Integrafin Holdings Plc · LSE:IHP
Integrafin — FY2022 Earnings Presentation
35 slides from Integrafin's earnings presentation, Dec 14, 2022
Slide 1: Results Presentation
Results Presentation Full year ended 30 September 2022
Slide 2: Summary
Summary Investing in the Award Winning Resilient Performance Business Platform Resilient and strongly positive net flows, Continued delivery of planned IT and No 1 UK advised platform with and growth in revenue and underlying operational enhancements, with cost Investment Trends and CoreData for ear
Slide 3: IHP Group – clear strategy and a simple business model
IHP Group – we have a clear strategy and a simple 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 • We do this by harnessing t
Slide 4: IHP Group – our business model delivers growth
IHP Group – our business model delivers growth Leveraging our leading customer service, technology, and scalable operations to drive business growth Strong FY22 results Maintain cash Invest in the generation and a Deliver on Drive growth business and grow strong balance dividend policy earnings shee
Slide 5: Our award winning service proposition
Our award winning service proposition The Transact platform: • Received top rating in the UK Investment Trends Adviser Technology & Business Report 2022 • Received the top Net Promotor Score (NPS) out of 18 platforms in the UK Investment Trends Survey 2022 • Won Professional Adviser Best Platform fo
Slide 6: Resilient Group underlying PBT margin in a year of volatile asset markets
Resilient Group underlying PBT margin in a year of volatile asset markets Group and Transact platform underlying PBT margin 60% 55% 52.7% • The Group underlying PBT 51.5% 51.8% 51.3% margin has reduced from 50.3% the FY21 level due to 50% 49.3% increased investment in the 47.7% 47.7% business to sup
Slide 7: Group costs have been managed, in an inflationary environment
Group costs have been managed, in an inflationary environment The Group total underlying cost base has increased by 16% : FY22 – £66.2m (FY21: £57.1m) We reiterate that our cost guidance for FY23 and FY24 is unchanged Staff Costs (£m) • Staff costs have increased in FY22 due to a staff pay increase
Slide 8: IHP Group – our operational plan
IHP Group – our operational plan Investment in IT and software development: • 15 IT staff have been recruited • Further IT staff (c. 35) are targeted to be recruited through FY23 – this is built into our cost guidance • We confirm that after this IT investment is completed we then do not expect mate
Slide 9: Update on Time4Advice
Update on Time4Advice • Time4Advice is an important strategic development to build out CRM software for adviser firm – this will also have a high quality interface with the Transact platform • Time4Advice’s cloud-based next generation CURO software went live (from 5 December 2022) with an adviser fi
Slide 10: Other Group developments
Other Group developments • Senior management additions - UK based Group CTO and Group CRO joining in early 2023; actively recruiting for a Group CFO • Commenced implementation of a structured environmental plan to achieve carbon net zero by 2050 – with design assistance from Willis Towers Watson • S
Slide 11: Platform update, and advised market outlook
Platform update, and advised market outlook 11
Slide 12: Transact growth opportunity from substantial UK assets off platform
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 pension auto enr
Slide 13: UK government encourages long term savings through tax incentive wrappers
The UK government encourages long term savings and investment through tax incentive wrappers The UK is the fifth largest wealth market in the world and growing Type of UK tax incentive wrapper UK profile 30.2 million people in the UK have a private pension in Personal Pensions accumulation In 2020 n
Slide 14: Forecast adviser platform market growth
Forecast adviser platform market growth Adviser platform assets – forecast by Fundscape 2022-27 CAGR £1,200bn £1,100bn 16% £1,000bn £900bn 11% £800bn 8% £700bn CAGR 8% 2018-2022 £600bn £500bn £400bn £300bn 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Historical Pessimistic Realistic Optimistic
Slide 15: Transact continues to meet financial adviser needs
Transact continues to meet financial adviser needs What are the most important factors advisers consider when choosing a platform? • Transact was consistently ranked in the top 3 platforms in the 19 service 1 Customer Service Levels categories of the Investment Trends Adviser Technology Report 2022
Slide 16: Transact has developed its digital-first capabilities
Transact has developed its digital-first capabilities to support adviser needs for online platform functionality FY22 • Live chat usage increased 141% • Co-browse requests are up 53% The development of a new ‘adviser support team’ to help advisers when they use Transact Online, through the use of li
Slide 17: Transact is a top 3 platform in the UK advised market
Transact is a top 3 platform in the UK advised market Percentage of FY22 Advised Technology FUD as at Platform Platform advised Net Inflows Provider 30.09.22 market FUD 1 True Potential £5.1bn Proprietary 1 Abrdn £66.9bn 13% 2 Aviva £4.7bn 2 Quilter £64.6bn 12% 3 Transact £4.4bn Proprietary 3 Transa
Slide 18: Group revenue and net inflows over time
Group revenue and net inflows over time Group revenue and Transact platform net inflows £160 £6 Millions Billions £140 £5 £120 £4 £100 £80 £3 £60 £2 £40 £1 £20 £0 £0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Group Revenue Transact platform net inflows 18
Slide 19: Transact platform – robust market share in a growing advised market
Transact platform – robust market share in a growing advised market 10.0% 9.5% 9.5% 9.3% 9.0% 8.9% 8.9% 8.7% 8.5% 8.0% FY18 FY19 FY20 FY21 FY22 Market share of UK adviser platform FUD Source: Fundscape Q322 November 19
Slide 20: Transact platform - resilient inflows
Transact platform - resilient inflows This was our 2nd highest year ever for net inflows, Sources of gross inflows (FY22) despite the volatility in asset markets 4% £5.0 35% Billions £4.5 £4.0 £3.5 £3.0 £2.5 61% £2.0 £1.5 £1.0 Inflows from current investors putting more onto the Platform £0.5 Inflow
Slide 21: Transact Platform update for FY22
Transact Platform update for FY22 • Average daily FUD for the year £52.5bn (FY21 £47.2bn) • Closing FUD £50.1bn (FY21 £52.1bn) • Launched the Transact-Blackrock Model Portfolio Service Advisers Clients 7.5k up 5% (FY21: 7.2K) 224.7k up 8% (FY21: 209K) Adviser Concentration: Average Client Profile :
Slide 22: Increasing registered advisers on Transact and share of adviser wallet
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 36,000 36,000c.35k UK registered financial c.5.5k advisers c.7.5k (FY21:
Slide 23: Financial update
2: IntegraFin Financial update 23
Slide 24: Group revenue has grown 8% in FY22
Group revenue has grown 8% in FY22 £m IHP Group IHP Group +/- % FY 22 FY 21 change Group revenue (£m) 133.6 123.7 +8% Underlying Group PBT • Underlying PBT for FY21 now (£m) 65.8 65.2 +1% includes the FY21 VAT charge on software costs (£1.7m). This was Underlying Group PBT margin 49.3% 52.7% paid in
Slide 25: Platform revenue has consistently grown, with moderate revenue yield decreases
Platform revenue has consistently grown, with moderate revenue yield decreases from price cuts Platform revenue (£m), and revenue yield (bps) £140 35 bps £m £130 29.6 £120 28.6 27.7 30 £110 25.7 • The platform revenue yield 24.7 £100 25 has decreased over time as £90 we have reduced charges £80 20 f
Slide 26: Group revenue analysis
Group revenue analysis FY21 Total Platform FY22 Total Platform Platform revenue includes a mix of: Revenue: £121.3m Revenue: £129.7m +7% • recurring annual commission (dependent 2.2 3.0 on FUD levels) Transact (£m) 11.6 10.6 • wrapper fees (fixed £ charge, dependent on the number of wrappers) • othe
Slide 27: Staff numbers
Staff numbers 30 30 Change September September 22 21 • At H1 22 we had 117 software Software development 131 118 +13 development and IT infrastructure and IT infrastructure staff Operational and support 389 395 -6 activities • Over the period we have added a total of 15 software development and IT i
Slide 28: Group liquidity position, and dividends
Group liquidity position, and dividends Group liquidity position Dividend FY22 FY21 FY20 FY22 (£m) Per share Total Group consolidated cash 183.0 Ordinary – first 3.2 pence 3.0 pence 2.7 pence interim Ordinary – second Total Group cash held for: regulatory 7.0 pence 7.0 pence 5.6 pence interim requir
Slide 29: Capital and cash priorities
Group capital and cash allocation approach Drive financial resilience through strong cash position 1.On-going capital and with no debt Support evolving regulatory capital and liquidity liquidity requirements Capital and cash priorities requirements Maintain additional buffer for risk appetite
Slide 30: Guidance
2: IntegraFin Guidance 30
Slide 31: Financial guidance - cost guidance for FY23 and FY24 remains unchanged
Financial guidance - cost guidance for FY23 and FY24 remains unchanged (as issued in July 2022) FY23 FY24 FY23 FY24 Expected to be a c.18% Expected to be a c.9% Platform Buy Commission threshold will be reduced from Staff costs increase on FY22 (£47.1m) increase on FY23. £200k to £100k in March 2023
Slide 32: To summarise
To summarise • Resilient performance • Investing in the business • Award winning Transact platform • Compelling market opportunity • Time4Advice Next Generation CURO • Outlook 32
Slide 33: Q&A
Q&A 2: IntegraFin 33
Slide 34: Appendices
2: IntegraFin Appendices 34
Slide 35: Appendix A - Analysis of non-underlying costs in FY22 and FY21
Appendix A - Analysis of non-underlying costs in FY22, and FY21 FY21 Non-underlying costs FY22 Non-underlying costs £m £m £0.8m- VAT interest (all years including FY22) £11.5m £8.0m- VAT costs (pre FY22 only) £11.5m -£0.3m -£0.3m- Dilapidations accrual £0.1m- Stamp Duty release (credit) £1.0m- One o