IntegraFin on target as 'somewhat insulated' from market turmoil

Fund platform operator IntegraFin reported a 10% increase in profits in its first full-year results as a listed company, as positive gross inflows contributed to good growth in funds under direction.

There were net inflows £4.1bn into the Transact financial adviser-facing investment platform, up 12% on the previous year. By the 30 September year end, the platform counted a 10% increase in clients to 166,000 and with funds under direction up 19% to £33.1bn, as already reported.

Revenue of £91.2m was up 14%, adjusted operating profits were up 15% to £43.3m and profits after tax increased 10% to £32.9m. Adjusted earnings per share rose 15% to 10.7p and a dividend of 6.4p per share was recommended.

Chief executive Ian Taylor hailed gross inflows of £5.96bn, the highest the group has ever enjoyed since Transact was launched 18 years ago.

"Following a good performance in 2017, the year to 30 September 2018 was again, by many measures, our most successful so far. It was a year in which we made strides forward as a service to our clients and as an asset to our shareholders."

On the outlook for the new financial year, he added: "Many commentators currently opine that the global economic, political and stock market outlooks are challenging. There is little to hand to contradict this speculation."

But he argued that using a platform is not an investment decision but "an administration decision", with platforms "somewhat insulated" if not quite immune to stock market movements.

IntegraFin shares, which were floated at 196p and topped 400p in the summer, were down 4% on Thursday to 267.95p.

Broker Peel Hunt adjusted its model to take account of the results, and more significantly the impact of lower market levels on the level of FUD with the net effect of cutting its forecasts for FY19 and FY20 by 8% and 11%, respectively.

Analyst Stuart Duncan now expects PBT and EPS of £45.7m and 11.2p for FY19, with £52.4m and 12.89p for FY20.

"We do not believe this affects the long-term prospects for IntegraFin," he added, although the target price was cut to 380p from 420p.