REG - XPS Pensions Group - Half-year Report
21/11/2024 07:00
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RNS Number : 0639N XPS Pensions Group PLC 21 November 2024
21 November 2024
XPS Pensions Group plc
Unaudited interim results for the half year ended 30 September 2024
Consistently delivering growth and profitability
Financial highlights:
Adjusted and excluding NPT ((1)) As reported
Half year ended 30 September 2024 2023 YoY 2024 2023 YoY
Actuarial and Consulting £52.1m £44.4m 17% £52.1m £44.4m 17%
Investment Consulting £10.0m £10.2m (2%) £10.0m £10.2m (2%)
Total Advisory £62.1m £54.6m 14% £62.1m £54.6m 14%
Administration £45.2m £32.4m 40% £45.2m £32.4m 40%
SIP £6.1m £5.4m 12% £6.1m £5.4m 12%
Total Group Revenue (excl. NPT) £113.4m £92.4m 23% £113.4m £92.4m 23%
NPT((1)) - - - - £2.1m n/a
Total Group revenue £113.4m £92.4m 23% £113.4m £94.5m 20%
EBITDA £30.9m £22.5m 37% £26.1m £17.1m 53%
Profit before tax £26.5m £17.1m 55% £18.2m £8.1m 125%
Earnings per share 9.4p 6.2p 52% 6.3p 2.6p 142%
Fully diluted EPS 8.9p 5.8p 53% 5.9p 2.5p 136%
Net debt £22.4m £68.2m (67%) £22.4m £68.2m (67%)
Interim dividend 3.7p 3.0p 23% 3.7p 3.0p 23%
((1) ) Adjusted measures exclude the impact of amortisation of
acquired intangibles, share based payments, exceptional items and the fair
value adjustment to contingent consideration. They also exclude the results of
the National Pension Trust (NPT) business which was sold in November 2023 (see
appendix of the financial review).
· Strong client demand, increased project work, expansion of
services and inflationary fee increases drove 23% growth in Group revenues to
£113.4 million
· Further improvement in operational gearing with adjusted EBITDA
of £30.9 million (+37% YoY)
· Tenth consecutive half year of YoY growth in revenues across
Advisory and Administration which account for 95% of Group revenues:
o Continued strong growth in Actuarial and Consulting revenues (+17% YoY,
all organic)
o Activity levels in Investment Consulting normalising after growth of 48%
in previous two years (-2% YoY)
o Administration revenue growth of 40% YoY with high levels of project work
particularly for public sector clients
· SIP revenues up 12% YoY driven by growth in underlying SIP sales
volumes and bank commission from higher client deposits
· Adjusted fully diluted EPS was up 53% YoY to 8.9 pence
benefitting from strong trading, operational gearing and lower interest costs
due to the reduction in debt following the sale of National Pension Trust in
November 2023
· Increased interim dividend of 3.7 pence (2023: 3.0 pence) per
share declared by the Board, reflecting XPS's progressive dividend policy and
our continued confidence in the Group's prospects
Continuing to deliver on our growth strategy:
· Continuing to deliver consecutive YoY revenue growth since
listing in 2017 alongside operational leverage; underscoring the strength of
the brand and product offering, the highly predictable and recurring nature of
the business model and the relentless focus on driving returns from investment
in client services
· Strong culture reflected in high levels of retention, excellent
client satisfaction scores as well as high employee net promoter scores
· Multiple industry awards - 'Actuarial and Pensions Consulting
Firm of the year' and 'Covenant Advisor of the year'
· Proud to have joined the FTSE 250 - a significant milestone for
the business and helpful in raising our industry profile when in discussions
with larger pension schemes and employers
· Continuing to successfully transition clients on to Aurora; our
proprietary administration platform which is expected to drive further
operational gearing in the future
· Investing in building out our capability to service insurers,
with key hires including David Honour, as head of Insurance Consulting.
· Continued focus on sustainability within the business, notable
milestones achieved:
o Retained signatory to the FRC's Stewardship Code
o Remained fully carbon neutral for 4 years
Outlook
Another strong first half financial performance underscores the predictable
and recurring nature of the XPS business model as well as the strength of the
brand and our product offering. Regulatory changes continue to support
client demand within Advisory. There remain growth opportunities for
Administration in both the private and public sector. The Board is pleased
with the Group's performance in the first half of the year and,
notwithstanding an even tougher comparative period in the second half of the
year, is confident of achieving overall full year results in line with its
recently upgraded expectations.
Paul Cuff, Co-CEO of XPS Group, commented:
"We are very pleased with the first half performance of the Group. We have
seen strong, profitable growth alongside further operational leverage as we
have responded to high client demand, including in areas that we have invested
in over recent years such as our risk transfer advisory capability and in
public sector administration.
We have achieved many milestones, including the ongoing roll out of our
proprietary new administration system, Aurora, and investing in our people,
including making senior hires to drive future growth as we continue to broaden
our advisory capabilities in an evolving pensions and insurance market.
Gaining entry into the FTSE 250 this summer was a big milestone on our
journey. We are really excited about the future and are continuing to build
on the positive momentum we have. I would like to thank all our people for the
way they continue to support each other and our clients, we are very proud of
them."
For further information, contact:
XPS Group
Snehal Shah +44 (0)20 3978 8626
Chief Financial Officer
Canaccord Genuity (Joint Broker) +44 (0)20 7523 8000
Adam James
George Grainger
RBC Capital Markets (Joint Broker) +44 (0)20 7653 4000
James Agnew
Jamil Miah
Media Enquiries:
Camarco +44 (0)20 3757 4980 / xps@camarco.co.uk
Gordon Poole
Rosie Driscoll
Phoebe Pugh
Notes to Editors:
XPS Group is a leading consulting and administration business focused on UK
pension schemes and insurers. XPS combines expertise, insight and technology
to address the needs of over 1,400 pension schemes and their sponsoring
employers on an ongoing and project basis, also providing advice and
administration to UK life insurance companies. 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
83 with assets over £1bn.
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%(1) is impressive, particularly
given it follows two prior years of strong growth.
Our growth has again been profitable, with a rise of 37% in adjusted EBITDA on
the prior period and continued operational leverage. This reflects a
continued mix of business effect, as we have grown strongly in higher margin
activities such as risk transfer advisory work, and also the benefits of
increased efficiency in our business continuing to come through.
An evolving market, driving demand for our services
The UK pensions landscape has changed significantly in recent years. The
rise in long-term interest rates has materially improved the financial
position of most defined benefit schemes. This has opened up options for our
clients, some of whom are now closer to the possibility of insurance
transactions more quickly than they expected to be. Many pension schemes and
employers are weighing these options against the idea of "running on for
surplus".
All our clients need advice about their options and support on whichever path
they conclude is right for them. Clients pursuing insurance transactions
need wide ranging help, in areas such as evolving their asset strategies to be
able to transact, to cleanse their membership data, and of course all of the
broking work. These are often multi year projects. Clients pursuing "run
on" also need wide ranging advice and support about how to do this safely,
protecting the interests of all stakeholders including the pension scheme
members.
Regulatory change is also a driver of demand. A new funding code was
introduced in late September 2024, which changed the rules on how actuarial
valuations should be carried out from this date onwards. Our advisory
clients need bespoke advice on how to adapt to the new rules, and of course
not all defined benefit schemes are yet in surplus; a sizeable number continue
to wrestle with deficits that will take years to address. The new
regulations have a bigger impact on schemes in this position.
We continue to work through other regulatory changes; work on GMP projects
continues and provides a strong revenue stream. To date, we have still only
completed GMP work for 14% of clients.
There are rectification projects in the public sector too. All public sector
schemes are faced with the challenge of amending their members' benefits
following the McCloud judgement that ruled that changes made to public sector
pension schemes have not been implemented legally. This is driving high
demand for our public sector administration clients, including the police
forces and fire services. This work is one off in nature, with a statutory
deadline to be largely complete by 31 March 2025, although we do see
opportunities to win more ongoing clients where we can differentiate ourselves
having been seen to have provided a strong service in this area.
As we look ahead, we continue to develop new services to meet market
demands. The pensions world and the insurance world have always overlapped
to a degree, and the rapid growth of the bulk annuity market is increasingly
blurring the difference between the two. We have for many years provided
services directly to insurers, supporting them in writing bulk annuity
contracts. We are investing to broaden the services we can provide to life
insurers, and were delighted to make a senior hire to lead our business in
this area. David Honour, who joins us from PwC where he was a senior partner
in the insurance advisory practice, started with us on 1 October 2024.
The roll out of our new administration system
We continue to transition clients onto our new proprietary administration
system, Aurora. We achieved a big milestone successfully moving National
Pension Trust, the master trust that we sold to SEI in November 2023 but where
we retain the role of administrator, onto Aurora. More widely we have now
migrated 46 clients, with over 150,000 members, on to the platform and we
remain on track to migrate the remaining clients.
Aurora has multiple benefits for us; it drives efficiency in our business,
helps us provide a better service to clients and online access for their
members and is a key differentiator on new business opportunities.
(1 Excluding NPT, including NPT year-on-year growth was 20%.)
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 "Pensions and
Actuarial Consulting firm of the year" at the Professional Pensions Awards -
arguably the "main award" at this event, and the third time in five years we
have won this. At the same event, we also won "Employer Covenant Advisor of
the year" which was particularly pleasing as this is the area of the business
that was boosted by the acquisition of Penfida two years ago, and is real
testament to the successful integration of Penfida colleagues into XPS.
We also win awards for our culture; our most recent awards were for "Business
Culture Builder Award" and "Best Working Environment and Practices Initiative
Award" at the Business Culture Awards 2024. We are passionate about our
culture - 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.
FTSE 250 Entry
The performance of the Group has been strong for a number of consecutive
financial reporting periods. We have grown revenues strongly - now up 68%
over the last 3 years. We have grown profitably, demonstrating operational
gearing, and we have increased our dividend throughout. The consequence of
this has been good shareholder returns and, during H1, entry into the FTSE
250.
This is a big milestone for the Group. It is positive from an investor
perspective, and more fundamentally the "blue chip" status is positive from a
client and new business perspective. It also has the effect of boosting
morale within the firm - our people can rightly feel very proud of how far our
firm has come in recent years.
Outlook
Another strong first half financial performance underscores the predictable
and recurring nature of the XPS business model as well as the strength of the
brand and our product offering. Regulatory changes continue to support
client demand within Advisory. There remain growth opportunities for
Administration in both the private and public sector. The Board is pleased
with the Group's performance in the first half of the year and,
notwithstanding an even tougher comparative period in the second half of the
year, is confident of achieving overall full year results in line with its
recently upgraded expectations.
Financial Review
Adjusted ((1)) As reported
Half year ended 30 September 2024 2023 Change YoY 2024 2023 Change YoY
Revenue
Actuarial & Consulting £52.1m £44.4m 17% £52.1m £44.4m 17%
Investment Consulting £10.0m £10.2m (2%) £10.0m £10.2m (2%)
Total Advisory £62.1m £54.6m 14% £62.1m £54.6m 14%
Administration £45.2m £32.4m 40% £45.2m £32.4m 40%
SIP £6.1m £5.4m 12% £6.1m £5.4m 12%
NPT - - - - £2.1m n/a
Total revenue £113.4m £92.4m 23% £113.4m £94.5m 20%
Other operating income - - - - £0.1m n/a
Administrative expenses (£82.5m) (£69.9m) (18%) (£87.3m) (£77.5m) (13%)
EBITDA £30.9m £22.5m 37% £26.1m £17.1m 53%
Depreciation & amortisation (£3.1m) (£2.8m) (11%) (£6.6m) (£6.4m) (3%)
EBIT £27.8m £19.7m 41% £19.5m £10.7m 82%
Net finance expense (£1.3m) (£2.6m) 50% (£1.3m) (£2.6m) 50%
Profit before tax £26.5m £17.1m 55% £18.2m £8.1m 125%
Income tax expense (£7.0m) (£4.3m) (63%) (£5.2m) (£2.6m) (100%)
Profit after tax £19.5m £12.8m 52% £13.0m £5.5m 136%
Earnings per share 9.4p 6.2p 52% 6.3p 2.6p 142%
Fully diluted EPS 8.9p 5.8p 53% 5.9p 2.5p 136%
Interim dividend 3.7p 3.0p 23% 3.7p 3.0p 23%
((1))Adjusted measures exclude the impact of amortisation of acquired
intangibles, share-based payments, exceptional items and the fair value
adjustment to contingent consideration. They also exclude the results of the
NPT business which was sold in November 2023. See note 3 for details of
exceptional and non-trading items.
Group revenue
Total Group revenue for the six months ended 30 September 2024 grew 20% year
on year to £113.4 million. Excluding NPT, total Group revenues grew 23%
year on year.
Actuarial and Consulting
Revenue has grown 17% YoY to £52.1 million. The growth reflects client
demand, expansion of services and the lagged impact of annual price increases
implemented at times of higher inflation.
Investment Consulting
Revenue decreased by 2% to £10.0 million as demand normalised following
growth of 48% in the previous two years.
Administration
Revenue has grown 40% year on year to £45.2 million on the back of new client
wins coming on stream, strong demand for project work such as GMP equalisation
and the McCloud judgement rectification. As with the Advisory business,
inflationary fee increases also helped to drive the growth in the period. The
number of members under administration was c. 1,070,000 at 30 September
2024; YoY increase of 2.1%.
SIP
Revenue has grown 12% to £6.1 million, driven by strong underlying sales
volumes and bank commission from higher client deposits.
Operating costs
Total operating costs (excluding exceptional and non-trading items) of £85.6
million for the Group grew by 12% or £10.9 million year on year, below the
growth in group revenues evidencing the Group's strengthening operational
gearing. Factors contributing to the cost growth include higher number of
employees from ongoing recruitment, inflationary/market driven pay increases,
higher bonus accrual commensurate with trading performance, and inflationary
increases in other cost lines.
Adjusted EBITDA
Adjusted EBITDA of £30.9 million is up 37% YoY with an increase in the margin
to 27.2%.
Exceptional and non-trading items
During the half year ended 30 September 2024 the Group incurred £8.2 million
of exceptional and non-trading charges (see note 3 for further details).
Net finance expenses
Net finance expense of £1.3 million were 50% lower than the prior year,
largely due to the significant reduction in the bank debt in the second half
of FY2023/24, following the disposal of the NPT business in November 2023.
Taxation
Tax charge on adjusted profit before tax for the half year was £7.0 million.
The tax charge on statutory profits was £5.2 million. The YoY increase is
largely due to the impact of the increase in taxable profits.
Basic EPS
Basic EPS in the half year ended 30 September 2024 was 6.3p; up 142% YoY
benefitting from a strong trading performance resulting in an increase in
profits in the period.
Adjusted fully diluted EPS
Adjusted fully diluted EPS in the half year ended 30 September 2024 was 8.9p;
up 53% YoY benefitting from a strong trading performance resulting in an
increase in profits in the period.
Dividend
An interim dividend of 3.7p has been declared by the Board (2023: 3.0p),
reflecting XPS's progressive dividend policy and our continued confidence in
the Group's prospects. The interim dividend amounting to £7.7 million (2023:
£6.2 million), will be paid on 7 February 2025 to those shareholders on the
register on 10 January 2025.
Cash-flow, capital expenditure and net debt
The Group generated £18.8 million from operating activities. After £4.4
million on capital expenditure; paying £14.6 million in dividends; £0.9
million of interest, £1.1 million of lease liabilities; £0.6 million
dividend equivalents on vesting of employee share schemes; £6.4 million on
repurchasing own shares, partially offset by a net £8.0 million drawdown of
committed facility, and receipt of £0.8 million on the exercise of SAYE share
options by employees, the net decrease in cash was £0.4 million at 30
September 2024.
At 30 September 2024 net debt (as defined for RCF covenants and therefore
excluding IFRS 16) was £22.4 million, down 67% YoY. The leverage ratio for
financing covenants was 0.37x (2023: 1.55x). At 30 September 2024, the Group
had £68.0 million of undrawn committed facility. The Group's RCF expires in
October 2026.
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 2024
(pages 47-52).
Appendix: Reconciliation of reported/statutory results to alternative
performance measures (APMs)
In order to assist the reader's understanding of the financial performance of
the Group, it continues to present a range of results metrics to demonstrate
its performance. These include those presented in accordance with
International Accounting Standards (IFRS) and APMs. APMs exclude specific
exceptional and non-trading items as set out in note 3 of the condensed
consolidated financial statements.
An explanation of the Group's key APMs has been detailed below:
APM Closest equivalent statutory measure APM definition and purpose
Adjusted EBITDA excluding the NPT business Profit/loss from operating activities Definition: Earnings before interest, tax, depreciation and amortisation
excluding exceptional and non-trading items, and excluding the NPT business
disposed of in November 2023 as if a discontinued operation.
Purpose: A recognised APM which has been central to the business over many
years and through different ownership structures. It allows the Group to
monitor the underlying trading performance of the business without the impact
of external and exceptional and non-trading factors distorting the figures.
Adjusted diluted EPS excluding the NPT business Diluted earnings per share Definition: Reflects the profit after tax, adjusted to remove the impact of
exceptional and non-trading items and the NPT business disposed of in November
2023.
Purpose: Presents an EPS measure used more widely by investors and analysts
and more in line with how the Group's dividends are calculated.
Leverage (Net debt/EBITDA) Cash and cash equivalents Definition: Leverage ratio showing the amount of third-party debt excluding
leases (net of cash held) relative to last twelve months adjusted pro-forma
EBITDA.
Purpose: Management can measure exposure to reliance on third-party debt.
Leverage is the key measure in reporting to the Group's banks and driving the
interest rate margin which is added to SONIA to determine the all-in rate
payable.
A reconciliation of the Group's APMs to their closest statutory measure has
been provided below:
1. Adjusted EBITDA excluding NPT
Half year ended 30 September 2024 2023
£m £m
Profit from operating activities 19.6 10.7
Depreciation and amortisation 6.5 6.4
Other exceptional and non-trading items 4.8 5.6
Remove trading EBITDA in respect of NPT business (1) - (0.2)
Adjusted EBITDA excluding NPT 30.9 22.5
2. Adjusted diluted EPS excluding NPT
Half year ended 30 September 2024 2023
£m £m
Profit after tax and total comprehensive income 13.0 5.5
Adjustment for exceptional and non-trading items (net of tax) (2) 6.5 7.5
Remove profit after tax from operating activities for NPT business (1) - (0.2)
Adjusted profit after tax 19.5 12.8
Dilutive weighted average number of shares ('000) 220,231 219,634
Adjusted diluted EPS excluding NPT (pence) 8.9 5.8
3. Leverage
Half year ended 30 September 2024 2023
£m £m
Cash and cash equivalents 9.6 5.8
Bank debt (3) (32.0) (74.0)
Contingent consideration - -
Net debt 22.4 68.2
Last twelve months (LTM) trading EBITDA (4) 63.5 47.3
Impact of IFRS 16 ignored for bank covenants purposes (5) (3.0) (3.2)
Pro-forma impact of M&A transactions in year (6) (0.2) -
Adjusted EBITDA for covenant 60.3 44.1
Leverage 0.37x 1.55x
(1) Profit after tax from operating activities for NPT business
The results of the NPT business in H1 2023/24 are as follows:
6 month period ended 30 September 2023
Trading items Non-trading and exceptional items Total
Unaudited Unaudited Unaudited
£m £m £m
Revenue 2.1 - 2.1
Other operating income - - -
Administrative expenses (1.9) (1.7) (3.6)
Profit/(loss) from operating activities 0.2 (1.7) (1.5)
Finance income - - -
Finance costs - - -
Profit/(loss) before tax 0.2 (1.7) (1.5)
Income tax (expense)/credit - - -
Profit/(loss) after tax and total comprehensive income for the period 0.2 (1.7) (1.5)
Memo
EBITDA 0.2 (1.7) (1.5)
Depreciation and amortisation - - -
Profit/(loss) from operating activities 0.2 (1.7) (1.5)
(2) See note 3 of the condensed consolidated interim financial statements
(3) As per balance sheet at 30 September 2023, before the loan was paid down
using proceeds from the disposal of the NPT business
(4) The LTM trading EBITDA can be calculated from:
2024 2023
£m £m
March 2024 (2023) full year reported adjusted EBITDA 55.3 42.4
Less: September 2023 (2022) interim results (22.7) (17.8)
Add: September 2024 (2023) interim results 30.9 22.7
LTM trading EBITDA 63.5 47.3
(5) The Group's banking facilities agreement ignores IFRS 16 for covenant test
purposes. Debt excludes lease-related liabilities and to be on a consistent
basis adjusted pro-forma EBITDA includes rent-related costs as an operating
expense unlike in the statutory income statement where they are treated as
depreciation of right-of-use assets with a related financing cost.
(6) Pro-forma related adjustments reflect the impact of M&A-related
transactions as if they had been included for the whole financial year. The
adjustment in both periods is to reflect the NPT sale taking place on 1 April
2023 (i.e. it removes the EBITDA that the NPT business contributed between 1
April 2023 and the point it was sold on 20 November 2023).
Condensed Consolidated Statement of Comprehensive Income
for the period ended 30 September 2024
6 month period ended 30 September 2024 6 month period ended 30 September 2023
Trading items Non-trading and exceptional items Total Trading items Non-trading and exceptional items Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 4 113,414 - 113,414 94,510 - 94,510
Other operating income - - - - 92 92
Administrative expenses (85,590) (8,232) (93,822) (74,650) (9,247) (83,897)
Profit/(loss) from operating activities 27,824 (8,232) 19,592 19,860 (9,155) 10,705
Finance income 36 - 36 20 - 20
Finance costs (1,383) - (1,383) (2,577) - (2,577)
Profit/(loss) before tax 26,477 (8,232) 18,245 17,303 (9,155) 8,148
Income tax (expense)/credit (6,973) 1,766 (5,207) (4,375) 1,693 (2,682)
Profit/(loss) after tax and total comprehensive income for the period 19,504 (6,466) 13,038 12,928 (7,462) 5,466
Memo
EBITDA 30,907 (4,818) 26,089 22,733 (5,634) 17,099
Depreciation and amortisation (3,083) (3,414) (6,497) (2,873) (3,521) (6,394)
Profit/(loss) from operating activities 27,824 (8,232) 19,592 19,860 (9,155) 10,705
Pence Pence
Pence Pence
Earnings per share attributable to the ordinary equity holders of the Company: Adjusted Adjusted
Profit or loss:
Basic earnings per share 5 9.4 6.3 6.2 2.6
Diluted earnings per share 5 8.9 5.9 5.9 2.5
Condensed Consolidated Statement of Financial Position
as at 30 September 2024
30 September 31 March
2024 Unaudited 2024
Audited
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 5,063 3,976
Right-of-use assets 14,682 8,892
Intangible assets 206,082 208,070
225,827 220,938
Current assets
Trade and other receivables 53,209 50,922
Current income tax asset 1,338 -
Cash and cash equivalents 9,574 10,005
64,121 60,927
Total assets 289,948 281,865
Liabilities
Non-current liabilities
Loans and borrowings 6 31,524 23,386
Lease liabilities 13,045 7,295
Provisions for other liabilities and charges 3,048 1,802
Deferred tax liabilities 14,645 15,593
62,262 48,076
Current liabilities
Lease liabilities 2,225 1,872
Provisions for other liabilities and charges 1,086 1,914
Trade and other payables 41,845 43,722
Current income tax liabilities - 427
45,156 47,935
Total liabilities 107,418 96,011
Net assets 182,530 185,854
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 (3,293) (2,925)
Retained earnings 8 135,246 138,202
Total equity 182,530 185,854
Condensed Consolidated Statement of Changes in Equity
for the period ended 30 September 2024
Share capital Share premium Investment in own shares Accumulated deficit/ retained earnings Total equity
£'000 £'000 Merger relief reserve £'000 £'000 £'000
£'000
Balance at 1 April 2024 104 1,786 48,687 (2,925) 138,202 185,854
Profit after tax and total comprehensive income for the period - - - - 13,038 13,038
Contributions by and distributions to owners
Shares purchased by employee benefit trust for cash - - - (6,405) - (6,405)
Dividends paid (note 9) - - - - (14,577) (14,577)
Dividend equivalents paid on exercised share options - - - - (591) (591)
Share-based payment expense - equity settled from employee benefit trust - - - 6,037 (5,270) 767
Share-based payment expense - IFRS2 charge - - - - 2,586 2,586
Deferred tax movement in respect of share-based payment expense - - - - 421 421
Current tax movement in respect of share-based payment expense - - - - 1,437 1,437
Total contributions by and distributions to owners - - - (368) (15,994) (16,362)
Unaudited balance at 30 September 2024 104 1,786 48,687 (3,293) 135,246 182,530
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 2023 104 1,786 48,687 (1,350) 100,057 149,284
Profit after tax and total comprehensive income for the year - - - - 54,167 54,167
Contributions by and distributions to owners
Dividends paid - - - - (18,025) (18,025)
Dividend equivalents paid on exercised share options - - - - (576) (576)
Shares purchased by employee benefit trust for cash - - - (5,621) - (5,621)
Share-based payment expense - equity settled from employee benefit trust - - - 4,046 (4,019) 27
Share-based payment expense - IFRS2 charge - - - - 4,910 4,910
Deferred tax movement in respect of share-based payment expense - - - - 1,167 1,167
Current tax movement in respect of share-based payment expense - - - - 521 521
Total contributions by and distributions to owners - - - (1,575) (16,022) (17,597)
Balance at 31 March 2024 104 1,786 48,687 (2,925) 138,202 185,854
Condensed Consolidated Statement of Cash Flows
for the period ended 30 September 2024
Note Period ended Period ended
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Cash flows from operating activities
Profit after tax for the period 13,038 5,466
Adjustments for:
Depreciation 486 394
Depreciation of right-of-use assets 1,390 1,572
Amortisation 4,621 4,374
Loss on disposal of right-of-use assets - 54
Finance income (36) (20)
Finance costs 1,383 2,577
Share-based payment expense 2,586 2,408
Other operating income - (92)
Income tax expense 5,207 2,682
28,675 19,415
Increase in trade and other receivables (2,287) (3,025)
Decrease in trade and other payables (1,683) (2,187)
Increase/(decrease) in provisions 122 (621)
24,827 13,582
Income tax paid (6,068) (2,280)
Net cash inflow from operating activities 18,759 11,302
Cash flows from investing activities
Payment of deferred consideration - (406)
Purchases of property, plant and equipment (1,603) (743)
Purchases of software (2,779) (3,369)
Net cash outflow from investing activities (4,382) (4,518)
Cash flows from financing activities
Proceeds from existing loans 12,000 6,000
Repayment of loans (4,000) -
Payment relating to extension of loan facility - (200)
Repurchase of own shares (6,405) (4,277)
Proceeds from the exercise of share options settled by EBT shares 767 16
Interest paid (870) (2,235)
Lease interest paid (166) (119)
Payment of lease liabilities (966) (1,195)
Dividends paid to the holders of the parent 9 (14,577) (11,825)
Dividend equivalents paid on vesting of share options (591) (438)
Net cash outflow from financing activities (14,808) (14,273)
Net decrease in cash and cash equivalents (431) (7,489)
Cash and cash equivalents at start of the period 10,005 13,285
Cash and cash equivalents at end of period 9,574 5,796
(
)
( )
Notes to the Condensed Consolidated Financial Statements
for the period ended 30 September 2024
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 2024.
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 2024, except for the following amendments which apply for
the first time in 2024/25. 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 2024:
• Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);
• Classification of Liabilities as Current or Non-Current (amendments to IAS
1 Presentation of Financial Statements);
• Non-Current Liabilities with Covenants (Amendments to IAS 1 Presentation
of Financial Statements); and
• Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows
and IFRS 7 Financial Instruments: Disclosures).
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.
Management has prepared cash flow forecasts up to 31 March 2026, which the
Directors have approved. These include the 12-month period from the date of
approval of these interim financial statements. These forecasts 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 2026 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.
The Group's banking facility is in place until October 2026 and gives the
Group access to a Revolving Credit Facility of £100 million with an accordion
of £50 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.
Management has also performed some scenario modelling to further assess the
liquidity of the Group. Firstly, management have modelled a scenario at which
the banking covenants could potentially be breached, which is the point where
going concern could be threatened. In this worst case 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 if
this worst case scenario was to happen. Another scenario modelled was a
reasonable downside scenario, where no growth is experienced in revenues not
related to compliance. The result of this reasonable downside scenario was
that even with no actions to reduce costs in line with the revenue decrease,
the Group remained profitable and complied comfortably with its banking
covenants. This reasonable downside scenario is considered to be very
unlikely, as historically the Group has always performed discretionary work
for its customers.
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 1% of the forecast figure, and
adjusted EBITDA was within 4% 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, as well as the impact of the
national insurance increase announced in the Autumn budget, 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 increase in
the rate of inflation has stabilised at a lower level than in recent years,
although management is monitoring the situation with Russia and Ukraine as
well as the situation in the Middle East as any further escalations could
trigger further price increases with potential for related interest rate
increases. The Group does have protection for any increases in the inflation
rate built into customer contracts, which stipulate that the price charged can
be increased by an inflationary amount. Pricing on indexation-linked contracts
continues to be reviewed and prices are uplifted accordingly as contracts are
renewed. 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.
Alternative performance measures (APMs)
The Group presents APMs within its interim report, these APMs are not defined
under the requirements of IFRS. These include those that are visible from the
consolidated statement of comprehensive income and the following key APMs:
adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share,
and leverage. Management believes that the presentation of these APMs provides
stakeholders with additional information on the underlying performance of the
business, as well as aiding comparability between reporting periods by
adjusting for factors which affect IFRS performance measures. These APMs are
not a substitute for or superior to IFRS measures. The Group's APMs are
defined, explained and reconciled to the nearest statutory measure within the
Chief Financial Officer's review.
Non-trading and exceptional items
To assist in understanding its underlying performance, the Group has defined
the following items of 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:
· Profits or losses on disposal of assets or businesses, which are
considered to be non-trading in nature as these do not reflect the underlying
performance of the Group. These transactions tend to be material in value, and
the timing can be uncertain. The impact on the financial statements can be
significant and can distort certain key performance indicators, such as basic
EPS;
· Corporate transaction and restructuring costs are considered to
be exceptional in nature as these can be material and are not a reflection of
the underlying performance of the Group. The timing of these costs can vary,
and amounts can differ significantly year on year, which can have a distortive
impact on the statutory measures of performance;
· Amortisation of acquired intangibles is considered to be
non-trading as this is a material number and does not reflect the underlying
performance of the Group, and users of the accounts expect to be able to
assess the profitability and growth of the Group excluding this figure.
Additionally, this is a significant non-cash cost;
· Changes in the fair value of contingent consideration - these
movements do not reflect underlying trade and the timing of these items can be
significantly different from the date of the original transaction to which
they relate. They do not reflect the underlying performance of the Group as a
whole;
· Expenses relating to deferred consideration deemed as
post-acquisition remuneration under IFRS 3 are considered to be exceptional in
nature. Without the link to continuing employment, these costs would have been
treated as consideration and are material in value;
· Share-based payments, which are considered a non-trading cost as
they are a significant non-cash cost which are excluded from the results for
the purposes of measuring performance for Performance Share Plan (PSP) awards
and also dividend amounts. Additionally, the large non-cash related credits go
directly to equity and so have a limited impact on the reserves of the Group;
and
· the related tax effect of these items.
Notes to the Condensed Consolidated Financial Statements (continued)
1 Accounting policies (continued)
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, together with an
understanding of the effect of non-recurring or large individual transactions
upon the overall profitability of the Group.
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 within the course of
business. 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. The
estimates and underlying assumptions are reviewed on an ongoing basis. In the
future, actual experience may differ from these estimates and assumptions.
Significant judgements are separately identified where applicable. The
Directors have reviewed the accounting estimates and judgements made, and have
determined that there is one critical judgement, relating to the valuation of
contract assets - accrued income within the unbilled element of pensions,
investment and administration services.
Management will make a judgment as to whether a project is in an accrued or
deferred position at the end of each month/reporting period. This judgement is
based on the time recorded against each client project versus the amount
billed, as well as other factors including expected recoverability levels
based on past experience the nature of the work undertaken, and to what extent
the performance obligations have been met, all in line with IFRS 15.
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.
2 Financial information
The financial information in this report was formally approved by the Board of
Directors on 20 November 2024. 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
2024 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 2024 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 2023 was unaudited but was reviewed by the
Group's auditor.
Notes to the Condensed Consolidated Financial Statements (continued)
3 Non-trading and exceptional items
Period ended Period ended
30 September 2024 30 September 2023
Unaudited Unaudited
Total before tax Tax on adjusting items (5) Adjusting items after taxation Total before tax Tax on adjusting items (5) Adjusting items after taxation
£'000 £'000 £'000 £'000 £'000 £'000
Corporate transaction costs (1) (1,106) - (1,106) (2,611) 1 (2,610)
Exceptional items (1,106) - (1,106) (2,611) 1 (2,610)
Contingent consideration write back (2) - - - 92 - 92
Share-based payment costs (3) (3,712) 912 (2,800) (3,115) 812 (2,303)
Amortisation of acquired intangibles (4) (3,414) 854 (2,560) (3,521) 880 (2,641)
Non-trading items (7,126) 1,766 (5,360) (6,544) 1,692 (4,852)
Total (8,232) 1,766 (6,466) (9,155) 1,693 (7,462)
( )
(1) The Group incurred total corporate transaction costs of £1.1 million (H1
2023/24 £2.6 million) in the period, which relates to contingent
consideration in respect of the acquisition of Penfida Limited (H1 2023/24:
£0.9 million). 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 entire contingent consideration was paid in
October 2024. The remainder of the costs in H1 2023/24 relate to the disposal
of the NPT business by the Group. The overall corporation transactions costs
are material and do not reflect the underlying performance of the Group. Users
of the accounts expect these costs to be disclosed separately, to aid
visibility of underlying performance. The timing of these costs can also vary
and are not normally aligned with the related benefits of the transaction.
(2) The prior year contingent consideration write back relates to the
revaluation of the contingent consideration for the Michael J Field (MJF)
acquisition. This income is deemed to be exceptional in nature as it is linked
to a payment set out in the business transfer agreement for the MJF
acquisition in February 2022. This income is not related to underlying
business performance and so is disclosed as non-trading income. Management
does not include this figure in income when reviewing overall business
performance. There are no further payments to be made in respect of this
acquisition.
(3) Share-based payment expenses and related National Insurance are included
in non-trading and exceptional costs as they are significant non-cash costs
which are excluded from the results for the purposes of measuring performance
for PSP awards and dividend amounts. Additionally, the largely non-cash
related credits go directly to equity and so have a limited impact on the
reserves of the Group. They are therefore shown as a non-trading item to give
clarity to users of the accounts on the profit figures that dividends and PSP
performance are based on.
(4) During the period the Group incurred £3.4 million of amortisation charges
in relation to acquired intangible assets (customer relationships) (H1
2023/24: £3.5 million). As this figure is material, and is linked to
non-trading activity, management excludes this cost when reviewing and
reporting on the underlying performance of the Group. Similarly, users of the
accounts expect to be able to assess the profitability and growth of the Group
excluding this figure.
(5) The tax credit on exceptional and non-trading items of £1.8 million (H1
2023/24: £1.7 million) represents a credit of 21% (H1 2023/24: 18%) of the
non-trading and exceptional items incurred of £8.2 million (H1 2023/24: £9.2
million). This is different to the expected tax credit of 25% (H1 2023/24:
25%), as various adjustments are made to tax including for deferred tax and
the exclusion of amounts not allowable for tax.
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
2024 2023
Unaudited Unaudited
Revenue from external customers £'000 £'000
Actuarial and Consulting 52,107 44,422
Administration 45,233 32,370
Investment Consulting 10,011 10,185
SIP (1) 6,063 5,415
National Pension Trust (NPT) (2) - 2,118
Total 113,414 94,510
(1) Self Invested Pensions (SIP) business, incorporating both SIPP and SSAS
products.
(2) The NPT business was sold on 20 November 2023.
5 Earnings per share
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Profit for the period 13,038 5,466
Weighted average number of shares: '000 '000
Weighted average number of shares in issue 207,273 206,947
Effects of:
Outstanding share options 12,958 12,687
Diluted weighted average number of ordinary shares 220,231 219,634
Basic earnings per share (pence) 6.3 2.6
Diluted earnings per share (pence) 5.9 2.5
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.
Adjusted earnings per share
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Adjusted profit after tax 19,504 12,928
Adjusted basic earnings per share (pence) 9.4 6.2
Diluted adjusted earnings per share (pence) - total 8.9 5.9
The adjusted profit after tax is the trading profit after tax and excludes the
exceptional and non-trading items disclosed in note 3.
Notes to the Condensed Consolidated Financial Statements (continued)
6 Loans and borrowings
At 30 September 2024, the Group had drawn down £32.0 million (31 March 2024:
£24.0 million) of its £100.0 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 are included in the consolidated statement of comprehensive income.
Capitalised loan-related costs are amortised over the life of the loan to
which they relate.
Total debt net of capitalised arrangement fees was £31.5 million (31 March
2024: £23.4 million).
Net debt for bank reporting purposes:
Period ended Period ended
30 September 31 March
2024 2024
Unaudited Unaudited
£'000 £'000
Drawn revolving credit facility 32,000 24,000
Contingent consideration - -
Less: cash (9,574) (10,005)
Net debt 22,426 13,995
7 Share capital
Ordinary Ordinary Ordinary Ordinary
shares shares shares shares
('000) (£'000) ('000) (£'000)
30 September 30 September 31 March 31 March
2024 2024 2024 2024
In issue at the beginning of the period 207,545 104 207,443 104
Issued during the period 794 - 102 -
In issue at the end of the period 208,339 104 207,545 104
30 September 30 September 31 March 31 March
2024 2024 2024 2024
('000) (£'000) (000) (£'000)
Allotted, called up and fully paid
Ordinary shares of 0.05p (March 2024: 0.05p) each 207,239 104 206,032 103
Shares held by the Group's Employee Benefit Trust
Ordinary shares of 0.05p (March 2024: 0.05p) each 1,100 - 1,513 1
Shares classified in shareholders' funds 208,339 104 207,545 104
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.
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 shares: Cost of own shares held by the EBT.
Notes to the Condensed Consolidated Financial Statements (continued)
9 Dividends
Amounts recognised as distributions to equity holders of the parent in the
period
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Final dividend for the year ended 31 March 2024: 7.0p per share (2023: 5.7p) 14,577 11,825
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Interim dividend for the year ending 31 March 2025 of 3.7p (2024: 3.0p) 7,664 6,209
The final dividend for 2023/24 was paid on 23 September 2024. The final
dividend has been reflected in the Statement of Changes in Equity.
The interim dividend was approved by the Board on 20 November 2024 and has not
been included as a liability at 30 September 2024.
10 Related party transactions
Key management emoluments during the period
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Emoluments 563 536
Share-based payments 1,026 772
Company contributions to money purchase pension plans 15 15
Social security costs 104 71
1,708 1,394
Directors' bonuses are not included in the emoluments figure at 30 September
2024 or 30 September 2023 as the bonus amount is dependent on full year
results and is also at the discretion of the Remuneration Committee.
922,615 shares were exercised by Directors in the period (H1 FY24: nil).
Non-executive emoluments during the period
30 September 30 September
2024 2023
Unaudited Unaudited
£'000 £'000
Emoluments 250 165
Social security costs 31 20
281 185
11 Financial Instruments
The fair values and the carrying values of financial assets and liabilities
are not materially different.
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
20 November 2024
INDEPENDENT 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 2024 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 2024 which comprises of 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 Revised International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410
(Revised)"). 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 (Revised), 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 statements 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
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BDO LLP
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20 November 2024
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