IntegraFin Holdings Aktie

Good morning, everyone. Welcome to IntegraFin's interim results presentation for the 6 months ended 31st March 2026. I'm Alex Scott, Group CEO, and joining me today is our Group CFO, Euan Marshall.

I'm going to kick off with an overview of the excellent results that the group has delivered over the past 6 months, highlighting our strength in platform inflows and accelerating growth in profitability. I'll then hand over to Euan to run through the group's financial performance and provide an update on the progress of the group cost and efficiency program. Finally, I'll share an update on the operational performance of the Transact platform. In particular, I'll explain how the group positions itself as an attractive proposition for all sizes of advice firms, including consolidators, and I'll discuss the opportunities for AI use, both in the IHP business and in the wider financial advice industry. Then we'll conclude with Q&A.

The group has delivered a step change in profitability with impressive earnings growth in the first half of the financial year. The Transact platform demonstrated strong performance in flows and FUD, thanks to the enduring appeal of our market-leading proposition that combines proprietary technology and personal service. This strategy has helped secure the group's prominent position in the growing U.K. adviser investment platform market. Our exceptional market position is the result of our consistent, resilient business model and long-term focus. Clients, advisers and shareholders alike benefit from a stable platform that delivers reliable profitability and plans for longevity.

Our results since IPO have demonstrated our capacity for growth with the implementation of key initiatives, including our cost management program and our focus on delivering technology automation, we anticipate even stronger growth in future. Half year '26 gross and net inflows were at or near record levels, with net inflows growing 14% compared to the half year '25 and average FUD up 17% to GBP 77 billion. Our platform revenue grew 11% with 99% of that coming from recurring sources.

Meanwhile, efficiency and productivity enhancements from our cost management initiatives drove a moderation in administrative expense growth in line with our guidance. The reduction in the rate of underlying cost growth supports an enhanced profit margin and in time, will reduce the cost to serve the platform clients. As a result of this coordinated strategy delivery, we achieved 16% profit before tax growth for the half year period and expanded our PBT margin to 51%. We see further profit margin expansion as sustainable, thanks to the broad-based strength of our business. Our business model is highly cash generative and has delivered growing dividends. I'm pleased to announce we've raised our first interim dividend for this financial year to 3.8p per share, up 15%.

Focusing on our inflows performance, this half year saw considerable strength in platform flows with gross inflows reaching a record level of over GBP 6 billion. Net inflows were GBP 2.4 billion, up 14% on the half year '25 comparative, a reflection of the ongoing quality of the Transact platform and the digital and integration enhancements we've made over recent years. Transact was in the top 3 in the adviser platform market for both gross inflows and net inflows for the period. Client numbers were up 5% over the period, reaching over 254,000. And we also improved our transfer ratio over the period -- half year -- previous half year period to 2.8 in half year '26, sitting in our strong competitive position.

I'd like to highlight 3 key work streams essential to our continued growth. Data access and data quality of paramount importance, especially as use of AI tools becomes more widespread among financial advice firms. We're renewing our focus on integrations and APIs to ensure that Transact interfaces seamlessly with advice firms' chosen technology stacks. Relatedly, we are assessing ways in which we can further leverage automation and AI to reduce processing time and deliver efficiencies, both internally in support functions and operationally for our clients and advisers. We're exploring how we can use AI tools to enhance the coding capabilities of our development team to the benefit of our proprietary technology.

Our third key program of work relates to delivering the cost and efficiency program announced last year. This program is progressing well, and we are already seeing moderation in cost growth in half year '26 compared to half year '25. We have seen great success with the restructuring of our support functions and the introduction of new tools to increase efficiency. Executing and delivering on these 3 key work streams will strengthen our proposition, delivering greater client numbers, strong net inflows and increased profitability.

I'll now hand over to Euan for a more in-depth look at the financials for the period.

Thanks, Alex. Good morning, everyone. The first slide that I'm going to share with you this morning is an overview of our KPIs. What you will clearly see, as I talk you through these metrics, is the acceleration in the financial performance of the business coming through, which is resulting from the ongoing delivery of our strategic priorities that Alex has described. As shown in the top left graph, average daily FUD has grown 17% year-on-year to GBP 77.5 billion. Aside from market movements, this has been driven by record gross inflows of GBP 6 billion during H1, of which the main driver has been the strengthening of our net transfers as the platform continues to attract more business from our competitors. We have achieved an impressive 14% compound annual growth rate in average daily FUD since HY '23.

Now looking at the top right graph, the growth in our average FUD has translated into group revenue of GBP 85.8 million for HY '26, up 11% from H1 last year. I'll discuss platform revenue, which constitutes the majority of group revenue in more detail on the next slide. The bottom left graph shows that this record revenue, combined with the slowing growth in the cost base, has driven group underlying profit before tax up 16% to GBP 43.9 million and delivered an improved underlying profit margin of 51%.

Moving on to this bottom right graph. The group delivered strong growth in underlying EPS, up 14% on the prior year to 10p per share. As a result, we have increased the first interim dividend by 15% to 3.8p per share. Looking in more detail at the Transact platform revenue for HY '26, we can see investment platform revenue increased by GBP 8.5 million or 11% in comparison to the prior year to GBP 83.2 million. The majority of platform revenue is driven by annual charge income and the 17% growth in average daily FUD during the period translated into 14% growth in this revenue stream to GBP 76.4 million.

As we have previously discussed, the lower increase in annual charge income is, in comparison to average FUD, is mainly as a result of clients benefiting from the natural movement through our tiered pricing structure as the value of their portfolio increases. Taking this into account, roughly 3/4 of the FUD growth drops through to annual charge income. Wrapper fee income reduced in comparison to last year, reflecting the reduction in charges for family-linked portfolios that we implemented in H2 of the previous financial year. These 2 recurring revenue streams combined to deliver 99% of total platform revenue. As a reminder, we continue not to generate revenue through retention of interest on client cash. T4A revenue increased slightly to GBP 2.6 million.

Following next on the platform revenue margin. The graph highlights how revenue margins continued to moderate. The reduction of 1 basis point from the prior year comes primarily as a result of the natural progression of client portfolios through our tiered pricing structure, and the effect of the reduction in charges for family-linked portfolios that was implemented at the start of H2 last year that I described on the last slide. Given that the impact of the reduction in family-linked portfolios is included in last year's H2 revenue, we anticipate a more noticeable moderation in revenue margin as we move forward.

I'll now move -- I'll now provide more detail on our H1 cost base and cost initiatives. Firstly, as an overview of our cost initiatives, we have made good progress during the first half of the year. Across our support functions and operational areas, we have been implementing efficiencies and structural changes. Our platform operations have continued to focus on increasing the level of straight-through processing and automation, resulting in a reduction in manual tasks and processing times. Both of these in combination have enabled us to remove headcount in certain functions during recent months.

In parallel, we have continued to invest in our market-leading proposition and also in staff who focus on enabling the delivery of future efficiencies, including more automation. You'll see that staff costs have been the major driver of the 4% or GBP 1.7 million rise in administrative expenses in H1. But you also see in the bottom graph that headcount in the period has reduced by 16 or 3%, meaning that staff cost run rate is in a good position as we enter H2. Non-staff costs have fallen this year as a result of some rebates on property provisions, but also through rigorous review of our contracts with third-party suppliers.

We remain confident in meeting the 3% or GBP 94 million administrative expense target for FY '26. Future road map efficiencies, which offset planned investments, also puts us in a good footing for achieving our cost target for FY '27. These actions have put us on a clear path to long-term sustainable growth, including reducing our cost to serve per client while creating a more focused and resilient business for the future.

Next, moving on to liquidity. The liquidity buffer has not changed meaningfully since the year-end, mainly as a result of higher regulatory capital requirements in our regulated entities. We have also disclosed the liquidity held in our group company and surplus held in our group subsidiaries as it illustrates that there will always be timing differences between profit generation in our operating subsidiaries and surplus liquidity in those entities flowing up to the group company. As a result, as well as taking into account the timing lags that I've just described, we maintain a liquidity buffer to ensure we have resilience against external shocks and can continue to invest in the business while continuing to pay dividends to our shareholders. We remain confident that at this point in time, we have the right level of available liquidity to keep -- to help support the future requirements of the group.

In terms of cash flow, the business continues to be highly cash generative with the majority of profit flowing through into cash. We generated an additional GBP 34 million of liquidity in HY '26 in comparison to profit after tax of GBP 33 million, giving a conversion of just over 100%. Cash conversion of around 100% is expected for the full year and on an ongoing basis. For those of you that want to understand more on corporate cash flows, a reconciliation of this figure is provided in the appendix to the presentation. The high level of profit to cash conversion allows us to continue to pay dividends on an ongoing basis. I'm pleased to say we have approved a dividend for the half year of 3.8p per share, a 15% increase on HY '25. Our dividend policy continues to be to pay out 60% to 65% of profit after tax for the year over our 2 dividends.

Next, I'll talk you through the group's guidance for FY '26 and FY '27. In summary, there are no changes to our revenue and cost guidance. We're focused on managing the platform revenue margin. We expect the reduction in this metric to slow with the main driver of the reduction being clients moving through the tiered charging structure. As I highlighted on our cost slides, we remain on track to deliver total underlying administrative expenses growth at 3% per year in FY '26 and FY '27, with cost growth in H2 of this year slowing in comparison to H1. Given changes to interest rate expectations over recent months, we now expect net interest income to be a little higher than anticipated earlier in the year. We have uplifted expectations to GBP 10 million in FY '26 and GBP 11 million in FY '27. We continue to expect net gain attributable to policyholder returns to be in the region of GBP 2 million per year.

Moving on to my final slide. I wanted to highlight again the 3 core levers on which we are focused in order to drive earnings growth. Firstly, we've invested significantly in the business over the last few years. We believe this investment has been fundamental to improving our prominent position in a competitive market, with market share of net inflows consistently being in excess of 20% over recent periods. This investment now puts us in a position where we can focus on margin delivery.

The second and third levers focus on revenue margin and on cost management, and leave us in a position to accelerate earnings growth and enhance shareholder value in future years. You are already seeing this come through in the H1 financials through underlying PBT growth of 16% and profit margin improvement to 51%. The strategy is delivering, and we're confident in ongoing delivery moving forward. That concludes my part of the presentation.

I will now hand back to Alex.

Thanks, Euan. In this next section, I'll provide an update on the group's operational performance and the key developments within the financial advice market. I'll discuss how the group has been adapting to make our proposition more appealing to advice firm consolidators. And I'll also provide some color on how we're implementing automation and AI into the group's processes and how our market-leading proposition is well placed to keep winning in an evolving advice market.

We operate in an expanding market with a compelling growth opportunity. The U.K. adviser platform market grew by 13% in the past 12 months. Our market research forecasts an average annual realistic growth rate of 12% for the next 5 years. There also remains a large and growing pool of U.K. investable assets with potential to move into the platform market. Within this attractive market, Transact continues to take a strong share of net inflows. Our share of net inflows in the first half of financial year '26 was 25% of the market, reflecting the quality and competitiveness of Transact's proposition.

Transact's stability and consistency is a key factor in our success. We have a 10% share of U.K. adviser platform market FUD. We continue to seek to improve our technology and service to further improve our position. A key trend in the U.K. advice market is the growth of financial firm consolidators. This is not a new trend and importantly, is one that we've been actively aligned with for some time with the broadening of our Transact proposition for large and consolidator advice firms. Therefore, Transact is already a highly attractive platform partner for consolidators and large advice firms.

We continue to see strong transfer in ratios, both across the market overall and specifically from consolidators. Our net transfer ratio in ratio with consolidators is increasing as firms consolidate assets onto a smaller number of strategic platforms. Known as platform panels, many consolidators are choosing to include Transact in their selection of platforms.

Central to this success is that Transact's proposition is closely aligned with consolidators' priorities. They are focused on continuing to grow assets under advice, drive efficiency through scale and managing regulatory and taxation complexity. The Transact platform allows them to do this. Our breadth of wrapper capability, including bonds and trusts, is an attractive proposition for consolidators across their asset base. At the same time, our full-service model and adviser succession service support advice firms scaling without sacrificing service quality.

From an efficiency standpoint, APIs, platform rationalization and integration with CURO, and other advice firms' CRMs, allow larger firms and consolidators to standardize workflows and reduce operational friction as they grow. Critically, our in-house technology and regulatory support helps consolidators manage risk as their client bases expand. While the core proposition is already well suited to our consolidators, we're also evolving aspects of our approach to reflect the increasing scale and sophistication of these firms.

That includes deeper multilayered engagement with consolidator leadership teams, more tailored services and MI for larger firms. These refinements to our business model reflect the increasing scale and sophistication of consolidators rather than change in Transact's core strategy. In short, we understand consolidation. We are already winning with these firms, and we're selectively upgrading our business model to be even more attractive to these firms in future.

Another area of focus for business model enhancement is AI and automation. Integrations were already a key component of our proprietary technology strategy. Now our investment in the APIs that improve the quality and speed of integration for advice software is streamlining the implementation and adoption of external AI tools for advice firms. We're also adopting AI tools within the group's proprietary technology development process itself, particularly in back-end coding and testing. The focus here is on reducing development cycle times, improving consistency and empowering our experienced team of developers.

Across group support functions, including finance, risk and HR, we're already bringing in new systems that will enable us to implement trusted AI productivity tools in core processes. This is about freeing up capacity and improving accuracy, and allowing teams to increase the efficiencies of their workflows. Stepping back, the common theme across these initiatives is efficiency and scalability. AI can enable a more attractive platform proposition, a lower marginal cost per client and a highly scalable operating model, all of which support further profit margin progression and a reducing cost to serve clients over time.

We approach AI as we've approached all new technologies as a means to enhance our best-in-class service proposition, not a replacement for our core competencies. Our cost guidance already incorporates ongoing technology investment, including AI and automation. The work streams presented here are about deploying budgeted resources to improve efficiency, scalability and operational resilience.

Looking at AI's possible impact on the advice market more broadly, we see it as a potential tailwind for the U.K. advice market. In particular, AI can help advice firms scale more efficiently within an increasingly complex regulatory environment. The development of AI tools can support adviser productivity. Examples include the recording and transcription of client meetings, and tools that help support suitability requirement and client reporting processes.

Importantly, these tools are about assisting advisers rather than replacing them, a complement, not a substitute. This will help advisers spend more time productively with clients as well as growing their book of clients and assets while maintaining regulatory standards. Taken together, these developments support the scale growth of more efficient advice firms that are able to serve larger client bases and greater assets under advice.

Overall, we see AI's impact on the financial advice market as a net positive. Harnessed correctly, it can support the long-term sustainability and growth of the U.K. advice market. In turn, this creates a supportive backdrop for continued strong asset flows on to Transact. IntegraFin's investment in AI and exploration of its possible opportunities built to top our established competitive position. The group's unique and hard-to-replicate business model is built to both withstand and benefit from ongoing technological change. The group utilizes proprietary technology, and we're well placed to benefit from AI back-end coding efficiencies. We provide a high-touch client service delivered by experienced staff, which is highly valued by both clients and advisers.

We're a leading and award-winning brand with a strong reputation among the U.K. financial adviser community, and we have a deep understanding of the complex and evolving U.K. tax and regulatory regime. This combination of factors is differentiated, hard to replicate, and allows us to keep winning new business and take advantage of the new market opportunities presented by AI.

So to summarize, in the half year '26, we delivered record gross and strong net inflows in a growing U.K. adviser platform market. We are confident of maintaining good net inflows momentum in future years. The group has delivered earnings growth with a 51% profit before tax margin in half year and earnings per share up 14% in the first half of the year.

As we implement the cost management initiatives from the group-wide cost review, we expect to continue growing profitability and profit margin. Our continued investment in enhancing our market-leading proposition makes Transact an ideal platform for both large consolidators and small financial advice firms. The increased efficiency from the implementation of AI and automation in our proprietary technology will allow us to better serve our clients and deliver for our shareholders. We are well positioned to drive sustainable earnings growth. Thank you for your time, and we'll now open to questions.

[Operator Instructions] Our first question this morning is coming from Ross Luckman calling from Peel Hunt.

Just one question from me. You've obviously reiterated your cost guidance for just 3% growth over the next 2 years, supported by those efficiency initiatives, which is great. How do you think about the ongoing investment and cost growth required further into the medium term to support the platform?

Yes. Thanks for the question, Ross. I think over the medium term, we believe we're now reaching a good cadence of finding cost efficiency, but also tempering that with the ability to allow us to invest in the business as well. I think that's being demonstrated through the half year results and our ongoing commitment to the cost guidance over this year and next.

When you look beyond FY '27, we've always got to be a little circumspect about what the future may hold from technological change. At the moment, as current things stand, we believe we can still maintain a low level of cost growth going forward. Some of the primary reasons for that are that the way that technology has developed over recent years is that you don't necessarily need a step change in technology investment. You can have a better cadence of cost growth increase and investment. So we remain comfortable with the guidance and also with basically what the market is expecting around cost growth from FY '28 onwards.

Next question will be coming from Michael Sanderson calling from Barclays.

A couple of questions, if that's okay for me. First one, obviously, one of your peers has decided to start charging on or retaining interest having not been in the past. I just would love to know your thinking about the change in that and whether advisers genuinely care and end clients genuinely care on your principled stance that you've held throughout your existence.

Second question was obviously, seeing a lot of transfers across. Interested if there's any color on the sort of adviser types and client types that come in that transfer? Is it different behaviors, different style, different requirements that you need to address as a result? So interested to know if there's any material change there. I'll leave at those two at the moment.

Thanks, Michael. Okay. So I'll pick up on the retention of client interest piece and perhaps leave -- perhaps let Euan pick up on the transfers piece. But on the client interest, yes, it was -- from our perspective, it was disappointing to see yet another major platform decide to actually move to taking a share of client interest. It's not so much the principle of taking the interest that we see as sort of problematic. It's actually the actual impact in the size of the charge that, that relates into the client relative to the charge that would otherwise apply to the cash that's on the platform. And it is a significant increase in multiple that is being generated by this change.

And actually, our biggest issue is on the transparency of that through to the end client when they are actually selecting their platform, making the decisions on their investment and actually putting their monies on the platform. And that's where we think that there is significant room for improvement. And we've had the results of some independent surveys that have been done that have shown that when you actually get to the end client, they have no idea this is happening to them, and they are not actually very impressed when they find out it is.

So there is clearly a failing in the disclosure part of this. And that's the part that concerns me the most because it's actually not giving the clients a fair view of what's actually happening with their monies and what they're actually paying for being on the platforms.

And Mike, on your second question on transfers, a few things that are probably worth noting. And so firstly, it's great to see that we see a good deal of variety in the net transfers at an adviser level, both from new and existing advice firms. Secondly, we're seeing transfers coming in from pretty much all of our competitor platforms on a net positive basis. So it's not just due to the misfortune, let's say, of one individual platform provider, it's across the piece, which gives a great representation of the strength of the overall proposition.

And kind of moving on to your specifics around style and requirements of adviser firms and clients. It's difficult to say because there's a number of different things that adviser firms look at when they're contemplating platform selection. So it will be a combination of things that we need to remain strong in all elements of. So it might be our personal service that helps move them over because of the reputation we have there, the value that we're offering at a great price, the functionality that we offer and also the product diversity.

As we've kind of disclosed over the last year, 18 months now, there's quite a lot of change going on as a result of the government budgets and a shift towards bonds. And we have a great product offering there from both an onshore and offshore bond perspective, which also gives us -- puts us on the front foot for transfers. I hope that helps.

We'll now move to David McCann of Deutsche Bank.

So first question for me. I mean, April numbers you've given today suggest that you benefited from the market uplift and indeed, net inflows have continued, which is obviously good to see in April. I just wondered more generally from what you're seeing in both April and May in sort of underlying client and adviser sentiment given there's obviously growing inflationary macro and other sort of U.K. political noise out there. So any sort of signals of any kind of change there would be interesting and particularly seeing that actually translate into actual flow changes. That's the first question.

Secondly, maybe you can touch on what the key drivers of those fairly notable increase in the regulatory capital requirements were in the period, given they were quite large. You kind of glossed over them, but perhaps you could talk why they actually have increased that much? And then finally, third question, you reiterated the 60% to 65% dividend payout ratio at the full year. So that's pretty clear. You also previously talked about the interim dividend being based off of 40% to 45% of the prior year's final. This time, it was 47.5%. So maybe if you could just talk to that, is there actually a change here? How should we think about that ratio for the interim going forward?

Thanks, David. Picking up on your questions on sentiment. I mean we sort of, March, April is always sort of an interesting mix because we have sort of the cutoff for the quarter at the 31st of March and the tax year-end falling variously across that with working days dependent on where Easter falls. So this year, we sort of certainly saw a Easter falling in a structure that it created most of the pensions inflow monies coming in at the back end of the tax year, all falling in March.

And then ISA monies, you get the catch-up on people who are putting in their last minute contributions followed by a sort of large uptick in the start of April of people putting their new ISA monies in. Whereas on the pension side, you tend to get an outflow swing in April at the start of the new tax year as people who have been sort of wanting to take monies out of their pension wait for the new tax year to start. So it's always a little bit variable across that period. But we saw everything holding up really strongly relative to last year.

And then even moving on from that, it tends to be a quieter period towards the end of April, but we're not seeing anything sort of any quieter than normal in an April period. There doesn't seem to be any sort of negative sentiment flowing through that period. And even into May, it's sort of continued to be a relatively positive market. I think whilst there's an awful lot of sort of noise geopolitically and even in the U.K. political landscape, that's not actually yet really translating into anything that's resulting in people's ability or propensity to save being reduced.

There's still the need for people to be saving for their pensions. There's no sort of surge in job losses or anything of that nature. I mean, even this morning, I mean inflation has come in somewhat lower than expected. And I still expect we all think that there's going to be some spikes to come in that. But at the moment, none of that is really translating through into things that impact the sentiment in the advice market.

Yes. And then on your question on the regulatory capital requirements. So firstly, I'd just like to say that, that rise is not expected to continue at that rate going forward. But however, delving into a little bit of detail on that, you'll probably be aware that we have 3 regulated entities across the group, 1 investment firm and 2 insurance firms. So these change in regulatory capital requirements was driven by, firstly, around half of it was from our investment firm. And that is a relatively formulaic change because of the way the investment firm regulatory capital requirements work.

The second -- the insurance piece is based on actuarial valuations on forward look. So there's quite a lot that goes into that, but I wouldn't anticipate that, that rise would be of the same value going forward. So -- but yes, you are right to note the rise. On the dividend piece, I think I've just tried to do some calculations on where you got your number from. I think your 47.5% is 47.5% of the second dividend from last year. So how we generally look at the first dividend of the year is it's probably going to be around the 35% mark of the total dividend for the prior year, which was 11.3p per share. So I hope that helps on kind of modeling the first interim dividend going forward.

Did this answer your question, sir? Next question is coming from Greg Simpson of BNP Paribas.

Three from my side. Firstly, just wanted to check in on the dividend and why you think 60% to 65% is the right payout and why it couldn't be more, given you're highlighting the 100% cash conversion, there's limited CapEx, limited appetite for M&A. That's the first question.

Second one is, kind of goes back a bit on the previous question. It sounds like inflows are looking fine, but just wanted to check if you're seeing anything on the outflow side, given pensions coming under inheritance tax soon and also presumably some upwards pressure on mortgage rates from current rates? And then thirdly, on the consolidators, thanks for the color. I just wanted to check, are you willing to flex your fees to get some of these larger firms on board? Or are you -- is every covered advice firm on the kind of standard Transact fee schedule?

I think on the -- I'll take the dividend question, Greg, and then I'll pass over to Alex for the other 2. So on the dividend, what we're trying to illustrate in the presentation is that we remain comfortable in the level of liquidity we have across the group. So kind of David also hits on a question where sometimes there are changes to regulatory capital requirements. So we do need to be able to weather that in order to -- and still have sufficient liquidity to pay dividend to our shareholders.

So at the moment, we feel that we have the right level of liquidity within the group. So if you look at the slide, in total, we have around -- at the half year, we had around GBP 20 million of liquidity in our group company, i.e., the one that pays the dividends out to shareholders. There was a little bit of a buffer due to timing differences of profit generation and paying dividends from our subsidiaries up to the group company as well, but we remain comfortable with that level of where it is at the moment from a dividend perspective.

That's notwithstanding the fact that the Board do keenly look at the amount of liquidity we have available, and we want to remain as efficient as possible with our liquidity and where we see we are developing excess liquidity. We do discuss those levels, but we're not at that point at the moment. Over to Alex.

Yes. So on your question on outflows, I mean, where we are at the moment, outflows are relatively stable. We've not seen any big upticks from the current sort of environment issues. I am wary when I make a comment like that because we all know what's going on around the world and inflationary drivers will be the predominant point of what causes outflows to go up. That will sort of apply to people in pensions drawdown who need more to live on.

And your point about mortgages, although I'm slightly more bullish on the mortgage point for the moment because the -- we sort of have seen for the last 2 or 3 years, people replacing their sort of very low interest rate-based mortgages that were for fixed periods. They're sort of -- we've been through a cycle as people have had to move on to higher rate mortgages. So I would be hopeful that there's far less impact of that in terms of pushing outflow rates higher. But I had anticipated probably 12, 18 months ago that they would start to sort of level off and maybe even come back a bit. And certainly, with the current environment, I don't see that happening. But we're not seeing any big uptick at the moment.

And then coming to your point on consolidators, our line has been the same forever. We don't do pricing deals. We have a rate card and we sort of keep people on that rate card. It's hugely important for actually maintaining sort of the stability of the business and actually sort of controlling systems, and it just makes everything more efficient. So there's lots of reasons why we don't do individual deals on consolidated groups.

And I think there's a realization actually that what we deliver to our clients, the value for money, what we actually sort of provide across the platform, the technology, the service, the support for advisers that actually we're not needing to do special deals to be able to win the business.

[Operator Instructions] We'll now move to Ben Bathurst of RBC Capital Markets.

I've got questions in 3 areas, if that's okay. Starting with one on cost development in FY '26 for Euan. I wonder if I could just reference back to the cost waterfall guidance from results last year. Do those percentages of 2% investment, 3% inflation and 2% cost savings that you set out in December, do they still apply? Or have those numbers moved around at all even if that 3% sort of final destination is unchanged?

Then secondly, on AI, you've spoken about assessing use of AI and automation. Just given the amount of development work that you do on the platform, should we be thinking that there could ultimately be a cost-saving angle for the group linked to the deployment of AI? And when do you think you'll be in a position to sort of conclude your assessment of this?

And then thirdly, on the consolidation opportunity, really a high-level question, but what proportion of consolidation businesses out there do you think are amenable to using a third-party platform and using panels versus the proportion that are going it alone? Have there been any changes in industry norms in that respect in the last couple of years?

Yes. Ben, I think -- thanks very much for your questions this morning, Ben. On the cost side, I think the brief answer is going to be yes. Those percentages still apply. We've been delivering savings through the first half of the year. We have more to make during the rest of the year, but there is an ongoing investment program that we also have where we are increasing costs on the investment side in H2 as well as we hire certain resources in order to deliver on future requirements. Sorry about the short answer, Ben, it's quite simple because the answer is yes.

Great. Okay. So on the AI point, Ben, I mean, the way I'm looking at this at the moment is what -- we have a very experienced development team. In fact, we have a couple of development teams across the business. And what I would expect in certainly the sort of short term is that what we'll see is that AI will allow more to be developed by fewer people. But that doesn't mean that we're going to have fewer people. It means we'll be doing more development, but we should be able to slow down the speed of growth of the development -- number of developers and therefore, the cost of development as we continue to grow the business.

So that sort of feeds into the sort of the cost per servicing of each client coming down, driven both by increasing numbers of clients, but also driven by an actual ability to develop the systems in a way that is cheaper than -- or per capita is cheaper than it is today, if not actually cheaper. So it's going to be very much a moving feast. And we're very, very aware of moving this at, should we say, an appropriate rate such that we are investing where we can see very clear benefits of doing so. But it's a balance between investing sensibly to do that and not throwing loads of money at something that isn't going to give any quality of return in the long term. So this is very much as slowly as we go and actually sort of learning not just from our own experiences, but from what's going on around us in the market as well.

And then coming to your point on consolidators. I think from our perspective, we are seeing pretty much all consolidators prepared to open discussions. That doesn't necessarily mean that they're ready and prepared to move or to add us on to platform panels. But we've seen a significant shift in the last probably 6 to 9 months in terms of an understanding amongst a lot of the consolidator firms that what they thought they could perhaps benefit from financially by running their own platform is nowhere near as easy to deliver as they may originally have thought.

And that's actually causing many of them to reassess their view and perhaps consider that they can run their own platform structures for the more easy cases, the less complex tax requirements, but they need the capabilities and support of an established platform to deliver sort of for the more complex clients. And they need to be able to provide for every type of client because that's the nature of the consolidated businesses, is they're buying advice firms that have every type of client within them.

So I think the answer -- the rather simplistic answer is it's all available. It probably isn't 100% of the business of each of them that's entirely available, but that's unfortunately then very dependent on the firm in question. So it's difficult to give you any sort of specific answer, but hopefully, that helps give a bit of color to it.

We have another question now coming in from Hal Potter of Bank of America.

Just 2 of them. So on costs, we saw occupancy had the benefit of rebates and the provisions release. So what are your expectations for this line item in H2? Are they effectively nonrecurring? And then my second question is on capital, which is as you accelerate profit growth, is the dividend going to remain the key focus? Or would you ever consider other potential uses of capital?

Thanks for the questions, Hal. On the cost side, on occupancy, yes, there were some nonrecurring releases of provisions. So it would more likely move back to probably what you've got as an expected run rate for occupancy there. So similar to -- well, not similar to prior years because we had dual running of property as well. But you've got to remember, it's a very small line item for us because due to accounting treatment, the predominant impact of our premises costs comes through depreciation and interest in our P&L.

The -- from a capital perspective, we -- at our full year results, we talked through our capital allocation policy. We do regularly talk at a Board level as to what a level of surplus looks like and if and when we should be discussing returns in excess of our dividend policy. As I said earlier in the Q&A, we're not at that point, but we do discuss it at a Board level periodically and keep testing the water with it. So at the moment, no change to -- in summary, no change to dividend policy.

As we have no further questions in the queue, Mr. Scott, I'd like to turn the call back over to you for any additional or closing remarks. Thank you.

Thank you. Just to thank everyone for your time this morning and wish you all a good day.

Good morning, and welcome to IntegraFin's 2025 Full Year Results Presentation. We're joined today by Alex Scott, Group CEO; and Euan Marshall, Group CFO. Following the presentation, there will be a Q&A session.

But for now, I'd like to hand the call over to Alex. Please go ahead.

Good morning, and welcome to IntegraFin Holdings Full Year Results Presentation for the financial year ended 30th of September 2025. I'm Alex Scott, Group Chief Executive; and joining me today is our Group Chief Financial Officer, Euan Marshall. I'm going to kick off with an overview of the group's performance and our business highlights from FY '25. I'll then hand over to Euan to run through the group's financial performance in the period and the outcomes of the group's cost and efficiency review. Finally, I'll close with an update on the performance of the Transact platform and a look at the good progress we've made on our key work streams throughout the year before moving on to Q&A.

FY '25 has been an excellent year for IHP. The group demonstrated continued strong performance, and we delivered on our strategic priorities. We attracted impressive net inflows of GBP 4.4 billion, driven by record gross inflows. Net inflows were up 76% on FY '24, a reflection of the ongoing quality of the Transact platform and the technological enhancements we've made over recent years. On the back of these excellent inflows, the group delivered impressive financial results with good growth in revenue and underlying earnings. Underlying earnings per share increased 7% in FY '25 to 17.4p per share.

As we first announced in July, we have undertaken a review of group-wide costs. We have now completed the review, and we've identified clear opportunities to enhance productivity, and these initiatives are now underway. Looking forward, we have a clear focus on driving sustainable future earnings growth. I'm pleased to announce we've raised our total dividends for FY '25 to 11.3p per share, up 9%. Our market-leading Transact platform is built on proprietary technology and supported by exceptional service. This business model is a driving force behind these results. Our strategy has delivered consistent client growth a strong market share of both gross and net flows in the U.K. adviser market and recognition through industry awards.

We have invested in our proprietary technology and IT infrastructure to sustain our highly differentiated proposition and extend our market leadership. We now expect that in FY '26 and FY '27, there will be group underlying annual cost growth of around 3%, including ongoing technology investment. Therefore, we will deliver both group-wide cost savings and continued investment in our technology capabilities as we reduce average cost to serve platform client. The business is now in an excellent position to accelerate future earnings growth.

Our main priority in the financial year has been enhancing the platform's features and online processes through digitalization as well as broadening our ability to integrate with a wide range of adviser firm software. By streamlining key wealth management tasks, Transact remains the leading platform for financial advice firms.

These enhancements drive higher inflows, strengthen client retention and increase the stickiness of assets on the platform. We also commenced our cost and efficiency program, which has been more possible -- made possible through our investment and we'll deliver a more streamlined operating model and greater efficiencies across the business in turn, increasing our operating margin.

I'll now hand over to Euan for a more in-depth look at the financials for the period and an explanation of how we'll deliver the cost and efficiency program.

Thanks, Alex. Good morning, everyone. Firstly, I'm going to share an overview of our KPIs, which demonstrate the ongoing delivery of our strategic priorities is converting into strong operational and financial performance. As shown in the top left graph, average daily FUD has grown 14% year-on-year to GBP 67.9 billion. Aside from the market's movements, this has been driven by record gross inflows of GBP 10.1 billion for the period, whilst growth in gross outflows has slowed. A key driver has been our platform continuing to attract more business from our competitors, strengthening our net transfers. We have achieved an impressive 10% compound annual growth rate in average daily FUD since FY '21.

Now looking at the top right graph, the growth in our average FUD has translated into revenues of GBP 156.8 million for FY '25, up 8% on FY '24. I will discuss platform revenue in more detail on the next slide. The bottom left graph shows that this record revenue has driven group underlying profit before tax, up 7% to GBP 75.4 million and equates to an underlying profit margin of 48%. Nonunderlying expenses totaled GBP 9.2 million in FY '25. This included a GBP 7.5 million impairment of goodwill relating to T4A, which was announced at the half year, and GBP 1.1 million of overlapping rental costs for our new head office relocation. We've also recognized a GBP 3.4 million non-underlying gain attributable to policyholder returns as a result of a release of GBP 0.4 million policyholder reserves to the P&L.

Moving on to the bottom right graph. The group delivered strong growth in underlying EPS, up 7% on FY '24 to 17.4p per share. For FY '25, we have increased the second interim dividend to 8p per share, taking the total FY '25 dividend to 11.3p per share, a 9% increase on FY '24. Looking in more detail at Transact platform revenue for FY '25, we can see investment platform revenue increased by GBP 11.8 million in the year, representing 97% of group revenue. Growth in average daily FUDs during the year drove increased platform revenue with our annual charge income increasing 10% to GBP 138.1 million. The lower increase in annual charge income in comparison to average FAD is mainly a result of clients benefiting from the natural progression through our tiered pricing structure as the value of their portfolio increases.

Wrapper fee income deed slightly year-on-year and reflects the reduction in charges for family-linked portfolios. These 2 recurring revenue streams combined to deliver 99% of total platform revenue. We continue not to retain any interest on client cash. In FY '25, total T4A revenue increased slightly to GBP 5 million.

Focusing next on platform revenue margin. The graph highlights how platform revenue margin has moderated steadily in the past, but this attrition is now expected to slow in FY '26. Over time, our revenue margin has seen a measured decline as we've strategically invested in price through targeted fee reductions. These changes contribute to the strength of the overall platform proposition which in turn, have helped to attract new flows and improve the retention of client assets on the platform. Looking forward, we expect the reduction in revenue margin to come primarily as a result from the natural progression of client portfolios through our tiered pricing structure and the annualization of the prior year's targeted price reductions. As an indicative figure, the platform revenue margin for September 2025, the last month of FY '25 was 21.9 basis points.

I'll now share more detail on our costs, starting with how we have carefully managed our administrative expenses in FY '25. In line with guidance, total underlying administrative expenses were 9% higher than in FY '24. Employee costs make up the largest proportion of our cost base and rose 11% in the year. This was because of several factors: firstly, a slight increase in average staff head count of 2%; secondly, the impact of investments in broadening the senior management team; and finally, our periodic review of remuneration packages across the business to ensure that we continue to provide competitive salaries to attract and retain high-quality individuals within the business.

Before looking in detail at the cost review program announced in July, it's important to contextualize the previous investment we have made in the group. During the heightened investment phase over recent periods, we have enhanced the group's IT infrastructure and technology capabilities to deliver improved platform digitalization and provide a greater number of integrations with third-party software providers. A further key factor has been our investment in people. As I have just mentioned, we have broadened our senior management team over the past 2 years, expanding the expertise and quality of our people to the business. This investment in our technology and people will enable us to deliver future cost efficiencies and reduce our cost to sales per platform clients.

Moving on from the cost growth in FY '25. I will now expand on the outcomes of the cost review program, which will help deliver enduring efficiencies in the coming years. We have completed the detailed assessment of our cost drivers and identified 3 key areas for sustainable cost savings that will create a more efficient business. Firstly, the greatest savings identified will come from improved productivity in our internal support functions. We are introducing more third-party technology, which will automate many manual processes for staff across the business. We're also changing the structure of some of those functions to simplify and standardize how we do things improving productivity so that we can maximize the value of the strong foundations that we've already put in place. The second source of savings will come from enhancing procurement and supplier management processes. The final element will be from enhanced platform efficiencies.

Our ongoing focus on increasing the level of straight-through processing and automation is reducing manual tasks and processing times which Alex will discuss in more detail later in the presentation. We expect the cost review program to deliver GBP 4 million of annualized savings by FY '27. The strength of this review is in the sustainable ongoing nature of the savings. FY '26 and FY '27, total underlying administrative expenses are expected to grow at around 3% per year. Delivering these changes will not come at the expense of our client service or our technology. Our proprietary technology is a key differentiator in the U.K. adviser platform market. And through focused investment, we will continue to improve our proposition while implementing our cost efficiencies. Note that the anticipated one-off costs required to achieve the savings are included in the investment spend on this slide.

Due to the timing of cost savings coming through, we anticipate cost reduction in the speed of cost increases to be weighted towards the second half of this year, meaning that H1 and H2 costs will be broadly similar. These actions put us on a clear path to long-term profitable growth while creating a more focused and resilient business for the future.

Moving on to the next slide. I wanted to highlight the 3 core levers on which we are focused to drive earnings growth. Firstly, we've invested significantly in the business over the last few years, we believe this investment has been fundamental to improving our prominent position in a competitive market. This investment has now put us in a position where we can focus on margin delivery. We expect our market-leading platform to continue to drive strong net inflows in a growing U.K. advisor platform market. The second and third levers, our focus on revenue margin and our cost review leave us in a position to accelerate earnings growth and enhance shareholder value in future years.

We're focused on the platform revenue margin with attrition in FY '26 being due to the impact of our tier pricing structure and the annualization of prior year price changes. Our group-wide cost review has identified productivity opportunities within the business and will reduce the rate of future underlying cost growth. We're confident in our strategy and business plan moving forward.

Returning to our FY '25 financial position. The business continues to be highly cash generative with the majority of profit flowing through into cash. This positions us strongly for the future as we expect our group profit margin to increase. The left-hand table illustrates the group's strong liquidity position. Each of the group's regulated entities maintain a capital and liquidity buffer above the minimum levels required under various regulations. As a reminder, we maintain a liquidity buffer to ensure we have the ability to accommodate ongoing increases to capital requirements in our regulated entities and can continue to invest in the business, all whilst continuing to pay dividends to our shareholders. We remain confident this is the right level to help support the future requirements of the group.

I'm pleased to say that we have approved a total dividend for the year of 11.3p per share, a 9% increase on FY '24, representing 65% of the total underlying profit after tax. As mentioned on the last slide, we've approved a dividend of 11.3p per share this year as part of our capital allocation framework. For reference, our capital allocation framework is shown here on the slide.

Finally, I'll talk you through the group's guidance for FY '26 and FY '27. We're focused on managing platform revenue margin. We expect the reduction in the platform revenue margin to slow, driven by clients moving through the tiered price of charging structure and the impact of prior year price changes.

As I mentioned earlier, our platform revenue margin was 21.9 basis points in September. As I highlighted on our cost slides, we expect total underlying administrative expenses to grow at 3% per year in FY '26 and FY '27. Net interest income is expected to be around 9% per year and the net gain attributable to policyholder returns are expected to be in the region of GBP 2 million per year.

That concludes my part of the presentation. I'll now hand back to Alex.

Thanks, Euan. In this section, I'll provide an update on the Transact proposition enhancements that we've delivered and a more in-depth look at the Transact platform flow performance during the period. We've delivered significant enhancements to the Transact platform, leading to growth of client numbers and inflows and the strengthening of our marketing position. These digital upgrades have streamlined platform operations by reducing manual and paper-based processes, both for us and for advice firms. This has improved operational efficiency and elevated service levels across the platform. The movement of paper forms to online straight-through processing reflects our purpose to make financial planning easier.

We have focused the transition on processes with the highest rates of human intervention. With standardized formats and instant data validation, we now receive clean instructions. Digitalization was a key step to further developing Transact platform integrations and APIs. With improved accuracy and greater data validation, advisers can now send instructions directly from their back-office systems, and we can trust the data being supplied. This is particularly important for the future use of AI. For the group, this means faster processing times, greater scalability of the platform and the ability for our client-facing teams to respond quicker to client needs.

During FY '25, the Transact platform delivered record gross inflows and impressive net inflows. Total net inflows for the year were GBP 4.4 billion, up 76% on the prior year. Our excellent net inflow performance has been driven by record levels of gross inflows with 7 consecutive quarters above GBP 2 billion. This is a testament to the market-leading service we provide and the digital enhancements we have made to our proposition. We have also improved our net transfer ratio with other platforms as we continue to win more business from competitors with our transfer ratio improving to 2.8 in FY '25. We have also taken an impressive share of net inflows to the U.K. adviser platform market, which I'll cover in more detail on the next slide.

And finally, outflows were largely stable during the year and reduced as a percentage of opening FUD to 9% in FY '25. Our impressive net inflows performance in FY '25 means we continue to have a strong market share of the net flows into the U.K. advisor platform market. This is a further reflection of the quality of our proposition as we continue to increase our market share of FUD and maintain an over 20% share of net inflows. We have a 10% share of the U.K. adviser platform market FUD and the external market review company, Fundscape, expects the adviser platform market to continue to grow at an impressive rate of around 12% over the next 5 years.

I'm pleased to say the Transact platform continues to win industry awards, picking up the Schroders Best Use of Platform Technology and the Money Marketing Best Platform Award this year. Our market-leading service continues to drive growth in client numbers using the platform, and our long-term track record in client growth is displayed in the middle chart. This growth in client numbers in turn ensures a durable and growing source of inflows to the platform as illustrated on the right-hand side.

So to summarize, in FY '25, we've delivered record growth and strong net inflows in the growing U.K. advisor platform market. We're confident of demonstrating good net flows momentum into future years. The award-winning Transact platform continues to enhance its proposition through digital enhancements and an expanding range of APIs. We have begun implementing the initiatives from the group-wide cost review. This will help to enhance business efficiency and drive operating margin growth.

And to conclude, we have a very scalable platform and best-in-class proposition centered on our proprietary technology and high levels of client service. We're focused on growing revenue and delivering savings from our cost and efficiency program. Overall, this positions us well to drive sustainable earnings growth in future years. Thank you for your time, and we'll now open to questions.

[Operator Instructions] Our first question today is coming from Michael Sanderson of Barclays.

Just a couple of questions, if that's okay. First one, I suppose you set out your capital allocation framework and you have the inorganic element before any sort of thoughts of returning to shareholders. I'd be interested to know what areas you think inorganic development might go at this point, given your sort of strong organic story over many years. And I guess, the second piece I was interested is there's obviously been quite a lot of noise or quite a lot of developing noise around sort of tokenization in the funds market and how that's likely to evolve in the coming years. And I guess, interested to know how you think about sort of preparation investment. That's something that the timing is so unclear and how you -- given that your proprietary technology, how you choose to allocate and approach potential quite sizable change in the market in due course.

Thanks for those questions, Michael. I'll take the first one, and then I'll hand over to Alex for your second. So on our approach to inorganic opportunities, yes, we predominantly focus on organic growth. That's something that you should take away from the call today. From a platform perspective, we don't necessarily see significant opportunities from inorganic growth through acquisitions, specifically in the platform market. But when it comes to looking at the technology that can enable the -- that can enable our wider proposition. We do continue to scan opportunities through the market. But we don't, at this point in time, see that as being a major driver. But of course, it has to be part of our capital allocation framework and considerations at a Board level.

Just picking up on tokenization. This is going to be one that I think we'll be talking about for a while to come. I mean it has actually been boating around for quite some time, and we've been talking about this with different companies for several years now. So it's not something that we're just sort of suddenly starting from scratch in terms of how we consider it and what we're doing. So this is something we've had in mind for some time.

Obviously, there's lots of issues around how different markets, different regulatory jurisdictions are actually considering the controls they put around this. And obviously, we're having to take all of that into account as well. You'll be aware that the Financial Conduct Authority issued a consultation paper on this as well.

So at the moment, we are doing more than nothing, but being very aware that, in many cases, the rules and structures are not formalized. So we'll be feeding into all of those consultations and making sure that our views and opinions are clearly heard and then driving forward from there.

We'll now move to David McCann of Deutsche Bank.

Three for me, please. So firstly, you've given some guidance that you're expecting a similar Q1 for net flows for Q1 of last year. Obviously, that compares to some of your peers, which you obviously pointed to a weaker period-on-period comparison really driven by pension lump sum outflows in relation to the budget. So I guess, why do you think you haven't quite seen the same impact that some of your peers have been talking about there? That's the first one.

And second one on costs. I mean what comfort can we as investors and analysts gain from the comments you made today that the 3% is a rigid ceiling on cost growth, given some of the experience from yourself and the sector in the past where the cost growth obviously been higher than that for a number of years. So should we really be sort of banking on free to have been an absolute upper ceiling there? So any further comfort you can give us there to the comments you've already made.

And then finally, sticking with the cost theme, like beyond FY '27, could we see kind of a return to more historically normal levels or sort of mid- to high single-digit growth being more normal here. So if there's really just a 2-year thing and then it sorts of reverts to normal thereafter? Or do you think there can be a lasting effects of sort of lower single-digit growth?

I'll pick up on the net flows piece. I mean, it's one of those that from where we've set, we've seen not a dissimilar behavior to the patterns that we saw around the sort of October, November period last year with lots of budget speculation. As you rightly say, there's been significant movements in pensions money with people drawing down their PCLS. From our perspective, we have seen significantly heightened flows in both directions. And overall, as we've indicated in our announcement, our overall position, we're expecting to be sort of relatively net neutral from that. So why would we be different from other firms that have actually experienced more of an outflow from it and not seeing the upside on the inflows piece.

I mean, I think that comes down to a couple of things. I mean, first and foremost, I'd say it's because when people are taking monies out from other pension arrangements that they have they're bringing that to the Transact platform, and we're seeing that being sort of put into other wrapper types that we have, so use of our investment bond structures and the like. And I think that sort of testament to the quality of Transact and the fact that we're still able to attract those monies in during those periods.

Cost side, David. So firstly, over the last couple of years, we've been meeting our cost guidance. So I would just like to reiterate that we have a plan in place, which management across the business are fully aligned on. We've really looked at the investment opportunities in the business, both from a platform development perspective, but also put structures in place where we've identified and prioritized the best areas to invest for future productivity improvements. And we are now already executing on that plan given that we're already a couple of months into the financial year.

From a medium-term outlook perspective, naturally, as you look more than a couple of years out, there's inherently going to be uncertainty there about what the world may yield to us. But we have some good structures in place now and a budget to continue to invest in those future productivity improvements. So we'll be continuing to demonstrate that we are delivering productivity enhancements over that longer period of time. Hopefully, that answers your questions, David.

Does that answer your questions, Mr. McCann?

Yes.

We will be moving on now to James Allen of Berenberg.

Two from me. Just around your point on revenue margin and the attrition now being expected to slow. In terms of the price cuts on the platform during FY '25, what was the in-period revenue impact? And what is the annualized impact of that, i.e., the remaining impact in FY '26? Secondly, the Australian VAT issue, I know it's been a few years since we heard anything on this. Could you just remind me about where we are on this now? From memory, we were waiting for cases to be resolved involving HSBC or Barclays that set a precedent. If you could just remind us where we are on that, that would be helpful.

Thanks, Allen. On the revenue margin, I think we've disclosed in prior presentations what the annualized impact of those changes are. The biggest of those came through the start of April, I think, so start of H2. However, I think the main thing to look at here is during the presentation, I mentioned the revenue margin at the end for September, which was 21.9 basis points. So that could be useful for you to use. The other thing to keep in mind as well is that as funds under direction grows, broadly, we retain -- well, there's an attrition of around -- for every -- for FUD growth of 10%, we'll retain around 7.5% of that coming through to revenue. So that could be a good way of looking at it for modeling into the future as well.

Thanks, James. On the VAT issue, just a quick update. So we do continue to be stayed behind Barclays in this situation. We still consider that to be a sensible place to be as do HMRC because in that structure, there's a considerable savings from our perspective on legal fees because we're not having to drive the case forward. So -- and we keep a very close track on the Barclays case to be sure that it is still relevant and consistent with our own case. Aside from that, we do also continue to have ongoing dialogue with HMRC around our own case to better improve their understanding of what we do and where our structure sits. So it is moving forward. I'm afraid it is glacial. And I expect it will still be another 18 months to 2 years at the speed that these things move before we have any certainty on it.

But just for everyone's comfort, just to be absolutely clear here, we are actually working on a basis that we pay VAT on everything. And therefore, there is no accruing liability. There is only a potential upside on this for us.

We'll now move to Ben Bathurst of RBC.

I've got questions in 3 areas, if I may. Starting on one for Alex, probably on pricing. I just wondered, could you provide some market context to the decision to broadly hold charges flat at this point? And sort of specifically, how do you now assess the current pricing differential to be for Transact versus your closest competitors? And do you expect that differential to now change looking forward? And then secondly, on capital, probably for Euan, how should we think about the likely growth in ongoing capital requirements looking forward? Should that grow broadly with the level of funds under direction? Or could that be at a slightly slower rate than that? And then finally, on the flow outlook, obviously, you talked about confidence in growing market share. Are there any customer groups that you could do better with in terms of net flows? And are you intending to target those more specifically looking forward?

Thanks, Ben. I'll pick up the first and third of those, and then hand over to Euan. So in terms of pricing, we've done quite a lot over the last few years to bring our pricing down to a pretty competitive level across the market areas that we really want to be competitive in. And I think where we are relative to our key competitors, we're in a good position. There are changes in the shape of the market, and there are also changes -- have been changes in the way that competitors have actually extracted revenue from their clients. So it's become ever more tricky to actually review exactly what clients are being charged by any one platform because of the use of taking a share of client interest that is undertaken by several other platforms.

So when we actually compare across the total take from clients, we find that we're actually in a pretty strong position in all places. How that shape will evolve is obviously something that regulators have had things to say on, but they seem to have settled down now and see quite on. And we've seen that now predominantly the changes that are being driven are people trying to do deals with sort of consolidating groups to actually try and win blocks of business. We're finding actually that we are not particularly needing to do deals and we're still able to win consolidator business through the delivery of the requirements that they need and the quality of service that they want.

And you asked about where there's areas of net flows that we still think that there's more for us to do. I mean I've spoken before about the fact that we've changed one of the parts of our sales team to be more focused on the consolidated part of the market because traditionally, we were very much more in the smaller adviser firm sector.

And we've definitely grown out of there and are actually sort of pushing more into actually working with the consolidating firms, understanding better what their needs and requirements are, not just from a pricing perspective, but how they want to work with us and what we can deliver for them. And we've certainly found that we've been doing pretty successfully with adviser groups where they've sort of started to move down routes of delivering their own platform to then actually moving to a more panel structure where Transact has been very successful in being the chosen outside provider to be bought in to work alongside their own platform offering. Euan, if you want to pick up on the capital.

Yes. On the capital piece, Ben, I think it's -- you probably know this very well already, but we have 3 regulated entities across the group. So when you look at the MIFIDPRU regulated entity, yes, the answer to your question would be, is broadly a good idea to look at growth of FUD through -- coming through as growth in regulatory capital requirements. And there's a few funnies in there, but that's a good broad assumption to make. We then have 2 insurance entities as well where it gets a little bit more complicated. But again, I would anticipate a good rule of thumb is probably to look at increasing capital requirements in line with FUD growth over time.

As we do not appear to have any further questions. Mr. Scott, I'd like to turn the call back over to you for any additional or closing remarks. Thank you.

Thank you. Well, thank you, everyone, for attending this morning and listening to us. And I wish you all a good day and a happy Christmas.