XPS Pensions on track as solid demand drives H1 revenues higher

(Sharecast News) - XPS Pensions posted a solid increase in half-year profits, helped by continued double-digit revenue growth and strong client demand, as it reiterated its outlook for the full year. The FTSE 250 pensions-focused consulting and administration business reported group revenues of £128.5m for the six months to 30 September, up 13% over last year, with all three business arms posting growth.

Advisory revenues, which make up the bulk of the business, jumped 19% to £73.7m, helped by strong growth in the actuarial and investment consulting operations, supported by ongoing regulatory change, including new rules on pension scheme valuations that came into force in 2024.

Insurance consulting (also part of the advisory arm) performed well, helped by an expanded offering through the acquisition of Polaris Actuaries and Consultants earlier this year.

Administration revenues were up 6% at £48.1m, with growth held back by strong prior-year comparatives after a non-recurring project with McCloud came to an end. Excluding this project, admin sales would have risen 16%.

Meanwhile, the Self Invested Pensions (SIP) business saw 10% growth in revenues to £6.7m.

Group pre-tax profits were up 5% year-on-year at £27.9m, lower than the top-line growth rate as a result of reduced margins due to increased investment, higher National Insurance costs and the impact of the McCloud project the previous year.

Nevertheless, the company increased its interim dividend by 11% to 4.1p per share.

"The board is delighted with the group's performance in the first half of the year and is confident of achieving full year results in line with its previous expectations," XPS said.

Shares were trading 0.9% lower at 333.5p by 1028 GMT.