The maturity of 'defined benefit' pension schemes is a pressing issue for many companies, especially where those schemes are burdened by funding deficits. It’s against this backdrop that Xafinity (XAF) is substantially scaling up its business, announcing plans to acquire the actuarial, administration and investment consultancy businesses of rival Punter Southall for up to £153m. Xafinity will pay £92.5m in cash, funded by placing more than 41m new shares at 170p each. In addition, it will transfer its HR Trustees business to Punter Southall’s parent group for £8.5m.
Without the IPO-related costs incurred in the prior year, statutory pre-tax profit during the first half shot up. On an underlying basis, cash profit edged up 2 per cent to £8.7m. Sales in the pensions advisory and administration business – which accounted for 80 per cent of the group total – was up slightly to £21.5m. Five new clients were won during the period, with scheme sizes ranging from below £100m to £500m.
Defined contribution mastertrust National Pension Trust grew assets under management to £292m by the end of September, belonging to more than 26,000 savers. This had risen to £320m post-period.
| XAFINITY (XAF) | ||||
| ORD PRICE: | 187p | MARKET VALUE: | £256m | |
| TOUCH: | 180-187p | 12-MONTH HIGH: | 188p | LOW: 151p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 23p* | NET DEBT: | 72% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016** | 26.0 | 1.7 | 1.0 | na |
| 2017 | 26.6 | 4.9 | 2.9 | 2.1 |
| % change | +2 | +185 | +190 | - |
| Ex-div: | 28 Dec | |||
| Payment: | 8 Feb | |||
| *Includes intangible assets of £57.4m, or 42p a share **Prior to IPO | ||||
