Integrafin, parent company of platform Transact, suffered a near £4m fall in IFRS pre-tax profit in the half year to 31 March as it was hit by rising costs and adverse markets.

IFRS pre-tax profit for the half year to March fell from £31.7m in 2022 to £27.9m in 2023, a £3.8m fall.

In its half year results announced today the company said that despite the setback it notched up record platform client numbers of 228,000, up 4% year on year. The total number of adviser clients of Transact also rose from 7,356 to 7,563.

Net platform inflows fell from £2.7bn in the first half in 2022 to £1.6bn this year and total group revenue dropped slightly from £67m to £66.5m.

The group said that despite the falls underlying group profit was “resilient.”

The company’s figures were hit by a combination of challenges including rising costs, economic uncertainty and adverse market conditions. Additional VAT costs of £800,000 were also paid related to a review from the previous year.

Total closing funds under direction (FUD) rose slightly from £53.5bn to £54bn however average daily Funds Under Direction fell from £53.04bn to £52.64bn.

The first interim dividend was held at 3.2 pence per share (HY22: 3.2pps).

The digitalisation programme for the Transact platform is under way, the firm said, and is being “positively received.” 

Recruitment of IT and software professionals is going well although slower than planned as the market for IT professionals remains competitive. Recruitment will continue into FY24 but with no increase in the planned total additional headcount.

Alex Scott, Integrafin's group chief executive, said: "I am pleased to report another solid performance, despite the six months to 31 March 2023 presenting a challenging backdrop for UK consumers and businesses, with persistently high inflation, macroeconomic uncertainty and volatile asset markets.

"The combination of the strength of the UK advisers we work with and the services provided by the Transact investment platform and the CURO adviser back office solution, ensured that we delivered a resilient performance.

"Net inflows to the Transact platform were over 6% of opening period FUD and we now serve a record 228,000 clients, and 7,600k registered advisers."

"During the period, market performance resulted in investment platform average daily FUD falling by 1% year on year. The main component of group revenue is earned on average FUD, so this resulted in steady group revenue. Furthermore, during a period of continuing investment in the business for future growth, we delivered a resilient underlying profit before tax for the group of £29.4 million.

"We continue to implement our Transact platform digitalisation programme to deliver comprehensive online functionality for advisers and clients, as well as straight through processing for core internal administration activities. This means that we will be able to make our business more scalable, and our customer services people will be able to spend more of their time on the most important value adding activities for clients and advisers."

"Time4Advice (Transact's fintech acquisitions) continues to progress well, with registered users of the Curo software increasing by over 10% since year end.

"In a period of ongoing economic and market volatility, clients rely more than ever on their advisers. Clients receive high quality, personal, Financial Planning and support delivered by UK authorised advisers. As we've always done, we'll continue to support UK financial advisers and clients by providing our combination of in house technology and well trained people delivering high quality service. This creates a holistic Financial Planning solution for clients, which is both easier to deliver and more scalable for UK financial advisers.

"Overall, we remain focused on our aim to be the number one provider of software and services for clients and UK financial advisers.''