with IFRS 9. Assessment has been
made of the expected credit loss in relation to debtors, as
required under IFRS 9, this measure requires assessment of the past
default experience for debtors, grouped by type and with reference
to available information both historic and forward-looking. No
credit losses are expected in relation to these matters.
In accordance with market practice, certain balances with
clients, Stock Exchange member firms and other counterparties
totalling GBP898.6 million (31 December 2019: GBP529.1 million, 30
June 2020: GBP640.2 million) are included in trade receivables.
These balances are presented net where there is a legal right of
offset and the ability and intention to settle net . The gross
amount of trade receivables is GBP1,139.4 million and the gross
amount of offset in the balance sheet with trade payables is
GBP213.6 million. Other than counterparty balances trade
receivables primarily consist of fees and amounts owed by clients.
There are no balances where there is a legal right of offset but
not a right of offset in accordance with accounting standards, and
no collateral has been posted for the balances that have been
offset.
2.4 Cash and cash equivalents
Unaudited Unaudited Audited
at 31 at 31 at
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Group cash and cash equivalent
balances 280.7 182.6 232.8
Restricted cash - balances held
by Hargreaves Lansdown EBT 1.2 2.2 3.1
281.9 184.8 235.9
Cash and cash equivalents comprise cash on hand and demand
deposits held by the Group that are readily convertible to a known
amount of cash. The carrying amount of these assets is
approximately equal to their fair value.
Included within "Assets classified as held for sale" as at 31
December 2019 were cash and cash equivalents totalling GBP11.4m,
these are classified in the same way as the cash and cash
equivalents of the Group. See note 2.5 for further details.
At 31 December 2020 segregated deposit amounts held by the Group
on behalf of clients in accordance with the client money rules of
the Financial Conduct Authority amounted to GBP7,114 million (31
December 2019: GBP5,634 million, 30 June 2020 GBP7,506 million). In
addition there were cash balances held on behalf of clients not
governed by the client money rules of GBP7,836 million (31 December
2019: GBP6,600 million, 30 June 2020: GBP6,254.0 million), which
includes monies held in SIPP Trust and in accordance with the
Payment Services Regulations 2017. The client retains the
beneficial interest in both these deposits and cash accounts and
accordingly they are not included in the balance sheet of the
Group.
2.5 Assets classified as held for sale
In the prior year the Group entered into an arrangement to sell
FundsLibrary Ltd. As at 31 December 2019, the Group was committed
to the sale of the subsidiary and as such the assets and
liabilities of FundsLibrary Ltd were classified as held for sale
and are shown separately in the Consolidated Statement of Financial
Position. The assets and liabilities of the subsidiary were as
shown below:
Unaudited
at
31 December
2019
GBPm
Assets:
Property, plant and equipment 0.7
Intangible assets 0.1
Deferred tax assets 0.2
Trade and receivables 1.5
Cash and cash equivalents 11.4
Total assets 13.9
Liabilities:
Trade and other payables 2.1
Current tax liabilities 0.5
Non-current lease liabilities 0.3
Total liabilities 2.9
Net assets 11.0
Included in the property, plant and equipment of FundsLibrary
Ltd was a right-of-use asset in relation to the offices of the
company, carried at GBP0.4m. Included in trade and other payables
were current lease liabilities of GBP0.2m.
The disposal of the subsidiary lead to a gain of GBP38.8m for
the Group - further details are available in the Group's annual
report.
2.6 Trade and other payables
Unaudited Unaudited Audited
at 31 at 31 at
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Financial liabilities:
Trade payables 877.4 548.8 637.1
Current lease liabilities 3.7 - 3.3
Accruals 19.7 10.6 22.3
Other payables 18.5 23.1 26.3
919.3 582.5 689.0
Non-financial liabilities:
Deferred income 0.2 0.2 0.4
Social security and other taxes 5.2 5.2 7.3
Short term provisions - 0.9 -
924.7 588.8 696.7
In accordance with market practice, certain balances with
clients, Stock Exchange member firms and other counterparties
totalling GBP 846.1 million (31 December 2019: GBP531.1 million, 30
June 2020: GBP634.8 million) are included in trade payables. As
stated in note 2.3, where we have a legal right of offset and the
ability and intention to settle net, trade payable balances have
been presented net.
Other payables principally comprise amounts owed to clients as a
loyalty bonus and to staff as a bonus, as well as the current
element of IFRS 16 lease payables. Accruals and deferred income
principally comprise amounts outstanding for trade purchases and
revenue received but not yet earned on workplace pension schemes
administered on behalf of other groups, where an ongoing service is
still being provided.
Contingencies
The Group operates in a highly regulated environment and, in the
ordinary course of business, has provided information to various
authorities as part of informal and formal requests and enquiries.
In addition the Group may receive complaints or claims in relation
to its services from time to time. There are inherent uncertainties
in the outcome of such matters and it is not practicable to
estimate the financial impact, if any, on the Group's results or
net assets at the period end.
Section 3: Equity
Condensed Consolidated Statement of Changes in Equity
for the period ended 31 December 2020
Shares
Share held EBT Retained Non-controlling Total
capital by EBT reserve earnings Total interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 July 2019 1.9 (3.4) 1.5 457.9 457.9 1.4 459.3
Impact of change in
accounting policy - - - (4.1) (4.1) - (4.1)
Revised balance as
at 1 July 2019 1.9 (3.4) 1.5 453.8 453.8 1.4 455.2
Total comprehensive
income - - - 139.2 139.2 0.1 139.3
Employee Benefit Trust:
Shares sold during
the period - 3.8 - - 3.8 - 3.8
Shares acquired in
the period - (5.4) - - (5.4) - (5.4)
Loss on HL EBT share
sale - - (2.4) - (2.4) - (2.4)
Reserve transfer on
exercise of share options - - 0.8 (0.8) - - -
Employee share option
scheme:
Share-based payments
expense - - - 2.0 2.0 - 2.0
Current tax effect
of share-based payments - - - 0.3 0.3 - 0.3
Deferred tax effect
of share-based payments - - - (0.1) (0.1) - (0.1)
Dividend paid (note
3.2) - - - (150.2) (150.2) - (150.2)
---------------------------- --------- -------- --------- ---------- -------- ---------------- --------
At 31 December 2019 1.9 (5.0) (0.1) 444.2 441.0 1.5 442.5
At 1 July 2020 1.9 (6.3) (1.9) 564.6 558.3 (0.7) 557.6
Total comprehensive
income - - - 152.2 152.2 (0.2) 152.0
Employee Benefit Trust:
Shares sold during
the period - 6.1 - - 6.1 - 6.1
Shares acquired in
the period - (6.0) - - (6.0) - (6.0)
Loss on HL EBT share
sale - - (4.2) - (4.2) - (4.2)
Reserve transfer on
exercise of share options - - 3.0 (3.0) - - -
Employee share option
scheme:
Share-based payments
expense - - - 2.3 2.3 - 2.3
Current tax effect
of share-based payments - - - 0.4 0.4 - 0.4
Deferred tax effect
of share-based payments - - - (0.4) (0.4) - (0.4)
Dividend paid (note
3.2) - - - (207.1) (207.1) - (207.1)
At 31 December 2020 1.9 (6.2) (3.1) 509.0 501.6 (0.9) 500.7
The share premium account represents the difference between the
issue price and the nominal value of shares issued.
The shares held by the Employee Benefit Trust ("the EBT")
reserve represents the cost of shares in Hargreaves Lansdown plc
purchased in the market and held by the Hargreaves Lansdown plc EBT
to satisfy options under the Group's share option schemes.
The EBT reserve represents the cumulative loss on disposal of
investments held by the Hargreaves Lansdown EBT. The reserve is not
distributable by the Company as the assets and liabilities of the
EBT are subject to management by the Trustees in accordance with
the EBT trust deed.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein. Non-controlling interests consist of the minority's
proportion of the net fair value of the assets and liabilities
acquired at the date of the original business combination and the
non-controlling interest's change in equity since that date. The
non-controlling interest represents a 7.5% shareholding in
Hargreaves Lansdown Savings Limited and in the prior year included
a 22% shareholding in Funds Library Limited, both subsidiaries of
the Company.
Section 3: Equity
Notes to the Condensed Consolidated Statement of Changes in
Equity
for the period ended 31 December 2020
3.1 Share capital Audited
Unaudited Unaudited at
at 31 December at 31 December 30 June
2020 2019 2020
GBPm GBPm GBPm
Issued and fully paid:
Ordinary shares of 0.4p 1.9 1.9 1.9
Shares Shares Shares
Issued and fully paid:
Number of ordinary shares of 0.4p 474,318,625 474,318,625 474,318,625
The Company has one class of ordinary shares which carry no
right to fixed income.
3.2 Dividends paid
Unaudited Unaudited Audited
at 31 at 31 at
December December 30 June
2020 2019 2020
GBPm GBPm GBPm
Amounts recognised as distributions to equity holders
in the period:
2020 Final dividend of 26.3p
per share (2019 - 23.4p) 124.7 110.9 110.9
2020 Special Dividend of 8.3p
per share (2019 - 8.3p) 82.4 39.3 39.3
2020 First interim dividend of
11.2p per share - - 53.1
Total 207.1 150.2 203.3
The Hargreaves Lansdown Employee Benefit Trust, which held the
following number of ordinary shares in Hargreaves Lansdown plc at
the date shown, has agreed to waive all dividends.
Unaudited Unaudited Audited
at 31 at 31 at
December December 30 June
2020 2019 2020
Number of shares held by the
Hargreaves Lansdown Employee Benefit
Trust 576,691 447,134 571,856
Representing % of called-up share
capital 0.12% 0.09% 0.12%
Section 4
Condensed Consolidated Statement of Cash Flows
as at 31 December 2020
Audited
Unaudited Unaudited at
at 31 at 31 30 June
December December 2020
2020 2019
Note GBPm GBPm GBPm
Net cash from operating activities
Profit for the period after
tax 152.0 139.3 313.2
Adjustments for:
Income tax expense 36.4 31.8 65.1
Gain on disposal of subsidiary - - (38.8)
Depreciation of plant and
equipment 4.3 4.2 8.4
Amortisation of intangible
assets 3.1 2.6 5.2
Share-based payment expense 2.4 2.1 3.6
Interest on lease liabilities 0.3 - 0.7
Gain on termination of lease (0.3) - -
Increase in provisions - - 0.1
Operating cash flows before
movements in working capital 198.2 180.0 357.5
(Increase)/decrease in receivables (241.1) (128.1) (209.6)
(Decrease)/increase in payables 226.5 104.3 208.9
Increase in derivative liabilities - - 0.1
Cash generated from operations 183.6 156.2 356.9
Income tax paid (35.3) (58.8) (91.5)
Net cash generated from operating
activities 148.3 97.4 265.4
Investing activities
Decrease/(increase) in term
deposits 120 80.0 (15.0)
(Purchase of) / Proceeds on
disposal of investments (0.4) 0.2 0.5
Purchase of property, plant
and equipment (1.3) (2.1) (5.8)
Purchase of intangible assets (6.6) (2.6) (10.1)
Proceeds on disposal of subsidiary - - 38.2
Net cash from / (used in)
investing activities 111.7 75.5 7.8
Financing activities
Purchase of own shares in
EBT (6.0) (5.4) (14.8)
Proceeds on sale of own shares
in EBT 1.9 1.4 5.8
Dividends paid to owners of
the parent (207.1) (150.2) (203.3)
Payments of principal in relation
to lease liabilities (2.7) (1.8) (4.3)
Interest paid on lease liabilities (0.3) - -
Net cash used in financing
activities (214.0) (156.0) (216.6)
Net increase in cash and cash
equivalents 46.0 16.9 56.6
Cash and cash equivalents
at beginning of period 235.9 179.3 179.3
Cash and cash equivalents
of Group at end of period 281.9 196.2 235.9
Cash held as part of assets - (11.4) -
classified as held for sale
at end of period
------------------------------------ ----- ---------- ---------- ---------
Cash and cash equivalents
at end of period 2.4 281.9 184.8 235.9
The adoption of IFRS 16 and adjustments made in relation to the
adoption of that standard have had no impact on cash flows. As a
result the value of current lease liabilities included in other
payables does not impact the change in payables in the current
period.
Section 5
Other Notes
as at 31 December 2020
5.1 Basis of preparation
The consolidated Interim Financial Statements of Hargreaves
Lansdown plc for the six months to 31 December 2020 have been
prepared using accounting policies in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European
Union and in accordance with the International Accounting Standard
(IAS) 34 Interim Financial Reporting and the Disclosure Rules and
Transparency Rules of the United Kingdom's Financial Conduct
Authority . The Interim Financial Statements have been prepared on
the historical cost basis, except for the revaluation of certain
financial instruments, and are presented in pounds sterling which
is the currency of the primary economic environment in which the
Group operates.
The financial information contained in these Interim Financial
Statements does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006. However, the
information has been reviewed by the company's auditor,
PricewaterhouseCoopers LLP, and their report appears earlier in
this document. The financial information for the year ended 30 June
2020 has been derived from the audited financial statements of
Hargreaves Lansdown plc for that year, which have been reported on
by PricewaterhouseCoopers LLP and delivered to the Registrar of
Companies. Copies are available online at www.hl.co.uk . The
auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditor drew
attention by the way of emphasis without qualifying the report and
did not contain statements under section 498 (2) or (3) of the
Companies Act 2006.
Going concern
Throughout the period, the Group was debt free, has continued to
generate significant cash and has considerable financial resources
enabling it to meet its day-to-day working capital
requirements.
The Directors have considered the resilience of the Group,
taking account of its current financial position, the principal
risks facing the business in severe but plausible scenarios and the
effectiveness of any mitigating actions. As a consequence, the
Directors believe that the Group is well placed to manage its
business risks in the context of the current economic outlook and
has adequate financial resources to continue in operational
existence for a period of at least 12 months from the date of
approval of these interim financial statements. They therefore
continue to adopt the going concern basis in preparing the
consolidated interim financial statements.
The same accounting policies, methods of computation and
presentation have been followed in the preparation of the Interim
Financial Statements for the six months ended 31 December 2020 as
were applied in the Audited Annual Financial Statements for the
year ended 30 June 2020.
Seasonality of operations
A high proportion of the Group's revenue is derived from the
value of assets under administration or management on the HL
platform or within HL funds. The values of these assets are
influenced predominantly by new business volumes, the stock market
and client withdrawals.
Revenues are not considered to be seasonal, with approximately
51% of revenues being earned in the second half of the financial
year, based on previous financial years. The Group revenue is,
however, sensitive to the impact of net new business inflows during
a particular period. Although a Brexit deal has been reached there
is still some uncertainty as to the economic consequences of
leaving the EU, which combined with the ongoing impact of COVID-19
could have a detrimental effect on client confidence and net new
business. If this were to happen there could be a subsequent impact
on revenues over the coming months.
5.2 Material events after interim period-end
After the interim balance sheet date, an ordinary interim
dividend of 11.9 pence per share (H1 2020: interim dividend 11.2
pence) amounting to a total dividend of GBP56.4 million (2020:
GBP53.1 million) was declared by the plc Directors. These financial
statements do not reflect this dividend payable.
There have been no other material events after the end of the
interim period.
5.3 Principal risks and uncertainties
The principal risks and uncertainties which could impact the
Group for the remainder of the financial year are those detailed on
pages 25 to 29 of the Group's Annual Report and Financial
Statements 2020, a copy of which is available on the Group's
website, www.hl.co.uk. These remain the principal risks and
uncertainties for the second half of this financial year and
beyond; the key ones of which are listed below and they are
regularly considered by the Board.
Operational risks
-- Cybercrime, fraud or security breaches in respect of the
Group's information, data, software or information technology
systems.
-- Business continuity event.
-- Changing markets and increased competition.
5.3 Principal risks and uncertainties (continued)
Financial risks
-- Risk of a decline in earnings due to a decline in interest
rates or regulatory changes affecting interest income.
-- Fluctuations in the capital markets adversely affecting
trading activity and /or the value of the Group's assets under
administration.
The Group is exposed to interest rate risk, the risk of
sustaining losses from adverse movements in interest bearing
assets. These assets comprise cash, cash equivalents and term
deposits. At 31 December 2020 the value of such assets on the Group
balance sheet was GBP391.9 million (at 31 December 2019: GBP331.2
million). A 50bps (0.5%) move in interest rates, in isolation,
would therefore, not have a material direct impact on the Group
balance sheet or results. This exposure is continually monitored to
ensure that the Group is maximising its interest earning potential
within accepted liquidity and credit constraints. The Group has no
external borrowings and as such is not exposed to interest rate or
refinancing risk on borrowings.
As a source of revenue is based on the value of client cash
under administration, the Group also has an indirect exposure to
interest rate risk on cash balances held for clients. These
balances are disclosed in note 2.4 and are not on the Group
Statement of Financial Position.
5.4 Related party transactions
The Company has a related party relationship with its Directors
and members of the Executive Committee (the "key management
personnel"). There were no material changes to the related party
transactions during the financial period; transactions are
consistent in nature with the disclosure in note 5.6 to the 2020
Annual Report.
5.5 Financial instruments' fair value disclosure
The fair values of the Group's financial assets and liabilities
are not materially different from their carrying values. There have
been no transfers of assets or liabilities between levels of the
fair value hierarchy and there are no non-recurring fair value
measurements.
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
fair value is observable:
Level Level 2 Level Total
1 Directly 3
Quoted observable Inputs
prices market inputs not based
for other than on observable
similar Level 1 market
instruments inputs data
GBPm GBPm GBPm
Unaudited at 31 December
2020
Financial assets at fair
value through profit or
loss 1.0 - - 1.0
Derivative financial assets - 0.1 - 0.1
Derivative financial liabilities - (0.1) - (0.1)
---------------------------------- ------------- --------------- --------------- ------
1.0 - - 1.0
---------------------------------- ------------- --------------- --------------- ------
Unaudited at 31 December
2019
Financial assets at fair
value through profit or
loss 0.9 - - 0.9
Derivative financial assets - 0.1 - 0.1
Derivative financial liabilities - - - -
---------------------------------- ------------- --------------- --------------- ------
0.9 0.1 - 1.0
---------------------------------- ------------- --------------- --------------- ------
Audited at 30 June 2020
Financial assets at fair
value through profit or
loss 0.5 - - 0.5
Derivative financial assets - 0.1 - 0.1
Derivative financial liabilities - (0.1) - (0.1)
---------------------------------- ------------- --------------- --------------- ------
0.5 - - 0.5
---------------------------------- ------------- --------------- --------------- ------
The fair value of financial instruments traded in active markets
is based on quoted market prices at the end of the reporting
period. Instruments included in Level 1 comprise primarily equity
investments and fund units entered into on a counter-party basis.
As such there is no recurring valuation of financial instruments
between reporting periods.
The fair value of financial instruments that are not traded in
an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation
techniques maximise the use of observable market data, such as
foreign currency exchange rates, where it is available and rely as
little as possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable, the
instrument is included in Level 2.
Glossary of Alternative Performance Measures
Within the Interim Report and Condensed Financial Statements
various Alternative Financial Performance Measures are referred to,
which are non-GAAP (Generally Accepted Accounting Practice)
measures. They are used in order to provide a better understanding
of the performance of the Group and the table below states those
which have been used, how they have been calculated and why they
have been used.
Measure Calculation Why we use this measure
Dividend The total dividend per share Provides a measure of the level
pay-out ratio divided by the earnings of profits paid out to shareholders
per share (EPS) for a financial and the level retained in the business.
year.
----------------------------------- --------------------------------------------
Dividend Total dividend payable relating Dividend per share is pertinent
per share to a financial year divided information to shareholders and
(pence per by the total number of shares investors and provides them with
share) eligible to receive a dividend. the ability to assess the dividend
Note ordinary shares held yield of the Hargreaves Lansdown
in the Hargreaves Lansdown plc shares.
Employee Benefit Trust have
agreed to waive all dividends.
----------------------------------- --------------------------------------------
Operating Profits after deducting Provides a measure of profitability
profit margin operating costs but before of the core operating activities
the impact of finance income and excludes non-core items.
and other gains or losses
divided by revenue.
----------------------------------- --------------------------------------------
Net new business Represents subscriptions, Provides a measure of tracking the
inflows cash receipts, cash and success of gathering assets on to
stock transfers in less the platform over time.
cash withdrawals, cash and
stock transfers out.
----------------------------------- --------------------------------------------
Percentage The total value of renewal Provides a measure of the quality
of recurring commission (after deducting of our earnings. We believe recurring
revenue (%) loyalty bonuses), platform revenue provides greater profit
fees, management fees and resilience and hence it is of higher
interest earned on client quality than non-recurring revenue.
money divided by the total
revenue.
----------------------------------- --------------------------------------------
Revenue margin Total revenue divided by Provides the most comparable means
(bps) the average value of assets of tracking, over time, the margin
under administration which earned on the assets under administration
includes the Portfolio Management and is used by management to assess
Services assets under management business performance.
held in funds on which a
platform fee is charged.
----------------------------------- --------------------------------------------
Revenue margin Revenue from cash (net interest Provides a means of tracking, over
from cash earned on the value of client time, the margin earned on cash
(bps) money held on the platform held by our clients.
divided by the average value
of assets under administration
held as client money).
----------------------------------- --------------------------------------------
Revenue margin Revenue derived from funds Provides the most comparable means
from funds held by clients (platform of tracking, over time, the margin
(bps) fees, initial commission earned on funds held by our clients.
less loyalty bonus) divided
by the average value of
assets under administration
held as funds, which includes
the Portfolio Management
Services assets under management
held in funds on which a
platform fee is charged.
----------------------------------- --------------------------------------------
Revenue margin Management fees derived Provides a means of tracking, over
from HL Funds from HL Funds (but excluding time, the margin earned on HL Funds.
(bps) the platform fee) divided
by the average value of
assets held in the HL Funds.
----------------------------------- --------------------------------------------
Revenue margin Revenue from shares (stockbroking Provides a means of tracking, over
from shares commissions, management time, the margin earned on shares
(bps) fees where shares are held held by our clients.
in a SIPP or ISA, less the
cost of dealing errors)
divided by the average value
of assets under administration
held as shares.
----------------------------------- --------------------------------------------
Recurring Revenue that is received We believe recurring revenue provides
revenue every month depending on greater profit resilience and hence
the value of assets held is of higher quality than non-recurring
on the platform including revenue.
platform fees, management
fees and interest earned
on client money and represents
revenue earned over a period
of time.
----------------------------------- --------------------------------------------
Transactional Revenue that is non-recurring Such revenue is not as high quality
revenue in nature and dependent as recurring revenue but helps to
on a client instruction show the diversification of our
such as a deal to buy or revenue streams.
sell shares or take advice.
This represents revenue
earned at a point in time.
----------------------------------- --------------------------------------------
Underlying Profit after tax attributable The unadjusted profit after tax
earnings to equity holders of the includes gains from transactions
parent company adjusted that are not repeated annually or
for the existence of other that may not indicate the true performance
gains outside of the normal of the business.
course of business, such
as the disposal of subsidiaries.
----------------------------------- --------------------------------------------
Underlying Underlying earnings divided The calculation of basic earnings
basic earnings by the weighted average per share using unadjusted profit
per share number of ordinary shares after tax includes those gains that
for the purposes of basic are not consistent from year to
EPS. year.
----------------------------------- --------------------------------------------
Underlying Underlying earnings divided The calculation of diluted earnings
diluted earnings by the weighted average per share using unadjusted profit
per share number of ordinary shares after tax includes those gains that
for the purposes of diluted are not consistent from year to
EPS. year.
----------------------------------- --------------------------------------------
Underlying Profit before tax excluding Provides the best measure for comparison
profit before other gains outside of the of profit before tax between financial
tax normal course of business. periods
----------------------------------- --------------------------------------------
General Information
EXECUTIVE DIRECTORS
Chris Hill
Philip Johnson
NON-EXECUTIVE DIRECTORS
Deanna Oppenheimer
Andrea Blance
Adrian Collins
Moni Mannings
Dan Olley
Roger Perkin
John Troiano
COMPANY Secretary
Alison Zobel
INDEPENDENT AUDITOR
PricewaterhouseCoopers LLP, London
BROKERS
Barclays
Numis Securities Limited
REGISTRARS
Equiniti Limited
Registered Office
One College Square South
Anchor Road
Bristol
BS1 5HL
Registered number
02122142
WEBSITE
www.hl.co.uk
DIVIDEND CALENDAR
First dividend
(interim)
Ex-dividend date* 11 February
2021
Record date** 12 February
2021
Payment date 8 March 2021
* Shares bought on or after the ex-dividend date will not
qualify for the dividend.
** Shareholders must be on the Hargreaves Lansdown plc share
register on this date to receive the dividend.
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END
IR VKLFLFFLZBBL
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