Hargreaves Lansdown rides the wave of ‘seismic’ Royal Mail IPO
new LTE platforms come to market that will not be reliant on a component from Californian microelectronics giant Qualcomm, which includes its own audio feature and, therefore, leaves no niche for Wolfson.
The company is on track to deliver $10m in cost savings after phasing out some older “legacy” lines in a process that shed about 50 jobs, including contractors.
Chief executive Mike hickey said it had been a disappointing year as the firm had initially anticipated strong growth.
But he added: “We expect to resume our growth trajectory in the second half of 2014 as customer phone inventories unwind; customers’ new products launch with Wolfson’s next generation, higher content audio hubs; and we benefit as new LTE platforms come to market.”
The firm has secured a $25m bank facility to support its anticipated growth, which hickey said would be used to meet any spikes in demand as major customers roll out fresh products. The group is currently debt free and has about $48m in the bank.
The latest generation of audio chips made by Wolfson are so sensitive that they can be used to control electrical devices without touching them.
holly ThE Royal Mail flotation helped “fund supermarket” hargreaves Lansdown attract a record number of new investors as Britons scrambled to take part in the UK’s biggest state sell-off for decades.
The firm said yesterday that the float had a “seismic effect” on UK investment as it notched up 77,000 new clients in the second half of last year – more than the equivalent periods of the last three years combined.
it said around 27,000 of these clients used the broker to invest solely in Royal Mail shares when it floated last October. including existing clients, around 118,000 people – or 18.5 per cent of the UK public who invested in Royal Mail shares – did so through the Bristol-based firm.
Demand was so high that up to 60,000 people a day tried to call hargreaves Lansdown in the run up to the initial public offer- est rates on cash holdings caused profits growth to lag behind its “staggering” rise in funds under management.
The group also announced a U-turn on plans to increase charges for customers who hold investment trusts on its Vantage platform in a move that will benefit almost 80,000 clients.
it angered investors last month when it said those with investment trusts would pay an additional charge of 0.45 per cent from 1 March as part of a wider shake-up of fees to meet new City rules.
But outcry over the move, which saw some clients claim their fees were being doubled, prompted hargreaves to axe plans for the extra charge.
“We have listened to our clients – investment trust charges are not going ahead,” the group said.
The decision will now see investment trust clients pay slightly lower fees, it added.
The technology is likely to be built into the next generation of mobile phones, tablet computers, in-car entertainment systems and even white goods.
Nick James, an analyst at Numis, said it was very difficult to forecast figures for Wolfson, but he expects 5 per cent revenue growth this year.
he added: “We still see significant strategic value in the business and believe that profitability will be transformed as soon as competitive dynamics in the baseband market normalise.
“With [yesterday’s] drop, the stock looks very attractive, albeit a special situation.”
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