Integrafin Holdings Plc · LSE:IHP
Integrafin — FY2018 Earnings Presentation
17 slides from Integrafin's earnings presentation, December 2018
Slide 1: Results Presentation – Year ended 30 September 2018
Results Presentation Year ended 30 September 2018
Slide 2: Presentation team
Presentation team Ian Taylor Alex Scott Chief Executive Officer Chief Financial Officer • Co-founded IntegraFin in 1999 • Joined IntegraFin in 2009 • 1992 – Seven years in asset • 1997 – Twelve years in insurance management licence provision • 1987 – Five years in life industry • 1991 – Six years in
Slide 3: Key messages
Key messages Best ever inflows Gross and net inflows have increased and FUD is up 19% since Sep ’17 Total fee income £91.2m, up 14% compared to FY17 Adjusted operating profit £43.3m, up 15% compared to FY17 Adjusted operating profit margin increased to 47.5% from 47.0% in FY17 Profit after tax £32.9
Slide 4: Impressive FUD growth
Impressive FUD growth Growth in Funds Under Direction (£bn)(1) compared to the MSCI World Index 2007 33.1 • Transact has enjoyed FUD 2,500 First dividend growth every year since 2003 paid yearly Transact thereafter 27.9 2000 moves into operational 2,000 2000 profit during • FUD growth maintained 200
Slide 5: Net inflows for FY18 were 11.7% higher than the previous year
Net inflows for FY18 were 11.7% higher than the previous year £1.6bn £1.53bn £1.52bn £m FY18 £1.45bn £1.46bn £1.45bn £1.41bn £1.39bn £1.4bn Opening FUD 27,927 £1.2bn £1.09bn Inflows 5,957 £1.05bn £1.07bn £1.04bn £1.00bn £0.98bn £1.0bn £0.93bn £0.96bn Outflows (1,863) £0.8bn £0.69bn Net inflows 4,094
Slide 6: Total fee income up 14%
Total fee income up 14% 96% of total fee income is recurring FY18 FY17 Change £m £m Annual Fee Annual basis point charge levied on 79.2 69.5 +14% Income assets and cash held on the platform (87%) (87%) Wrapper Fee Annual fixed fee levied on all Transact 8.1 7.3 +11% Income wrappers (9%) (9%) Buy Com
Slide 7: Expenses were higher mainly due to one-off IPO related costs
Expenses were higher mainly due to one-off IPO related costs £m FY18 FY17 Staff costs 35.0 (1) 30.5 Occupancy 3.6 3.5 Regulatory and professional fees 6.8 4.5 Other costs 3.7 3.7 Total expenses 49.1 42.2 Depreciation and amortisation 0.6 0.6 (3) Total operating expenses 49.7 (2) 42.8 (1) Of which £0
Slide 8: P&L and cash flows
P&L and cash flows Profit & Loss Cash Flows £m FY18 FY17 £m FY18 FY17 FUD (£bn) 33.1 27.9 Adjusted Operating Profit 43.3 37.7 Adjustments (IPO) (2.6) (0.9) Total Fee Income 91.2 80.2 Operating Profit 40.7 36.8 Cost of Sales (0.8) (0.6) Depreciation & Amortisation 0.6 0.6 Net Revenue 90.4 79.6 Workin
Slide 9: Strong profit growth while also reducing fees
We continue to achieve strong profit growth while also reducing fees CAGR: 11% £91.2m £80.2m £59.5m £63.6m £68.4m • Transact has an impressive record of consistently growing both Revenue and Operating Profit Income(1) Total Fee • Given its scale and operating leverage, Transact has been able to impl
Slide 10: Group balance sheet remains strong
Group balance sheet remains strong 30 September ‘18 £m Non-current assets • Transact operates with a conservative balance Loans and receivables 1.2 sheet position: Intangible assets 13.0 Property, plant and equipment 1.8 Deferred acquisition costs 46.1 • No debt as at Sep ’18 62.1 Current assets • P
Slide 11: Strategy
Strategy • Remain focused: • UK only • Intermediary only • Maintain high service standards • Reinvest in business: • Continue to enhance online functionality • Continue to enhance proposition by adding new financial planning components for advisers • Control expenses • Continue to grow inflows • Min
Slide 12: Transact enjoys a strong growth profile
Summary: Transact enjoys a strong growth profile Growth in UK Wealth Market Industry Drivers Growth in assets managed by financial advisers Growth in wealth managed by current advisers Increasing penetration of current advisers Penetration Market New advisers joining Transact Strong growth profile f
Slide 13: 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
Slide 14: Appendix – Industry growth (FUD)
Appendix 1 – Industry growth (FUD) Platform growth remains strong £600bn £540bn Sep ‘18 £500bn £400bn £300bn £200bn £100bn £0bn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Platforum Results Presentation 14
Slide 15: Appendix – Pension transfers in split by DB/DC
Appendix 2 – Pension transfers in split by DB/DC £800m £700m £600m £395m £500m £392m £363m £394m £446m £400m DC DB £300m £200m £340m £315m £282m £253m £100m £216m £0m Q4 FY16/17 Q1 FY17/18 Q2 FY17/18 Q3 FY17/18 Q4 FY17/18 Quarter Q4 16/17 Q1 17/18 Q2 17/18 Q3 17/18 Q4 17/18 DB as a % of total pensio
Slide 16: Appendix – Growth in number of clients and advisers
Appendix 3 – Growth in number of clients and advisers 200,000 6,000 180,000 5,000 160,000 140,000 Investor Count Adviser Count 4,000 120,000 100,000 3,000 80,000 2,000 60,000 40,000 1,000 20,000 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Count of Investors Count of Advisers Results Presentatio
Slide 17: Appendix – Operational update
Appendix 4 – Operational update • We built all of the necessary software and created documentation so that both Transact and advisers meet their MiFID II regulatory requirements • We released new enhancements to software for our internal and external systems (Transact Online) demonstrating our commi