- Full year to be materially ahead
- Regulatory change tailwind
- Analysts upgrade earnings
In an unscheduled trading update, pension consulting and administration group XPS Pensions (XPS) said it expects full year results to March to be ‘materially’ ahead of prior expectations.
The shares raced 14% ahead, hitting an all-time peak of 396p in early trading before settling around the 386p level.
Over the last 12-months, shares in the FTSE 250 company are up 93%, reflecting strong momentum across the business and persistent upward revisions to analysts’ earnings estimates.
Co-CEO Paul Cuff said: ‘There has been strong demand for our services, as clients have needed support to respond to market and regulatory changes.
‘At the same time as achieving strong growth, we have been delighted with the results of our annual client survey, which were extremely positive. At XPS, our culture is at the heart of what we do, and I would like to thank all our people for the way they support each other and our clients.’
RAISED GUIDANCE
Growth drivers include work around the McCloud remedy which removes age discrimination in NHS pension schemes, the guaranteed minimum pension and new business in the Risk Transfer market.
Good cost control and investments in technology are enabling increasingly efficient delivery of project work, the company said. Consequently, the board expects operational gearing to have improved and full year results to be materially ahead of previously upgraded expectations.
The board now expects full year revenues to grow between 15% and 16% to be in a range of £226 million and £229 million. Consensus expectations are pegged at the lower end of the new range.
Analysts at Canaccord Genuity have a revenue forecast of £226.1 million and have decided to leave this unchanged, noting the ‘small upside risk.’ However, the analysts upgraded their EPS (earnings per share) forecast by 6% implying 27% year-on-year growth.
‘The changes are driven largely by McCloud remedy work being delivered more efficiently than we previously expected, ‘explained Canaccord.
‘XPS has demonstrated another year of strong demand for its services in full year 2025, which are regulatory-driven and unaffected by the macro-cycle, while again delivering operating leverage,’ the analysts said.
LEARN MORE ABOUT XPS PENSIONS
