Hargreaves Lansdown's share price jumped as it released record inflows for the first quarter, and issued a bullish outlook for the financial year ahead, thanks to next spring's Lloyds Banking Group share sell-off.
The Bristol-based group attracted a record 47 per cent new business inflows of £1.43bn for the three months to 30 September on the same period last year. Total active client numbers rose by 24,000 to reach 760,000, up from 736,000 in 2014.
However assets under administration fell by £500m to £54.7bn, as investors' cash was hit by falls in the market driven primarily by concerns about the Chinese economy. Net revenue rose to £78.5m, up 11 per cent from £70.8m last year.
Hargreaves Lansdown's share price jumped more than four per cent in early trading.
Why it's interesting
Hargreaves Lansdown's co-founder Peter Hargreaves revealed he was stepping down earlier this year, prompting the firm's share price to fall. More recently it's become apparent that short-sellers are circling the firm because of its exposure to commodities and emerging markets.
But that has clearly not dampened enthusiasm for investors to use the asset manager, which said it was "particularly pleased" with trading data, given the challenging stock markets and weakness in investor confidence.
Revenue grew despite falling markets, and client and asset retention rates were still strong, and the adviser indicated that 2015/16 would be a positive full year.
Last week the company revealed that more than 120,000 investors had already signed up to get their mits on the £2bn Lloyds Banking Group shares, expected to be released next spring.
What Hargreaves Lansdown said
"Looking ahead, early indications suggest considerable interest in next year's Lloyds share sale," the asset manager said. "A sizeable number of people buy their first ever share via an IPO, and retail share offers are therefore very important in encouraging the UK public to invest.
"As ever, future stock market levels and investor confidence will have a significant part to play during the remainder of our financial year. However, we remain confident of growing the business further to the benefit of our clients and shareholders."
Having benefited in the past from the Royal Mail share sell-off, Hargreaves Lansdown is expecting Lloyds Banking Group share sale to give another boost to its bottom line.