Greek drama fails to hurt Hargreaves
INVESTMENT manager Hargreaves Lansdown said the Eurozone crisis would drag on “until Greece goes bust” as it revealed a jump in profits.
Co-founder Peter Hargreaves told City A.M. the seeds of a recovery had been cut off by the “perpetual” problem of Greece and the single currency.
“Greece will never pay its debts. The tanks will roll in Athens and then they will have a military regime,” he said.
Hargreaves was speaking as the Bristol firm, which provides investment management products and services to private investors in the UK, said first-half pre-tax profits climbed 21 per cent to £72m, stripping out the impact of an industry levy for compensating failed investment schemes.
Investor fears over the British economy and the Eurozone took their toll, however, and net new business fell 13 per cent to £1.16bn.
But in the final quarter, a steady flow of clients jumping ship from rivals boosted assets under administration at 31 December by five per cent year-on-year to £23.4bn, with 16,000 new customers signing up. The biggest driver of growth was the innovative Vantage fund platform product, Hargreaves Lansdown said.
Revenues for the half year were up 16 per cent to £112.9m.
Ian Gorham, chief executive, said: “This record result has been achieved despite the continued backdrop of economic uncertainty both at home and abroad… Total UK net retail sales of funds have fallen to levels only previously seen during the credit crunch of 2008. The UK is also courting a double-dip recession and the average member of the UK investing public feels poorer today than a year ago.”
Collins Stewart said the “impressive” figures were slightly below expectations but rated the stock a “buy”.
Shares slipped five per cent in morning trading, but settled flat at 460.3p.