Growth and Dividends Rise
XPS Pensions Group Reports Significant Revenue Growth and Increased Dividend for Fiscal Year 2026
Anonymous
Key Points
1
XPS reported lower statutory earnings per share: basic EPS (continuing operations) of 0.13 vs 0.147 a year earlier, and diluted EPS (continuing operations) of 0.124 vs 0.138.
2
The proposed final dividend is 9.1 pence per share (total £19.0 million) and is scheduled to be paid on 21 September 2026 to shareholders on the register as of 21 August 2026—subject to AGM approval.
3
In Administration, underlying revenue growth was stronger after removing the prior-year McCloud impact: administration revenues grew 5% YoY, but “excluding the impact of McCloud, underlying revenues grew 18% YoY.”
4
XPS specified that Polaris (acquired and completed on 28 February 2025) contributed £16.1 million of revenues in Advisory in FY 2026, and noted group revenues (after adjusting for McCloud in the prior year) grew 18% with 12% organic.
5
The company cited a recent major mandate and industry momentum, including a “major mandate with the Metropolitan Police pension scheme,” along with “multiple awards,” alongside management’s confidence in growth and an “expanded addressable market of £4.5bn a year.”
XPS Pensions Group posted its fourth straight year of double-digit revenue growth on June 18, 2026, with total revenue climbing 13% to £262.7 million for the year ended March 31, 2026, according to MarketScreener. The board proposed a final dividend of 9.1 pence per share, lifting total dividends per share by 11% — even as statutory net income dipped to £26.56 million from £30.34 million a year earlier.
Shares fell 2.5% to 309p in London trading after the results dropped, according to MarketScreener. The market reaction reflected the tension between strong headline revenue and a decline in statutory earnings per share, with basic EPS falling to 13p from 14.7p.
Revenue Surges Even After McCloud Project Ends
The headline 13% revenue rise masks an even stronger underlying story. The prior year included a surge of work tied to the McCloud remedy — a UK court ruling that forced public sector pension schemes to fix discriminatory rules by a March 2025 deadline. Strip out that one-off boost, and XPS's administration revenues grew 18% year-on-year, compared to just 5% on a raw basis, according to ADVFN.
The newly acquired Polaris business, completed on February 28, 2025, added £16.1 million in advisory revenues during the year. Organic growth — excluding Polaris — still ran at 12%. Management said the group's addressable market stands at £4.5 billion a year, and pointed to advisory, administration, and self-invested pension services all posting double-digit gains.
Metropolitan Police Win Signals Bigger Public Sector Push
XPS secured a major new contract with the Metropolitan Police pension scheme during the year. The win is significant. Large public sector mandates have traditionally gone to global firms like Mercer or Aon. XPS winning this business suggests its investment in proprietary administration platforms and AI tools is beginning to pull clients away from bigger rivals.
Management cited the deal alongside "multiple awards" as evidence of growing momentum. The company is investing in AI solutions to automate routine pension calculations, which could push margins higher in coming years. XPS said its administration platform is scalable — meaning it can handle more clients without a matching rise in costs.
Dividend Rises 11% Despite Statutory Profit Drop
The board's decision to raise dividends 11% even as statutory profit fell shows confidence in cash generation. Operating cash conversion stayed above 90% for the year. Net debt sat at just 0.64 times adjusted EBITDA — a conservative level that leaves room for further acquisitions, according to Morningstar.
The 9.1p final dividend — worth £19.0 million in total — is due to be paid on September 21, 2026, to shareholders on the register as of August 21, 2026, subject to AGM approval. Adjusted EBITDA grew 9% and adjusted profit before tax rose 8%, giving management the cover to lift payouts despite lower statutory earnings, according to MarketScreener.
Bears Focus on Falling EPS as Polaris Costs Bite
Not everyone is cheering. Diluted EPS from continuing operations dropped to 12.4p from 13.8p a year earlier, according to MarketScreener. Critics argue that Polaris integration costs and the end of high-margin McCloud work are squeezing statutory returns, even as adjusted figures look healthier. Statutory net income fell nearly £4 million year-on-year.
Management pushed back by framing the adjusted figures as the real measure of performance. They called the model "capital-light" and "scalable" — meaning future growth should not require heavy spending. With leverage at just 0.64 times EBITDA, analysts expect XPS to pursue more bolt-on deals in insurance consulting or self-invested pension services before the end of FY 2027, according to ADVFN.
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
14
Articles
31
Reach
45
Topics
A
AnonymousAuthor
