Tatton Asset Management plc

Please feel free to submit questions as we proceed through the presentation. But for now, I will hand over to Paul Hogarth, CEO.

Thank you, Hannah, and good morning. Yes, if I could just run you through slide eight, if we could start off there. I'll take you through the sort of the operational highlights and some of the financial highlights as well. Absolutely tremendous six months. Could not be happier with what we've achieved over that period. In particular, obviously, you're seeing the funds under management increase, and we had 1.7 billion of new flows over that six-month period. I'm happy to say that that flow rate has continued post that half-year end. So October's been good, November's been good so far, and we're at 27.1 billion in total, so 2.1 billion year-to-date on flows. What we put that down to is the growing momentum in MPS. MPS is absolutely omnipresent in the IFA world. You cannot pick up any press from Citywire or FT Advise or whatever and not see MPS being front and central. And also, too, on the website as well. On all websites, wherever you go, MPS is everywhere. So growing momentum everywhere. We're doing incredibly well, I think, in our share of that. I'll come back to that later. But really good solid flows, good pipeline moving forward, all organic, and beautifully adding to the FUM. Actually, when we look at it, those sorts of positions on flows we think would have been even better if we didn't have the kind of macro position that we've got on in the world today. So obviously there's a lot of waiting for Wednesday with the budget. There are discussions around, obviously, the toppiness of the markets as well. And, you know, we're seeing IFAs being very, very busy And a lot of it has been moving tax-free cash out of the pension scheme just in case that was played within the budget. And pleasingly, that money's not been spent. It's just sitting there, probably waiting in the wings to see what happens with ISAs on Wednesday. And we would expect that if there's nothing, if that kind of decision-making on ISAs is benign, that those assets will obviously can't make their way back into the pension scheme again, but will find its way into the ISA world. And then, you know, a couple of just sort of standout numbers, really. The number of supporting IFA firms up to 1170. And again, post the interim six-month point, we've again done well in recruiting more and more firms. Just a quick bit of arithmetic. You know, if you look at our average account size with 167,000 employees, plus account holders, we've now got an average of £154,000 per account holder. And that is up probably over the last few years, it was 130 to 140, now 154, which again is a good sign, but it also sort of franks the point that we said that we brought discretionary fund management to the mass affluent market via the IVA community. And just on that, the IFA community remains very, very strong. And, you know, they're very, very busy dealing with existing clients and struggling to cope with all of the new ones that they've got coming through. So the IFA community and Root Health. And just on financials, I won't pick on everything in there, but obviously an improvement in the profit margin. And that's the group margin rather than the Timor margin. But we'll come back to that later. And the interim dividend going up to 12%. for the first half and obviously we you know that we're 50 50 so that 12 should reflect in a further 12 later on so that's it for slide eight we move to slide nine just our bragging slide really showing um where we've gone with the funds under management and AUI. So despite all of the events, you know, we've climbed nicely. Just a point of note that that AUI at 27.1 includes perspective, which is we all know we lose in January. So we will track back on the back of that loss. Interesting, the next slide is 0.10. shows us, I just think this is of interest more than anything else, as to how our share price has performed compared to our TAT and CORE global equity portfolio and comparing that against ARC equity and the FTSE AIM as well. So, been a really good, strong performance of the share performance over that period. And more of the same again on slide 11, which shows you how we've maximized shareholder value over the period. both with the improvements in the market cap and the EPS side, and also the dividend payments that we've made over that period. So strong proposition. And without further ado, I'll pass you over to Paul, who will take you through the financials.

Thanks, Paul. Yeah, so, yeah, overall, it's a really positive start to the year. You know, we've kind of touched on some of these numbers in the highlights, but the revenues, and operating profit both increased by 19% and 20%, respectively, with margins increasing to 51%. There are no exceptional items in this period, albeit we do adjust for share-based payments and amortization of intangibles. And the finance income that we see there, the half a million, is all related to cash that's on the group balance sheet. So overall, Adjusted fully daily service per share increased 70%, pretty much in line with the key KPIs within the growth. And as Paul said, that's interim dividend. Our policy remains to pay 70% of adjusted earnings on a 50-50 basis. And you'll see that in the first half, it ticks up to over 70% and we'll balance out as we pay the other 50% in the second half of the year. So overall, super positive start to the year. Just delving into the detail on the next page, another standout performance from TATN, both revenue and operating profit increased by 21% and 22% respectively, with an increase in the margin again of 64%. So as Paul was mentioning earlier, the grew revenue around 51% and TATN at 64%. Clearly that's been driven by the increase in AUI, and that's £4 billion over the period. And the key components of that are strong organic net flows of 1.7 billion. And obviously we've had very good investment performance in the first six months. So 2.1 billion from investment points alone. And that plays out that on average, our net flows are 281 million. I think last year they averaged around 307. And when we exclude perspective, And that nets down to 225, which is pretty much in the middle of the guidance that we gave at the end of last year. And just to sort of highlight the perspective that we've been talking about now for sort of the last 12, 18 months, perspective will leave us in January of 26. The AUM currently sits at 3.5. It flows in this period with £333 million and it contributed revenue of £800,000. And then moving on to Paradigm, it just remains pretty steady and consistent actually. Paradigm revenue increased 6% and the operating profit also increased 6% with the margin staying stable at around 29. The mortgage number of firms increased to 196 so and that's been a consistent metric that we've been posting now for a few years. And overall, that drove actually quite a material increase in the overall lending to 8.6 billion year on year, albeit that has been driven by record applications and obviously the increase in members have helped contribute to that. But overall, a very positive contribution from Paradigm. And then it's a nice little segue into the next slide, really, when we just looked at the evolution of the two business. So we're kind of highlighting this really to show how effectively TATN has scaled over the last eight years since IPO. And our paradigm has gone from 32% of the income to just 13%. And I think it's more pronounced on the operating profit, actually, where paradigm now only counts for 7% of overall profitability. And we're going to continue to separate these two businesses out. But it's just to sort of to highlight the fact that at some point, you know, paradigm is becoming a little subscaled. and there may be a need to either divest of perhaps part of the business, but more importantly, actually just potentially consolidate the reporting into just a group performance. Jumping back into the detail, we've had this slide on overheads now for the last few years. It really just gives you the progress that we're making here. Overall, When we annualize the six months to September 25, you'll see that total increase in overhead has been 12%, but the underlying increase has been 8%. And the employee cost remains 60%. And that's, again, been a very consistent KPI. And the point I always like to make is that of that 60% or 15.5 million, 4.3 of that is actually variable costs. and is related to targets and performance. So it helps us to manage a business and underpin the earnings. Overall, we're still giving that guidance of 10% to 12% going forward. And one question we always get, is there any sort of one-off significant costs that TAT will need to invest in at some point in the future? And the answer to that is no, as long as we continue to do exactly what we've been doing since IPO and we keep the same operating model. The direction of the cost increases over that period has been very, very smooth. And then the last couple of slides on the obligatory balance sheet and cash flow. We're in excellent shape. We've got net assets now of £55.9 million and total qualifying capital resources of £27.9 million. when you excluded the foreseeable dividend on qualifying assets. And that gives us circa 22 million of headroom above our 5.5 million capital adequate requirement. So we've got 34 million cash on the balance sheet. We're net debt free. And I think we're in excellent position. And, you know, that strong balance sheet gives us flexibility going forward. And then on the cash flow, you know, the, the war between, um, two 34 million, there's nothing on this cash flow, which is, uh, unusual, um, interest received dividends, paid corporation tax, and a relatively small amount of CapEx gives a war between 32 and 34 million. Uh, and then finally on the, on the final slide on page 19, we'll just give you a little bit of a, um, guidance here from an outlook perspective for H2. So, you know, the board is making the statement we're on track to deliver our forecast in line with the board's expectations, but obviously analysts as well. The margin, the revenue margin between 20 to 21 bits and paradigm revenue will continue on that sort of mid single digit level. And then net flows 200 to 250, excluding paradigm, sorry, perspective. And then the annual cost increase, as I said earlier, 12%. The only thing that's a little unusual, we'll start the moving of our ACD from Waystone and ValueTrack to Apex in the second, in the final quarter, should I say. And that may ship into the first quarter of next year. But we'll be annual cost savings of half a million. And the projected cost of doing that will be about half a million as well. Thank you, Paul.