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Profits leap by 67% for Hargreaves Lansdown

Hargreaves Lansdown’s first annual results as a listed company show a 67 per cent increase in operating profits to £40.7m from £24.3m.

Assets under administration also rose by 67 per cent from £6.1bn to £10.2bn. Group revenue was £98.8m in the year to June 30 compared with £73.5m the previous year. The proportion of recurring revenue rose to 65 per cent while the company’s underlying profit margin increased to 41 per cent.

Hargreaves, which has a total of more than 600 employees, floated on the London stock exchange in May. Founders Peter Hargreaves and Stephen Lansdown will be able to sell 25 per cent of their shares from next September under the terms of the flotation. Hargreaves till owns 32 per cent of the firm and Lansdown has 28 per cent/

Chief executive Peter Hargreaves says the firm will be looking for “more of the same” and chairman Stephen Lansdown points to the potential for self-invested personal pensions to become the biggest part of the business.

Hargreaves is pleased with the results but is aware that world stockmarkets have experienced difficulties since the firm’s year-end.

He says: “The market is still uncertain of the extent of the problems caused by the US sub-prime lending market. Although Hargreaves Lansdown has no direct exposure to this area, sentiment is likely to cause an overreaction in markets and it is impossible to know when the bottom will occur.”

Lansdown says: “We have seen 44 per cent growth in Sipps over the past 12 months, with average sub-account values on Vantage rising from £29,500 to £42,500. This is only going to continue as investors looks to push in bigger sums in preparation for retirement.”

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