Profits surge at Hargreaves as founder leaves

 
Michael Bow
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HARGREAVES Lansdown founder Peter Hargreaves yesterday criticised big consumer companies for failing to treat customers as individuals.

Hailing a “sparkling” set of full year results for the firm, he said clients’ trust in the firm had boosted its performance, a factor he said was all too readily neglected by other consumer and financial firms with lots of customers.

“One of the problems with other firms is they have so many customers that they find it easier to ignore them all, because any individual customer is so worthless in their eyes,” he said.

“It’s like telephone companies, each individual customer is so unimportant that they don’t look after them.”

The company yesterday said it had boosted pre-tax profits by 21 per cent and increased revenues by 15 per cent in the full year. It also upped its total dividend by 20 per cent to 22.59p. Hargreaves said: “If we’d had a great investment environment, those results would have been good. The fact we’ve had a bad investment environment means the results we’ve had have been sparkling.”

Yesterday’s results were accompanied by an announcement that the firm’s co-founder and major shareholder Stephen Lansdown, 59, was stepping down from his non-executive role on the board.

The move brings to an end a 31 year partnership between Lansdown and co-founder Peter Hargreaves, which started the firm together in 1981. Lansdown will step down in November.

PROFILE: STEPHEN LANSDOWN

WHEN Peter Hargreaves and Stephen Lansdown began work at the same Bristol-based investment business back in 1979, there was no inkling it would yield one of the most successful entrepreneurial business partnerships of the last 30 years. Just 20 months after meeting, the two men started trading from a bedroom in 1981. The venture was called Hargreaves Lansdown. Now, three decades later, the firm is a FTSE 100 unindebted giant, booming along with double digit profit growth. Lansdown, 59, says it is now time to step away from the firm. He leaves a rich man. His 20 per cent stake in the business is worth around £600m. This year alone he stands to collect £21.6m, after the firm raised its dividend by 20 per cent. Lansdown, Hargreaves’s junior by six years, first qualified as a chartered accountant with Touche Ross & Co in 1975 and is noted for his interest in football. He says his life ambition is to see Bristol City Football Club in the Premier League and he is a leading shareholder in the club. He even went as far as to sell a 4.7 per cent stake in Hargreaves Lansdown for £47.2m, which he put towards the cost of building Bristol City's new football stadium. His most recent role at Hargreaves Lansdown was as non-executive director, having stepped down as chairman in 2009. “He’s showing the ultimate faith in the management team, because without a seat on the board he can assess how good the board is,” Peter Hargreaves said yesterday. Hargreaves, who said he planned to party at Lansdown’s 60th birthday bash next month, now carries the mantle as the sole founder left on the board.