IntegraFin H2 Earnings Call Highlights

IntegraFin (LON:IHP) management used its full-year FY25 results presentation to highlight strong platform inflows, rising assets, and a new multi-year cost and efficiency program that the company said is intended to support sustainable earnings growth while continuing to invest in technology.

FY25: record inflows and higher earnings

Group CEO Alex Scott said FY25 was “an excellent year,” pointing to net inflows of £4.4 billion, driven by record gross inflows. Management said net inflows rose 76% versus FY24 and reflected continued demand for the Transact platform and technology enhancements made in recent years.

Group CFO Euan Marshall reported average daily funds under direction (FUD) increased 14% year-on-year to £67.9 billion, supported by record gross inflows of £10.1 billion and slower growth in gross outflows. Marshall also noted a 10% compound annual growth rate in average daily FUD since FY21.

On the income statement, Marshall said group revenue rose 8% to £156.8 million, while underlying profit before tax increased 7% to £75.4 million, implying an underlying profit margin of 48%. Underlying earnings per share increased 7% to £17.40.

Dividend increase and capital position

Management said the company increased its second interim dividend to £0.08 per share, taking the total dividend for FY25 to £11.30 per share, up 9% year-on-year. Marshall added that the dividend represented 65% of total underlying profit after tax and said the business remained “highly cash-generative,” with most profit converting to cash.

Marshall also emphasized liquidity and capital buffers across regulated entities, saying the group maintains buffers above minimum regulatory requirements to accommodate rising capital needs, support investment, and continue paying dividends.

Transact revenue mix and platform margin commentary

IntegraFin’s platform operations remained the key driver of results. Marshall said investment platform revenue increased by £11.8 million and represented 97% of group revenue. Annual charge income rose 10% to £138.1 million, while wrap fee income declined slightly, which he attributed to reduced charges for family-linked portfolios. Management said these two recurring revenue streams accounted for 99% of total platform revenue.

Marshall reiterated the group’s practice of not retaining interest on client cash, contrasting this with market practices that, he said, can make platform pricing comparisons more complex. In the Q&A, Scott said several competitors extract revenue via client cash interest, and he characterized Transact as “in a pretty strong position” on total client cost when compared across the market.

On revenue margin, Marshall said the platform revenue margin has moderated over time due to targeted fee reductions, but the pace of attrition is expected to slow in FY26. He cited an “indicative” platform revenue margin of 21.9 basis points for September 2025, the last month of FY25, and said future reduction should be driven mainly by client portfolios moving through the tiered pricing structure and annualizing prior price changes.

Cost and efficiency review: £4 million annualized savings by FY27

A central theme of the call was the group-wide cost and efficiency review first announced in July. Marshall said underlying administrative expenses rose 9% in FY25, in line with guidance, and employee costs increased 11%. He attributed that increase to a 2% rise in average headcount, expansion of the senior management team, and remuneration reviews intended to keep pay competitive.

After completing its review, management said it identified three areas of sustainable cost savings:

• Improved productivity in internal support functions, including greater use of third-party technology to automate manual processes and changes to simplify and standardize work.
• Enhanced procurement and supplier management processes.
• Platform efficiencies, with more straight-through processing and automation to reduce manual tasks and processing times.

Marshall said the program is expected to deliver £4 million of annualized savings by FY27. Looking ahead, the company guided for total underlying administrative expense growth of around 3% per year in FY26 and FY27, while continuing to invest in technology. He added that the timing of savings means the “speed of cost increases” should slow more in the second half of FY26, with first- and second-half costs expected to be broadly similar.

In the Q&A, Marshall said the company had met cost guidance in recent years and that management is aligned on the plan already being executed, while acknowledging uncertainty increases beyond the next couple of years.

Flow momentum, market share, and key Q&A topics

Scott said the company delivered significant platform enhancements in FY25, focusing on digitization and shifting paper-based processes to online straight-through processing with standardized formats and instant data validation. He said the upgrades support integrations and APIs that allow advisers to send instructions directly from back-office systems, improving processing times and scalability, and laying groundwork for potential future use of AI.

Operationally, Scott said seven consecutive quarters delivered gross inflows above £2 billion. He added that the platform’s transfer ratio improved to 2.8 in FY25, and outflows were “largely stable,” falling to 9% of opening FUD.

Scott said IntegraFin maintained an over 20% share of net inflows in the UK adviser platform market and a 10% share of market FUD. He cited Fundscape’s view that the adviser platform market could grow around 12% over the next five years and noted awards including Schroders’ Best Use of Platform Technology and Money Marketing’s Best Platform.

During Q&A, management addressed several investor topics:

• Inorganic growth: Marshall said the company remains focused primarily on organic growth and does not see significant acquisition opportunities in the platform market, though it continues to scan technology-related opportunities.
• Tokenization: Scott said the company has discussed tokenization for several years, is monitoring regulatory developments (including an FCA consultation), and plans to feed into consultations while acknowledging rules and structures are not yet formalized.
• Budget-related pension behavior: Marshall said the group saw heightened flows in both directions and expects to be “relatively net neutral,” citing clients bringing money onto Transact and using other wrappers such as investment bond structures.
• Australian VAT issue: Scott said IntegraFin remains stayed behind Barclays’ case, continues dialogue with HMRC, and expects another 18 months to two years before greater certainty. He added the company is paying VAT on everything, meaning “no accruing liability,” with only potential upside.
• Capital requirements: Marshall said a reasonable rule of thumb is capital requirements increase broadly in line with FUD growth, noting the group has three regulated entities, including two insurance entities with more complexity.

Management closed by reiterating confidence in net flow momentum, continued platform enhancements, and implementation of cost initiatives intended to improve operating margin while maintaining client service and ongoing technology investment.

About IntegraFin (LON:IHP)

IntegraFin Holdings plc (IntegraFin) is the holding company for all of the entities involved in the provision of the Transact service. Transact is one of the largest independent wrap platforms in the UK. It offers advisory professionals a comprehensive financial planning infrastructure for investing client assets in a tax-efficient way.