IntegraFin Holdings plc

Good morning and welcome to the interim results presentation for Integrity and Holdings for the six-month period ended 31st of March 2025. I'm Alex Scott, Group Chief Executive, and joining me here today is our Group Chief Financial Officer, Ewan Marshall. I'm going to kick off with an overview of the Group's highlights during the last six months. I will then hand over to Ewan to run you through the Group's financial performance in the period. Finally, I'll close with an update on the Transact platform and a strategic update on Time for Advice before moving on to Q&A. The Group's platform business continued to demonstrate strong performance in attracting flows, driven by our market-leading proposition. We delivered net inflows of £2.1 billion in the half-year of 2025, up 91% from the prior year comparison. Our consistently high standards of client service help Transact achieve the highest net promoter score for overall user satisfaction in the 2025 Investment Trends Platform Survey. We are particularly pleased to achieve this high net performer score as it is voted on by advisors and it underlines our commitment to delivering excellent client service. We also delivered strong growth in the group's underlying financial performance, with underlying profit before tax in the half year up 13% on the prior half year. Furthermore, average daily funds under direction also recorded record highs in the period. Underpinning these impressive results is our consistent delivery of positive client outcomes, and of course we don't retain any interest on client cash, paying this all onto our clients in full. Our established business model continued to drive growth in FUD and clients over the course of the period, with client numbers up 4% year-on-year. Record group revenue as well as cost management helped increase the group's underlying profit margin to 49%. This was delivered alongside investment in further digitalisation upgrades to the Transact platform. We continue to deliver strong cash flows and maintain a debt-free balance sheet. We have declared a first interim dividend of 3.3 pence per share.

I'm now going to hand over to Ewan for a more in-depth look at the financials. Thanks, Alex.

Moving to the financials for the period. As you can see in the top left graph, average daily FUD has grown 16% year-on-year to £66.3 billion, driven by both record gross inflows for the period and positive market movements since last year. We have achieved an impressive 12% compound annual growth rate in average daily FUD since HY20. Now, if we look across to the top right graph, the growth in our average FUD has translated into revenue of £77.2 million for HY25, an increase of 10% from HY24. Our group revenue has continued to grow over the years, whilst in parallel we have continued to share the benefits of scale with our clients by providing them with targeted price cuts. The bottom left graph shows that record revenue has driven group underlying profit before tax up 13% to £37.9 million. Even with the planned cost increases over recent years, which have continued to enhance our client proposition, it is pleasing to see our underlying profit margin expand. As displayed in the bottom right graph, the group delivers a consistent dividend. For HY25, we have increased the first interim dividend to 3.3 pence per share. The group delivered strong growth in underlying EPS, up 14% in comparison to H1 2024. Moving on to revenue for the period. HY25 platform revenue increased by £6.7 million and represented 97% of group revenue. Growth in average daily FUD during the period drove increased platform revenues, with our annual charge income increasing 10% to £67.3 million. The lower increase in annual charge income in comparison to average FUD resulted in a reduction in the blended annual charge rate payable by clients. This naturally occurs as a result of a greater proportion of individual client FUD benefiting from progressively lower fees in our tiered pricing structure as client portfolios increase in value. Wrapper fee income increased 6% year-on-year. That reflects increase in open wrappers on the platform and the continued growth of client numbers. These two recurring revenue streams combine to deliver 99% of total platform revenue. We continue to not retain any interest on client cash. As you will be able to see in our interim accounts, total T4A revenue has increased modestly to £2.5 million for HY25 and delivered consistent recurring licence fee revenue of £2.3 million. Moving on to our underlying administrative expenses for the period. In HY25, we manage costs in line with guidance, with total underlying administrative expenses being 9% higher than in HY24. Employee costs make up the largest proportion of the overall cost base, and these rose 10% in the year because of two factors. Firstly, a slight increase in average staff headcount, and secondly, an enhancement of remuneration packages to ensure we continue to provide competitive salaries to attract and retain high-quality individuals within the business. Moving on to slide 9. As illustrated on this slide, our revenue margin has moderated steadily, primarily as a result of our ongoing price cuts as we share our success and growing scale with advisors and clients. The platform revenue margin also moderates marginally as platform FUD grows. As I described a couple of slides ago, as client portfolio values increase, FUD enters lower fee bands, reducing the blended annual charge rate. Overall, this demonstrates our standing as a premium platform offering which is provided at a competitive price while also increasing our profitability. Moving on to slide 10, the table on your left demonstrates the group's strong liquidity position. Each of the group's regulated entities maintain a capital and liquidity buffer above the minimum levels required under various regulations. Surplus cash and gilts was £41 million as at 31 March. I'm pleased to say we have approved a first interim dividend for the year of 3.3 pence per share, a 3% increase on the first interim payment made last year. Finally, moving on to guidance. Our guidance for FY25, which we gave in December at the FY24 results, remains unchanged. Global equity markets adversely impacted FUD in the month of April. Average daily FUD for the month was £64.4 billion. However, FUD as at 30th April 2025 was £65.8 billion, down by only 0.2% from the quarter end. Alongside the ongoing recovery in global equity indices, FUD has continued to improve as May has progressed. Importantly, the market turbulence has had a negligible impact on our flows and we have continued our good momentum. In the HY25 accounts, we have recognised a £7.5 million impairment to the goodwill and intangible assets held in relation to T4A. This is treated as a non-underlying expense and has no cash impact on the group. The impairment is purely an accounting treatment, and we believe T4A's QRO proposition remains of strategic importance to the group, which Alex will discuss in more detail shortly. Looking beyond FY25, we remain confident of the group's competitive position, which is complemented by continuing growth in the UK wealth market. And with that, I'll hand back to Alex.

Thank you, Ian. In this next section, I will provide a more in-depth look at how the Transact platform has performed in the period, as well as explaining the time for advice component of the group's strategy. Our decision to further invest in our proprietary software has delivered major enhancements to the Transact platform. The enhanced platform functionality and improved digital interface are key factors behind the continuing growth of user numbers and flows onto Transact. The platform digital enhancements have driven improved online adoption and a reduction in manual and paper processes for both us and for the advisor firms that use us. This has enabled us to enhance our operational efficiency and service levels. 90% of all portfolios are now opened online using our guided applications approach. This is up from around 30% in FY21. Our leading client service levels are supported by a strong technical team who provide support to advice firms as they need it. This helps to guide advisors through the myriad of tax and regulatory rule complexity, and this support is very highly valued by the advice firms who use our platform. We have also developed enhanced platform integrations with other third-party advice firm software that will, over time, create a more efficient ecosystem for advice firms. That will help them to reduce the cost to serve their client base as they grow their businesses. Integrations is a key area of focus on our platform software development roadmap over the next period. Altogether, these developments help us to maintain our position as a market-leading advisor platform and help us to attract a greater share of platform market net inflows, whilst continuing to retain high levels of our existing clients and advisors. During half-year 25, the Transat platform delivered record gross inflows and impressive net inflows. Total net inflows for HY25 were 2.1 billion, nearly double the same period in half-year 24. Our strong net inflow performance has been driven by gross inflows continuing to grow with the delivery of our market-leading service and enhanced digital proposition. And improving net transfer ratio with other platforms as we win more business from other large platforms. And finally, outflows stabilising due to interest rates and inflation pressures moderating. Moving to slide 15. This year we were particularly pleased to be ranked first out of 22 providers in the Investment Trends Net Promoter Score and Overall User Satisfaction Survey. Our market-leading service continues to drive growth in clients using the platform, and our long track record in client growth is displayed in the middle chart. This growth in clients in turn ensures a durable source of future inflows to the platform, as illustrated by the pie chart on the right-hand side of the page. Finally, I would like to provide a strategic update on time for advice. T4A's Curo proposition is of continued strategic importance to the group. Curo is already used by a cohort of consolidating advisor firms and large UK advice firms who collectively administer assets of over £40 billion, which accounts for over half of the total assets under advice on the Curo software. Curo will help increase the group's attractiveness across the UK advice market, including with its consolidators and large advice firms. By a way of comparison over time, the joint users of Transact and Curo have grown their FUD on the Transact platform from £1.5 billion at the time of acquisition to over £4 billion today. We expect this overlap of assets between Curo and Transact to grow as we accelerate our plans to deliver enhanced data integrations between Curo and Transact. This level of integration is something we believe will be increasingly attractive to the UK advice market. So to summarise, in the first half of the year we have delivered platform growth and continued improvements to financial performance. The Transat platform demonstrated its continued attractiveness to clients and advisors, with high levels of gross and net inflows. And the Transat platform continues to be a leading advisor platform in the growing UK market, with a first-place net promoter score and second place for gross inflows in the market in the period. The group has delivered a strong financial performance in the period, increasing revenues by 10% and underlying earnings per share by 14%, whilst also expanding the group's underlying profit margin to 49%. Thank you for your time, and we'll now open to questions.

Thank you very much, sir. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your tablet keypad and just make sure that your line is not muted to allow you to signal with your equipment. Our very first question is coming from Ben Bathurst of RBC. Please go ahead.

Morning. I'd like to ask questions on two areas, if I may, starting with time for advice. I just wondered, what was the change in the value in use calculation, which meant that an impairment was necessary now and not in earlier impairment testing? So maybe put another way, what has changed with T4A in the last six months? Also on T4A, And you disclosed the joint user under the direction of $4 billion. I wondered if you could guide an acceptable growth rate for that figure looking forward. And secondary questions around costs. Employee costs increased by 10% with headcount growth of 1% in the first half. I wondered, could you provide some colour on the expected split of headcount growth versus remuneration growth for the full year? Should we be expecting a sort of similar dynamic to play out there with a greater contribution from remuneration growth than headcount? And also, to what extent is the guidance around moderating expense growth in FY26 and beyond predicated on lower future annual salary increases than those that we've seen in the first half? Thank you.

Thanks, Ben. That's a nice selection there. I'll pick up on the growth in crossover between Transact and Kiro. The aim is still at the moment – we're still finalising the Kiro product. I've said before we were running this in test, significantly trialling this. There's two very large advisor firms that are sort of well into that period of time. And in the meantime, we've just been gradually chipping away at businesses on the books. We are probably not looking to push anything particularly heavily on this in sales before the end of this financial year at the very earliest. And then, as I've alluded to, we still think there are two or three integrations that we would like to make with the Transac platform before we push for... sort of significant growth in those areas. So at this moment, I'm not going to provide any specific advice. But what I would say is we're not expecting this to sort of suddenly leap forward in the next sort of six to 12 months as we continue with those pieces of work. But in the meantime, we are still benefiting from firms that use Kiro consolidating and bringing more business on and through to Transact as well. And we will continue to work with those companies that already use Kiro to encourage them to move business on to Transact. And then I think most of the rest of your questions I'm going to hand over to you.

Yeah. So, Ben, I'll first take your value in use calculation question. So we'll stick to T4A there. I think all of the calculations are available in the condensed financial statements. There's a number of different moving parts which are explained in there. However, in summary, there's probably two main areas that we need to highlight. So first of all, an increase in the discount rate that we've used for the DCF calc. And then secondly, the revenue expectations we have over the short to medium term for the T4A standalone entity. They're the two main drivers. On the cost side in general, on the cost, the staff, first of all, the half-year 10% number for staff costs increasing. So headcounts increased 1.5% over the versus half-year last year. We obviously have kind of standard kind of inflationary increases across our entire staff base, but we've also seen the need to rebase certain salaries across the group as well, depending on demand for certain types of skills and expertise. And that probably accounts for about half of the rise overall as well, just under half. Looking forward, when it comes to our anticipated moderation in the growth of the cost base in the future, of course, that is dependent on what the overall... looks like and therefore yes if market rates increase above anticipated well higher than our anticipated inflation then yes there is a risk there however we don't necessarily see that changing to more than let's say 4% per year on the look forward at the moment but obviously that can change and we watch the market keenly because we look to acquire and retain really good staff

Great. Thank you for that. Thank you. What's your question, sir? Ladies and gentlemen, as a reminder, if you have any questions, please press star one on the top one keypad. We will now go to James Allen of Amir Liberal. Please go ahead, sir.

Hi. Morning, Alex. Morning, Ewan. Three for me if I can. One on T4A, which I'll start with. How much is actually being paid for T4As? since acquisition. I think it was up to 26 million consideration originally. And I was just wondering whether any remaining deferred consideration has now been written off. Second question, the digitalization appears to be going well. I can see from the presentation, 90% of new portfolios are now open fully online by advisors. I was just wondering how that compares to peers. Is that improvement in digitalization kind of catch up or are you now ahead of the curve versus the competition? And then finally, what proportion of the clients on the platform are classed as non-advised for whom you've reduced charges from 1st January 2025? Thanks.

Thanks, James. In terms of what we've paid for time for advice. The overall amount is sort of in the region of about 16 to 17 million. I don't have the exact figure off the top of my head, but as none of the performance elements of the original deal were paid to the founding shareholders of T4A, the total amount at the end would have been in that 16 to 17 ballpark. Moving on to your question on digitalisation, I want to just emphasise the words that I used when I actually referenced the 90%, because what I actually talked about was 90% use our guided application process, which is quite a complex approach that takes the advisor through the application process for setting up within the Transact platform. And the reason I flagged that is because... If we actually go back to 2020, we could probably have argued at that point that 100% of things were being done online. But the processes were not ideal. They didn't help the advisor in the way that this system that we've set up now does. It didn't give the efficiencies and savings both to the advisor firm and to ourselves. It just wasn't the type of quality experience that we at Transat want to deliver to our advisors and our clients. So we have moved people onto this process now that, as I say, 90% of all portfolios now are open this way. So I suspect that you could compare to some peers who would say that everything works. is opened online, and I'm sure that would be true. But I think the quality and the support within the actual process of that delivery versus what we actually provide may be quite different. And then finally, in terms of the percentage of clients who are non-advised on the platform, I'm going to pass that over to Ewan.

On the non-advised clients, I think to get perspective, we don't actively seek to acquire non-advised clients. These are clients who effectively... have lost their advisor in one way or another, deliberately or not, but have chosen to remain on the platform. So that number is a very low single-digit percentage of our overall client base of 241,000 clients. Perfect.

That's very clear.

Thank you very much. And thank you very much, sir. The next question today will be coming from Rahim Kareem of Investec. Please go ahead, sir. Your line is open.

Good morning. Two questions, if I may. One to follow up from Ben's around the impairment right down for T4A. Ewan, you mentioned the fact that pricing was one of the big drivers. Could you just elaborate on that a little bit? Is that because you're trying to win these enterprise solutions and therefore... there is a different pricing level to the one that you previously anticipated being able to achieve or is there something else going on? And then the second is probably a slightly bigger picture question is what kind of lessons have you learned from the T4A deal given it's several years now since that was done and fully bedded in and does it create the desire to do further deals whether it's in terms of consolidating your space in the platform market or perhaps broadening your offering to make it more attractive to the advisor network. It would just be useful to get your thoughts on both of those two points.

Thank you. Thanks for the questions, Rahim. On the impairment piece, I just want to make clear when I was answering the previous question, we talked about – well, I talked about revenue in the short to medium term, not relating to pricing. So – and just to be ultra clear, there's no change to the pricing of that offering. the short to medium term outlook has changed because what we've done is we've taken a very conservative approach to how we look for clients to adopt the new platform that's being rolled out, and that's taking a little bit longer than we had anticipated. But that's the only real driver of that short- to medium-term revenue change in Outlook. So if you push that out, that obviously disproportionately affects your discounted cash flow, unfortunately. So it's very much a formulaic problem that we have there. I'll hand over to Alex on the lessons learned.

Thanks, Ian. I think the key point, Raheem, on the time for advice acquisition is that what we acquired was not a complete and finished product at the time. And when we bought it, we had a view of what the future looked like. And over the course of the last four years, there's been quite a significant change in the shape of the advisor market, the way consolidation has worked within the market. And what that has caused us to do predominantly is to actually sort of slow down some of the things that were originally in the plans for T4A. around sort of use with, shall we say, smaller advised firms and actually sort of look to the longer-term expectations of regulatory controls and investment in the advisor market, potentially driving a future market that looks to have a smaller number of small firms and a growing number of larger and growing firms and the way that those firms want to work. So for me, whilst I wouldn't necessarily say it's a lesson learned, maybe in terms of presenting externally it's a lesson learned, on the dynamism of such acquisitions and the way that they need to be integrated into the Transact platform structure that we already have to enable us to deliver externally with the quality of both product and service that Transact delivers. Because, as I'm sure you'll all appreciate, the one thing we want to do is rush anything out that causes any damage to the Transac brand. So I think that's probably the key area that I would say is sort of the things that have been picked up through the process. And then I think in terms of where that leaves us with further deals, I mean, we have sort of over the years done things like bringing the life companies into the in-house. We've bought in two development companies now because the Transac software development company wasn't originally an in-house company. So these are things we have done before, and I certainly wouldn't sort of sit here and say we wouldn't do them again. But as with everything we've done, it's always had a direct strategic alignment with the business and what we do, which is making financial planning for clients and advisors as easy for them as we can make it.

That's very helpful. And apologies, Ewan, for misrepresenting what you said. That wasn't my intention.

No problem. No problem. It's good to clarify that.

Thank you for your question, sir. We will now move to Greg Simpson of BNP Paribas. Please go ahead, sir.

Yeah, morning. Free from my end. Firstly, on gross outflows relative to funds and direction, they've been about 9% annualized this period. What's your view about how that evolves going forward, given it was more like 5% to 7% in some of the older periods? Do you see scope for it to continue to fall as interest rates fall? Second question is, given you're quite a client-friendly platform in terms of interest paid to clients, is it fair to think there's less need to reduce the headline annual platform charge today in terms of how you're thinking about pricing changes going forward? And then the third question, just would be interested to hear what the penetration of MPS is on the Transact platform and how the partnership with BlackRock has scaled, if possible. Thank you.

Thanks, Greg. Let me pick up on the outflows then. The position with outflows has most definitely moderated over the last few months. And I think we've seen some major volatility around, but it hasn't particularly affected outflows. And I think that's because really there's been a bit of a stabilisation of outflows interest rate and inflation in the UK, which has seen the levels going off in one-off payments out of the platform, which we know to some extent were being used on the likes of mortgage pay down. They have sort of leveled off, but they certainly haven't dropped off. And with interest rates still where they are, I still expect that to stay up for some time to come. Um, we've also seen, um, although it's a relatively small proportion of our outflows, but we do have, you know, pensions in payment. They have ticked up. They reflect the, the effects of, uh, the increasing cost of living. Um, And that will be baked in. Once people have gone into drawdown, I don't expect to see that fall back. So I think the rate of around 5% that you were talking about, about being the long-term average, I suspect even when things do drop back a bit more, that it won't go down quite that low because we have seen that change. And then I suppose the other area for us and the one that we really don't like is when we're losing monies out to other platforms. And if anything, we've seen that sort of drop off a little more over this period than perhaps the six, nine months beforehand, which I think is just indicative of all the other things that we've been talking about in terms of the work we've done to improve the digitalisation and integrations of the platform, the service we deliver, etc., So short term, I think that outflows are probably going to stay reasonably up where they are with a gradual drop off to a slightly higher rate than the long term norm prior to the last three or four years. Then picking up on pricing, I think that... Our long-term view continues to be the same. So whilst there's been interest rates have been up and down, we've been saying for a long time that we expected our position sort of long-term around pricing to sort of come down to somewhere around the 25 basis points, 15 basis points on our sort of tiered charging positions. at the sort of the two main bands. And I still think that that's the long-term position that I would expect us to sort of be sort of heading towards. But we've always been clear that that would depend on the environment that we're in and how we best think we can... reduce those prices and drive more business onto the platform at the same time. So we will take those views as and when the time is right to do so. Interest rates are part of that total consideration when we're looking at our pricing.

Yeah, and then on the BlackRock MPS as well, that continues to be a success. It continues to be historically the fastest growing asset that we've put onto our platform. And I think the important thing here is that we do – It does continue to attract and is unique in offering to our client base and therefore it does make it another factor that keeps clients onto our platform and potentially attracts them to our platform as well. At the moment it's a small percentage of overall FUD. So it's not one to get excited about in the scheme of things. It's not there to generate revenue for the group directly. That's the important thing to think. It's a hygiene factor, I'd say.

Thank you. What's your question, Mr. Simpson? We'll now move to Vivek Raja of Shore Capital. Please go ahead. Vivek, your line is open.

Hi, morning. Apologies, I was on mute. Thanks for taking my questions and apologies. More on T4A. I wanted to understand what exactly, if you can specify, what further integrations or enhancements you planned for rolling this out in full in terms of sales attention. And I just wondered if I could push you to over the medium term, how much overlap do you think is achievable between Transact and Q? I know that's at about 4 billion now. What do you sort of aspire to for that over the medium term? Thanks.

Yeah, thanks, Vivek. So the main integration that we've been working on and has just come through has been on actually advisory remuneration. And that's actually now finished and live and has good uptake. There are a couple that I'm prepared to actually mention that we're working on, which is the main big one at the moment will be account opening, which is sort of enabling... Bear in mind that this is a back-office system, so it has to be able to deal with... this process across all platforms, but what we're looking here is to put a very sophisticated integration in between the Transat platform and Kiro on account opening. And then the other one is around contributions and withdrawals and the advisor's ability to actually integrate through their back office system straight through into the transact system in in doing those um they're ones that we've actually talked about um externally and i'm prepared to mention but there are sort of several others in the pipeline that will follow and then on your second point um vivek um

I think on medium-term overlap potential, I think what we've done in the presentation today is show there is a lot of potential there, but the important thing to describe as well is that currently the Transact platform has largely a different client base in comparison to the Curo proposition, so it helps us gain overall penetration in the advisor market. So Curo appeals mainly to the larger consolidators at present. So it's kind of more thinking about the broader appeal of our stable of offering rather than looking at just the overlap potential, as it were. I hope that helps.

Thank you.

Thank you very much for your questions, Mr Raja. Ladies and gentlemen, as a final reminder, if you have any questions or follow-up questions, please press star 1 at this time. We do not appear to have any further questions at this time. Mr Scott, it's recall back over to you for any additional or closing remarks. Thank you.

Thank you. Well, thank you, everyone, for attending and thank you for your questions. And I wish you all a good day.