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Hargreaves Lansdown PLC Reveals Profits Up 28% to £195m

The shares of Hargreaves Lansdown (LSE: HL) dropped 26p to 1,005p during early trade this morning after the stock broker revealed its annual pre-tax profits had climbed 28% to £195m.

The full-year results from FTSE 100 member showed revenues gaining 22% to £292m, the ordinary dividend lifted 30% to 20.68p per share and a special dividend of 8.91p per share.

Supporting the performance were client numbers increasing by 76,000 to 507,000 and new client money of £5bn. Aided as well by positive market movements, total client assets under administration advanced by £10bn to £36bn.

The results also revealed a £178m cash position and claimed the business had a 28% share of the “direct investing market“.

Michael Evans, the chairman of Hargreaves Lansdown, said:

These results speak for themselves. We have increased margins, profits, funds under management and improved client satisfaction.” 

Hargreaves Lansdown continues to be a financially strong organisation with a clean, strong, debt-free balance sheet retaining a healthy margin over the regulatory capital adequacy requirements; a source of comfort to our clients. 

Mr Evans also disclosed the group’s pricing structure would be changed to meet the new Retail Distribution Review legislation. He claimed Hargreaves Lansdown would offer funds with lower annual charges and at the same time introduce new charges for its services. 

Based on today’s results, the shares of Hargreaves Lansdown trade on a P/E of 32 and offer a dividend yield of 2.1%

Of course, whether that valuation, today’s results and the wider outlook for the investment industry all combine to make Hargreaves Lansdown a ‘buy’ right now is something only you can decide.

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> Maynard does not own any share mentioned in this article.