Integrafin Holdings Plc · LSE:IHP
Integrafin — FY2023 Earnings Presentation
30 slides from Integrafin's earnings presentation, Dec 14, 2023
Slide 1: Results Presentation – Full year ended 30 September 2023
Results Presentation Full year ended 30 September 2023 “Resilient performance and continued growth”
Slide 2: Agenda
Agenda 1. Group highlights 2 Transact performance 3. Financial update 4. Guidance and outlook 5 Q&A 2
Slide 3: Group highlights
Group highlights Record high FUD level, and strong Winning market share in a growing Award-winning platform net inflows during FY23 market Record high year-end FUD on the The Transact platform won Platform of Transact’s share of the UK adviser platform at £55.0bn, and resilient net the Year at the S
Slide 4: We remain focused on our clear strategy and business model
We remain focused on our clear strategy and business model Our aim is to be the number 1 provider of software and services for clients and UK financial advisers Our strategy is focused: • We make financial planning easier for clients and their UK financial advisers, with a Consumer Duty aligned advi
Slide 5: Our business model is delivering growth
Our business model is delivering growth Leveraging our leading customer service, technology, and scalable operations to drive business growth FY23 results Invest in the Maintain cash generation Deliver on dividend Drive growth business and grow and a strong balance policy earnings sheet • Advisers +
Slide 6: Transact's growing share of FUD and flows in the UK adviser platform market
Transact’s growing share of FUD and flows in the UK adviser platform market £9 25% Billions 21.7% £8 20% £7 £6 15.6% 14.8% 14.4% 15% £5 13.0% 12.0% 10.2% £4 9.8% 9.9% 9.8% 10.1% 8.8% 10% 9.8% £3 9.3% 9.5% 8.7% 8.9% 8.9% £2 5% £1 £0 0% FY18 FY19 FY20 FY21 FY22 FY23 Net Inflows Gross Inflows Transact
Slide 7: Transact platform digitalisation is enhancing service and efficiency
Transact platform digitalisation is enhancing service and efficiency FY23 This enhances adviser firm experience and enhances platform efficiency Strong adviser firm uptake of online functionality, and ‘Live chat’ usage Grew online platform functionality has increased by 25% and completed ‘Co-browses
Slide 8: Transact performance
i: IntegraFin Transact performance
Slide 9: Robust Transact platform performance during FY23
Robust Transact platform performance during FY23 • Record closing FUD £55.0bn (FY22 £50.1bn) • Average daily FUD for the financial year £53.6bn (FY22 £52.5bn) Advisers Clients 7.7k up 2% (FY22: 7.5K) 230.3k up 2% (FY22: 224.7K) Adviser Concentration: Average Client Profile : • Low levels of adviser
Slide 10: Transact had the 2nd highest net inflows across adviser platforms in FY23
Transact had the 2nd highest net inflows across adviser platforms in FY23 Adviser platforms with highest net inflows in FY23 1 True Potential £3.7bn • Transact’s growth in FUD, clients and advisers is wholly organic 2 Transact £2.7bn • Transact is growing market share of adviser 3 Aviva £2.6bn platf
Slide 11: Resilient growth of the Transact platform
Resilient growth of the Transact platform Transact FUD and client numbers growth Source of gross inflows (FY23) £60 250 Billions Thousands 4% £50 200 £40 41% 150 £30 100 55% £20 50 £10 Inflows from current investors putting more onto the platform £0 - Inflows from advisers with established relations
Slide 12: The Transact platform has grown to be one of the largest adviser platforms in the UK
The Transact platform has grown to be one of the largest adviser platforms in the UK Percentage Technology FUD as at of adviser Platform Provider 30.09.23 market FUD 1 Quilter £69.7bn 12% • Our award-winning service and Consumer Duty 2 Abrdn £68.5bn 12% aligned proposition has helped us become one o
Slide 13: Transact's award-winning service proposition
Transact’s award-winning service proposition • Maintained the title of ‘Best Large Platform’ - CoreData 2023* • Schroders Platform of the Year 2023 • Schroders Leading Platform for Discretionary Management 2023 • Platforum – highest satisfaction rating from primary users (91%)** CoreData 2023 Overal
Slide 14: The Transact platform continues to meet adviser needs
The Transact platform continues to meet adviser needs Key factors for adviser firms choosing a platform – according to Platforum research • Transact rated top by Advisers for service provided by a large platform Customer service levels (>£10bn) in the Investment Trends Report 2023 • Transact ranked
Slide 15: We are gaining market share, in a market with solid growth forecasts
We are gaining market share, in a market with solid growth forecasts Adviser platform assets – forecast by Fundscape 2023-28 CAGR £1,400bn 16% £1,200bn 11% £1,000bn £800bn 7% CAGR 8% 2018-2023 £600bn £400bn £200bn - 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Historical Pessimistic Realis
Slide 16: A Consumer Duty aligned platform
A Consumer Duty aligned platform • Market leading interest rate earned on client cash is fully paid onto clients - interest rate paid on pooled client cash (instant access) for September 2023 was 4.9% Treatment of client cash interest • Client cash is actively managed using 7 highly rated UK banks •
Slide 17: Financial update
i: IntegraFin Financial update
Slide 18: Financial headlines FY23
Financial headlines FY23 £m IHP Group IHP Group FY 23 FY 22 Group revenue (£m) 134.9 133.6 • The underlying Group PBT for FY23 has 63.0 65.8 declined as a result of: Underlying Group PBT (£m) • planned investment in the Transact platform digitalisation programme • inflationary cost pressures Underly
Slide 19: Platform revenue continues to grow, with moderate revenue yield decreases
Platform revenue continues to grow, with moderate revenue yield decreases from our pricing initiatives Platform revenue (£m), and revenue yield (bps) £140 35 bps £m 29.6 £120 28.6 30 27.7 25.7 24.7 24.3 £100 25 £80 20 £129.7 £130.1 £60 £121.2 15 £107.3 £99.2 £91.2 £40 10 £20 5 £0 0 FY18 FY19 FY20 FY
Slide 20: Consistent Group revenue performance
Consistent Group revenue performance FY23 Total Platform FY22 Total Platform Transact platform revenue includes a mix of: Revenue: £130.1m Revenue: £129.7m 1.7 2.2 • Recurring annual commission (dependent on average 12.3 11.6 FUD levels) Transact (£m) • Wrapper fees (fixed £ charge, dependent on the
Slide 21: Costs managed in line with expectations
Costs managed in line with expectations Staff Costs (£m) • Staff costs have increased in FY23 due to the planned increase in total average staff headcount, staff pay increases in recognition of the cost of living, and a salary/bonus restructure in October 2022 53.9 47.1 • Recruitment of IT and softw
Slide 22: Healthy Group liquidity position and cash generation
Healthy Group liquidity position and cash generation Group liquidity position As at 30.09.23 Dividend FY23 FY22 FY21 (£m) Per share Total Group consolidated cash 177.9 Ordinary – first 3.2 pence 3.2 pence 3.0 pence interim Total Group cash held for: regulatory requirements; risk appetites; foreseeab
Slide 23: Guidance and outlook
2: IntegraFin Guidance and outlook
Slide 24: Financial guidance for FY24 remains unchanged
Financial guidance for FY24 remains unchanged FY24 • Platform buy commission, and wrapper fee for JISAs, will be removed from March 2024 – total Platform revenue annualised cost of £600k to revenue • Expected to be a c.12% increase on FY23, primarily driven by the increase in headcount to Staff cost
Slide 25: Summary
Summary Resilient performance in volatile markets Award-winning proposition driving growth in market share A Consumer Duty aligned platform Transact digitalisation driving improved service and operational efficiency 25
Slide 26: Q&A
Q&A 2: IntegraFin
Slide 27: Appendix 1 - Transact growth opportunity from substantial UK assets off platform
Appendix 1- Transact growth opportunity from substantial UK assets off platform Significant growth opportunities - with assets coming to advisers from: savings; consolidation of pensions and ISAs from other providers; inheritance; and, pension accumulation, including under the Government required pe
Slide 28: Appendix 2 - Increasing registered advisers and share of adviser wallet
Appendix 2- We continue to increase the number of registered advisers on Transact, whilst also gaining greater ‘share of adviser wallet’ There are c.35k registered financial advisers in the UK – we estimate c.13k is contestable 3,000 c.22k c.35k 36,000 36,000 UK registered financial advisers c.5.3k
Slide 29: Appendix 3 - Progress in creating a more sustainable business
Appendix 3- Progress in creating a more sustainable business Responsible business Our People Community • The Group is committed to achieving • 94% satisfaction rate for employee • We jointly sponsored an adviser net zero in the decade leading up to well-being organised ‘Rock for Ukraine’ event in 20
Slide 30: Disclaimer
Disclaimer The information contained in this presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein