XPS Pensions Group PLC: Quality growth story continues

Research evidence excerpt

XPS Pensions Group PLC: Quality growth story continues

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XPS Pensions Group PLC

Quality growth story continues

Reiterate Rating: BUY | PO: 440 GBp | Price: 310 GBp

FY26 small beat; confident outlook 19 June 2026

XPS delivered a low single digit beat on adj. EPS (22.3p +8% YoY) and on the declared Equity

DPS (13.2p +11% YoY). Growth in higher-margin Advisory and ongoing digitalisation

helped to protect EBITDA margin at 29% (vs 30% in FY25) despite 1) the roll-off of

Key Changeshigh-margin comparator McCloud project; 2) higher headcount to sustain the topline

growth trajectory and 3) a pre-flagged headwind from National Insurance increases. The (GBp) Previous Current

outlook for mid-to-high single digit revenue growth and underlying operational gearing Price Obj. 426.00 440.00

are in line with consensus expectations. Management noted a significant inorganic 2027E Rev (£m) 280.8 281.3

opportunity for XPS as an acquiror to expand either 1) share of its legacy pension 2028E Rev (£m) 300.8 301.1

consulting market which remains fragmented; or 2) expanding its addressable market 2029E Rev (£m) 320.8 320.9

into services for General Insurers or other financial institutions. Management views the 2027E EPS 23.26 23.83

second of these as most likely. 2028E EPS 25.40 25.96

2029E EPS 27.07 27.60

2027E DPS 13.88 13.86Questions for management

We note investors have questioned the margin trajectory of XPS. On the YoY

compression, the McCloud roll-off explains the majority of the difference, but we think Hal Potter, CFA >>

Research Analyst

management commentary regarding the pipeline deserves further consideration. The MLI (UK)

company sees lots of public sector administration opportunities following the success of +44 20 7996 3010 hal.potter@bofa.com