FY25 headline numbers: earnings up, flows surge at Transact
IntegraFin Holdings plc, the operator of Transact, posted a solid set of FY25 results with momentum in all the right places: earnings, flows and assets. Underlying profit before tax rose 7% to £75.4m, with underlying EPS up 7% to 17.4p. Reported EPS dipped 1% to 15.5p due to one-off charges, but the engine underneath is running well.
Crucially for any platform, investors will like the direction of the money: net inflows rocketed 76% to £4.4bn and Funds under Direction (FUD) climbed 16% to £74.2bn. Management also finished a Group-wide cost review, signalling a step-down in expense growth to around 3% per year in FY26 and FY27. That combination – stronger flows, more assets, and tighter costs – is the earnings cocktail long-term holders want.
| Key FY25 metrics | FY25 | FY24 | Change |
|---|---|---|---|
| Total revenue | £156.8m | £144.9m | +8% |
| Underlying PBT | £75.4m | £70.6m | +7% |
| Reported PBT | £69.1m | £68.9m | +0% |
| Underlying EPS | 17.4p | 16.2p | +7% |
| Reported EPS | 15.5p | 15.7p | -1% |
| Net inflows | £4.4bn | £2.5bn | +76% |
| Closing FUD | £74.2bn | £64.1bn | +16% |
| Clients | 246,191 | 234,998 | +5% |
| Total dividend per share | 11.3p | 10.4p | +9% |
Flows, assets and clients: the growth drivers behind the numbers
Transact’s growth flywheel was humming in FY25. Gross inflows reached a record £10.1bn, up 25%, powered by a mix of one-off deposits and higher transfers in from competitors. Gross outflows of £5.7bn were elevated but stable, reflecting drawdowns and cost-of-living pressures. The transfer ratio improved materially to 2.8 from 1.7, a clean sign of share gains from rivals.
With market tailwinds contributing £5.7bn, closing FUD rose 16% to £74.2bn, and average daily FUD grew 14% to £67.9bn. The client base increased 5% to 246,191, with client retention at 95% for the year. Management note Transact took over 20% of net flows into the UK adviser platform market in FY25 – a statement of competitive strength.
Revenue mix and margin: what changed under the bonnet
Group revenue increased 8% to £156.8m. The platform did the heavy lifting, contributing £151.8m (+8%), with:
- Recurring annual charges: £138.1m (+10%) on higher average FUD.
- Recurring wrapper charges: £12.5m (-2%), reflecting previous wrapper pricing changes.
- Other income: £1.2m (+9%).
Back-office tech (T4A’s CURO) delivered £5.0m (+2%) as licence users rose to 3,395.
As portfolios grow, Transact’s tiered fee structure naturally blends down the average charge rate. You can see that in the platform revenue margin slipping to 22.4 bps (FY24: 23.5 bps). Management expect the rate of reduction to slow from here, which, coupled with cost discipline, should support margins at Group level.
Costs and one-offs: why reported EPS dipped while underlying rose
Total administrative expenses rose 18% to £100.2m, with underlying expenses up 9% to £91.0m, reflecting investment in staff, tech and capacity. Non-underlying items increased to £9.2m (FY24: £1.7m), the main ones being:
- £7.5m impairment of goodwill and intangibles at Time4Advice (T4A).
- £1.1m overlapping occupancy costs during the London office move.
- £0.6m final deferred consideration for T4A.
That’s why reported EPS dipped 1% to 15.5p despite healthy operating momentum. Strip those out and underlying EPS rose 7% to 17.4p. The effective tax rate also nudged up to 26% (FY24: 24%) due to the non-deductibility of the T4A impairment.
Dividend, cash and capital: funded and disciplined
The Board declared a second interim dividend of 8.0p per share, taking the total FY25 dividend to 11.3p, up 9%. Key dates: ex-dividend 02 January 2026, record date 05 January 2026, payment 30 January 2026.
Liquidity is strong. Cash and gilts totalled £263.8m, with surplus cash, cash equivalents and gilts of £33.7m after buffers, regulatory and policyholder needs, and foreseeable dividends. Regulatory capital cover remains comfortable:
- IFAL: 128% cover (requirements £70.5m; resources £90.1m).
- ILUK: 133% cover (requirements £244.8m; resources £326.4m).
- ILInt: 168% cover (requirements £32.5m; resources £54.6m).
Outlook and guidance: slower cost growth, steady flows, margin watch
Management see Transact well positioned to continue capturing a strong share of adviser-platform net inflows in FY26 and beyond. They guided to:
- Underlying administrative expense growth slowing to around 3% in FY26 and FY27, as cost review actions land.
- Platform revenue margin reduction to slow, mainly reflecting tiering and prior-period pricing changes.
- Q1 FY26 net inflows expected to be comparable with the prior year, after Budget-related activity reverted to trend.
The strategy is straightforward: protect service quality, keep integrating and digitalising to boost adviser efficiency, and bank the cost savings to accelerate earnings growth.
Balanced view: what’s positive and what to watch
Positives that matter
- Net inflows of £4.4bn (+76%) and FUD up 16% to £74.2bn – the core value creators for a platform.
- Underlying PBT up 7% and dividend up 9% – shareholder returns growing.
- Market share gains – “over 20%” of industry net flows in the year.
- Cost growth set to slow to c.3% in FY26 and FY27, supporting margin expansion.
- Robust liquidity and regulatory capital, giving strategic flexibility.
Watchpoints and risks
- Reported numbers versus underlying: one-offs masked progress in FY25; clarity on further T4A actions will be helpful.
- Revenue margin: blended rate dipped to 22.4 bps; management say the pace of decline should slow, but it remains a key KPI to track.
- Outflows: still elevated, albeit stable; continued improvement in transfers out is encouraging.
- Effective tax rate drifted to 26%; further changes to policyholder tax rates are on the legislative horizon.
- Competition risk flagged as increasing; the integration roadmap and service leadership must keep delivering.
My take for investors
This is a classic “quality compounder” update. The core flywheel – great service, adviser loyalty, rising FUD, scaling revenues – is intact. FY25 showed strong commercial execution: record gross inflows, bigger net inflows, more clients, and higher underlying profits. The cost review outcome is timely; slowing expense growth to around 3% over the next two years should unlock operating leverage even if platform pricing stays keen.
The blemishes are manageable: a T4A impairment and office move costs dented reported EPS, and the revenue margin blended down as expected with growth. Neither undermines the investment case. With a 9% higher dividend, solid surplus liquidity and healthy regulatory cover, IntegraFin looks set up to convert its flow and efficiency gains into faster earnings growth in FY26-27.
Bottom line: a quietly confident print. If net inflows hold, cost actions land, and the margin drift slows as guided, FY26 should be a year of operating margin rebuild and stronger EPS growth.
