REG - Investacc Group Ltd. - Trading Update and Change in Financial Year End

InvestAccAnnouncement

05/12/2024 07:00

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RNS Number : 8788O  Investacc Group Limited  05 December 2024

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LEI: 2549008KZ7HM27V4O637

5 December 2024

InvestAcc Group Limited

Trading Update and Change in Financial Year End

InvestAcc Group continues to deliver strong organic growth and award winning
levels of customer service

InvestAcc Group Limited ("InvestAcc", the "Company" or, together with its
subsidiaries, the "Group"), a specialist pensions administrator, is pleased to
provide a trading update and announce a change in its financial year end.

Business Unit Operating Performance Highlights

On 9 October 2024, the Company completed the acquisition of InvestAcc Holdings
Limited (the "Acquisition") following FCA change in control approval.
Operating performance highlights for the Acquisition for the twelve months to
31 October 2024 were: -

·      Total revenue increased 15% to £10.1m, building on the strong
performance of 14% growth in FY23 and 11% in FY22

·      Pension administration revenue growth of 15% to £5.1m,
representing 50% of total revenue

·      Addition of 1,868 new pensions schemes bringing the total to
12,195, growth of over 18%

·      EBITDA increased 19% to £4.2m (FY23: £3.6m) with cash
conversion in line with previous years

·      Total assets under administration in excess of £5bn (FY23:
£4bn)

·      Maintained industry-leading customer retention rates of over 96%

·      Continued service quality recognition through multiple industry
awards in the last quarter:

o  Moneyfacts Best SIPP Provider for 2024 (fifth time winning)

o  Moneyfacts Best Pension Services for 2024 (fifth consecutive time winning)

o  FT Adviser 5 Star Pensions and Protection Advisor for 2024 (seventh time
winning)

Group Update

·      Group EBITDA margin is targeted to be 30%* in FY25 with cash
conversion in line with previous years

·      The board has determined that the Group year-end will change to
31 December

·      As announced on 16 October 2024, the appointment of Giovanni
Castagno, Helen Copinger-Symes and Martin Potkins as Independent Non-Executive
Directors to strengthen governance to support the Group's growth strategy.

* this is a target for the year ending 31 December 2025, not a profit
forecast.

Chairman, Mark Hodges, commented:

"We are pleased our first acquisition continues to deliver significant organic
growth and excellent customer service which is testament to the InvestAcc
team. Given the quality of the acquired business and the strength of our
market position, we remain excited about prospects for future growth".

Market Position and Growth Strategy

InvestAcc aims to become the UK's leading specialist pensions administrator,
serving both business customers (wealth managers and financial advisers) and
direct clients. Recent FCA analysis(1) demonstrates the scale of our market
opportunity:

·      Total SIPP Operator assets under administration: £567bn

·      Platform-based SIPP assets: £204bn

·      Traditional SIPP Operator assets: £184bn (up from £130bn in
2022)

·      Total consumer base: approximately 5.3m

Our business model benefits from:

·      Fixed fee-based service revenues, providing protection from
financial market volatility

·      Expected customer lifetime value exceeding 25 years

·      Commitment to fair customer outcomes from treasury services

·      Industry-leading customer service performance

M&A Strategy and Regulatory Environment

We remain highly confident of the opportunity to acquire customer books and
operating businesses that will enable us to scale significantly and continue
to deliver growth over the coming years enabled by the excellent operational
platform and growth characteristics already demonstrated by InvestAcc.

M&A and Integration Platform

The leadership team has the ability to originate these opportunities from a
range of sources, from owner-operators through to banks and life companies,
through their significant relationships and reputations within the industry.

The assessment and due diligence carried out on these opportunities remains a
fundamental part of both risk mitigation and future integration planning. The
ability to manage the integration of these businesses and transfer of
customers efficiently, ensuring the quality of the customer experience, is
fundamental to the M&A strategy while also driving long-term financial and
other operating efficiencies.

Pension Market and Recent HMRC Consultation

We note the treatment of pensions for inheritance tax purposes, which we do
not expect to have a negative impact on our business. We are monitoring the
current technical consultation on the role of the pension administrator. We
believe our role as a specialist pension administrator continues to be
reinforced by legislative proposals such as this, with the potential
responsibilities only improving the prospects and opportunities for
high-quality operators, as well as potentially increasing the scope and scale
of services we will offer our clients.

Change in Financial Year End

The board has determined that the Group year-end will change to 31 December.
The change will align the Group and each of its subsidiary companies to a
single year end.

As a result of the change, the Group's current financial period will comprise
six months from 1 July 2024 to 31 December 2024. The Board intends to report
as follows, in each case with appropriate comparatives:

·      Audited final results for the six months to 31 December 2024 -
publication by 30 April 2025

·      Unaudited interim results for the six months to 30 June 2025 -
publication by 30 September 2025

(1)FCA 2024 SIPP's data request completed in July 2024

Enquiries:

Company Secretary - + 44 (0) 207 004 2700
Antoinette Vanderpuije

FGS Global - PR Adviser
Rollo Head 07768 994 987

Chris Sibbald 07855 955 531

Panmure Liberum Limited (Corporate Broker) - + 44 (0) 203 100 2000

Chris Clarke / Ed Thomas / Anake Singh

Zeus Capital Limited (Corporate Broker) - + 44 (0) 207 220 1666

Harry Ansell / Katy Mitchell

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