Strategic report Governance Financial statements Other information OPERATING AND FINANCIAL REVIEW CONTINUED The Group seeks to maintain a strong net cash position and a Total attributable shareholders’ equity, as at 30 June 2021, made Reflecting this policy, the Board has declared a 2021 total dividend robust balance sheet with sufficient capital and liquidity to fund up of share capital, share premium, retained earnings and other of 50.5 pence per share. Excluding the one-off return of 8.2 pence ongoing trading and future growth, in line with our aim of offering reserves increased to £593.5 million (2020: £558.3m) as continued per share from the gain on disposal of FundsLibrary within the a lifelong, secure home for people’s savings and investments. profitability more than offset payment of the 2020 final and special 2020 special dividend, this was 8% ahead of the like-for-like total The Group has a high conversion rate of operating profits to cash dividends and the 2021 interim dividend. Having made appropriate dividend equivalent of 46.7 pence per share. This is in line with the and its net cash position at 30 June 2021 was £503.5 million (2020: deductions as shown in the table above, surplus capital amounts growth in underlying earnings per share, reflecting the Board’s £462.8m). Cash generated through trading more than offset the to £190 million. confidence in the prospects for the business. payments of the 2020 final ordinary and special dividends and the The Group has four subsidiary companies authorised and The Board considers that an element of 2021’s earnings were 2021 interim dividend. This includes cash on longer-term deposit regulated by the FCA. These firms have capital resources at a level generated from unusual levels of share dealing activity during the and is before funding the 2021 final dividend of £126 million and which satisfies both their regulatory capital requirements and their pandemic that does not form an element of its forward guidance special dividend of £57 million. working capital requirements and, as a Group, we maintain a robust on Share revenues. In order to maintain the Board’s desire to grow The Group has a Revolving Credit Facility agreement with Barclays balance sheet retaining a capital base over and above regulatory the ordinary dividend progressively across the cycle, it has chosen Bank to provide access to a further £75 million of liquidity. This is capital requirements. Further disclosures are published in the to recommend a total ordinary dividend of 38.5 pence per share currently undrawn and was put in place to further strengthen the Pillar 3 document on the Group’s website at www.hl.co.uk. and declare a higher special dividend of 12.0 pence per share in Group’s liquidity position and increase our cash management Dividend policy and 2021 declarations order to maintain the total dividend payout ratio at 81% (2020: 81%). flexibility. The Group also funds a share purchase programme to Hargreaves Lansdown has a progressive ordinary dividend policy. Subject to the shareholder approval of the final dividend at the 2021 ensure we avoid any dilution from operating our share-based The Board considers the dividend on a total basis, with the AGM, the final and special dividends will be paid on 20 October 2021 compensation schemes. intention of maintaining the ordinary dividend payout ratio at to all shareholders on the register at the close of business on The healthy net cash position provides both a source of competitive around 65% across the market cycle and looking to return excess 24 September 2021. advantage and support to our client offering. It provides security cash to shareholders in the form of a special dividend after the The Board is confident that Hargreaves Lansdown has sufficiently to our clients, giving them confidence to manage their money year end. Any such return will be determined according to market strong financial, liquidity and capital positions to execute its through us over many years, and allows us to provide them with conditions and after taking account of the Group’s growth, strategy without constraints and can operate a sustainable and an excellent service, for example through using surplus liquidity to investment and regulatory capital requirements at the time. progressive ordinary dividend policy going forward. The Board allow same day switching between products that have mismatched Dividend (pence per share) remains committed to paying special dividends in future years settlement dates. should sufficient excess cash and capital exist after taking account 2021 2020 of market conditions and the Group’s growth, investment and Capital Interim dividend paid 11.9 11.2p regulatory capital requirements at the time. 30 June 2021 30 June 2020 Final dividend declared 26.6 26.3p £m £m Total ordinary dividend 38.5 37.5p Shareholder funds 593 558 Special dividend 12.0 17.4p Philip Johnson Less: goodwill, intangibles Total dividend 50.5 54.9p and other deductions (37) (32) Chief Financial Officer Tangible capital 556 526 8 August 2021 Less: provision for dividend (183) (207) Qualifying regulatory capital 373 319 Less: estimated capital requirement (183) (180) Surplus capital 190 139 64 Hargreaves Lansdown Report and Financial Statements 2021