Business Irish

Monday 19 February 2018

IFG revenues rise but overseas expansion behind profit fall

Donal O'Donovan

PENSION and investment adviser IFG Group has reported a 29pc rise in revenue to €120.6m in results for the year to the end of December, but profits fell due to the cost of overseas expansion.

Results show revenues increased to €120.6m from €93.3m over the year, growing in particular through the acquisition of UK-based James Hay in March.

Pretax profits at IFG dropped from €7.4m in 2009 to €3.1m last year. The decline in profits is largely down to a restructuring charge booked to reflect the cost of the Hay deal.

Net income rose to €5.41m from €5.38m in 2009.

Overall the preliminary statement of annual results was in line with analyst expectations. Shares in the Dublin listed company were unchanged after the results were announced at €1.40 each.

IFG is valued at €174m.

The results show that the UK now accounts for 60pc of turnover and is the main driver of profits. IFG Group's chief executive Mark Bourke said the group was eyeing UK further expansion both through takeovers and organic growth.

Management said IFG was well positioned to grow either organically or through acquisitions after cutting debt by 67pc to €14.8m.


On the acquisition front, IFG is eyeing UK-based personal pension managers that are under pressure to boost their capital and could therefore welcome investor interest.

IFG's City of London-based financial adviser business Saunderson House saw its profits up 67pc to €3.8m.

The subsidiary has €3bn in assets under management and plans to expand staff numbers ahead of UK pension rules changes that mean all company pensions advisers move from commission to fee-based charging. Saunderson already operates on a fee model.

Ireland is the weakest link in the IFG chain and is a drag on profits however. The Irish division delivered a loss of €1.4m for 2010. IFG plans to dispose of its mortgage brokerage and concentrate on the pension market, where it does see opportunities.

International business, mainly in Cyprus, generated operating profits of €11m, largely thanks to Cyprus which had been highlighted back in November.

Operating profit at the UK division was €14.8m, beating analysts' forecasts.

Mark Bourke said he was "comfortable" with analysts' estimates for higher adjusted earnings per share this year of 19 cents to 21 cents. Adjusted earnings per share fell to 18.77 cents in 2010 from 19.8 cents a year earlier.

IFG's board is recommending a final dividend of 2.65cent per share, or approximately €3.3m.

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