XPS: Small FY26 beat, but margin improvements expected to slow

Research evidence excerpt

XPS: Small FY26 beat, but margin improvements expected to slow

EQUITY RESEARCH QUICK TAKE

RBC Europe Limited

Ben Cohen (Analyst)

Dawid Pych (Analyst)

Sarah Chong (Senior Associate)

June 18, 2026

XPS Pensions Group PLC

Small FY26 beat, but margin improvements expected to slow

LSE: XPS | GBp 317.00 | Outperform | Price Target GBp 465

Sentiment: Negative

XPS has published its FY26 results (12 months to 31 Mar 2026) and will host an analyst call at 9.30am.

Overall, XPS reported a solid set of FY26 results with revenue in line with Apr trading update and adj. EPS and DPS both

4% ahead of consensus. On FY27 outlook, management pointed to 'further growth in FY27 and beyond' (cons and RBCe

revenue FY26-28 CAGR: 6%) with confidence underpinned by expanded addressable market, investments made, as well as a

'continuously supportive regulatory and market environment'. Management clarified that, despite the FY26 margin beat, it

remains comfortable with current consensus for margins, which implies less margin improvement than we and others had

modelled, as it continues to invest to grow the business, with the outlook for top-line growth also unchanged at 6.5%/6.0%.

Key takeaways from the release:

• Revenue growth of 13% yoy to £262.7m was in line with the 21 April trading update (RBC note: FY26 revenue growth confirmed

at 13% with no upgrades to earnings).

• Headline Adj. EBITDA of £75.7m grew 9% yoy, being 2% ahead of consensus of £74.2m (RBCe £75.1m), notwithstanding the

impact of higher National Insurance contributions. However, excluding McCloud, adj. EBITDA growth outpaced revenue growth

(>13%), demonstrating continued operational leverage as the business scales.

○EBITDA margin deteriorated yoy by 1.2%pts to 28.8% (cons: 28.4%, RBCe: 28.6%).

• Adj.