Interim Results

RNS Number : 9100G
Hargreaves Lansdown PLC
10 February 2010
 



 

 

 

 

 

 

 

 

 

 

 

 

 

Hargreaves Lansdown plc Group

 

Interim Report and

Condensed Consolidated Financial Statements

6 months ended 31 December 2009

 

Embargoed: for release at 0700h, 10 February 2010

 

 



Contents

 

 


Page

Highlights to 31 December 2009

2

Interim Management Report

3-7

Responsibility Statement

8

Independent Review Report to Hargreaves Lansdown plc

9

Condensed Consolidated Income Statement

10

Condensed Consolidated Statement of Comprehensive Income

11

Condensed Consolidated Statement of Changes in Equity

12

Condensed Consolidated Balance Sheet

13

Condensed Consolidated Statement of Cash Flows

14

Notes to the Condensed Consolidated Financial Statements

15-23

Directors, Company Secretary, Advisers and Shareholder Information

24

 

 

 

 

The Interim Management Report contains 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 2009 Annual Report, underlying such forward-looking information.

 



 Highlights to 31 December 2009

 

·    Strong growth

·    Total net business inflows of £1.4 billion, up 56% over first half last year

·    Total assets under administration up 58% at £15.6 billion

·    Active Vantage clients increased by 18,000 since 30 June 2009

·    Revenue increased by 14% to £74.6 million

·    Adjusted profit* before tax up 16% at £43.1 million

·    Total interim dividend of 9.6 pence per share

 

 

 


Six months ended 31 December 2009

Six months ended 31 December  2008

Change %

Year

to 30 June

2009

Revenue

£74.6m

£65.6 m

+14%

£132.8 m

Proportion of recurring revenue

71%

72%

-1 pts.

70%

Adjusted profit* before tax

£43.1m

£37.3m

+16%

£74.5 m

Profit before tax

£39.8m

£36.5m

+9%

£73.1m

Adjusted operating profit* margin

57%

54%

+3 pts

54%

Total assets under administration

£15.6 bn

£9.9 bn

+58%

£11.9 bn

Adjusted*  diluted earnings per share

6.6p

5.7p

+16%

11.5p

Diluted earnings per share

6.0p

5.5p

+9%

11.0p

Net business inflows

£1.4 bn

£0.9 bn

+56%

£2.0bn

*Adjusted profit excludes one-off costs relating to new offices, as detailed in the Financial Review.

 

Commenting on the results, Peter Hargreaves, Chief Executive said:

 

Our reputation with investors for quality of information and unsurpassed service has generated real momentum to the business.  The esteem we have created in our field is without parallel.  This has resulted in us recruiting new clients and business at ever increasing volumes.  A situation that has enabled us to once again increase our profits despite the huge negative effect of the current low interest rate regime.  We are confident that we can continue to grow our business and its profits, but investment markets will still have a material effect on that growth.

 

About us:

 

The Hargreaves Lansdown Group (the "Group") distributes investment products and attracts high quality earnings derived from the value of investments under administration or management.

Our success can be attributed to innovative marketing, a high retention of clients through the provision of first class service and information.  The company employs a unique direct selling model which is cost effective, scalable and affords a high profit margin.

 

For further information please contact:

 

Hargreaves Lansdown                                                 +44 (0)117 988 9967

Peter Hargreaves, Chief Executive

Ben Yearsley, Media and Investor Relations

 

                           Responsibility Statement

 

Unless otherwise stated, all figures below refer to the six months ended 31 December 2009 ("H1 2010").  Comparative figures are for the six months ended 31 December 2008 ("H1 2009")

 

Chief Executive's Statement

 

The first six months' trading of the current financial year have been gratifying.  This is a period where it can be complex to reconcile the actual performance of the business with the improvement in profitability. 

In our first six months we have enjoyed substantial inflows of client funds and at the same time we have seen substantial new interest in the services we offer.  During this time we have recruited 25,000 new clients (H1 2009: 17,000). 

The increase in stock markets worldwide together with the £1.4 billion new inflows has increased the funds within our administration to £15.6 billion (31 December 2008: £9.9 billion).

The above figures all would indicate significant improvement in profit.  Indeed I am pleased to report that the adjusted profit before tax is £5.8 million ahead of the same six month period last year (H1 2010: £43.1 million, H1 2009: £37.3 million).  This represents a 16% improvement over last year.  The reason this figure is difficult to reconcile with the performance of the business is that the interest earned on deposits has had a significant effect on this period's trading profit.  Twelve months ago a combination of the interest rates that were available and those which we had locked into were on average more than three times higher than current rates.  During the next six months the effect of the lower  interest rates will continue to present a challenge to maintaining our comparative profits.  It  shall represent a loss of income until we see rising interest rates.

On a more positive note, it is our view that the increased amount that investors can place within an ISA (£10,200 for investors aged over 50) and the fear of increasing taxes will improve the flow of funds into our service.  I am very encouraged by the inflows during this first six months and, providing markets remain firm, there is every chance we shall again improve our business during the second six months.  Clearly the most important matter during that period will be the level of markets although one cloud is how much the inevitable general election will affect client sentiment.  During previous general elections we have experienced client paralysis during the hustings. The eventual election result will also have a significant effect on investors and for that matter the stock market. 

In summary we look forward to the next six months.  The performance of our business will depend as much on our own skill and innovations as many external effects.  Interest rates, the fear of higher taxes, stock markets, world events and our industry's response to the Retail Distribution Review will all play their part.  The impending general election will also test us.  In the past it has been during such times that we have flourished and improved our market share.

 

Financial Review

Summary of Results


Unaudited

6 months ended

31 December

2009

Unaudited

6 months ended

31 December

2008

Audited

Year

to

30 June

2009


£' million

£' million

£'million

Revenue

74.6

65.6

132.8

Administrative expenses

(31.9)

(29.9)

(61.6)

One-off administrative expenses

(3.3)

(0.8)

(1.4)

Operating profit

39.4

34.9

69.8

Non operating income - investment revenue and other gains

0.4

1.6

3.3

Profit before taxation

- before one-off expenses

- after one-off expenses

 

43.1

39.8

 

37.3

36.5

 

74.5

73.1

Taxation

(11.8)

(10.6)

(21.0)

Profit after taxation

28.0

25.9

52.1



 

Segmental reporting

This year the Group is required to comply with the requirements of the new accounting standard IFRS 8 "Operating Segments".  As a result, previously published information within the Financial Review will reflect a number of restatements when presented as comparative information in the Group's interim and full year results. The accounting standard requires the identification of those segments which are regularly reviewed by the chief operating decision maker, being the Board, and the disclosure of profit and revenue used by the chief operating decision maker.  The implementation of IFRS 8 has no effect on amounts presented on the face of the Income Statement or the Balance Sheet.

The Board monitors the business organised into three segments:  Vantage, Discretionary and Third Party/Other Services.  The results of these segments are published within the interim management report.  In previous Financial Reviews we have provided the results of five divisions.  The key differences are:

·      The Securities Management account and other legacy nominee services are now reported within the Vantage business (previously within a separate Stockbroking division);

·      Other stockbroking services - certificated dealing services, CFD's and Foreign Exchange services - are now reported within the Third Party/Other Services segment (previously within a separate Stockbroking division);

·      All advisory business transacted is now reported within the segment to which the business relates, either Vantage, Discretionary or Third Party/Other Services, rather than in a separate Advisory division;

·      Central Services activities, namely banking services and data services, are now reported within the Third Party/Other Services segment.

Assets Under Administration (AUA)

During the period, the FTSE All-Share has risen by 27 per cent from 2,172.08 to 2,760.80.  The value of Hargreaves Lansdown's total assets under administration has grown by 31 per cent from £11.9 billion as at 30 June 2009 to £15.6 billion as at 31 December 2009. Total assets under administration can be broken down as follows:

 


31 December 2009

£'billion

31 December 2008

£'billion

30 June   2009

£'billion

Vantage Assets Under Administration (AUA)1

14.4

9.0

10.9





Assets Under Administration and Management (AUM)




Portfolio Management Service (PMS)

1.2

0.9

1.0

Multi-manager funds held outside of PMS

0.5

0.3

0.4

AUM Total

1.7

1.2

1.4


 

(0.3)



Less: Multi-manager funds (AUM) included in Vantage (AUA)

(0.5)

(0.3)

(0.4)

Total Assets Under Administration

15.6

9.9

11.9

1 Vantage AUA includes £0.1 bn of assets (June 2009: £0.2 bn) previously classified as 'Other AUA' (6,000 active clients)

 

The value of assets under administration held within the Vantage service, the Group's direct-to-private investor fund supermarket and wrap platform, increased from £10.9 billion as at 30 June 2009 to £14.4 billion as at 31 December 2009.  This can be attributed to £1.3 billion net new business inflows (H1 2009: £0.8 billion) and the £2.2 billion positive impact of the market and other growth factors during the period.  Net new business generated within the Vantage ISA increased significantly to £0.4 billion (H1 2009: £0.1 billion) assisted by £30 million additional contributions resulting from the increased ISA allowance for people aged over 50.  As at 31 December 2009, the value held within the Vantage ISA was £6.2 billion, (30 June 2009: £4.8 billion), within the Vantage SIPP was £3.8 billion (30 June 2009: £2.9 billion) and within other Vantage nominee accounts was £4.4 billion (30 June 2009: £3.2 billion).  The number of active Vantage clients at 31 December 2009 was 300,000 compared with 282,000 as at 30 June 2009, including 6,000 clients in legacy nominee services.

Clients have decreased their cash weightings during the period. The composition of assets across the whole of Vantage at 31 December 2009 was 27% stocks and shares (30 June 2009: 25%), 61% investment funds (30 June 2009: 59%) and 12% cash (30 June 2009: 16%).

The value of assets held in our managed services, namely our Portfolio Management Service and our range of multi-manager funds, was £1.75 billion as at 31 December 2009, up 26 per cent from £1.39 billion at 30 June 2009, including £0.5 billion of Hargreaves Lansdown multi-manager funds administered through Vantage.  The increase can be attributed to the £0.25 billion positive impact of the market during the period and £0.11 billion of net new business which predominantly relates to the Portfolio Management Service.



 

Revenue

Whilst the FTSE All-Share index has risen by 25 per cent in the last twelve months, the average level has been just 4 per cent higher during the six months to 31 December 2009 than in the six months ended 31 December 2008.  In comparison, the Group's revenue has increased by 14 per cent.

 


Unaudited

6 months ended

31 December 2009

£'million

Unaudited

6 months ended

31 December 2008

£'million

Increase %





Vantage

51.3

42.0

+22%

Discretionary

11.5

9.9

+16%

Third Party & Other Services

 

11.8

13.7

-14%





Total Revenue

74.6

65.6

+14%

 

During the current financial year the predominant factor affecting profits is the significant difference between current interest rates and those prevailing during the previous financial year.  This single factor has created a significant headwind on the current year's profitability in comparison to previous years.  Whilst interest rates remain low this will have a continuing effect on profitability although the comparative effect will be most felt in the current year, primarily during the second half. 

Performance from the Group's Vantage service has again been good. The number of clients using this service has increased by 16 per cent over the last twelve months.  Despite the headwind of significantly lower income from interest rate margins (H1 2010: 109 bps, H1 2009: 189 bps), we have increased revenue from the Vantage service by 22 per cent from £42.0 million to £51.3 million.  This increase was primarily created by the assets (AUA) being on average 40 per cent higher in value than in H1 2009. The increased dealing volumes during the spring and summer months have continued throughout the autumn, with overall equity dealing volumes 87 per cent higher than in H1 2009. 

The Discretionary division has seen an increase in revenue of 16 per cent compared to H1 2009.  The overall level of funds under management has increased by 42 per cent to £1.7 billion since 31 December 2008, with the number of clients using PMS increasing by 11 per cent and the value of HL Multi-Manager funds held outside of PMS increasing by 43 per cent to £526 million.  The HL Multi-Manager funds have shown strong growth compared to H1 2009 with £0.1 billion net new business and 19 per cent market growth.  The managed portfolios within PMS have also performed well, outperforming the relevant IMA indices with average market growth of 18%.

Revenue from the Third Party and Other Services division fell by 14 per cent compared to the same period last year.  Generally, revenue from third party pensions and investments is set to gradually decline as more clients choose to transfer their assets onto the Vantage platform. The exceptions are income from VCT's and from annuities which in total have remained at a similar level to the previous period at £3.2 million (H1 2009: £3.1 million).  Revenue from third party investments, personal pensions and corporate pensions have fallen in aggregate by 11 per cent due primarily to reduced levels of new corporate pensions business.  Third party revenue in the first six months of the previous year was boosted by particularly strong volumes of annuity sales and higher levels of income from the implementation of new corporate pension schemes.  Income from other services, namely certificated share dealing, CFD's, currency service, banking and data services, fell by £0.6 million to £2.4 million. 

Administrative Expenses

Overall, administrative expenses were increased during the period in response to the increase in business volumes.  Included in administrative expenses in the current period is £3.3 million of non-recurring costs relating to the new offices which will be occupied during February 2010, replacing the existing five smaller offices.  Excluding these costs, administrative expenses were 7 per cent higher than the same period last year.  An additional £0.9 million of associated non-recurring costs, primarily rent on empty properties, will be incurred in the second half of this year. 

 


Unaudited

6 months ended

31 December 2009

£'million

Unaudited

 6 months ended

31 December 2008

£'million

 

Increase %

Staff costs

18.1

18.4

-2%

Commission payable

5.5

4.3

+28%

Marketing costs

3.6

2.2

+64%

Depreciation, amortisation and financial costs

0.8

0.8

-

Other costs

3.9

4.2

-7%





Expenses before one-off costs

31.9

29.9

+7%

One-off costs related to new offices

3.3

0.8

+313%

Total administrative expenses

35.2

30.7

+15%

 

 

The Group's largest expense is staff costs which decreased by 2 per cent. The average number of staff during the six months ended 31 December 2009 was 607 (H1 2009: 608). During the last few months we have been recruiting additional administrative staff to deal with the increased business volumes, and at 31 December 2009 we employed 627 staff.

Commission payable includes the share of renewal commission which the Group receives on funds held in Vantage which is rebated back to clients as a cash loyalty bonus. It increased by 28 per cent, from £4.3 million to £5.5 million.  

The Group increased marketing spend by 64 per cent from £2.2 million to £3.6 million, an increase of £1.4 million. This includes the cost of sending information to existing and potential clients.  These costs also include an element of media advertising, postage, stationery and the cost of corresponding with clients.  There has been an overall increase in the level of client communication and direct marketing activity in the six months ended 31 December 2009 compared to H1 2009.  Almost 3 million copies of 'The Investment Times' were distributed in the period, an increase of over 60 per cent, and literature requests received from clients were up by more than 30 per cent.  The cost of this increased activity has been reduced by a higher level of client marketing and distribution taking place online or via email.  

The charge for depreciation, amortisation and financial costs for the period remained at £0.8 million.

Other costs include items such as building costs and utility costs, dealing costs, irrecoverable VAT, compliance costs, insurance, legal and professional services, computer maintenance and external administration charges. These costs decreased from £4.2 million to £3.9 million.  In the next financial year, building costs will increase by approximately £1.5 million due to the relocation of the business to a new larger office during February 2010.

The Group incurred £3.3 million (H1 2009: £0.8 million) in relation to the fit-out of its new offices.  These are non-recurring costs, primarily professional fees, and rental costs on vacant properties.

Investment revenues

Investment revenues decreased by 75 per cent from £1.6 million to £0.4 million. This is attributed to the decrease in interest rates earned on the Group's own cash balances.

Taxation

The charge for taxation in the income statement increased in line with higher profits to £11.8 million from £10.6 million. There was also an increase to the effective tax rate from 29.1 per cent in H1 2009 to 29.8 per cent in the current period.  In total, taxation of £1.0 million has also been credited directly to equity. 

Earnings per share (EPS)

The diluted EPS increased from 5.5 pence to 6.0 pence.  Excluding the one-off costs associated with the office move, the adjusted diluted EPS increased from 5.7 pence to 6.6 pence.

Dividend

A large proportion of shares in the Company are held by private individuals.  Given the 10% increase to the top rate of tax taking effect in the next tax year and uncertainty brought by the impending election, the Board has resolved that it is appropriate to pay as much dividend as possible prior to the end of the current tax year. In reaching this decision the Board has considered the regulatory capital requirements, cash requirements and profitability of the Group.

The Board is pleased to declare an interim dividend of 8.0 pence per share and a special dividend of 1.6 pence per share, payable on 26 March 2010 to all shareholders on the register at 12 March 2010.  This amounts to a total dividend of £44.6 million.

The Board has not changed its overall dividend policy.  The size of this dividend should not be used to forecast what the Company profit may be or to make any assumptions about the amount of further dividends in this current year.  The Board intends to make a further dividend declaration at the same time as our preliminary results announcement, with the dividend payable on 29 September 2010.

An arrangement exists under which the Hargreaves Lansdown Employee Benefit Trusts (the "EBT's") have agreed to waive all dividends.  As at 31 December 2009 the EBT's held 9,908,896 shares.

Capital expenditure and cash flow

Capital expenditure totalled £2.9 million for the six months ended 31 December 2009, compared with £0.9 million for the same period in the previous financial year. £2.2 million relates to the fit-out of the new offices which we shall occupy during February 2010.  The normal ongoing capital expenditure of the business remains fairly low.  

The Group's own cash balances totalled £69.9 million at the end of the period.  This includes £6.9 million of cash held within the EBT.  The only significant cash outflow from underlying profits has been the final and special dividends totalling £32.7 million paid during September 2009.  In addition to the Group's own cash, the figure for cash and cash equivalents on the balance sheet includes client cash which is being held on account pending the settlement of transactions.  This will vary depending on the level of trading activity around the balance sheet date.  As at 31 December 2009, this balance was £8.1 million (31 December 2008: £5.6 million).  



 

Net assets, capital requirement and treasury policy

The Group net assets increased by 8 per cent from £74.9 million at 31 December 2008 to £80.8 million at 31 December 2009. 

Under the Capital Requirements Directive, the Group is required to make Pillar 3 disclosure of additional information on its risk management framework, capital resources and individual risks. These disclosures are published on the Group's website at www.H-L.co.uk.  The Group has four subsidiary companies which are authorised and regulated by the Financial Services Authority. We continue to hold a level of capital that provides significant headroom over the regulatory minimum.  At 31 December 2009, the regulated companies had Tier 1 capital of £27 million which provided excess regulatory capital of approximately £21 million. 

The Group is soundly financed with a strong balance sheet and no borrowings. This is an important strength which provides both resilience and flexibility. The Group deposits its liquid funds with selected financial institutions specified within the Group Treasury policy.  The Group actively maintains cash balances on short term deposit to ensure that it has sufficient available funds for operations. This policy is designed to ensure that the Group takes no material liquidity risk. The Group is not exposed to significant foreign exchange translation or transaction risk.

Related party transactions

There were no material changes to the related party transactions during the financial period.

Board changes

As previously announced, Stephen Lansdown stepped down as executive chairman on 1 December 2009, although remains on the Board as an executive director.  We were pleased to appoint Michael Evans as non-executive chairman.

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 15 to 16 of the Group's Annual Report and Financial Statements 2009, a copy of which is available on the Group's website www.H-L.co.uk.  These remain the principal risks and uncertainties for the second half of this financial year and beyond, and they are regularly reviewed by the Board.

Going concern

The interim report and condensed financial statements are prepared on a going concern basis as the directors are satisfied that, at the time of approving the interim report and condensed financial statements, the Group has the resources to continue in business for the foreseeable future.

Outlook

Due to the lower interest rate environment during the period, we have experienced reduced margins on cash balances compared to the exceptional rates available during the previous financial year.  The reduction will be greater during the second half of the year as the remainder of the better rates that we locked into a year ago fall away.  The first half results have demonstrated the resilience of our business model.  Impressive new business levels and improved market conditions have more than compensated for the reduced deposit interest.  

The pace of regulatory change is likely to increase, especially as Governments and regulators around the world respond to the challenges of the banking crisis. However, we believe that current initiatives in the UK should not have a detrimental effect on our business.

We retain a focus on cost control.  This year in particular this will involve keeping infrastructure costs under control while increasing our capacity and further scaling the business.  The move to our new office during February 2010 will give us the space to expand and we believe we shall benefit from being under one roof and harmonising the special culture we enjoy.  Together with work undertaken to expand the capacity of our IT infrastructure and capabilities of our proprietary systems, we are well placed for our next phase of growth. 

We have produced a solid set of interim results.  Underlying market conditions are likely to remain uncertain in the second half of the year, but we continue to endeavour to provide our clients with the best service, the best prices and the best information, irrespective of what market conditions prevail.  Our staff remain vital to our reputation and our ability to innovate and respond to changing circumstances, and we thank all our members of staff for their hard work and dedication.



 

The directors confirm that to the best of their knowledge:

a) the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting;

b) the interim management report includes a fair review of the information required by the Disclosure and Transparency Rules (DTR) 4.2.7R - "indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year";

c) the interim management report includes a fair review of the information required by DTR4.2.8R - "disclosure of related party transactions and changes therein".

 

On behalf of the Board

 

Tracey Taylor                                                                                       Peter Hargreaves                   

Group Finance Director                                                                           Chief Executive 

 

9 February 2010                                                                                     9 February 2010                        

 

                          


 

Independent Review Report to Hargreaves Lansdown plc

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2009 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Statement of Cash Flows and related notes 1 to 19. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

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 inquiries, 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 Ireland) 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.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

 

Deloitte LLP

Chartered Accountants and Statutory Auditors

9 February 2010

Bristol, United Kingdom


 

Condensed Consolidated Income Statement


Note



Unaudited

6 months ended 31 December

2009

 

 

£'000

 

Unaudited 6 months ended 31 December

2008

 

 

£'000

Audited Year to

30 June

2009

 

 

£'000








Revenue

8



74,556

65,643

132,845















Total operating income




74,556

65,643

132,845








Administrative expenses




(35,204)

(30,732)

(63,038)















Operating profit




39,352

34,911

69,807








Investment revenues

9



463

1,553

2,534

Other gains and losses

10



(1)

-

740















Profit before tax




39,814

36,464

73,081








Tax

11



(11,847)

(10,611)

(20,968)















Profit for the period




27,967

25,853

52,113















Attributable to :







Equity holders of the Company




27,967

25,855

52,123

Non-controlling interest




-

(2)

(10)



















27,967

25,853

52,113








 

Dividend per share (pence) *
12
 
 
 
 
 
2009 Final dividend
 
 
 
4.229
-
-
2009 Special dividend
 
 
 
2.807
-
-
2009 Interim dividend
 
 
 
-
3.065
2008 Final dividend
 
 
 
2.420
2.420
2008 Special dividend
 
 
 
2.324
2.324
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total dividend per share
 
 
 
7.036   
4.744
7.809
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share (pence)
Basic earnings per share
13
 
 
6.0    
5.5
11.2
Diluted earnings per share
 
 
 
6.0    
5.5
11.1
 
 
 
 
 
 
 
 
All income, profits and earnings are in respect of continuing operations.
 
 
* After the balance sheet date, the directors declared an ordinary interim dividend of 8.0 pence per share and a special interim dividend of 1.6 pence per share payable on 26 March 2010 to shareholders on the register on 12 March 2010.
 
 
 

 

 


 

Condensed Consolidated Statement of Comprehensive Income

 

 

 

 

 

 

 

 

 

 


Unaudited

6 months ended 31 December

2009

 

 

£'000

 

Unaudited

6 months ended 31 December

2008

 

 

£'000

Audited Year to

30 June

2009

 

 

£'000







Profit for the period



27,967

25,853

52,113







Other comprehensive income for the period:-






Net increase/(decrease) in fair value of available-for-sale investments



184

-

(77)













Total comprehensive income for the period

28,151

25,853

52,036













Attributable to:-






Equity holders of the Company



28,151

25,855

52,046

Non-controlling interest



-

(2)

(10)
















28,151

25,853

52,036







         Condensed Consolidated Statement of Changes in Equity



Attributable to the owners of the Company




Share capital

Share premium account

Investment revaluation reserve

Capital redemption reserve

Shares held by EBT reserve

EBT reserve

Share option reserve

Retained earnings

Total

Non-controlling interest

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000













At 1 July 2008

1,897

8

-

12

(9,739)

12,053

6,885

59,255

70,371

(60)

70,311













Profit for the period

-

-

-

-

-

-

-

25,855

25,855

(2)

25,853













Employee Benefit Trust:-












Shares sold during the period

-

-

-

-

1,283

-

-

-

1,283

-

1,283

EBT share sale net of tax

-

-

-

-

-

(1,086)

-

-

(1,086)

-

(1,086)













Employee share option scheme:-












Share based payments expense

-

-

-

-

-

-

104

-

104

-

104

Deferred tax effect of share based payments

-

-

-

-

-

-

(1,057)

-

(1,057)


(1,057)

Tax relief on exercise of share option

-

-

-

-

-

-

1,490

-

1,490

-

1,490













Dividend paid

-

-

-

-

-

-

-

(22,003)

(22,003)

-

(22,003)

























At 31 December 2008

1,897

8

-

12

(8,456)

10,967

7,422

63,107

74,957

(62)

74,895





































At 1 July 2009

1,897

8

(77)

12

(10,965)

11,118

7,577

75,150

84,720

(70)

84,650













Profit for the period

-

-

-

-

-

-

-

27,967

27,967

-

27,967













Other comprehensive income:-












Net fair value gains on available-for-sale assets

-

-

184

-

-

-

-

-

184

-

184













Employee Benefit Trust:-












Shares sold during the period

-

-

-

-

27

-

-

-

27

-

27

EBT share sale net of tax

-

-

-

-

-

(519)

-

-

(519)

-

(519)













Employee share option scheme:-












Share based payments expense

-

-

-

-

-

-

129

-

129

-

129

Deferred tax effect of share based payments

-

-

-

-

-

-

1,054

-

1,054

-

1,054

Tax relief on exercise of share option

-

-

-

-

-

-

(19)

-

(19)

-

(19)













Dividend paid

-

-

-

-

-

-

-

(32,675)

(32,675)

-

(32,675)













Reserves transfer

-

-

-

-

-

-

(8,741)

8,741

-

-

-

























At 31 December 2009

1,897

8

107

12

(10,938)

10,599

-

79,183

80,868

(70)

80,798

























 

 

 

 

The share premium account represents the difference between the issue price and the nominal value of shares issued.

 

The investment revaluation reserve represents the change in fair value of available-for-sale investments held by the Group, net of deferred tax.

 

The capital redemption reserve relates to the repurchase and cancellation of the Company's own shares.

 

The Shares held by Employee Benefit Trust reserve represents the cost of shares in Hargreaves Lansdown plc purchased in the market and held by the Hargreaves Lansdown plc Employee Benefit Trust to satisfy options under the Group's share options schemes.

 

The EBT reserve represents the cumulative (loss)/gain on disposal of investments held by the Hargreaves Lansdown Employee Benefit Trust ("the 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.

 

The share option reserve represented the effect of share based payments and associated tax.  From 31 December 2009 this will be shown within retained earnings rather than as a separate reserve.

 

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 15% shareholding in Library Information Services Limited, a subsidiary of the Company.

 

                                     Condensed Consolidated Balance Sheet




Note


Unaudited

6 months ended 31 December

2009

 

 

£'000

 

Unaudited 6 months ended 31 December

2008

 

 

£'000

Audited Year to

30 June

2009

 

 

£'000

Non-current assets







Goodwill




1,333

1,333

1,333

Other intangible assets




235

235

237

Property, plant and equipment




3,931

2,258

1,791

Deferred tax assets




2,447

1,909

1,826



















7,946

5,735

5,187















Current assets







Trade and other receivables


15


88,998

63,995

75,417

Cash and cash equivalents


15


77,996

72,192

87,416

Investments


14


2,158

2,204

2,382

Current tax assets

 




21

25

21



















169,173

138,416

165,236















Total assets




177,119

144,151

170,423















Current liabilities







Trade and other payables


16


83,673

57,905

75,992

Current tax liabilities




11,902

10,494

8,997



















95,575

68,399

84,989















Net current assets




73,598

70,017

80,247















Non-current liabilities







Provisions




746

857

784















Total liabilities




96,321

69,256

85,773















Net assets




80,798

74,895

84,650






















Equity







Share capital


17


1,897

1,897

1,897

Share premium account




8

8

8

Investment revaluation reserve




107

-

(77)

Capital redemption reserve




12

12

12

Shares held by Employee Benefit Trust




(10,938)

(8,456)

(10,965)

EBT reserve




10,599

10,967

11,118

Share option reserve




-

7,422

7,577

Retained earnings




79,183

63,107

75,150















Equity, attributable to equity shareholders of the parent            

80,868

74,957

84,720

 








Non-controlling interests




(70)

(62)

(70)








 

Total equity




80,798

74,895

84,650








 

The financial statements were approved by the board of directors on 9 February 2010 and signed on its behalf by:

 

 

 

 

T P Taylor                                                                                              P K Hargreaves                       

Group Finance Director                                                                           Chief Executive 

 

 

 

Company registered number:-  02122142

                            Condensed Consolidated Statement of Cash Flows



Note



Unaudited

6 months ended 31 December

2009

 

 

£'000

 

Unaudited

6 months ended 31 December

2008

 

 

£'000

Audited Year to

30 June

2009

 

 

£'000








Net cash from operating activities, after tax

18



25,273

25,924

56,951















Investing activities







Interest received




463

1,553

2,438

Dividends received from investments




-

-

96

Proceeds on disposal of available-for-sale investments




-

-

748

Purchases of property, plant and equipment




(2,783)

(640)

(1,007)

Purchase of intangible fixed assets




(132)

(17)

(345)

Acquisition of available-for-sale investments




-

(774)

(1,317)

Sale/(acquisition) of investments




408

(288)

-















Net cash (used in)/from investing activities




(2,044)

(166)

613















Financing activities







Purchase of own shares




-

-

(3,832)

Proceeds on sale of own shares




26

196

1,671

Dividends paid




(32,675)

(22,003)

(36,228)















Net cash used in financing activities




(32,649)

(21,807)

(38,389)















Net (decrease)/increase in cash and cash equivalents




(9,420)

3,951

19,175

Cash and cash equivalents at beginning of period




87,416

68,241

68,241















Cash and cash equivalents at end of period




77,996

72,192

87,416














                            Notes to the Condensed Consolidated Financial Statements


1.          Basis of preparation

 

The Interim Financial Statements for the 6 months to 31 December 2009 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) and in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting and the disclosure requirements of the Listing Rules.  The Interim Financial Statements have been prepared on the historical cost basis 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 435 of the Companies Act 2006.  However, the information has been reviewed by the company's auditors, Deloitte LLP, and their report appears at the front of this document.  The financial information for the year ended 30 June 2009 has been derived from the audited financial statements of Hargreaves Lansdown plc for that year, which have been reported on by Deloitte LLP and delivered to the Registrar of Companies.  Copies are available on-line at www.H-L.co.uk.  The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditors 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.

 

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 2009 as were applied in the Audited Annual Financial Statements for the year ended 30 June 2009, except as described below.

 

Changes in accounting policy

In the current financial year, the Group has adopted International Financial Reporting Standard 8 "Operating Segments" and International Accounting Standard 1 "Presentation of Financial Statements" (revised 2007).

 

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.  In contrast, the predecessor Standard (IAS 14 "Segment Reporting") required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach.  As the nature of the services provided, the regulatory environment, the customer base and distribution channels for each division are the same, the consolidated entity operates in one business segment  for the purposes of IAS 14 and hence no additional business segmental analysis were shown in the 2009 accounts.  The comparatives in note 3 are presented in accordance with IFRS 8. 

 

IAS 1 (revised) requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income.  As a result, a condensed consolidated statement of changes in equity has been included in the primary statements, showing changes in each component of equity for each period presented.

 

2.         Seasonality of operations

 

A high proportion of the Group's revenue is derived from the value of assets under administration or management in either the Vantage Service or the Portfolio Management Service (PMS). The values of these assets are influenced predominantly by new business volumes, the stock market and client withdrawals. Of these factors, new business within Vantage tends to be seasonal with greater inflows in the second half of the financial year between January and June. This can be attributed to the timing of the UK tax year-end and the fact that many individuals review their investments around this time.  The receipt of new business into PMS is less seasonal than this as a result of being distributed through our Financial Practitioners. In this instance, the inflow of business is also influenced by the timing of when advisers meet with clients.

 

As new business only accounts for a smaller proportion of asset values and because of other revenue streams and market effects, overall Group revenue is less seasonal than new business inflows.  In the year ended 30 June 2009, 51% of revenue was earned during the second half of the year. 

 

3.         Segment information

 

In 2009, the Group adopted IFRS 8 "Operating Segments".  The impact of this accounting standard is purely presentational.

At 31 December 2009, the Group is organised into three business segments, namely the Vantage Division, the Discretionary Division and the Third party/Other Services Division. This is based upon the Group's internal organisation and management structure and is the primary way in which the Chief Operating Decision Maker (CODM) is provided with financial information. The CODM has been identified as the Board of Executive Directors.

The 'Vantage' division represents all activities relating to the Vantage service, our direct to investor fund supermarket and wrap service.

The 'Discretionary' division is focused on the provision of managed services such as our Portfolio Management Service (PMS) and range of Multi-Manager funds. 

The 'Third Party/Other Services' division includes activities relating to the broking of third party investments and pensions, certificated share dealing and other niche services such as currency, CFD's and spreadbetting.  In this division, clients investments are not administered within the Group.

The 'Group' segment contains items that are shared by the Group as a whole and cannot be reasonably allocated to other operating segments.

Segment expenses are those that are directly attributable to a segment together with the relevant portion of other expenses that can reasonably be allocated to the segment. Gains or losses on the disposal of available-for-sale investments, investment income, interest payable and tax are not allocated by segment.

Segment assets and liabilities include items that are directly attributable to a segment plus an allocation on a reasonable basis of shared items.  Corporate assets and liabilities are not included in business segments and are thus unallocated.  At 31 December 2009 and 2008, these comprise cash and cash equivalents, short term investments, tax-related and other assets or liabilities. 

 


Vantage

Discretionary

Third Party/

Other Services

Group

Consolidation Adjustment

Consolidated


£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

6 months ended 31 December 2009







Revenue from external customers

51,265

11,504

11,786

1

-

74,556

Inter-segment revenue

-

1,192

-

-

(1,192)

-

Total segment revenue

51,265

12,696

11,786

1

(1,192)

74,556








Depreciation and amortisation

401

131

232

13

-

777

Interest revenue

-

-

-

463

-

463

Reportable segment profit before tax

28,675

5,749

5,073

317

-

39,814















Reportable segment assets

75,095

9,101

8,466

89,893

(5,436)

177,119

Reportable segment liabilities

(65,406)

(5,576)

(6,860)

(21,289)

2,810

(96,321)

Net segment assets

9,689

3,525

1,606

68,604

(2,626)

80,798








6 months ended 31 December 2008







Revenue from external customers

42,021

9,938

13,682

2

-

65,643

Inter-segment revenue

-

931

-

-

(931)

-

Total segment revenue

42,021

10,869

13,682

2

(931)

65,643








Depreciation and amortisation

254

131

317

53

-

755

Interest revenue

-

-

-

1,553

-

1,553

Reportable segment profit before tax

24,934

4,026

6,110

1,394

-

36,464















Reportable segment assets

46,941

5,529

12,199

82,161

(2,679)

144,151

Reportable segment liabilities

(35,359)

(3,493)

(11,882)

(19,050)

528

(69,256)

Net segment assets

11,582

2,036

317

63,111

(2,151)

74,895








 

Information about products/services

The group's operating segments are business units that provide different products and services.  The breakdown of revenue from external customers for each type of service is therefore the same as the segmental analysis above.

 

Information about geographical area

All business activities are located within the UK.

 

Information about major customers

The group does not rely on any individual customer.

 

4.         Material events after interim period end

 

After the interim balance sheet date, an ordinary interim dividend of 8.0 pence per share (2009: 3.065 pence) and special interim dividend of 1.6 pence per share (2009: nil) amounting to a total dividend of £44.6 million (2009: £14.22 million) was declared by the 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.         Changes in capital expenditure and capital commitments since the last annual balance sheet date

           

Capital expenditure

During the six months ended 31 December 2009, the Group acquired property, plant, equipment and software assets with a cost of £2.9 million (31 December 2008: £0.9 million, 30 June 2009: £1.5 million).   

 

Capital commitment

At the balance sheet date, the Group had £2.1 million of capital commitments relating to the fit out of the new offices.

 

 

 

6.          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 15 to 16 of the Group's Annual Report and Financial Statements 2009, a copy of which is available on the Group's website www.H-L.co.uk.  These remain the principal risks and uncertainties for the second half of this financial year and beyond, and they are regularly considered by the Board.

The Group is exposed to interest rate risk, the risk of sustaining losses from adverse movements in interest bearing assets.  These assets comprise cash and cash equivalents.  At 31 December 2009 the value of such assets on the Group balance sheet was £78 million (at 31 December 2008: £72 million).  A 100bps (1%) move in interest rates, in isolation, would not have a material 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.  Cash at bank earns interest at floating rates based on daily bank deposit rates.  Short term deposits are also made for varying periods of between one day and six months depending on the immediate cash requirements of the Group and earn interest at the respective fixed term deposit rates.  As a source of revenue is based on the value of client cash under administration, the Group has an indirect exposure to interest rate risk on cash balances held for clients. These balances are not on the Group balance sheet.

 

 

 

 

7.          Staff numbers

 

             The average number of employees of the Group (including executive directors) was:

 




Unaudited

6 months ended 31 December

2009

 

No.

Unaudited

6 months ended 31 December

2008

 

No.

 

Audited Year to

30 June

2009

 

No.







Operating and support functions



448

445

447

Administrative functions



159

163

160
















607

608

607







 

 



 

 

8.          Revenue

 

Revenue principally represents commission receivable from financial services provided to clients, interest on settlement accounts and management fees charged to clients.  It relates to services provided in the UK and is stated net of value added tax.  An analysis of the Group's revenue is as follows:

 

Revenue from services:



Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

30 June

2009

 

£'000

 

 

 

 

Fees and commission income



63,327

48,897

99,578

 

Interest and similar income



10,120

15,854

31,142

 

Subscriptions and sundry charges



1,109

892

2,125

 







 







 

Total operating income



74,556

65,643

132,845

 







 

 

 

 

9.          Investment revenues

 


Unaudited

6 months ended 31 December

2009

 

£'000

 

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

30 June

2009

 

£'000

 

 





 

 







 

Interest on bank deposits



463

1,553

2,438

 

Dividends from equity investment



-

-

96

 







 







 




463

1,553

2,534

 







 







 

 

            

 

10.        Other gains and losses

 


Unaudited

6 months ended 31 December

2009

 

£'000

 

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

30 June

2009

 

£'000






 







 

Gain on disposal of investments



-

-

740

 

 

 

Loss on disposal of non-current assets



(1)

-

-

 







 







 




(1)

-

740

 







 







 



 

 

 

11.        Tax

 


Unaudited

6 months ended 31 December

2009

 

£'000

 

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

30 June

2009

 

£'000

 





 

 

The tax charge for the period is based on the anticipated effective rate of tax for the year to 30 June 2010 of 29% (30 June 2009: 28%).

 

 

Current tax



11,413

10,224

21,262

 

Deferred tax



434

387

(294)

 







 







 




11,847

10,611

20,968

 







 







 







 

In addition to the amount charged to the income statement, certain tax amounts have been charged directly to equity as follows:


Unaudited

6 months ended 31 December

2009

Unaudited

6 months ended 31 December

2008

Audited Year to

30 June

2009

 




£'000

£'000

     £'000







Deferred tax relating to share based payments



1,054

(1,057)

(1,821)

Current tax relief on exercise of share options



(19)

1,490

2,329
















1,035

433

508







 

 

 

 

 

12.           Dividends paid

 


Unaudited

6 months ended 31 December

2009

Unaudited

6 months ended 31 December

2008

Audited Year to

30 June

2009


£'000

£'000

£'000





Amounts paid and recognised as distributions to equity holders in the period:

2009 Final dividend of 4.229p per share

19,640

-

-

2009 Special dividend of 2.807p per share

13,035

-

-

2009 Interim dividend of 3.065p per share

-

-

14,225

2008 Final dividend of 2.42p per share

-

11,224

11,224

2008 Special dividend of 2.324p per share

-

10,779

10,779





 

The Hargreaves Lansdown Employee Benefit Trust (the "EBT"), which held the following number of ordinary shares in Hargreaves Lansdown plc at the date shown, has agreed to waive all dividends.

 


Unaudited

6 months ended 31 December

2009

Unaudited

6 months ended 31 December

2008

Audited Year to

30 June

2009









Number of shares held by the

Hargreaves Lansdown Employee Benefit Trust (HL EBT)

9,908,896

10,262,061

9,762,032

Representing % of called-up share capital

2.09%

2.16%

2.06%









 



 

 

13.        Earnings per share

 

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 issue during the period, including ordinary shares held in the EBT reserve which have not vested unconditionally with employees.

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. 

 

Underlying basic earnings per share and underlying diluted earnings per share are calculated as for basic and diluted earnings per share, but using an adjusted earnings figure such that the profit attributable to equity holders of the Company is stated before investment gains.  The directors consider that the underlying earnings per share represent a more consistent measure of underlying performance.

 

 

            

 



Unaudited

6 months ended 31 December

2009

Unaudited

6 months ended 31 December

2008

Audited Year to

30 June

2009

 

Earnings (all from continuing operations)

 

£'000

£'000

£'000

 

Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the Company

27,967

25,855

52,123

 

Other gains and losses

1

-

(740)

 

Tax on other gains and losses

-

-

48

 





 





 

Earnings for the purpose of underlying basic and underlying diluted  earnings per share

27,968

25,855

51,431

 





 





   

 

 

 Number of shares



Number

Number

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

Shares held by HL EBT which have not vested unconditionally with employees




 

468,511,905

469,502,136

469,318,665

 

3,919,586

3,163,071

3,077,285

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share

464,592,319

466,339,065

466,241,380

 





 


Pence

Pence

Pence

Basic earnings per share



6.0

5.5

11.2

Diluted earnings per share



6.0

5.5

11.1

Underlying basic earnings per share



6.0

5.5

11.0

Underlying diluted earnings per share



6.0

5.5

11.0







 

 

 

14.        Investments

 

 

 

 


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000






At beginning of period


2,382

1,142

1,142

Acquisitions


-

1,062

1,317

Net increase/(decrease) in value of available-for-sale investments


184

-

(77)

Disposals


(408)

-

-











At end of period


2,158

2,204

2,382











Current asset investments


2,158

2,204

2,382






 

 

 

 

 

14.        Investments (continued)

 

 

 

 

 


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000






UK listed securities valued at quoted market price


1,417

1,463

1,641

Unlisted securities valued at cost


741

741

741













2,158

2,204

2,382











 

£347,000 (31 December 2008: £689,000, 30 June 2009: £717,000) of investments are classified as held at fair value through profit and loss and £1,811,000 (31 December 2008: £1,515,000, 30 June 2009: £1,665,000) are classified as available-for-sale. Available-for-sale investments have been included at fair value where a fair value can be reliably calculated, with the revaluation gains and losses reflected in the investment revaluation reserve until sale when the cumulative gain or loss is transferred to the income statement. If a fair value cannot be reliably calculated by reference to a quoted market price or other method of valuation, available-for-sale investments are included at cost where the directors believe that this is not significantly different to fair value, with a fair value adjustment recognised upon disposal of the investment.

 

 

15.        Other financial assets

 

 

Trade and other receivables


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000






Trade receivables


78,618

49,359

60,780

Other receivables


343

443

291

Prepayments and accrued income


10,037

14,193

14,346













88,998

63,995

75,417






 

Trade receivables are measured at initial recognition at fair value.  Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired.  In accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties totalling £66.7 million are included in trade receivables.

 

Cash and cash equivalents


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000






Cash and cash equivalents


77,996

72,192

87,416

Comprising:





Restricted cash - client settlement account balances


8,072

5,619

10,231

Restricted cash - balances held by Hargreaves Lansdown EBT


6,886

11,331

6,800

Group cash and cash equivalent balances


63,038

55,242

70,385






Cash and cash equivalents comprise cash held by the Group and institutional cash funds with near-instant access.  Included in cash and cash equivalents are amounts of cash held on client settlement accounts as shown above.  The amount of client cash held at the balance sheet date was £1,775 million (31 December 2008: £1,642 million, 30 June 2009: £1,785 million).



 

 

16.        Other financial liabilities

 

Trade and other payables


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000






Current payables





Trade payables


71,268

47,275

62,601

Social security and other taxes


1,699

1,395

3,423

Other payables


8,179

7,834

8,509

Accruals and deferred income


2,527

1,401

1,459













83,673

57,905

75,992






 

In accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties totalling £70.6 million are included in trade payables.  Accruals and other payables principally comprise amounts outstanding for trade purchases and ongoing costs.

 

 

17.        Share capital

 


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

 30 June

2009

 

£'000

 

Issued and fully paid:





 

Ordinary shares of 0.4p


1,897

1,897     

1,897

 






 






 






 



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. 



 

 

18.        Notes to the cash flow statement

 


Unaudited

6 months ended 31 December

2009

 

£'000

Unaudited

6 months ended 31 December

2008

 

£'000

Audited Year to

30 June

2009

 

£'000

 







 

Profit for the period after tax



27,967

25,853

52,113

 







 

Adjustments for:






 

Investment revenues



(463)

(1,553)

(2,534)

 

Other losses/(gains)



1

-

(740)

 

Income tax expense



11,847

10,611

20,968

 

Depreciation of plant and equipment



644

550

1,350

 

Amortisation of intangible assets



133

47

399

 

Share-based payment expense



129

104

184

 

(Decrease)/increase in provisions



(38)

413

340

 







 







 

Operating cash flows before movements in working capital

40,220

36,025

72,080

 







 

(Increase)/decrease in receivables



(13,581)

12,607

1,185

 

Increase/(decrease) in payables



7,681

(14,203)

3,884

 







 







 

Cash generated by operations



34,320

34,429

77,149

 







 

Income taxes paid



(9,047)

(8,505)

(20,198)

 







 







 

Net cash from operating activities after tax



25,273

25,924

56,951

 







 

 

 

19.        Related party transactions 

The Group has a related party relationship with its subsidiaries, and 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 34 to the 2009 Annual Report.

                           Directors, Company Secretary, Advisers and Shareholder Information


 

EXECUTIVE DIRECTORS

Peter Hargreaves  

Stephen Lansdown 

Tracey Taylor

 

NON-EXECUTIVE DIRECTORS

Jonathan Bloomer

Michael Evans

Jonathan Davis

 

COMPANY Secretary

Simon Power

 

AUDITORS

Deloitte LLP, Bristol

 

SOLICITORS

Burges Salmon LLP, Bristol

 

PRINCIPAL BANKERS

Lloyds TSB Bank plc, Bristol

 

BROKERS

Citigroup Global Markets Limited

Numis Securities Limited

 

REGISTRARS

Equiniti Limited

 

Registered Office

Kendal House

4 Brighton Mews

Clifton

Bristol

BS8 2NX

 

Registered number

02122142

 

WEBSITE

www.H-L.co.uk

 

 

 

DIVIDEND CALENDAR 2009/10

 


First dividend (interim)

 

Second dividend

Ex-dividend date*

10th March 2010

8th September 2010

Record date**

12th March 2010

10th September 2010

Payment date

26th March 2010

29th September 2010

 

*  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.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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