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REG - XPS Pensions Group - Acquisition & Trading Update

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RNS Number : 1150A  XPS Pensions Group PLC  21 September 2022

21 September 2022

         XPS Pensions Group plc

 

("XPS" or the "Group")

 

Acquisition of Penfida Limited and Trading Update

 

Acquisition of Penfida Limited

 

XPS Pensions Group plc, is pleased to announce that it has acquired the entire
issued share capital of Penfida Limited ("Penfida") the leading independent
corporate finance and covenant advisor to UK pension funds (the "Acquisition")
for a total cash consideration of £11.6 million, comprising £7.9 million on
completion and contingent deferred consideration of up to £3.7 million,
subject to business performance and the continued employment of key employees.
The Acquisition includes all staff and contracts within the business and
constitutes a Class 2 transaction for the purposes of the FCA's Listing Rules.

 

Penfida was established in 2005, with the mission of providing corporate
finance advice mainly to pension fund trustees, both in respect of complex
corporate transactions as well as regular covenant advisory work in connection
with pensions schemes' triennial valuations and monitoring. Penfida has built
up a substantial presence in the market as the leading independent specialist
adviser, with clients representing in aggregate more than £300 billion of
assets.

 

Under the pensions regulatory framework, all pension scheme trustees require
actuarial advice, investment advice, administration services and advice about
the strength of the sponsoring employer (referred to as the 'employer covenant
strength'). XPS has a strong offering in the first three of these areas, and a
successful and growing employer covenant practice.

 

Penfida's business will be combined with the existing XPS covenant team,
significantly boosting capability and giving critical mass in this important
area. The acquisition will enable XPS to offer covenant advisory services to a
wider range of XPS clients while Penfida clients and staff will benefit from
access to the wider capabilities of XPS. The business unit will be led by the
current Penfida management team, including Senior Partner Paul Jameson,
integrating within the wider XPS Group over time.

 

Penfida Limited generated profit before tax of £0.9 million in the year ended
31 March 2022. This is a statutory figure which is unadjusted for
company-specific policies regarding profit distribution. The Acquisition is
expected to contribute to the Group approximately £5 million of revenue per
annum at a 25% adjusted EBITDA margin. Gross assets were £3.6 million at 31
March 2022.

 

Paul Jameson, Penfida Limited Senior Partner, said: "We are delighted to be
joining the XPS family, where the culture and values of the firm align with
our own. As part of XPS we will be able to continue to provide independent
advice to our clients and we will benefit from ongoing investment to enable
the combined business to grow and thrive into the future."

 

XPS Trading Update

 

With the high levels of demand for XPS's services and increased client
activity, the Group has generated strong organic growth in the first five
months of our financial year, with revenue up 12% against the equivalent
period in 2021.

 

Whilst relatively early in the financial year, the continued resilience and
predictability of the XPS business model (including inflation-linked revenues)
alongside the strong pipeline of activity for both longstanding and new
clients is very encouraging. Combined with the Acquisition, the Board are
confident of achieving full year results slightly ahead of their previous
expectations of the year.

 

Paul Cuff, XPS Pensions Group Co-CEO, said: "Penfida is a business that we
have known and admired for a long time. We have seen first hand the high
quality service they provide when we have worked on clients we have in common.
We are excited to welcome their fantastic team. Their expertise complements
our existing strong and growing covenant business and means we can offer a
market leading service to current and future clients across the entire
spectrum of services that they need.

 

I am also very encouraged by the revenue growth we are experiencing at XPS
across all our divisions, as we deliver for our clients who have needed our
support against a backdrop of significant levels of regulatory change and
market turmoil. I am excited for the prospects of the Group and look forward
to updating shareholders as the year progresses."

 

-Ends-

 

 

For further information, contact:

 

 XPS Pensions Group
 Snehal Shah                         +44 (0)20 3978 8626

 Chief Financial Officer

 Canaccord Genuity (Joint Broker)    +44 (0)20 7523 8000
 Adam James
 Patrick Dolaghan
 RBC Capital Markets (Joint Broker)   +44 (0)20 7653 4000
 James Agnew
 Jonathan Hardy
 Jamil Miah
 Media Enquiries:
 Camarco
 Gordon Poole                        +44 (0)20 3757 4997
 Rosie Driscoll                      +44 (0)20 3757 4981

The person responsible for making this announcement is Zoe Adlam (Company
Secretary).

 

 Notes to Editors

 

About XPS Pensions Group

 

XPS Pensions Group is a leading pension consulting and administration
business focussed 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 968,000 members and provide advisory services to
schemes and corporate sponsors in respect of schemes of all sizes, including
51 with assets over £1bn.

 

In 2022 XPS Pensions Group was awarded Actuarial/Pensions Consultancy of the
Year, Investment Consultancy of the Year and Third-Party Administrator of the
Year at the UK Pension Awards. This is the first time any business has won all
three categories outright in a single year.

 

XPS Pensions Group has also been awarded Actuarial/Pensions Consultancy and
Third-Party Administrator of the Year in three of the last four years and the
Investment Consultancy of the Year for the last two years at UK Pension
Awards.  XPS was also highly commended for Technology Innovation of the Year
in 2022 and Third-Party Administrator of the Year and Education and Thought
Leadership Initiative of the Year in 2021.

 

XPS Pensions Group has also been ranked Gold in the Employee Engagement
category and Silver in the Employee-Centric Company category at the 2020 UK
Employee Experience Awards. XPS Pensions Group also won two awards at the 2020
Business Culture Awards winning Best Business Culture Transformation
Initiative and the overall Gold Award winner for Business Culture.

 

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