Good morning and welcome to the interim results presentation for IntegraFin 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, Euan 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 Euan 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 GBP 2.1 billion in the half-year of 2025, up 91% from the prior year comparison.
Our consistently high standards of client service helped 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 promoter 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. Of course, we do not retain any interest on client cash, paying this all onto our clients in full. Our established business model continued to drive growth in funds under direction 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 digitalization 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 GBP 0.033 per share. I'm now going to hand over to Euan 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 GBP 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 HY 2020. Now, if we look across to the top-right graph, the growth in our average FUD has translated into revenue of GBP 77.2 million for HY 2025, an increase of 10% from HY 2024. 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 GBP 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 HY2025, we have increased the first interim dividend to GBP 0.033 per share. The Group delivered strong growth in underlying EPS, up 14% in comparison to H1 2024. Moving on to revenue for the period, HY2025 platform revenue increased by GBP 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 GBP 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 GBP 2.5 million for HY25 and delivered consistent recurring license fee revenue of GBP 2.3 million. Moving on to our underlying administrative expenses for the period. In HY25, we managed 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 nine. 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 ten. 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 in gilts was GBP 41 million as at the 31st of March. I'm pleased to say we have approved a first interim dividend for the year of GBP 0.033 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 GBP 64.4 billion. However, FUD as at 30th of April 2025 was GBP 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 HY 2025 accounts, we have recognized a GBP 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 QO proposition remains of strategic importance to the Group, which Alex will discuss in more detail shortly. Looking beyond FY 2025, we remain confident of the Group's competitive position, which is complemented by continuing growth in the U.K. wealth market. I'll hand back to Alex.
Thank you, Euan. 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 comp1nt 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 2021.
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 2025, the Transact platform delivered record gross inflows and impressive net inflows. Total net inflows for HY2025 were GBP 2.1 billion, nearly double the same period in half-year 2024. 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, an improving net transfer ratio with other platforms as we win more business from other large platforms, and finally, outflows stabilizing 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 QO proposition is of continued strategic importance to the Group. QO is already used by a cohort of consolidating advisor firms and large U.K. advice firms who collectively administer assets of over GBP 40 billion, which accounts for over half of the total assets under advice on the QO software. QO will help increase the Group's attractiveness across the U.K. advice market, including with consolidators and large advice firms. By way of comparison over time, the joint users of Transact and QO have grown their FUD on the Transact platform from GBP 1.5 billion at the time of acquisition to over GBP 4 billion today.
We expect this overlap of assets between QO and Transact to grow as we accelerate our plans to deliver enhanced data integrations between QO and Transact. This level of integration is something we believe will be increasingly attractive to the U.K. advice market. To summarize, in the first half of the year, we have delivered platform growth and continued improvements to financial performance. The Transact platform demonstrated its continued attractiveness to clients and advisors with high levels of growth and net inflows. The Transact platform continues to be a leading advisor platform in the growing U.K. 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, Mr. Ladies and gentlemen, if you would like to ask a question, please press * 1 on your teleph1 keypad and just make sure your line is not muted to allow your signal reach your equipment. Our very first question is coming from Ben Bathurst of RBC Capital Markets. Please go ahead.
Morning. I'd like to ask questions on two areas, if I may, *ting 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? Maybe put another way, what has changed with T4A in the last six months? Also, on T4A, you disclosed the joint user under the direction of GBP 4 billion. I wondered if you could guide an acceptable growth rate for that FUD figure looking forwards. Secondary questions around costs. Employee costs increased by 10% with headcount growth of 1% in the first half. I wondered, could you provide some color 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? Also, to what extent is the guidance around moderating expense growth in fiscal year 2026 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 QO. The aim is still at the moment, we're still finalizing the QO product. I've said before, we were running this in test, significantly trialing this. There's two very large advisor firms that are sort of well into that period of time. 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. As I've alluded to, we still think there are two or three integrations that we would like to make with the Transact platform before we push for sort of significant growth in those areas.
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 6-12 months as we continue with those pieces of work. In the meantime, we are still benefiting from firms that use QO consolidating and bringing more business on and through to Transact as well. We will continue to work with those companies that already use QO to encourage them to move business on to Transact. I think most of the rest of your questions, I'm going to hand over to Euan.
. 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. First of all, an increase in the discount rate that we've used for the DCF calc. Then, the revenue expectations we have over the short to medium term for the T4A standal1 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. Headcount's increased 1 and a half 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. 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 market looks like. Therefore, yes, if market rates increase above anticipated, higher than our anticipated inflation, then yes, there is a risk there. However, we do not necessarily see that changing to more than, let's say, 4%-ish per year on the look forward at the moment.
Obviously, that can change, and we might watch the market keenly because we look to acquire and retain really good staff.
Great. Thank you for that.
Thank you for your questions, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press * 1 on your telephone keypad. We will now go to James Allen, our primary liberal. Please go ahead, sir.
Hi, morning, Alex. Morning, Euan. Speak for me if I can. One on T4A, which I'll start with. How much has actually been paid for T4A since acquisition? I think it was up to GBP 26 million consideration originally. 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? Finally, what proportion of the clients on the platform are classed as non-advised for whom you've reduced charges from 1st of January 2025? Thanks.
Thanks, James. In terms of what we paid for Time for Advice, the overall amount is sort of in the region of about GBP 16 million-GBP 17 million. I do not 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 GBP 16 million-GBP 17 million ballpark. Moving on to your question on digitalization, I want to just emphasize 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.
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. The processes were not ideal. They did not help the advisor in the way that this system that we have set up now does. It did not give the efficiencies and savings both to the advisor firm and to ourselves. It just was not the type of quality experience that we at Transact want to deliver to our advisors and our clients. We have moved people onto this process now that, as I say, 90% of all portfolios now are open this way. I suspect that you could compare to some peers who would say that everything is opened online, and I am sure that would be true.
I think the quality and the support within the actual process of that delivery versus what we actually provide may be quite different. Finally, in terms of the percentage of clients who are non-advised on the platform, I'm going to pass that over to Euan.
, I think on the non-advised clients, I think to get perspective, we do not 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. That number is a very low single-digit % of our overall client base of 241,000 clients.
Perfect. That is very clear. Thank you very much.
Thank you very much, sir. The next question today will be coming from Rahim Karim 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 write-down for T4A. Euan, 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'd previously anticipated being able to achieve, or is there something else going on? The second is probably a slightly bigger picture question: 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? 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'd 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. 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. That's the only real driver of that short to medium-term revenue change in outlook. If you push that out, that obviously disproportionately affects your discount, well, your discounted cash flow, unfortunately. It's very much a formulaic problem that we have there.
I'll hand over to Alex on the lessons learned.
Thanks, Euan. I think the key point, Rahim, on the Time for Advice acquisition is that what we acquired was not a complete and finished product at the time. When we bought it, we had a view of what the future looked like. Over the course of the last four years, there has been quite a significant change in the shape of the advisor market, the way consolidation has worked within the market.
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 advice 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.
For me, whilst I would not necessarily say it is a lesson learned, maybe in terms of presenting externally, it is 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. As I am sure you will all appreciate, the one thing we will not do is rush anything out that causes any damage to the Transact brand. I think that is probably the key area that I would say are sort of the things that have been picked up through the process. 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 house.
We've bought in two development companies now because the Transact software development company wasn't originally an in-house company. These are things we have done before, and I certainly wouldn't sort of sit here and say we wouldn't do them again. 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. Apologies, Euan, for misrepresenting what you said. That wasn't my intention.
No problem. No problem. It was good to clarify that.
Thank you. What's your question, sir? We will now move to Greg Simpson of BNP Paribas. Please go ahead, sir.
. Morning. Three from my end. Firstly, on gross outflows relative to funds under 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%-7% in some of the older periods? Do you see scale 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 kind of pricing changes going forward? 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. I think we've seen some major volatility around, but it hasn't particularly affected outflows. I think that's because really there's been a bit of a stabilization of interest rate and inflation in the U.K., which has seen the sort of 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 paydown. They have sort of leveled off, but they certainly haven't dropped off. With interest rates still where they are, I still expect that to stay up for some time to come. We've also seen, albeit it's a relatively small proportion of our outflows, but we do have pensions in payment. They have ticked up.
They reflect the effects of the increasing cost of living. That will be baked in. Once people have gone into drawdown, I do not expect to see that fall back. I think the sort of 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 will not go down quite that low because we have seen that change. I suppose the other area for us, and the one that we really do not like, is when we are losing money out to other platforms.
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 digitalization and integrations of the platform, the service we deliver, etc. 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. Picking up on pricing, I think that our long-term view continues to be the same.
Whilst 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 come down to somewhere around the 25 basis points, 15 basis points on our tiered charging approach at the two main bands. I still think that that's the long-term position that I would expect us to be heading towards. 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. 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.
. 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. I think the important thing here is that it does continue to attract and is unique in offering to our client base. 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. 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 Rajah 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 sort of specify, what further integrations or enhancements you planned for rolling this out in full in terms of sales attention. I just wondered if I could sort of push you to suggest over the medium term how much overlap you think is achievable between Transact and Q. I know that's at about GBP 4 billion now. What do you sort of aspire to for that over the medium term? Thanks.
, thanks, Vivek. The main integration that we've been working on and has just come through has been on actually advisor remuneration. 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. What we're looking at here is to put a very sophisticated integration in between the Transact platform and CURO on account opening. The other one is around contributions and withdrawals and the advisor's ability to actually integrate through their back-office system straight through into Transact system in doing those.
They're ones that we've actually talked about externally and I'm prepared to mention, but there are sort of several others in the pipeline that will follow. On your second point, Vivek.
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. 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. It helps us gain overall penetration in the advisor market. CURO appeals mainly to the larger consolidators at present. It is 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.