Hargreaves chiefs land millions in dividend payments

THE Neil Woodford scandal left many of its customers in turmoil, but at Hargreaves Lansdown profits keep rising and executives keep enjoying tasty dividends.

In the half year to December profit at the investment service rose 12% to £171 million on revenues of £258 million, a profit margin of 66%. The interim divi is upped 9% to 11.2p, a payout of £53 million to shareholders.

Co-founder and arch-Brexiteer Peter Hargreaves gets £17 million of that, on top of the £64 million he landed last summer. His co-founder Stephen Lansdown gets £4.9 million, perhaps to spend on players at Bristol City, the football team he owns which is clinging on to a playoff spot in the Championship.

HL did see new business fall 9% to £2.31 billion, but thinks that was due to low investor confidence rather than the Woodford fallout. Chief executive Chris Hill said: “The second half of 2019 was challenging and as we’ve seen in previous unpredictable periods, confidence and retail investment flows were affected across the industry.” “Clients can vote with their feet and join a rival platform,” Hill added. “But the fact that we’ve gained new clients in the last six months and we’ve increased our market share shows that we know that we stand in their corner.” It, and other investment groups, reported a sales bounce since the election as small investors piled in to UK funds.

HL now has assets under administration of £86 billion and a market share of more than 40%. Woodford’s Equity Income Fund was a regular presence on HL’s “best buy” lists, until its failure.

HL said today it has waived £2.3 million in fees it could have taken from Woodford funds. It has set up a Woodford-related helpdesk and says it has been lobbying hard on behalf of clients. Hill said: “The Woodford fund suspensions were disappointing and frustrating for us and our clients, but their impact and the learnings have been incorporated into developments to our service.”

HL is working on reforms to its best buy lists, but says customers find them helpful.