XPS announces half-year results

XPS announces half-year results

24 Nov 2022

XPS Pensions Group plc

Unaudited interim results for the half year ended 30 September 2022

Delivering strong and sustainable growth

Financial highlights:

 

Half year ended 30 September	2022	2021	YoY
Pensions Actuarial and Consulting	£35.1m	£30.9m	14%
Pensions Investment Consulting	£8.1m	£6.8m	19%
Total Advisory	£43.2m	£37.7m	15%
Pensions Administration	£27.3m	£24.7m	11%
SIP	£4.4m	£2.8m	57%
NPT	£2.1m	£2.1m	-
Total Group revenue	£77.0m	£67.3m	14%
Adjusted EBITDA (1)	£17.8m	£15.5m	15%
Profit before tax	£6.8m	£7.1m	(4%)
Basic EPS	2.9p	0.7p	314%
Adjusted diluted EPS	5.3p	4.5p	18%
Interim dividend	2.7p	2.4p	13%

¹⁾  Adjusted measures exclude the impact of exceptional and non-trading items: acquisition related amortisation, share based payments, corporate transaction costs, restructuring costs and other items considered exceptional by virtue of nature, size and incidence. See note 3 for further details.

• High levels of client activity and inflationary fee increases drove 14% growth in Group revenues to £77.0 million
• Operational gearing coming through with adjusted EBITDA of £17.8 million (+15% YoY) despite inflationary pressures in our cost base
• Excluding bolt on acquisitions, the Group delivered organic revenue growth of 13% YoY

• Sixth consecutive half year of YoY growth in revenues across Advisory and Administration:

  - Pensions Actuarial and Consulting revenues (+14% YoY, +13% organic)

  - Continued strong double digit growth in Investment Consulting revenues (+19% YoY)

  - Pensions Administration revenue growth of 11% YoY driven by new client wins coming on stream and project work

• SIP revenues increased 57% YoY due to the Michael J Field acquisition in February 2022 and the bank base rate increase, along with growth in underlying SIP sales (organic revenue growth of +21%) 

• NPT revenue flat YoY with AUM held steady at £1.3 billion despite significant volatility in asset prices

• Adjusted diluted EPS was up 18% YoY to 5.3 pence

• Increased interim dividend of 2.7 pence (2021: 2.4 pence) per share declared by the Board, reflecting our continued confidence in the Group's prospects

Operational highlights:

• Strong profitable and sustainable growth, driven by high client demand and inflationary fee increases underscoring the non-cyclical and resilient nature of our business
• Strong brand, enhanced by industry awards - 'Pensions Actuarial Consulting Firm of the Year', 'Investment Consulting Firm of the Year' and 'Third Party Administrator of the Year' - the first time a firm has won all three awards outright
• Strong new business pipeline with our 'Market Force' initiative continuing to create opportunities
• Strengthened our already successful covenant advisory business through the acquisition of Penfida Limited
• Michael J Field acquisition in FY 22 has integrated well and the SIP division won Best SIPP Provider at the Investment Life & Pensions Moneyfacts Awards   
• Additional resource brought in to meet demand and capitalise on client opportunities delivering strong results in areas such as risk transfer and DC consulting

• Continued focus on ESG within the business, notable milestones achieved:

  - Retained signatory to the FRC's Stewardship Code in the period

  - Remained fully carbon neutral (Scope 1, 2 and 3 emissions)

Outlook

The continued resilience and predictability of the XPS business model (including inflation-linked revenues) is very encouraging with momentum in the first half continuing into the second half of our financial year.  We continue to experience strong demand for our services in a wide range of activities, particularly in Advisory against the backdrop of the significant changes in the financial markets and have made a very strong start to H2. Adding to our recent announcements, combined with the recent bolt-on acquisition of Penfida, the Board are confident of achieving full year results slightly ahead of their previous expectations for the year.

Paul Cuff, Co-CEO of XPS Pensions Group, commented:

"We are very pleased with the first half performance of the Group, with strong profitable and sustainable growth being achieved across all core divisions.  Our last financial year was the strongest since listing in 2017 and we have carried on building on that momentum in this financial year.

The last two months have been particularly busy against the backdrop of more volatile financial markets.  We want to say a big thank you to our staff who have been superb in how they have looked after their clients and each other in such busy times.  We are proud of them.  We are also proud of the results of our latest staff survey - 98% of our people think we are a good company to work for (PY: 95%).

Our business model has continued to demonstrate its resilience. We have good visibility due to a high proportion of our revenues being non-discretionary and recurring. This, combined with high client demand leaves us well placed for future growth.

The near, medium and long term future for XPS looks very exciting.  We have the full suite of services our clients need as they adapt to the backdrop of a new world of higher interest rates together with an ever-growing profile in the industry to attract new clients."

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