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FSCS refund helps Hargreaves Lansdown break more records
by Dylan Lobo on Sep 04, 2013 at 07:44
Hargreaves Lansdown (HL) has broken more earnings records with its profitability boosted by a refund from the Financial Services Compensation Scheme (FSCS).
The Bristol-based firm successfully challenged the basis of the calculation of the levy, resulting in a refund of part of the FSCS levy relating to earlier years. This saw FSCS costs decrease from £4.8 million to a £0.5 million refund.
The reimbursement did little to appease HL's view on how the FSCS is funded. 'Contributions to the Financial Services Compensation Scheme continue to be a burden,' chief executive Ian Gorham (pictured) told the market.
'We are supportive of a safety net for retail investors but we remain critical of the way the FSCS is funded and some of its supplementary activities. We continue to campaign for a rational, sensible, economic compensation scheme, including having direct dialogue with the FSCS over our concerns.'
The refund contributed to a record profit of £195.2 million for HL over the year, an increase of 28%.
Revenues and assets under administration also hit record highs with the former jumping 22% to £292.4 million and the later rising 38% to £36.4 billion. The firm added 76,000 clients to lift the total number to 507,000.
The strong performance prompted a 31% rise in the dividend to 29.59p.
The market chose to take profit on the back of the results with shares 31.5p lighter at 999.5p at 8.30am.
Gorham is confident his firm can continue its strong performance.
‘During the year we consolidated our position as a leading FTSE 100 company. Our financial success has been built on continuing to deliver exceptional service, information and value. As a profitable company with no debt we present the financial strength to give investors comfort. This also enables us to reinvest in our business and respond to competitor activity,’ Gorham told the market.
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