XPS Pensions upbeat on strong half-year trading

XPS Pensions reported strong trading for the six months ended 30 September on Wednesday, with revenue from continuing operations up 23% year-on-year.

The FTSE 250 company said its advisory division saw significant growth, particularly in pensions actuarial consulting, where revenue increased 17%, driven by strong client demand, service expansion, and price adjustments following periods of higher inflation.

In contrast, pensions investment consulting revenue dipped 2%, as demand normalised after two years of rapid growth.

Pensions administration revenue surged 40%, benefiting from significant project work, particularly in the public sector, new client onboarding, and inflation-driven price increases.

The board said the successful transition of clients onto XPS' proprietary Aurora administration platform was expected to enhance future operational efficiency.

It said demand for GMP equalisation services also supported growth across both pensions actuarial consulting and pensions administration.

The SIP business continued to perform well, with revenue growing 13%, driven by increased sales of SIP plans and higher client deposits.

Regulatory changes, including the new funding regime for defined benefit schemes that came into effect in September, also bolstered demand for the group's advisory services, particularly as pension schemes explored long-term strategies like ‘run on for surplus’.

Looking ahead, XPS said it expected continued demand for its services, especially in pensions administration, with new client wins and ongoing project work in both the private and public sectors.

The board said it remained confident that the group would deliver full-year results ahead of its previous expectations.

“We are pleased to be on course for another strong financial performance for the year,” said co-chief executive officer Paul Cuff.

“We have seen good growth 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.”

Cuff said the company grew strongly in the two prior years, adding that to achieve further like-for-like growth of over 20% in addition to that was “very pleasing”.

“We have achieved this with an award-winning culture and I would like to thank all our people for the way they support each other and our clients.”

At 1049 BST, shares in XPS Pensions Group were up 9.42% at 337p.

Reporting by Josh White for Sharecast.com.