Hargreaves Lansdown has reported an increase in profits as its top bosses announce they will not be taking a bonus this year in light of the ongoing Woodford debacle in a "very challenging" 2019.
In its end of year results published today (August 8) the investment giant announced a 5 per cent increase in pre-tax profits to £305.8m and a 7 per cent growth in revenues to £480.5m in the year to June.
Assets under administration at Hargreaves Lansdown, which now has 1,224,000 clients, also grew from £91.6bn in June 2018 to £99.3bn this year, a rise of 8 per cent.
Total dividend per share at the company increased by 5 per cent from 40p to 42p.
Chris Hill, chief executive at Hargreaves Lansdown, said the company's second half of the financial year was particularly strong, supported by its "best ever tax year" as clients continue to use their Isa and Sipp allowances.
The results come as Mr Hill announced he and the company's chief financial officer Philip Johnson would be waiving their bonuses in light of the Woodford saga which has plagued investors this year.
Neil Woodford’s stricken Equity Income fund remained on Hargreaves Lansdown’s Wealth 50 buylist until the day it suspended dealing on June 3, despite three years of underperformance at the end of which Mr Woodford’s fund was the absolute worst performer in the IA UK All Companies sector.
In the weeks after the suspension Mr Hill faced questions from MPs on the relationship between his firm and Woodford Investment Management and the role of the firm's buylists.
Clients of Hargreaves Lansdown receive a discount on the annual management charge of the Woodford Equity Income fund, as they do for all of the funds on the Wealth 50 list.
But Hargreaves Lansdown insists that funds are chosen for its buylist based on performance, and not on the basis that a fee discount be granted to its clients.
Following the suspension Hargreaves waived its platform administration fee on direct holdings in the fund and called on Woodford Investment Management to suspend collecting its fees whilst their investors cannot access their cash. But Woodford declined.
However, Hargreaves has not suspended fees on its range of multi-manager funds which are also invested in the Woodford Equity Income fund.
Woodford Equity Income is expected to be suspended until December.
In today's statement Mr Hill said: "I am determined that we learn from events such as these. I have apologised to all clients who have been impacted by the recent problems because we all share their disappointment and frustration.
"In these difficult times we recognise the financial and personal impact the gating of the fund has had on them. Philip and I, together with the unanimous support of the board, have therefore decided that we will not take a bonus award for 2019."
Last year Mr Hill and Mr Johnson received bonuses of £1.7m and £997,000 respectively, reflective of "high levels of leadership shown by both during the year, as well as excellent performance against their personal objectives".
Looking forward Mr Hill said: "I am pleased with the performance and progress we have made throughout a very challenging 2019.
"We recognise that there are industry headwinds and that the environment continues to be difficult and we remain vigilant to these conditions.
"However, we are confident in the underlying strength of our business and that we are well placed to help our clients prosper whilst continuing to deliver strong and sustainable returns for shareholders."
rachel.mortimer@ft.com
