TIDMXPS
RNS Number : 3884U
XPS Pensions Group PLC
23 November 2023
23 November 2023
XPS Pensions Group plc
Unaudited interim results for the half year ended 30 September
2023
Continuing to deliver strong and sustainable growth
Financial highlights:
Half year ended 30 September 2023 2022 YoY
Pensions Actuarial and Consulting GBP44.4m GBP34.4m 29%
--------- --------- ------
Pensions Investment Consulting GBP10.2m GBP8.1m 26%
--------- --------- ------
Total Advisory GBP54.6m GBP42.5m 28%
--------- --------- ------
Pensions Administration GBP32.4m GBP28.0m 16%
--------- --------- ------
SIP GBP5.4m GBP4.4m 23%
--------- --------- ------
NPT GBP2.1m GBP2.1m -
--------- --------- ------
Total Group revenue GBP94.5m GBP77.0m 23%
--------- --------- ------
Adjusted EBITDA(1) GBP22.7m GBP17.8m 28%
--------- --------- ------
Profit before tax GBP8.1m GBP6.8m 19%
--------- --------- ------
Basic EPS 2.6p 2.9p (10%)
--------- --------- ------
Adjusted diluted EPS 5.9p 5.3p 11%
--------- --------- ------
Interim dividend 3.0p 2.7p 11%
--------- --------- ------
(1) Adjusted measures exclude the impact of exceptional and
non-trading items: acquisition related amortisation, share based
payments, corporate transaction costs, restructuring costs and
other items considered exceptional by virtue of nature, size and
incidence. See note 3 for further details.
-- High levels of client activity, new wins, inflationary fee
increases and bolt on M&A drove 23% growth in Group revenues to
GBP94.5 million (organic growth of 19% year on year)
-- Operational gearing continuing with adjusted EBITDA of
GBP22.7 million (+28% YoY) despite continuing inflationary
pressures in our cost base in addition to investment in people and
technology
-- Eighth consecutive half year of YoY growth in revenues across Advisory and Administration:
o Highest YoY growth in Pensions Actuarial and Consulting
revenues (+29% YoY, +22% organic)
o Continued strong growth in Investment Consulting revenues
(+26% YoY)
o Pensions Administration revenue growth of 16% YoY with
continued success in new business wins and strong growth in project
work
-- SIP revenues increased 23% YoY due to bank base rate
increases and growth in underlying SIP sales
-- Adjusted diluted EPS was up 11% YoY to 5.9 pence (despite
higher interest and increased rate of corporation tax)
-- Increased interim dividend of 3.0 pence (2022: 2.7 pence) per
share declared by the Board, reflecting XPS's progressive dividend
policy and our continued confidence in the Group's prospects
Operational highlights:
-- Strong client demand, continued success in winning new
business and inflationary fee increases continue to drive
profitable and sustainable growth
-- Continued strengthening of the brand, enhanced by industry
awards - 'Third Party Administrator of the Year', 'Fiduciary
Evaluator of the Year' and 'Diversity and Inclusion Excellence
Award'
-- Our proprietary administration platform Aurora delivered on
time and on budget with first new large client onboarded. Aurora is
also driving success in winning new appointments
-- Continued focus on ESG within the business, notable milestones achieved:
o Retained signatory to the FRC's Stewardship Code in the
period
o Reduced our own emissions and remain fully carbon neutral
(Scope 1, 2 and 3 emissions)
Post period end:
-- Continued success in the first-time administration
outsourcing market with the landmark appointment to the John Lewis
Partnership pension scheme
-- Sale of NPT to SEI (completed 20 November 2023) has
significantly reduced leverage while creating a valuable long term
commercial relationship with SEI
Outlook
The strong first half financial performances underscores the
resilience and predictability of the XPS business model. We expect
the demand for our services to remain high underpinned by both
market and regulatory tailwinds as well as the strength of our
brand. The business continues to trade well in H2 and combined with
the completion earlier this week of the EPS accretive sale of NPT,
the Board are confident of achieving overall full year results
ahead of its previous expectations.
Paul Cuff, Co-CEO of XPS Pensions Group, commented:
"We are very pleased with the first half performance of the
Group, with strong profitable growth being achieved across all core
divisions. To continue to achieve growth at these levels, even when
measured against what was a very strong prior year, is really
pleasing.
We made progress in many areas during the half year, as we
continued to invest in our business, welcoming new people and new
clients, and successfully implementing new technology. A real
highlight though was the awards we won for our culture - all our
people should be really proud, as put simply our culture is all of
us.
The future for XPS looks very exciting. There is much discussion
of the need for change in our industry, and we are pleased to be at
the heart of the debate as it develops, with wide ranging
capabilities to help our clients with all their needs."
For further information, contact:
XPS Pensions Group
Snehal Shah
Chief Financial Officer +44 (0)20 3978 8626
Canaccord Genuity (Joint Broker) +44 (0)20 7523 8000
Adam James
Alex Orr
RBC Capital Markets (Joint Broker) +44 (0)20 7653 4000
James Agnew
Jamil Miah
Media Enquiries:
Camarco
Gordon Poole +44 (0)20 3757 4997
Rosie Driscoll +44 (0)20 3757 4981
Notes to Editors:
XPS Pensions Group is a leading pension consulting and
administration business focused on UK pension schemes. XPS combines
expertise, insight and technology to address the needs of over
1,500 pension schemes and their sponsoring employers on an ongoing
and project basis. We undertake pensions administration for over
one million members and provide advisory services to schemes and
corporate sponsors in respect of schemes of all sizes, including 81
with assets over GBP1bn.
Forward Looking Statements
This announcement may include statements that are forward
looking in nature. Forward looking statements involve known and
unknown risks, assumptions, uncertainties and other factors which
may cause the actual results, performance or achievements of the
Group to be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements. These forward-looking statements are made only
as at the date of this announcement. Nothing in this announcement
should be construed as a profit forecast. Except as required by the
Listing Rules and applicable law, the Group undertakes no
obligation to update, revise or change any forward-looking
statements to reflect events or developments occurring after the
date such statements are published.
CO-CHIEF EXECUTIVES' REVIEW
We are very pleased with the performance of the Group in the
first six months of the financial year. Revenue growth of 23%, of
which 19% is organic, has been delivered with impressive growth
rates across all our business units. This was a significant
achievement against what was a strong comparator in HY23 - the
momentum we have been carrying for a couple of years now has been
sustained and has even strengthened.
Our growth has been profitable - 23% revenue growth has given
rise to a 28% increase in adjusted EBITDA on the prior period,
reflecting both a mix of business effect, with our strongest growth
in higher margin activities, and work done to increase efficiency
in our business.
Validation and development of our business model
As we have stated in previous releases, our ambition is to
achieve strong profitable growth against any economic backdrop.
Given the current challenging economic backdrop it is worth
repeating the key features of our business model that give rise to
this opportunity.
At the core of our business, we provide non-discretionary
recurring advisory and administration services to pension scheme
clients. We also provide high value consulting services to help
clients improve the position for pension scheme members or address
the challenges created by regulatory changes and market volatility.
As such we are a non-cyclical business. Furthermore, our contracts
typically enable us to pass on inflationary increases meaning we
have an inherent protection against a high inflation environment.
The half year we are reporting on today is a validation of this
business model.
We are of course pleased to have grown total group revenues
materially above inflation rates. This has been achieved by keeping
close to our clients, and continually ensuring we evolve to have
the expertise and experience to be able to provide support to them
against a backdrop of market and regulatory volatility. This leads
to high levels of client demand for the wide range of services we
now offer.
We have been particularly pleased with the progress we have made
in the risk transfer market, where we have proven that we are now
capable of winning large mandates against tough competition. This
had been achieved by a combination of senior hires and the
development of talented junior colleagues to create a formidable
team that continues to grow strongly.
As this market evolves, there is increasing activity from
insurers, particularly as the bulk annuity market grows and they
take on the risk from pension funds. We have been developing our
capability to provide the support that both established firms and
potential new entrants need, across our advisory and administration
businesses. We have had initial success with this strategy and
expect to continue to grow in this area.
As we look forwards, we continue to develop new services to meet
market demands. A simple example is our GMP offering which we are
expanding against a backdrop of high market demand, and in the area
of public sector pensions administration, where clients need
support on large rectification projects in response to recent court
cases that have ruled that changes to member benefits need to be
implemented.
We are growing our administration business. For example, there
continues to be a large opportunity to take on the administration
of large defined benefit schemes through 'first time outsourcing'.
We were delighted to announce our partnership with the John Lewis
Partnership to do just this, the latest large scheme we will take
on - once onboarded it will be our largest administration client,
with over 160,000 members, an increase of 15% on our current
total.
Delivery of our new administration system
We achieved a significant milestone in the development of our
new administration system (called 'Aurora') during H1, with our
first client successfully onboarded. The first phase of this large
IT project has been delivered on time and on budget.
We continue to develop the system and will be working through
our clients in an orderly fashion to move them to the new system
over the coming years. In time this will deliver efficiencies, as
we will cease to pay license fees to third parties whose systems we
currently use.
We have also begun to use Aurora in new business opportunities,
including the successful John Lewis Partnership discussions
referenced above.
The sale of NPT, and the de-leveraging of our balance sheet
During H1 we announced the sale of our defined contribution
master trust, National Pension Trust (NPT), to the US asset
management and technology firm SEI. This transaction completed on
20 November, and we have received the initial GBP35m consideration
payable (with an additional GBP7.5m payable contingently based on
future performance of NPT). This has materially reduced our
borrowing by approximately a half.
This was not however simply a sale of a business unit -
retaining exposure to the growing Mastertrust market through
provision of core services was a key objective and so, as part of
the deal, we have signed a long-term contract with SEI to remain a
service provider to NPT (including continuing to provide
administration and investment advisory services) and more widely.
We will remain very close to NPT and will provide support to help
it thrive long into the future.
The combination of the reduction in interest costs and the
continuation of parts of the NPT revenue through our partnership
with SEI mean that the transaction is expected to be immediately
EPS accretive.
Continued industry recognition, and a strong culture
We have had success in recent years in winning industry awards
for what we do, and this year was no different. We were delighted
to win 'Third Party Administrator of the Year' at the Professional
Pensions Awards - the second year in a row we have won this. At the
same event, our investment consulting business also won an award,
and we were delighted to win an award recognising our work on the
diversity and inclusion agenda. This latter award is important to
us, as it reflects the wide ranging effort, we put in to being a
great place to work, for everyone.
On the topic of culture, we have just seen the first cut of the
data from our annual staff survey. We are delighted to have
achieved an employee net promoter score of +31, a figure that we
are told is very high indeed for a professional services firm. This
year we entered The Sunday Times 'best companies to work for' and
were pleased to be an award winner in the 'best large companies'
category. This is truly a win for everyone at XPS - we are all our
culture, and we should all be really proud of the firm that
together we have created.
We are passionate about this - it is the right thing to do, and
it also drives good retention and recruitment and good business
performance more widely. Happy, motivated people look after each
other and our clients well.
A sustainable business
As well as advancing sustainability across our business, we
continue to work with our clients, communities, suppliers, and
colleagues to do the right thing, focusing on areas that are
material to all our stakeholders and where, as a business, we can
make an impact.
Our sustainability framework and ambitions have strong alignment
with the UN Sustainable Development Goals. Our Investment
Consulting business advises on pension assets in excess of GBP94
billion. We incorporate sustainability into our investment strategy
solutions, and we continue to be signatory to the FRC's UK
Stewardship Code.
As a large employer, we recognise that we have a responsibility
to address the environmental impacts of our operations and our
investments. In line with the Paris Agreement, we are committed to
a science-based net zero strategy that limits our operational
emissions to a level consistent with or below a 1.5degC global
temperature rise. We have continued to reduce our own emissions and
have continued to invest in high quality UN approved carbon offsets
to achieve carbon neutrality across our entire value chain,
covering our Scope 1, 2 and 3 emissions.
Developments in our wider market
During the last two years we have seen significant changes in
the economic backdrop, with material increases in both long term
interest rates and inflation. These changes have had profound
impacts on UK pension schemes of all types.
In general, most defined benefit schemes are in a healthier
financial position than they were. Schemes continue to need to
re-look at their long-term objectives and strategies to reflect the
'new world' of higher long term interest rates and funding levels.
This has driven significant demand for advisory services, and we
expect this to continue. XPS is well placed to meet this demand
with the depth of capability we have.
Pension funds have also been the subject of Government scrutiny
and newspaper headlines, with focus on asset allocation and whether
changes could be made so that the very large sums of money in the
pension system make an increased contribution to long term growth
in the UK economy. This is a live, ongoing debate with cross party
support for change and we have been pleased to be an active
participant including attending meetings with Treasury and the Bank
of England. The timing and extent of future developments is still
unclear, however any changes to the system are expected to drive
demand for advice from our clients.
Outlook
The strong first half financial performances underscores the
resilience and predictability of the XPS business model. We expect
the demand for our services to remain high underpinned by both
market and regulatory tailwinds as well as the strength of our
brand. The business continues to trade well in H2 and combined with
the completion earlier this week of the EPS accretive sale of NPT,
the Board are confident of achieving overall full year results
ahead of its previous expectations.
Financial Review
Change
Half year ended 30 September 2023 2022 YoY
Revenue GBP94.5m GBP77.0m 23%
----------- ----------- -------
Adj. Administration expenses(1) (GBP71.8m) (GBP59.2m) (21%)
----------- ----------- -------
Adj. EBITDA(1) GBP22.7m GBP17.8m 28%
----------- ----------- -------
Adj. Depreciation & amortisation(1) (GBP2.8m) (GBP2.6m) (8%)
----------- ----------- -------
Adj. operating profit (1) GBP19.9m GBP15.2m 31%
----------- ----------- -------
Exceptional and non-trading items (GBP9.2m) (GBP7.0m) (31%)
----------- ----------- -------
Operating profit GBP10.7m GBP8.2m 30%
----------- ----------- -------
Net finance expense (GBP2.6m) (GBP1.4m) 86%
----------- ----------- -------
Profit before tax GBP8.1m GBP6.8m 19%
----------- ----------- -------
Tax (GBP2.6m) (GBP0.9m) (189%)
----------- ----------- -------
Profit after tax GBP5.5m GBP5.9m (7%)
----------- ----------- -------
Basic EPS 2.6p 2.9p (10%)
----------- ----------- -------
Adj. diluted EPS 5.9p 5.3p 11%
----------- ----------- -------
Interim dividend 3.0p 2.7p 11%
----------- ----------- -------
(1) Adjusted measures exclude the impact of exceptional and
non-trading items: acquisition related amortisation, share based
payments, corporate transaction costs, restructuring costs and
other items considered exceptional by virtue of nature, size and
incidence.
Group revenue
Group revenue for the six months ended 30 September 2023 was up
23% year on year to GBP94.5 million (2022: GBP77.0 million).
Organically, group revenue grew 19%.
Pension Actuarial and Consulting
Revenue has grown 29% YoY (22% organically) to GBP44.4 million
(2022: GBP34.4 million). The growth reflects continued high levels
of client activity, driven in part by continued regulatory changes
and demand for advice in response to volatility in financial
markets and changes in pension scheme funding levels. Inflationary
fee increases have also contributed to the growth. The Penfida
acquisition completed in September 2022 has contributed GBP2.5
million to revenue in H1.
Pension Investment Consulting
Continued high client demand in the face of regulatory and
financial market changes, combined with inflationary fee increases,
has helped revenues grow 26% YoY to GBP10.2 million (2022: GBP8.1
million).
Pension Administration
Revenue has grown 16% year on year to GBP32.4 million (2022:
GBP28.0 million) on the back of new client wins coming on stream,
strong demand for project work and inflationary fee increases.
Number of members under administration were c. 1,048,000 at 30
September 2023 (2022: c. 990,000) and average fee per member has
grown 7% year on year.
SIP
Revenue has grown 23% to GBP5.4 million (2022: GBP4.4 million),
driven by strong underlying sales and the impact of the increase in
the bank base rate.
NPT
Revenues were flat year on year impacted by competitive price
pressures. We announced the sale of the NPT business to SEI in July
2023 pending regulatory approvals. The Pensions Regulator approved
the sale in October 2023 and the sale completed on 20 November
2023.
Operating costs
Total operating costs (excluding exceptional and non-trading
items) for the Group grew by 21% or GBP12.6 million year on year.
Organically, total operating costs grew 18% year on year, below the
organic growth in group revenues evidencing the continued
improvement in operational gearing. Factors contributing to the
cost growth include higher number of employees from ongoing
recruitment as well as bolt on acquisitions, higher bonus accrual
commensurate with trading performance, and inflationary increases
in other cost lines.
Adjusted EBITDA
Adjusted EBITDA of GBP22.7 million is up 28% YoY (2022: GBP17.8
million) with an increase in the margin to 24.0% (2022: 23.1%).
Exceptional and non-trading items
During the half year ended 30 September 2023 the Group incurred
GBP9.2 million (2022: GBP7.0 million) of exceptional and
non-trading charges (see note 3 for further details).
Net finance expenses
Net finance expense of GBP2.6 million was GBP1.2 million higher
than the prior year, largely due to increases in the bank interest
rate and a higher average net debt in the period.
Taxation
Tax charge on adjusted profit before tax for the half year was
GBP4.4 million (2022: GBP2.6 million) equating to an effective
corporation tax rate of 25.4% (2022: 18.7%).
The tax charge on statutory profits was GBP2.6 million (2022:
GBP0.9 million). The increase is largely due to the impact of the
increase in corporation tax rate from 19% to 25% from April 2023,
and the increase in taxable profits.
Basic EPS
Basic EPS in the half year ended 30 September 2023 was 2.6p
(2022: 2.9p). The variance is largely due to the impact of the
increase in corporation tax rates to 25% from April 2023. On a like
for like 19% corporate tax rate, basic EPS was 3.0p.
Adjusted fully diluted EPS
Adjusted fully diluted EPS in the half year ended 30 September
2023 was 5.9p (2022: 5.3p). On a like for like basis at 19%
corporate tax rate, adjusted fully diluted EPS was 6.3p.
Dividend
An interim dividend of 3.0p has been declared by the Board
(2022: 2.7p), reflecting XPS's progressive dividend policy and our
confidence in the Group's prospects. The interim dividend amounting
to GBP6.2 million (2022: GBP5.6 million), will be paid on 5
February 2024 to those shareholders on the register on 12 January
2024.
Cash-flow, capital expenditure and net debt
The Group generated GBP11.3 million from operating activities.
After GBP4.1 million on capital expenditure; paying GBP11.8 million
dividends; GBP2.2 million of interest, GBP1.3 million of lease
liabilities; GBP0.4 million dividend equivalents on vesting of
employee share schemes; GBP4.3 million on repurchasing own shares,
GBP0.4 million net payments relating to previous period
acquisitions, GBP0.2 million on fees relating to extension of the
loan facility for a further year, partially offset by a GBP6.0
million drawdown of committed facility, the net decrease in cash
was GBP7.4 million at 30 September 2023.
At 30 September 2023 net debt (as defined for RCF covenants and
therefore excluding IFRS 16) was GBP68.2 million (2022: GBP72.9
million. The leverage ratio for financing covenants was 1.55x
(2022: 2.09x). At 30 September 2023, the Group had GBP26.0 million
of undrawn committed facility. The Group's RCF expires in October
2026.
As a result of the completion of the NPT sale, current net debt
is approximately GBP30 million, representing a significant
reduction in the Group's leverage ratio to approximately 0.7x.
Principal risks and uncertainties affecting the business
The principal risks and uncertainties affecting the Group's
business activities remain those detailed within the Principal
Risks and Uncertainties section of the Annual Report and Accounts
for the year ended 31 March 2023 (pages 46-51).
Condensed Consolidated Statement of Comprehensive Income
for the period ended 30 September 2023
6 month period ended 30 September 2023 6 month period ended 30 September 2022
Trading items Non-trading and Total Trading items Non-trading and Total
exceptional exceptional
items items
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Revenue 4 94,510 - 94,510 76,998 - 76,998
Other operating
income 3 - 92 92 - - -
Administrative
expenses (74,650) (9,247) (83,897) (61,784) (7,050) (68,834)
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Profit/(loss) from
operating
activities 19,860 (9,155) 10,705 15,214 (7,050) 8,164
Finance income 20 - 20 - - -
Finance costs (2,577) - (2,577) (1,334) - (1,334)
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Profit/(loss)
before tax 17,303 (9,155) 8,148 13,880 (7,050) 6,830
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Income tax
(expense)/credit (4,375) 1,693 (2,682) (2,646) 1,703 (943)
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Profit/(loss)
after tax and
total
comprehensive
income for the
period 12,928 (7,462) 5,466 11,234 (5,347) 5,887
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Memo
EBITDA 22,733 (5,634) 17,099 17,799 (3,706) 14,093
Depreciation and
amortisation (2,873) (3,521) (6,394) (2,585) (3,344) (5,929)
Profit/(loss) from
operating
activities 19,860 (9,155) 10,705 15,214 (7,050) 8,164
Pence Pence Pence Pence
------------------ ----- -------------- ----------------- ---------- -------------- ----------------- ---------
Earnings per share Adjusted Adjusted
attributable to
the ordinary
equity holders of
the Company:
Profit or loss:
Basic earnings per
share 5 6.2 2.6 5.5 2.9
Diluted earnings
per share 5 5.9 2.5 5.3 2.8
Condensed Consolidated Statement of Financial Position
as at 30 September 2023
31 March
30 September 2023
2023 Unaudited Audited
Note GBP'000 GBP'000
--------------------------------------------- ---- --------------- --------
Assets
Non-current assets
Property, plant and equipment 4,006 3,079
Right-of-use assets 8,664 9,684
Intangible assets 210,834 212,103
Other financial assets 1,847 1,847
--------------------------------------------- ---- --------------- --------
225,351 226,713
--------------------------------------------- ---- --------------- --------
Current assets
Trade and other receivables 46,783 43,765
Cash and cash equivalents 5,796 13,285
--------------------------------------------- ---- --------------- --------
52,579 57,050
--------------------------------------------- ---- --------------- --------
Total assets 277,930 283,763
--------------------------------------------- ---- --------------- --------
Liabilities
Non-current liabilities
Loans and borrowings 6 73,248 67,310
Lease liabilities 6,682 7,234
Provisions for other liabilities and charges 1,297 1,869
Trade and other payables - 845
Deferred tax liabilities 17,049 18,445
--------------------------------------------- ---- --------------- --------
98,276 95,703
--------------------------------------------- ---- --------------- --------
Current liabilities
Lease liabilities 2,540 2,701
Provisions for other liabilities and charges 2,115 2,009
Trade and other payables 30,285 31,218
Current income tax liabilities 3,310 2,280
Deferred consideration - 568
38,250 38,776
--------------------------------------------- ---- --------------- --------
Total liabilities 136,526 134,479
--------------------------------------------- ---- --------------- --------
Net assets 141,404 149,284
--------------------------------------------- ---- --------------- --------
Equity
Equity attributable to owners of the parent
Share capital 7 104 104
Share premium 8 1,786 1,786
Merger relief reserve 8 48,687 48,687
Investment in own shares held in trust 8 (2,805) (1,350)
Retained earnings 8 93,632 100,057
--------------------------------------------- ---- --------------- --------
Total equity 141,404 149,284
--------------------------------------------- ---- --------------- --------
Condensed Consolidated Statement of Changes in Equity
for the period ended 30 September 2023
Accumulated
Merger relief Investment in own deficit/ retained
Share capital Share premium reserve shares earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Balance at 1
April 2023 104 1,786 48,687 (1,350) 100,057 149,284
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Profit after tax
and total
comprehensive
income for the
period - - - - 5,466 5,466
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Contributions by
and distributions
to owners
Shares purchased
by employee
benefit trust
for cash - - - (4,277) - (4,277)
Dividends paid
(note 9) - - - - (11,825) (11,825)
Dividend
equivalents paid
on exercised
share options - - - - (438) (438)
Share-based
payment expense
- equity settled
from employee
benefit trust - - - 2,822 (2,806) 16
Share-based
payment expense
- IFRS2 charge - - - - 2,408 2,408
Deferred tax
movement in
respect of
share-based
payment expense - - - - 466 466
Current tax
movement in
respect of
share-based
payment expense - - - - 304 304
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Total
contributions by
and
distributions to
owners - - - (1,455) (11,891) (13,346)
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Unaudited balance
at 30 September
2023 104 1,786 48,687 (2,805) 93,632 141,404
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Balance at 1
April 2022 103 116,804 48,687 (4,157) (17,002) 144,435
Profit after tax
and total
comprehensive
income for the
period - - - - 5,887 5,887
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Contributions by
and distributions
to owners
Share capital
issued 1 1,786 - - - 1,787
Shares purchased
by employee
benefit trust
for cash - - - (1,000) - (1,000)
Dividends paid
(note 9) - - - - (9,763) (9,763)
Dividend
equivalents paid
on exercised
share options - - - - (413) (413)
Share-based
payment expense
- equity settled
from employee
benefit trust - - - 3,066 (2,669) 397
Share-based
payment expense
- IFRS2 charge - - - - 1,571 1,571
Deferred tax
movement in
respect of
share-based
payment expense - - - - 20 20
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Total
contributions by
and
distributions to
owners 1 1,786 - 2,066 (11,254) (7,401)
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Unaudited balance
at 30 September
2022 104 118,590 48,687 (2,091) (22,369) 142,921
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Balance at 1
April 2022 103 116,804 48,687 (4,157) (17,002) 144,435
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Profit after tax
and total
comprehensive
income for the
year - - - - 15,837 15,837
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Contributions by
and distributions
to owners
Share capital
issued 1 1,786 - - - 1,787
Share premium
reduction - (116,804) - - 116,804 -
Dividends paid - - - - (15,331) (15,331)
Dividend
equivalents paid
on exercised
share options - - - - (549) (549)
Shares purchased
by employee
benefit trust
for cash - - - (2,200) - (2,200)
Share-based
payment expense
- equity settled
from employee
benefit trust - - - 5,007 (4,137) 870
Share-based
payment expense
- IFRS2 charge - - - - 3,892 3,892
Deferred tax
movement in
respect of
share-based
payment expense - - - - 258 258
Current tax
movement in
respect of
share-based
payment expense - - - - 285 285
Total
contributions by
and
distributions to
owners 1 (115,018) - 2,807 101,222 (10,988)
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Balance at 31
March 2023 104 1,786 48,687 (1,350) 100,057 149,284
----------------- ------------- ------------- ----------------- ----------------- ----------------- ------------
Condensed Consolidated Statement of Cash Flows
for the period ended 30 September 2023
Period ended Period ended
30 September 30 September
2023 2022
Unaudited Unaudited
Note GBP'000 GBP'000
---------------------------------------------------------------------- ---- ------------- -------------
Cash flows from operating activities
Profit for the period 5,466 5,887
Adjustments for:
Depreciation 394 442
Depreciation of right-of-use assets 1,572 1,288
Amortisation 4,374 4,198
Loss on disposal of right-of-use assets 54 -
Finance income (20) -
Finance costs 2,577 1,334
Share-based payment expense 2,408 1,571
Other operating income (92) -
Income tax expense 2,682 943
---------------------------------------------------------------------- ---- ------------- -------------
19,415 15,663
---------------------------------------------------------------------- ---- ------------- -------------
Increase in trade and other receivables (3,025) (3,608)
Decrease in trade and other payables (2,187) (3,014)
Decrease in provisions (621) (281)
---------------------------------------------------------------------- ---- ------------- -------------
13,582 8,760
---------------------------------------------------------------------- ---- ------------- -------------
Income tax paid (2,280) (2,209)
---------------------------------------------------------------------- ---- ------------- -------------
Net cash inflow from operating activities 11,302 6,551
---------------------------------------------------------------------- ---- ------------- -------------
Cash flows from investing activities
---------------------------------------------------------------------- ---- ------------- -------------
Acquisition of a subsidiary, net of cash acquired - (8,267)
Payment of deferred consideration (406) -
Purchases of property, plant and equipment (743) (219)
Purchases of software (3,369) (2,125)
Net cash outflow from investing activities (4,518) (10,611)
---------------------------------------------------------------------- ---- ------------- -------------
Cash flows from financing activities
Proceeds from the issue of share capital on exercise of share options - 1,787
Proceeds from existing loans 6 6,000 11,000
Payment relating to extension of loan facility (200) -
Repurchase of own shares (4,277) (1,000)
Proceeds from the exercise of share options settled by EBT shares 16 397
Interest paid (2,235) (1,037)
Lease interest paid (119) (149)
Payment of lease liabilities (1,195) (1,236)
Dividends paid to the holders of the parent 9 (11,825) (9,763)
Dividend equivalents paid on vesting of share options (438) (413)
---------------------------------------------------------------------- ---- ------------- -------------
Net cash outflow from financing activities (14,273) (414)
---------------------------------------------------------------------- ---- ------------- -------------
Net decrease in cash and cash equivalents (7,489) (4,474)
Cash and cash equivalents at start of the period 13,285 10,150
---------------------------------------------------------------------- ---- ------------- -------------
Cash and cash equivalents at end of period 5,796 5,676
---------------------------------------------------------------------- ---- ------------- -------------
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 September 2023
1 Accounting policies
XPS Pensions Group plc (the "Company") is a public limited
company incorporated in the UK. The principal activity of the Group
is that of an employee benefit consultancy and related business
services. The registered office is Phoenix House, 1 Station Hill,
Reading RG1 1NB. The Condensed Group Financial Statements
consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
Basis of preparation and statement of compliance with IFRS
The annual financial statements are prepared in accordance with
UK adopted International Accounting Standards ("IAS"). These
condensed financial statements have been prepared in accordance
with UK adopted IAS 34 'Interim Financial Reporting'. They do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the latest audited financial statements, for the
year ended 31 March 2023.
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 March 2023,
except for the following amendments which apply for the first time
in 2023/24. However, the below are not expected to have a material
impact on the Group's financial statements as they are either not
relevant to the Group's activities or require accounting which is
consistent with the Group's current accounting policies.
The following new standards and amendments are effective for the
period beginning 1 April 2023:
-- IFRS 17 Insurance Contracts;
-- Disclosure of Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement
2);
-- Definition of Accounting Estimates (Amendments to IAS 8
Accounting policies, Changes in Accounting Estimates and
Errors);
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 Income Taxes); and
-- International Tax Reform - Pillar Two Model Rules (Amendment
to IAS 12 Income Taxes)
Going concern
IFRS accounting standards require the Directors to consider the
appropriateness of the going concern basis when preparing the
interim financial statements. The Directors have taken notice of
the Financial Reporting Council guidance 'Guidance on the going
concern basis of accounting and reporting on solvency and liquidity
risks' which requires the reasons for this decision to be
explained.
The Directors have prepared cash flow forecasts up to 31 March
2025, which includes the 12-month period from the date of approval
of these interim financial statements which show that during that
period the Group is expected to generate sufficient cash from its
operations to settle its liabilities as they fall due without the
requirement for additional borrowings. The period to 31 March 2025
has been chosen as it covers the current and next financial years
and includes the 12-month period from the date of signing these
interim accounts. Inflationary increases have been modelled using
the OBR inflation forecasts for that period, and interest rate
increases have been included in the forecast based on latest market
projections. Additionally, the Directors have modelled a scenario
at which the banking covenants could potentially be breached, which
is the point at which going concern would be threatened. In this
scenario, revenue is modelled to decrease significantly, partially
offset with a reduction in staff bonuses. The headroom between this
scenario and current performance, and the budget and latest
forecast, is significant and a decrease of this magnitude is
considered to be extremely unlikely. In addition, the Group has
several additional cost reduction and cash preservation levers it
could utilise, which include managing staff costs through a hiring
freeze or a reduction in workforce, a reduction in capital
expenditure, and a reduction of dividends.
The cash flow forecasts discussed above do not factor in the
impact of the sale of the NPT business (see note 12). The impact on
EBTIDA for the Group is expected to be immaterial, however the cash
received on completion of the sale of the business would result in
a reduction in Group debt. This would lead to interest saving and a
related improvement in banking covenant test outcomes, which
already showed a position of headroom.
The Group's current revolving credit facility is in place until
October 2026 and gives the Group access to a Revolving Credit
Facility of GBP100 million with an accordion of GBP50 million. The
facility is subject to two covenants - net leverage and interest
cover. These covenants were not breached during the period, nor are
any breaches forecast. The Group does not have any non-financial
covenants.
Notes to the Condensed Consolidated Financial Statements
(continued)
1 Accounting policies (continued)
The Directors have reviewed the historical accuracy of the
Group's budgets/forecast. The Group's prior year performance was
compared to the budget/forecast, and actual revenue was within 3%
of the forecast figure, and adjusted profit after tax was within 8%
of the forecast figure. Actual results were ahead of forecast in
both cases. This demonstrates that the Group's forecasting process
is at a sufficient standard to be able to place reliance on it when
making a going concern assessment. The financial performance in the
current period has been favourable when compared to budget. The
Directors, after reviewing the Group's budget and longer-term
forecast models, including the worst case scenario referred to
above, conclude that the Group has adequate resources to continue
in operational existence for the foreseeable future and they
continue to adopt the going concern basis of accounting in
preparing these interim financial statements.
In terms of the wider macroeconomic and financial situation, the
main impact on the Group is the high level of inflation currently
being experienced in the UK, and also the related increases in
interest rates, albeit the interest rates are now expected to
stabilise. The Group is largely protected from a high inflation
environment because of its contractual ability to increase revenue
from the majority of customers by an amount linked to inflation.
Whilst higher interest rates have led to higher finance expenses
this has been modelled in the Group's forecasts and is not
considered a significant risk.
Non-trading and exceptional items
To assist in understanding its underlying performance, the Group
has defined the following items of pre-tax income and expense as
non-trading and exceptional items as they either reflect items
which are exceptional in nature or size or are associated with the
amortisation of acquired intangibles and share based payments.
Items treated as non-trading and exceptional include:
-- corporate transaction and restructuring costs;
-- amortisation of acquired intangibles;
-- changes in the fair value of contingent consideration;
-- share-based payments;
-- profits or losses on disposal of assets or businesses; and
-- the related tax effect of these items.
Any other non-recurring items are considered individually for
classification as non-trading or exceptional by virtue of their
nature or size.
The separate disclosure of these items allows a clearer
understanding of the trading performance on a consistent and
comparable basis.
The non-trading and exceptional items have been included within
the appropriate classifications in the consolidated income
statement. Further details are given in note 3.
Critical accounting estimates and judgments
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgments are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
There have been no material revisions to the nature and amount
of estimates of amounts reported since 31 March 2023 except for the
estimates relating to the business combination that related
specifically to the comparative period.
The sale of the NPT business has been reviewed, and it is the
Director's assessment that at 30(th) September 2023, the NPT
business is not classified as held for sale, as the criteria under
IFRS 5 had not been met. This judgement is due to several factors,
but the key element was that the Pensions Regulator had not given
their approval at this date, and approval could not be considered
to be customary.
Functional and presentation currency
The Financial Statements are presented in British Pounds which
is the functional currency of all Group entities. Figures are
rounded to the nearest thousand.
Notes to the Condensed Consolidated Financial Statements
(continued)
2 Financial information
The financial information in this report was formally approved
by the Board of Directors on 22 November 2023. The financial
information set out in this document does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006.
Statutory accounts prepared under UK adopted IFRS for the year
ended 31 March 2023 for XPS Pensions Group plc have been delivered
to the Registrar of Companies. The auditor's report on these
accounts was not qualified, did not draw attention to any matters
by way of emphasis and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
The financial information in respect of the period ended 30
September 2023 is unaudited but has been reviewed by the Group's
auditor. Their report is included at the end of this document. The
financial information in respect of the period ended 30 September
2022 was unaudited but was reviewed by the Group's auditor.
3 Non-trading and exceptional items
Period ended Period ended
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
--------------------------------------------------- ------------ ------------
Corporate transaction costs (1) (2,611) (1,894)
---------------------------------------------------- ------------ ------------
Exceptional items (2,611) (1,894)
Contingent consideration write back (2) 92 -
Share-based payment costs (3,115) (1,812)
Amortisation of acquired intangibles (3,521) (3,344)
Non-trading items (6,544) (5,156)
Total exceptional and non-trading items before tax (9,155) (7,050)
---------------------------------------------------- ------------ ------------
Tax on adjusting items (3) 1,693 1,703
---------------------------------------------------- ------------ ------------
Non-trading and exceptional items after taxation (7,462) (5,347)
---------------------------------------------------- ------------ ------------
(1) Included within this is GBP845,000 of contingent
consideration in respect of the acquisition of Penfida Limited (H1
2022/23: GBPnil). The maximum contingent consideration of
GBP3,379,000 would be payable on the second anniversary of the
acquisition subject to business performance which includes
retention of clients as well as continued employment of key
employees. As continued employment is one part of the contingent
consideration test, according to IFRS 3, the entire contingent
consideration must be treated as a post transaction employment cost
accruing over the deferment period of two years. The contingent
consideration is material in size and it is one-off in nature. As
such, in line with the Group's accounting policies, it has been
classified as an exceptional item. If the entire contingent
consideration is not payable at the end of the two year period, any
resulting credit will also flow through the exceptional category.
The remainder of the costs in the current period largely relate to
the disposal of the NPT business (see note 12). The costs in H1
2022/23 relate to the Penfida acquisition, as well as other
potential M&A opportunities explored by the Group in the
period.
(2) Contingent consideration revaluation credit of GBP92,000
relating to the reduction in the deferred cash-settled
consideration for the MJF acquisition (H1 2022/23: GBPnil).
(3) The tax credit on exceptional and non-trading items of
GBP1.7 million (H1 2022/23: GBP1.7 million) represents a credit of
18% (H1 2022/23: 24%) of the non-trading and exceptional items
incurred of GBP9.2 million (H1 2022/23 GBP7.1 million).
Notes to the Condensed Consolidated Financial Statements
(continued)
4 Operating segments
In accordance with IFRS 8 'Operating Segments', an operating
segment is defined as a business activity whose operating results
are reviewed by the chief operating decision maker ('CODM') and for
which discrete information is available. The Group's CODM is the
Board of Directors.
The Group has one operating segment, and one reporting segment
due to the nature of services provided across the whole business
being the same, pension and employee benefit solutions. The Group's
revenues, costs, assets, liabilities and cash flows are therefore
totally attributable to this reporting segment. The table below
shows the disaggregation of the Group's revenue, by product
line.
Period ended Period ended
30 September 30 September
2023 2022
Unaudited Unaudited
Revenue from external customers GBP'000 GBP'000
---------------------------------- ------------ ------------
Pensions Actuarial and Consulting 44,422 34,432
Pensions Administration 32,370 27,990
Pensions Investment Consulting 10,185 8,123
National Pension Trust (NPT) 2,118 2,063
SIP (1) 5,415 4,390
---------------------------------- ------------ ------------
Total 94,510 76,998
---------------------------------- ------------ ------------
(1) Self Invested Pensions (SIP) business, incorporating both
SIPP and SSAS products.
In the second half of the prior year, there was a change in the
way that divisional revenues are reported to the CODM which is more
reflective of the responsibilities and operations of the business.
As a result related revenue to the period ended 30 September 2022
of GBP0.7 million has been reallocated from the Pensions Actuarial
and Consulting division to the Pensions Administration division.
The above prior year comparative has been restated to reflect this
reallocation.
5 Earnings per share
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
--------------------------------------------------- ------------ ------------
Profit for the period 5,466 5,887
--------------------------------------------------- ------------ ------------
Weighted average number of shares: '000 '000
--------------------------------------------------- ------------ ------------
Weighted average number of shares in issue 206,947 204,091
Effects of:
Outstanding share options 12,687 9,464
Diluted weighted average number of ordinary shares 219,634 213,555
--------------------------------------------------- ------------ ------------
Basic earnings per share (pence) 2.6 2.9
--------------------------------------------------- ------------ ------------
Diluted earnings per share (pence) 2.5 2.8
--------------------------------------------------- ------------ ------------
The calculation of basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the period.
Notes to the Condensed Consolidated Financial Statements
(continued)
5 Earnings per share (continued)
Adjusted earnings per share
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
---------------------------------------------------- ------------ ------------
Adjusted profit after tax 12,928 11,234
---------------------------------------------------- ------------ ------------
Adjusted basic earnings per share (pence) 6.2 5.5
---------------------------------------------------- ------------ ------------
Diluted adjusted earnings per share (pence) - total 5.9 5.3
---------------------------------------------------- ------------ ------------
The adjusted profit after tax is the trading profit after tax
and excludes the exceptional and non-trading items disclosed in
note 3.
6 Loans and borrowings
At 30 September 2023, the Group had drawn down GBP74 million (31
March 2023: GBP68 million) of its GBP100 million revolving credit
facility. The current Revolving Facility Agreement was entered into
on 12 October 2021 and had a 4 year term, which was extended in
April 2023 by one year to October 2026. Interest is calculated at a
margin above SONIA (Sterling Overnight Index Average), subject to a
net leverage test.
The related fees for access to the facility were capitalised at
the point they were incurred and are amortised over the life of the
loan to which they relate.
Total debt net of capitalised arrangement fees was GBP73.2
million (31 March 2023: GBP67.3 million).
7 Share capital
Ordinary Ordinary Ordinary Ordinary
shares shares shares shares
('000) (GBP'000) ('000) (GBP'000)
30 September 30 September 31 March 31 March
2023 2023 2023 2023
In issue at the beginning of the year 207,443 104 205,151 103
Issued during the year 102 - 2,292 1
In issue at the end of the year 207,545 104 207,443 104
-------------------------------------- ------------ ------------ -------- ---------
30 September 30 September 31 March 31 March
2023 2023 2023 2023
('000) (GBP'000) (000) (GBP'000)
Allotted, called up and fully paid
Ordinary shares of 0.05p (March 2023: 0.05p) each 206,027 103 206,427 103
Shares held by the Group's Employee Benefit Trust
Ordinary shares of 0.05p (March 2023: 0.05p) each 1,518 1 1,016 1
-------------------------------------------------- ------------ ------------ -------- ---------
Shares classified in shareholders' funds 207,545 104 207,443 104
-------------------------------------------------- ------------ ------------ -------- ---------
The Group has invested in the shares for its Employee Benefit
Trust ('EBT'). These shares are held on behalf of employees and
legal ownership will transfer to those employees on the exercise of
an award. This investment in own shares held in trust is deducted
from equity in the consolidated statement of changes in equity.
Notes to the Condensed Consolidated Financial Statements
(continued)
8 Reserves
The following describes the nature and purpose of each reserve
within equity:
Reserve Description and purpose
---------------------- ------------------------------------------------------------
Retained earnings: All net gains and losses recognised through the consolidated
statement of comprehensive income.
Share premium: Amounts subscribed for share capital in excess of nominal
value.
Merger relief reserve: The merger relief reserve represents the difference
between the fair value and nominal value of shares
issued on the acquisition of subsidiary companies.
Investment in own Cost of own shares held by the EBT.
shares:
9 Dividends
Amounts recognised as distributions to equity holders of the
parent in the period
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
----------------------------------------------------------------------------- ------------ ------------
Final dividend for the year ended 31 March 2023: 5.7p per share (2022: 4.8p) 11,825 9,763
----------------------------------------------------------------------------- ------------ ------------
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------------------------------------------ ------------ ------------
Interim dividend for the year ending 31 March 2024 of 3.0p (2023: 2.7p) 6,209 5,568
------------------------------------------------------------------------ ------------ ------------
The final dividend for 2022/23 was paid on 21 September 2023.
The final dividend has been reflected in the Statement of Changes
in Equity.
The interim dividend was approved by the Board on 22 November
2023 and has not been included as a liability at 30 September
2023.
10 Related party transactions
Key management emoluments during the year
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
------------------------------------------------------ ------------ ------------
Emoluments 536 503
Share-based payments 772 261
Company contributions to money purchase pension plans 15 15
Social security costs 71 73
------------------------------------------------------ ------------ ------------
1,394 852
------------------------------------------------------ ------------ ------------
Directors' bonuses are not included in the emoluments figure at
30 September 2023 or 30 September 2022 as the bonus amount is
dependent on full year results and is also at the discretion of the
Remuneration Committee.
Non-executive emoluments during the year
30 September 30 September
2023 2022
Unaudited Unaudited
GBP'000 GBP'000
---------------------- ------------ ------------
Emoluments 165 162
Social security costs 20 22
---------------------- ------------ ------------
185 184
---------------------- ------------ ------------
Notes to the Condensed Consolidated Financial Statements
(continued)
11 Financial Instruments
The carrying values of financial assets and liabilities
approximates fair value.
Financial assets and financial liabilities measured at fair
value in the statement of financial position are grouped into three
levels of a fair value hierarchy. The three levels are defined
based on the observability of significant inputs to the
measurement, as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- Level 2: inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either
directly or indirectly; and
-- Level 3: unobservable inputs for the asset or liability.
The Group's finance team performs valuations of financial items
for financial reporting purposes, including level 3 fair values, in
consultation with third-party valuation specialists for complex
valuations. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of
maximising the use of market-based information. The finance team
reports directly to the Chief Financial Officer.
The Group considers that the carrying amount of the following
financial assets and financial liabilities are a reasonable
approximation of their fair value:
-- Trade receivables
-- Trade payables
-- Cash and cash equivalents
-- Loans and borrowings
-- Deferred consideration
12 Post balance sheet events
On 14th July 2023, the Group announced that it has entered into
an option agreement to sell the National Pension Trust ("NPT"), to
SEI. The intention is to create a market leading defined
contribution proposition for employers and pension scheme members.
The deal creates a strategic partnership between XPS Pensions Group
and SEI, under which the Group will provide wide ranging services
to continue to support NPT and SEI. The transaction is subject to
regulatory approval.
The total cash consideration payable to the Group upon
completion following regulatory approval is up to GBP42.5 million,
comprising of GBP35.0 million initial consideration and deferred
earn-out consideration of up to GBP7.5 million based on business
performance over two years.
The Transaction positions the SEI Master Trust to continue
delivering best-of-breed service at increased scale in partnership
with NPT. The Group will continue to provide high-quality pensions
administration and consultancy services to NPT and SEI which will
ensure continuity of service to the members and clients. SEI will
benefit from enhanced opportunities in the growing master trust
space, and XPS will benefit as a key service provider to SEI.
Gross assets attributable to NPT were GBP2.5 million (including
the regulatory capital cash account) and the adjusted EBITDA
contribution from NPT to the XPS Group in the year ended 31 March
2023 was GBP0.9 million.
At 30(th) September 2023 regulatory approval had not yet been
received and the Directors still believed that approval was
uncertain. The agreement received regulatory approval on 13(th)
October 2023, and the sale was completed on 20 November 2023.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting' and provide
a true and fair view as required by DTR 4.2.10;
b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of the important
events during the first six months and description of principal
risks and uncertainties for the remaining six months of the year);
and
c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
On behalf of the Board,
Snehal Shah
Chief Financial Officer
22 November 2023
INDEPENT REVIEW REPORT TO XPS PENSIONS GROUP PLC
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2023 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2023 which comprises the Condensed
Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Statement of Financial Position, the Condensed
Consolidated Statement of Changes in Equity, the Condensed
Consolidated Statement of Cash Flows and related notes.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with UK adopted international
accounting standards. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34,
"Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410, however future events or conditions
may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our Conclusions Relating to Going Concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London UK
22 November 2023
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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END
IR FLFSTLVLFFIV
(END) Dow Jones Newswires
November 23, 2023 02:00 ET (07:00 GMT)
Xps Pensions (LSE:XPS)
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