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Hargreaves’ share price falls 8 per cent on results

Hargreaves Lansdown’s share price has dropped by almost 8 per cent in a day following underwhelming financial results reported this morning.

The D2C giant started the day priced at 1497p but has dropped 7.6 per cent to 1383p as at 17.15 on 5 February. During the day it fell to a low of 1327p.

It today announced pre-tax profits of £104m for the first half of their financial year, missing Barclays’ analysts estimates by £4m.

Barclays’ analysts say the dip was primarily due to a reduction in net interest revenues earned on cash held on the platform. They say: “Group revenues of £158.4m was -3% light on our forecast £162.9m. The miss was mainly driven by lower-than-expected net interest income.”

Announcing its first half results to the stock exchange Hargreaves said profit margins fell slightly from 65.6 per cent in 2012 to 65.2 per cent at the end of 2013.

Client numbers grew to 584,000 in the six months to December 2013, an increase of 77,000.

Pre-tax profit for the period grew 11 per cent to £104m, up from £93.7m in the same period in 2012.

Despite the year on year increases, today’s share price fall erases most of the 11 per cent year to date price growth. 

Hargreaves also U-turned today on its decision to apply additional charges on investment trusts. It had planned to levy an extra 0.45 per cent on holdings in investment trusts.

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