Hargreaves Lansdown (HL) H2 2024 earnings summary

Executive summary

• A firm cash offer of GBP 11.40 (1,140p) per share for HL was announced, including a 30p FY24 dividend, with the board intending to unanimously recommend it and an alternative unlisted equity rollover option for eligible shareholders; completion is expected in Q1 2025, pending regulatory and shareholder approvals.

• Over the past year, the organization focused on improving client service, operational efficiency, and technology, while addressing slowing growth and retention.

• A comprehensive business-wide review identified opportunities to enhance client proposition, digital experience, operational automation, and cost efficiency, with strategy refreshed accordingly.

• FY24 saw resilient financial results with revenue up 4% to GBP 764.9 million and underlying profit before tax up 4% to GBP 456 million compared to FY23.

• Assets under administration grew 16% year-over-year to GBP 155.3 billion, with net new business inflows of GBP 4.2 billion and 78,000 net new clients (+15%).

Financial highlights

• Revenue increased 4% year-over-year to GBP 764.9 million, driven by AUA uplift and higher share dealing volumes.

• Statutory profit before tax was GBP 396.3 million, down 2% due to strategic OpEx, impairments, and restructuring costs; statutory profit after tax fell 9% to GBP 293.2 million.

• Underlying operating costs rose 8% to GBP 338.5 million, with H2 cost growth slowing to 5% from 10.5% in H1.

• Net cash increased to GBP 636.6 million, with shareholder funds rising to GBP 815 million and qualifying capital up 22% to GBP 631 million.

• Ordinary dividend increased by 4% to 43.2p per share, in line with guidance.

Outlook and guidance

• Strategic investment programs will extend to FY 2027, with around GBP 100 million remaining to be spent and total spend within the GBP 225 million envelope.

• Focus remains on improving client and asset retention, digital experience, and operational efficiency to drive medium-term growth.

• Transformation program carries significant execution uncertainty, with benefits expected to be non-linear.

• Medium to long-term opportunity seen as attractive, with significant transformation and investment required.