Good morning and welcome to IntegraFin Holdings' 2026 interim results presentation. We're joined today by Alex Scott, Group CEO, and Euan Marshall, Group CFO. Following the presentation, there will be a Q&A session. For now, I'd like to hand the call over to Alex. Please go ahead.
Thank you. Good morning, everyone. Welcome to IntegraFin Holdings' interim results presentation for the six months ended 31 March 2026. I'm Alex Scott, Group CEO, and joining me today is our Group CFO, Euan Marshall. I'm going to kick off with an overview of the excellent results that the Group has delivered over the past six months, highlighting our strength in platform inflows and accelerating growth in profitability. I'll then hand over to Euan to run through the Group's financial performance and provide an update on the progress of the Group cost and efficiency program. Finally, I'll share an update on the operational performance of the Transact platform. In particular, I'll explain how the Group positions itself as an attractive proposition for all sizes of advice firms, including consolidators, and I'll discuss the opportunities for AI use, both in the IHP business and in the wider financial advice industry.
We'll conclude with Q&A. The Group has delivered a step change in profitability with impressive earnings growth in the first half of the financial year. The Transact platform demonstrated strong performance in flows and FUD thanks to the enduring appeal of our market-leading proposition that combines proprietary technology and personal service. This strategy has helped secure the Group's prominent position in the growing U.K. advisor investment platform market. Our exceptional market position is the result of our consistent, resilient business model and long-term focus. Clients, advisers, and shareholders alike benefit from a stable platform that delivers reliable profitability and plans for longevity. Our results since IPO have demonstrated our capacity for growth. With the implementation of key initiatives, including our cost management program and our focus on delivering technology automation, we anticipate even stronger growth in future.
Half-year 2026 growth and net inflows were at or near record levels, with net inflows growing 14% compared to the half-year 2025 and average FUD up 17% at GBP 77 billion. Our platform revenue grew 11%, with 99% of that coming from recurring sources. Meanwhile, efficiency and productivity enhancements from our cost management initiatives drove a moderation in administrative expense growth in line with our guidance. The reduction in the rate of underlying cost growth supports an enhanced profit margin and in time will reduce the cost to serve the platform clients. As a result of this coordinated strategy delivery, we achieved 16% profit before tax growth for the half-year period and expanded our PBT margin to 51%. We see further profit margin expansion as sustainable thanks to the broad-based strength of our business. Our business model is highly cash generative and has delivered growing dividends.
I'm pleased to announce we've raised our first interim dividend for this financial year to GBP 0.038 per share, up 15%. Focusing on our inflows performance, this half year saw considerable strength in platform flows, with gross inflows reaching a record level of over GBP 6 billion. Net inflows were GBP 2.4 billion, up 14% on the half year 2025 comparative, a reflection of the ongoing quality of the Transact platform and the digital and integration enhancements we've made over recent years. Transact was in the top 3 in the advisor platform market for both gross inflows and net inflows for the period. Client numbers were up 5% over the period, reaching over 254,000, and we also improved our transfer ratio over the previous half-year period to 2.8% in that of HY 2026, signaling our strong competitive position. I'd like to highlight three key workstreams essential to our continued growth.
Data access and data quality are of paramount importance, especially as use of AI tools becomes more widespread among financial advice firms. We're renewing our focus on integrations and APIs to ensure that Transact interfaces seamlessly with advice firms' chosen technology stacks. Relatedly, we are assessing ways in which we can further leverage automation and AI to reduce processing time and deliver efficiencies, both internally in support functions and operationally for our clients and advisors. We're exploring how we can use AI tools to enhance the coding capabilities of our development team to the benefit of our proprietary technology. Our third key program of work relates to delivering the cost and efficiency program announced last year. This program is progressing well, and we are already seeing moderation in cost growth in half year 2026 compared to half year 2025.
We have seen great success with the restructuring of our support functions and the introduction of new tools to increase efficiency. Executing and delivering on these three key work streams will strengthen our proposition, delivering greater client numbers, strong net inflows, and increased profitability. I'll now hand over to Euan for a more in-depth look at the financials for the period.
Thanks, Alex. Good morning, everyone. The first slide that I'm going to share with you this morning is an overview of our KPIs. What you will clearly see as I talk you through these metrics is the acceleration in the financial performance of the business coming through, which is resulting from the ongoing delivery of our strategic priorities that Alex has described. As shown in the top left graph, average daily FUD has grown 17% year-on-year to GBP 77.5 billion. Aside from market movements, this has been driven by record gross inflows of GBP 6 billion during H1, of which the main driver has been the strengthening of our net transfers as the platform continues to attract more business from our competitors. We have achieved an impressive 14% compound annual growth rate in average daily FUD since HY 2023.
Now, looking at the top right graph, the growth in our average FUD has translated into Group revenue of GBP 85.8 million for HY26, up 11% from H1 last year. I'll discuss platform revenue, which constitutes the majority of Group revenue, in more detail on the next slide. The bottom left graph shows that this record revenue combined with the slowing growth in the cost base has driven Group underlying profit before tax up 16% to GBP 43.9 million and delivered an improved underlying profit margin of 51%. Moving on to the bottom right graph, the Group delivered strong growth in underlying EPS, up 14% on the prior year to GBP 0.10 per share. As a result, we have increased the first interim dividend by 15% to GBP 0.038 per share.
Looking in more detail at the Transact platform revenue for HY26, we can see investment platform revenue increased by GBP 8.5 million, or 11% in comparison to the prior year, to GBP 83.2 million. The majority of platform revenue is driven by annual charge income and the 17% growth in average daily FUDs during the period, translated into 14% growth in this revenue stream to GBP 76.4 million. As we have previously discussed, the lower increase in annual charge income is, in comparison to average FUD, is mainly as a result of clients benefiting from the natural movement through our tiered pricing structure as the value of their portfolio increases. Taking this into account, roughly three-quarters of the FUD growth drops through to annual charge income.
Wrapper fee income reduced in comparison to last year, reflecting the reduction in charges for family-linked portfolios that we implemented in H2 of the previous financial year. These two recurring revenue streams combine to deliver 99% of total platform revenue. As a reminder, we continue not to generate revenue through retention of interest on client cash. Time4Advice revenue increased slightly to GBP 2.6 million. Following next on the platform revenue margin, the graph highlights how revenue margins continue to moderate. The reduction of 1 basis point from the prior year comes primarily as a result of the natural progression of client portfolios through our tiered pricing structure and the effect of the reduction in charges for family-linked portfolios that was implemented at the start of H2 last year that I described on the last slide.
Given that the impact of the reduction in family-linked portfolios is included in last year's H2 revenue, we anticipate a more noticeable moderation in revenue margin as we move forward. I'll now provide more detail on our H1 cost base and cost initiatives. Firstly, As an overview of our cost initiatives, we have made good progress during the first half of the year. Across our support functions and operational areas, we have been implementing efficiencies and structural changes. Our platform operations have continued to focus on increasing the level of straight-through processing and automation, resulting in a reduction in manual tasks and processing times. Both of these in combination have enabled us to remove headcount in certain functions during recent months.
In parallel, we have continued to invest in our market-leading proposition and also in staff who focus on enabling the delivery of future efficiencies, including more automation. You'll see that staff costs have been the major driver of the 4% or GBP 1.7 million rise in administrative expenses in H1. You also see, in the bottom graph, that headcount in the period has reduced by 16, or 3%, meaning that staff cost run rate is in a good position as we enter H2. Non-staff costs have fallen this year as a result of some of the rebates on property provisions, but also through rigorous review of our contracts with third-party suppliers. We remain confident in meeting the 3%, or GBP 94 million, administrative expense target for FY 2026. Future roadmap eficiencies, which offset planned investments, also put us in a good footing for achieving our cost target for FY 2027.
These actions have put us on a clear path to long-term sustainable growth, including reducing our cost to serve per client while creating a more focused and resilient business for the future. Moving on to liquidity. The liquidity buffer has not changed meaningfully since the year end, mainly as a result of higher regulatory capital requirements in our regulated entities. We have also disclosed the liquidity held in our group company and surplus held in our group subsidiaries, as it illustrates that there will always be timing differences between profit generation in our operating subsidiaries and surplus liquidity in those entities flowing up to the group company.
As a result, as well as taking into account the timing lags that I've just described, we maintain a liquidity buffer to ensure we have resilience against external shocks and can continue to invest in the business while continuing to pay dividends to our shareholders. We remain confident that at this point in time we have the right level of available liquidity to help support the future requirements of the group. In terms of cash flow, the business continues to be highly cash generative, with the majority of profit throughout flowing through into cash. We generated an additional GBP 34 million of liquidity in HY 2026 in comparison to profit after tax of GBP 33 million, giving a conversion of just over 100%. Cash conversion of around 100% is expected for the full year and on an ongoing basis.
For those of you that want to understand more on corporate cash flows, a reconciliation of this figure is provided in the appendix to the presentation. The high level of profit to cash conversion allows us to continue to pay dividends on an ongoing basis. I'm pleased to say we have approved a dividend for the half year of GBP 0.038 per share, a 15% increase on HY 2025. Our dividend policy continues to be to pay out 60%-65% of profit after tax for the year over our two dividends. Next, I'll talk you through the group's guidance for FY 2026 and FY 2027. In summary, there are no changes to our revenue and cost guidance. We're focused on managing the platform revenue margin. We expect the reduction in this metric to slow, with the main driver of the reduction being clients moving through the tiered charging structure.
As I highlighted on our cost slides, we remain on track to deliver total underlying administrative expenses growth at 3% per year in FY 2026 and FY 2027, with cost growth in H2 of this year slowing in comparison to H1. Given changes to interest rate expectations over recent months, we now expect net interest income to be a little higher than anticipated earlier in the year. We have uplifted expectations to GBP 10 million in FY 2026 and GBP 11 million in FY 2027. We continue to expect net gain attributable to policyholder returns to be in the region of GBP 2 million per year. Moving on to my final slide, I wanted to highlight again the three core levers on which we are focused in order to drive earnings growth. Firstly, We've invested significantly in the business over the last few years.
We believe this investment has been fundamental to improving our prominent position in a competitive market, with market share of net inflows consistently being in excess of 20% over recent periods. This investment now puts us in a position where we can focus on margin delivery. The second and third levers focus on revenue margin and on cost management. Leave us in a position to accelerate earnings growth and enhance shareholder value in future years. You are already seeing this come through in the H1 financials through underlying PBT growth of 16% and profit margin improvement to 51%. The strategy is delivering, and we're confident in ongoing delivery moving forward. That concludes my part of the presentation. I'll now hand back to Alex.
Thanks, Euan. In this next section, I'll provide an update on the group's operational performance and the key developments within the financial advice market. I'll discuss how the group has been adapting to make our proposition more appealing to advice firm consolidators, and I'll also provide some color on how we're implementing automation and AI into the group's processes and how our market-leading proposition is well placed to keep winning in an evolving advice market. We operate in an expanding market with a compelling growth opportunity. The U.K. advisor platform market grew by 13% in the past 12 months, and market research forecasts an average annual realistic growth rate of 12% for the next five years. There also remains a large and growing pool of U.K. investable assets with potential to move into the platform market.
Within this attractive market, Transact continues to take a strong share of net inflows. Our share of net inflows in the first half of financial year 2026 was 25% of the market, reflecting the quality and competitiveness of Transact's proposition. Transact's stability and consistency is a key factor in our success. We have a 10% share of U.K. advisor platform market, but we continue to seek to improve our technology and service to further improve our position. A key trend in the U.K. advice market is the growth of financial firm consolidators. This is not a new trend and importantly is one that we've been actively aligned with for some time with the broadening of our Transact proposition for large and consolidator advice firms. Therefore, Transact is already a highly attractive platform partner for consolidators and large advice firms.
We continue to see strong transfer-in ratios both across the market overall and specifically from consolidators. Our net transfer ratio, in ratio, with consolidators is increasing as firms consolidate assets onto a smaller number of strategic platforms. Known as platform panels, many consolidators are choosing to include Transact in their selection of platforms. Central to this success is that Transact's proposition is closely aligned with consolidators' priorities. They are focused on continuing to grow assets under advice, drive efficiency through scale, and managing regulatory and taxation complexity. The Transact platform allows them to do this. Our breadth of wrapper capability, including bonds and trusts, is an attractive proposition for consolidators across their asset base. At the same time, our full-service model and advisor succession service support advice firms scaling without sacrificing service quality.
From an efficiency standpoint, APIs, platform rationalization, and integration with CURO and other advice firm CRMs allow larger firms and consolidators to standardize workflows and reduce operational friction as they grow. Critically, our in-house technology and regulatory support helps consolidators manage risk as their client base is expanding. Expand. While the core proposition is already well suited to our consolidators, we're also evolving aspects of our approach to reflect the increase in scale and sophistication of these firms. That includes deeper multi-layered engagement with consolidator leadership teams, more tailored services, and MI for larger firms. These refinements to our business model reflect the increase in scale and sophistication of consolidators, rather than a change in Transact's core strategy. In short, we understand consolidation, we're already winning with these firms, and we're selectively upgrading our business model to be even more attractive to these firms in future.
Another area of focus for business model enhancement is AI and automation. Integrations were already a key component of our proprietary technology strategy. Now our investment in the APIs that improve the quality and speed of integration for advice software which is streamlining the implementation and adoption of external AI tools for advice firms. We're also adopting AI tools within the group's proprietary technology development process itself, particularly in backend coding and testing. The focus here is on reducing development cycle times, improving consistency, and empowering our experienced team of developers. Across group support functions, including finance, risk, and HR, we're already bringing in new systems that will enable us to implement trusted AI productivity tools in core processes. This is about freeing up capacity and improving accuracy and allowing teams to increase the efficiencies of their workflows.
Stepping back, the common theme across these initiatives is efficiency and scalability. AI can enable a more attractive platform proposition a lower marginal cost per client, and a highly scalable operating model, all of which support further profit margin progression and a reducing cost to serve clients over time. We approach AI as we've approached all new technologies, as a means to enhance our best-in-class service proposition, not a replacement for our core competencies. Our cost guidance already incorporates ongoing technology investment, including AI and automation. The workstreams presented here are about deploying budgeted resources to improve efficiency, scalability, and operational resilience. Looking at AI's possible impact on the advice market more broadly, we see it as a potential tailwind for the U.K. advice market. In particular, AI can help advice firms scale more efficiently within an increasingly complex regulatory environment. The development of AI tools can support advisor productivity.
Examples include the recording and transcription of client meetings, and tools that help support suitability requirement and client reporting processes. Importantly, these tools are about assisting advisors rather than replacing them, a complement, not a substitute. This will help advisors spend more time productively with clients, as well as growing their book of clients and assets, while maintaining regulatory standards. Taken together, these developments support the scale growth of more efficient advice firms that are able to serve larger client bases and greater assets under advice. Overall, we see AI's impact on the financial advice market as a net positive. Harnessed correctly, it can support the long-term sustainability and growth of the U.K. advice market. In turn, this creates a supportive backdrop for continued strong asset flows onto Transact. IntegraFin Holdings' investment in AI and exploration of its possible opportunities builds atop our established competitive position.
The group's unique and hard-to-replicate business model is built to both withstand and benefit from ongoing technological change. The group utilizes proprietary technology, and we're well placed to benefit from AI backend coding efficiencies. We provide a high-touch client service delivered by experienced staff which is highly valued by both clients and advisors. We're a leading and award-winning brand with a strong reputation among the U.K. financial advisor community, and we have a deep understanding of the complex and evolving U.K. tax and regulatory regime. This combination of factors is differentiated, hard to replicate, and allows us to keep winning new business and take advantage of the new market opportunities presented by AI. To summarise, in the half year 2026, we delivered record growth and strong net inflows in a growing U.K. advisor platform market. We're confident of maintaining good net inflows momentum in future years.
The group has delivered earnings growth with a 51% profit before tax margin in half year and earnings per share up 14% in the first half of the year. As we implement the cost management initiatives from the group-wide cost review, we expect to continue growing profitability and profit margin. Our continued investment in enhancing our market-leading proposition makes Transact an ideal platform for both large consolidators and small financial advice firms. The increased efficiency from the implementation of AI and automation in our proprietary technology will allow us to better serve our clients and deliver for our shareholders. We are well positioned to drive sustainable earnings growth. Thank you for your time, we're now open to questions.
Thank you very much, Mr. Scott. Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. The star one for questions. We'll pause just a moment to give you a chance to signal. Our first question this morning is coming from Ross Luckman calling from Peel Hunt. Please go ahead, Ross. Your line is open.
Morning, guys. Just one question from me. You've obviously reiterated your cost guidance for just 3% growth over the next two years, supported by those efficiency initiatives, which is great. How do you think about the ongoing investment and cost growth required further into the medium term to support the platform?
Yeah, thanks for the question, Ross. I think over the medium term, we believe we're now reaching a good cadence of finding cost efficiency but also tempering that with the ability to allow us to invest in the business as well. I think that's being demonstrated through the half-year results and our ongoing commitment to the cost guidance over this year and next. When you look beyond FY 2027, we've always got to be a little circumspect about what the future may hold from technological change. At the moment, as current things stand, we believe we can still maintain a low level of cost growth going forward. Some of the primary reasons for that are that the way that technology has developed over recent years is that you don't necessarily need a step change in technology investment.
You can have a better cadence of cost growth increase and investment. We remain comfortable with the guidance and also with basically what the market is expecting around cost growth from FY 2028 onwards.
That's great. Thank you.
Thank you very much, sir. Next question will be coming from Michael Sanderson calling from Barclays. Please go ahead.
Morning, Alex. Morning, Euan. A couple of questions, if that's okay for me. First one, obviously one of your peers has decided to start charging on or retaining interest having not been in the past. I just would love to know your thinking about the change in that and whether advisors genuinely care and then clients genuinely care on your principal stance that you've held throughout your existence. Second question was, obviously seeing a lot of transfers across, interested if there's any color on the sort of advisor types and client types that come in that transfer? Is it different behaviors, different style, different requirements that you need to address as a result? Interested to know if there's any material change there.
I'll leave it with those two at the moment.
Thank you.
Thanks, Michael. I'll pick up on the retention of client interest piece and perhaps leave I'll perhaps let Euan pick up on the transfers piece. On the client interest, yes, from our perspective, it was disappointing to see yet another major platform decide to actually move to taking a share of client interest. It's not so much the principle of taking the interest that we see as sort of problematic. It's actually the actual impact in the size of the charge that relates into the client relative to the charge that would otherwise apply to the cash that's on the platform. You know, it is a significant increase in multiple that is being generated by this change.
Actually our biggest issue is on the transparency of that through to the end client when they are actually selecting their platform, making the decisions on their investment, and actually, you know, putting their monies on the platform. You know, that's where we think that there is significant room for improvement. You know, we've had the results of some independent surveys that have been done that have shown that, you know, when you actually get to the end client, they have no idea this is happening to them, and they are not actually very impressed when they find out it is.
There is clearly a failing in the disclosure part of this, and that's the part that concerns me the most, because it's actually not giving the clients a fair view of what's actually happening with their monies and what they're actually paying for being on the platforms.
Mike, on your second question on transfers, a few things that are probably worth noting. Firstly, it's great to see that we see a good deal of variety in the net transfers at an adviser level, both from new and existing advice firms. Secondly, we're seeing transfers coming in from pretty much all of our competitor platforms on a net positive basis. It's not just due to the misfortune, let's say, of one individual platform provider. It's across the piece, which gives a great representation of the strength of the overall proposition. Kind of moving on to your, you know, your specifics around style and requirements of adviser firms and clients. It's difficult to say because there's a number of different things that adviser firms look at when they're contemplating platform selection.
It will be a combination of things that we need to remain strong in all elements of. It might be our personal service that helps move them over because of the reputation we have there. The value that we're offering at a great price, the functionality that we offer, and also the product diversity. As we've kind of disclosed over the last year, 18 months now, there's quite a lot of change going on as a result of the government budgets and a shift towards bonds. We have a great product offering there from both an onshore and offshore bond perspective, which also gives us, puts us on the front foot for transfers in. Hope that helps. Thank you.
Thank you very much for your question, sir. We'll now move to David McCann of Deutsche Bank. Please go ahead.
Morning, both. The first question for me, the April numbers you've given today suggest that you've benefited from the market uplift and indeed net inflows have continued, which is obviously good to see in April. I just wondered more generally from what you're seeing in both April and May in sort of underlying client and adviser sentiment, given there's obviously growing inflationary macro and other sort of U.K. political noise out there. Any sort of signals of any kind of change there would be interesting, and particularly if you're seeing that actually translate into actual flow changes? That's, I guess, the first question.
Secondly, maybe you can touch on what the key drivers of those fairly notable increase in the regulatory capital requirements were in the period, given they were quite large. You only kind of glossed over them, but perhaps you could talk why they actually have increased that much. Third question, you reiterated the 60%-65% dividend payout ratio for the full year, that's pretty clear. We also previously talked about the interim dividend being based off of 40%-45% of the prior year's final. This time it was 47.5%. Maybe if you could just talk to that. Is there actually a change here? How should we think about that ratio for the interim going forward? Thank you.
Thanks, David. Picking up on your questions on sentiment, I mean, we've sort of March, April is always a sort of an interesting mix because we have sort of the cutoff for the quarter at the 31st of March and the tax year end falling variously across that, with working days dependent on where Easter falls. This year we sort of certainly saw Easter falling in a structure that it created most of the pensions inflow, monies coming in at the back end of the tax year, all falling in March. Then ISA monies, you get the catch-up on people who are putting in their last-minute contributions, followed by a sort of large uptick in the start of April of people putting their new ISA monies in.
Whereas on the pension side, you tend to get an outflow swing in April at the start of the new tax year. as people who have been sort of wanting to take monies out of their pension wait for the new tax year to start. It's always a little bit variable across that period, but we saw everything holding up really strongly relative to last year. Even moving on from that, you know, it tends to be a quieter period towards the end of April, but we're not seeing anything sort of any quieter than normal in an April period. There doesn't seem to be any sort of negative sentiments flowing through that period. Even into May, it's sort of continued to be a relatively positive market.
I think whilst there's an awful lot of sort of noise geopolitically and even in the U.K. political landscape, that's not actually yet really translating into anything that's resulting in people's ability or propensity to save being reduced. There's still the need for people to be saving for their pensions. There's no sort of surge in job losses or anything of that nature. I mean, even this morning, I mean, inflation has come in somewhat lower than expected. You know, I still expect, we all think that there's going to be sort of some spikes to come in that, but at the moment none of that is really translating through into things that impact the sentiment in the advice market.
On your question on the regulatory capital requirements, firstly I'd just like to say that that rise is not expected to continue at that rate going forward. However, delving into a little bit of detail on that, you'll probably be aware that we have three regulated entities across the Group, one investment firm and two insurance firms. The change in regulatory capital requirements was driven by, firstly, around half of it was from our investment firm, and that is a relatively formulaic change because of the way that investment firm regulatory capital requirements work. The second, the insurance piece is based on actuarial valuations on forward look, there's quite a lot that goes into that, I wouldn't anticipate that that rise would be of the same value going forward. Yes, you are right to note the rise.
On the dividend piece, I think I've just tried to do some calculations on where you got your number from. I think your 47.5% is 47.5% of the second dividend from last year. How we generally look at the first dividend of the year is it's probably going to be around the 35%-ish mark of the total dividend for the prior year, which was GBP 0.113 per share. I hope that helps on kind of modeling the first interim dividend going forward.
David, does that answer your question, sir?
Oh yes, thank you. That's great. Thank you very much.
Thank you very much, sir. Sorry for that. Next question will be coming from Gregory Simpson of BNP Paribas. Please go ahead. Your line is open, sir.
Yeah. Hi. Good morning. Greg from my side. Firstly, just want to check in on the dividend and why you think 60% to 65% is the right payout and why it couldn't be more given you're highlighting the 100% cash conversion, there's limited CapEx, limited presumably limited appetite for M&A? That's the first question. Second one is kind of go back a bit on the previous question.
That sounds like inflows are looking fine, but just wanted to check if you're seeing anything on the outflow side, given pensions coming under inheritance tax soon and also, presumably, some upward pressure on mortgage rates from current rates. Thirdly, on consolidators, thanks for the color. I just wanted to check, is every kind of advice firm on the kind of standard transaction fee schedule? Thanks.
I think I'll take the dividend question, Greg, and then I'll pass over to Alex for the other two. On the dividend, what we're trying to illustrate in the presentation is that we remain comfortable in the level of liquidity we have across the Group. Kind of David also hits on a question where sometimes there are changes to regulatory capital requirements that we do need to be able to weather that and still have sufficient liquidity to pay dividend to our shareholders. At the moment, we feel that we have the right level of liquidity within the Group. If you look at the slide, At the half year, we had around GBP 20 million of liquidity in our Group company, i.e., the one that pays the dividends out to shareholders.
There was a little bit of a buffer due to timing differences of profit generation and paying dividends from our subsidiaries up to the group company as well. We remain comfortable with that level of where it is at the moment from a dividend perspective. That's notwithstanding the fact that the Board do keenly look at the amount of liquidity we have available, and we want to remain as efficient as possible with our liquidity. Where we see we are developing excess liquidity, we do discuss those levels, but we're not at that point at the moment. Over to Alex on the other team.
On your question on outflows, I mean, where we are at the moment, outflows are relatively stable. We've not seen any big upticks from the current sort of environment issues. I am wary when I make a comment like that because we all know what's going on around the world, and inflationary drivers will be the predominant point of what causes outflows to go up. That will sort of apply to people in pensions drawdown who need more to live on. Your point about mortgages, although I'm slightly more bullish on the mortgage point for the moment because we sort of have seen for the last two or three years people replacing their sort of very low interest rate-based mortgages that were for fixed periods. They've sort of, we've been through a cycle as people have had to move on to higher rate mortgages.
I would be hopeful that there's far less impact of that in terms of pushing outflow rates higher, but I had anticipated probably 12, 18 months ago that they would start to sort of level off and maybe even come back a bit. Certainly with the current environment, I don't see that happening. We're not seeing any big uptick at the moment. Then coming to your point on consolidators, our line has been the same forever. You know, we don't do pricing deals. We have a rate card and we sort of keep people on that rate card. It's hugely important for actually maintaining sort of the stability of the business and actually sort of controlling systems. You know, it just makes everything more efficient. There's lots of reasons why we don't do individual deals on consolidated groups.
I think there's a realization actually that what we deliver to our clients, the value for money what we actually sort of provide across the platform, the technology, the service, the support for advisors that actually, you know, we're not needing to do special deals to be able to win the business.
Very helpful. Thank you.
Thank you much, sir.
Ladies and gentlemen, once again, if you have any questions or follow-up questions, please press star one on your telephone keypad at this time. We will now move to Ben Bathurst of RBC Capital Markets. Please, go ahead.
Morning, both. Thanks for taking my questions. I've got questions in three areas, if that's okay. Starting with one on cost development in FY 2026 for Euan. I wonder if I could just reference back to the cost waterfall guidance from results last year. Do those percentages of 2% investment, 3% inflation, and 2% cost savings that you set out in December, do they still apply, or have those numbers moved around at all, even if that 3% sort of final destination is unchanged? Secondly, on AI, you've spoken about assessing use of AI and automation.
Just given the amount of development work that you do on the platform, should we be thinking that there could ultimately be a cost-saving angle for the group linked to the deployment of AI? When do you think you'll be in a position to sort of conclude your assessment of this? Thirdly, on the consolidation opportunity, really a high-level question, but what proportion of consolidation businesses out there do you think are amenable to using a third-party platform and using panels versus the proportion that are going it alone? Have there been any changes in industry norms in that respect in the last couple of years? Thank you.
Yeah, Ben, I think, thanks very much for your questions this morning, Ben. On the cost side, I think the brief answer is going to be yes, those percentages still apply. We've been delivering savings through the first half of the year. We have more to make during the rest of the year, but there is that an ongoing investment program that we also have where we are increasing costs on the investment side in H2, as well as we hire certain resources in order to deliver on future requirements. Sorry about the short answer, Ben, it's quite simple because the answer is yes.
Great. Okay. On the AI point, Ben, I mean, the way I'm looking at this at the moment is what we have, a very experienced development team. In fact, we have a couple of development teams across the business. What I would expect in certainly the sort of short term is that what we'll see is that AI will allow more to be developed by fewer people. That doesn't mean that we're going to have fewer people. It means we'll be doing more development, but we should be able to slow down the speed of growth of the development, a number of developers, and therefore the cost of development, as we continue to grow the business. That sort of feeds into the sort of the cost per servicing of each client coming down.
Driven both by increasing numbers of clients, also driven by an actual ability to develop the systems in a way that is cheaper than per capita is cheaper than it is today, if not actually cheaper. It's going to be a very, very much a moving feast, you know, we're very, very aware of moving this at a, shall we say, an appropriate rate, such that we are investing where we can see very clear benefits of doing so. It's a balance between investing sensibly to do that and not throwing loads of money at something that isn't going to give any quality of return in the long term. This is very much a slowly as we go and actually sort of learning not just from our own experiences, but from what's going on around us in the market as well.
Coming to your point on consolidators, I think from our perspective, we are seeing pretty much all consolidators prepared to open discussions. That doesn't necessarily mean that they're ready and prepared to move or to add us on to platform panels. We've seen a significant shift in the last probably six to nine months. In terms of an understanding amongst a lot of the consolidator firms that, you know, what they thought they could perhaps benefit from financially by running their own platform is nowhere near as easy to deliver as they may originally have thought. That's actually causing many of them to reassess their view.
Perhaps consider that they can run their own platform structures for the more easy cases, the less complex tax requirements, but they need the capabilities and support of an established platform to deliver sort of for the more complex clients. They need to be able to provide for every type of client because that's the nature of the consolidator businesses. They're buying advice firms that have every type of client within them. I think the answer, the rather simplistic answer, is it's all available. It probably isn't 100% of the business of each of them that's entirely available, but that's unfortunately then very dependent on the firm in question. It's difficult to give you any sort of specific answer, but hopefully that helps give a bit of color to it.
That's very helpful color.
Thank you for that.
Thank you much, sir. We have another question now coming in from Hal Potter of Bank of America. Please go ahead, sir.
Morning, gents. Thank you for taking my questions, just the two of them. On costs, we saw occupancy had the benefit of rebates and a provisions relief. What are your expectations for this line item in H2? Are they effectively non-recurring? My second question is on capital, which is as you accelerate profit growth, is the dividend going to remain the key focus? Would you ever consider other potential uses of capital? Thanks.
Thanks for the questions, Hal. On the cost side, on occupancy, yeah, there were some nonrecurring releases of provisions. It would more likely move back to probably what you've got as an expected run rate for occupancy there. Similar to well, not similar to prior years because we had dual running of property as well. You've got to remember it's a very small line item for us because due to accounting treatment, the predominant impact of our premises costs comes through depreciation and interest in our P&L. From a capital perspective, our full year results, we talk through our capital allocation policy. We do regularly talk at a board level as to what a level of surplus looks like and if and when we should be discussing returns in excess of our dividend policy.
As I said earlier in the Q&A, we're not at that point, but we do discuss it at a board level periodically and keep testing the water with it. At the moment, in summary, no change to dividend policy.
Great, thank you.
Thank you very much, sir. As we have no further questions in the queue, Mr. Scott, I'll turn the call back over to you for any additional or closing remarks.
Thank you. Thank you. Just thank everyone for your time this morning and wish you all a good day.