IFG on course to hit target despite difficult market
UK business accounts for 60pc of group's profits
FINANCIAL services group IFG said yesterday that it remains on course to post earnings in line with expectations after what has been "satisfactory" trading so far this year but that the Irish market remains difficult.
In an interim management survey for the first nine months of the year, the Dublin-based company said it was on course to achieve earnings per share of between 18 and 20c, in line with market expectations.
IFG's UK business, which includes a pension administration and advisory business, will drive profits, the company said, accounting for up to 60pc of the group's profits.
Trading in pensions' admin was described as "robust" while the firm said it was working on building scale across both sectors.
All aspects of integration of James Hay, a UK pensions company acquired in March, were said to be either on or ahead of schedule.
However, in spite of trading conditions in Ireland being "very difficult", the company's plans to build an Irish business that will follow the model of the UK operations were progressing well, according to IFG.
The Group Pensions and Individual Advisory businesses here are turning in a "solid" performance, said the group.
Despite a reasonable performance in Ireland and the UK, a weak outlook on IFG's international divisions stood out for Stephen Lyons, an analyst with Davy Stockbrokers.
"The group's ability to maintain its guidance is encouraging, but not unexpected given its visible recurring revenue streams," he said.
"The continued successful integration of James Hay is significant given its transformational impact on the group but the weaker outlook on the international business is disappointing, especially the Cyprus business, one of the group's more recent acquisitions, which also underperformed in 2009."
"However, the international business guidance is now modelling for a similar outturn in H2 as in H1, so there it looks like there is no sequential deterioration but rather a delayed rebound to normalised recovery," he added.
Ciaran Callaghan of NCB echoed those sentiments, but added that the strength in the UK business outweighed any concerns.
"A slowdown in the international business has been off-set by the strong performance in the UK division, as the group continues to increase its presence in the pensions market.
"Impressive cash generation is driving a de-gearing of the business, leaving it in a comfortable position to renegotiate its banking facilitates by year-end."
IFG rose sharply yesterday morning in Dublin before falling back to close down 0.79pc at €1.30.