Profits surge for Hargreaves Lansdown after Brexit shares frenzy
Financial services group Hargreaves Lansdown has seen half-year profits surge by more than a fifth thanks to share dealing frenzy in the wake of the Brexit vote.
The Bristol-based investment supermarket said it saw client-driven share deals jump by 51% to 1.95 million in the six months after the EU referendum.
It added there was no sign yet of a slowdown in share trading, as the so-called Trump Bump following the US president's election continues to boost global stock markets.
The share dealing boost helped pre-tax profits leap 21% to £131 million in the last six months of 2016, while the group also notched up another record for assets under administration - up 13% since June 30 at £70 billion.
But the uncertainty caused by the decision last June to quit the EU also saw nervous investors withdraw cash and invest less, with net new business falling by 16% in its first half, at £2.34 billion against £2.77 billion a year earlier.
The group said it saw a "partial recovery" in investor confidence after the US presidential election, while it continues to benefit from an ongoing share dealing boom.
Outgoing chief executive Ian Gorham, who is handing over the reins this year after seven years at the helm, said: "The period since the Brexit vote has seen elevated levels of dealing by clients.
"The extent to which this elevated dealing level is a short term effect or a newly sustainable level is unknown, however, elevated levels of trading continue with no sign of material reduction six months on from the Brexit vote."
Hargreaves Lansdown, which also earns revenue from dealing charges, saw its share dealing market share jump to 28% from 23.8% at the end of 2015.
It has also seen the weak pound since the Brexit vote boost the value of client assets invested in overseas funds and equities, which is nearly a third of all assets on its Vantage platform.
Shares in Hargreaves fell more than 2% despite the half-year profits haul as investors took profits after a recent strong run.
Mr Gorham told the Press Association that recent events have "rekindled interest in markets".
But he said while investor confidence had recovered to levels seen before the Brexit vote, it remains low historically.
"There's a lot of uncertainty in the world and that makes long-term investors nervous, but it makes short-term investors excited and invest in markets," he said.
Mr Gorham said this would be his last set of results as chief executive, with successor Chris Hill effectively now taking the reins ahead of his formal promotion to the role in September.
Mr Hill was previously g roup financial officer, but was named as Mr Gorham's replacement last September and has been acting as deputy chief executive since October.
Mr Gorham said it was the "right time for change".
"I'm tired - it's been seven years and that's quite a while for a chief executive," he said.
He said he plans to work for himself, but is looking for a "change in direction" outside financial services.