IFG's profits fall to €10.5m in first half as company slashes debt
FINANCIAL services group IFG, the only Irish financial services company that pays a dividend, says profits dipped in the first six months of this year as the company dug deep to pay off debts.
The Dublin-based company saw pre-tax profit fall to just under €10.5m from €11.1m a year earlier as the company's debts were slashed to €21m.
Sales jumped 16pc to €57.4m as the company continued to benefit from the €42.7m acquisition of UK-based pension adviser James Hay earlier in March.
Full-year profit will be at least in line with the company's previous guidance to analysts, while net debt is forecast to fall to the low-to-mid teens.
IFG began to slash debt last year after it rose to around two times earnings before interest, taxes, depreciation, and amortisation, which would have breached its bank covenants.
"A huge part of what we have been doing is degearing," said chief executive Mark Bourke. Some of the money came from retained profits in James Hay, with about €3m coming from currency movements.
The integration of the British company is going to plan and IFG expects to start reporting earnings in pounds rather than euro as the bulk of the business shifts to the UK.
The company is making little from the Irish property market, where it has tied agents, and increasing its focus on Britain, where it sells annuities and other pension products.
IFG is also saving money by cutting staff and employs 420 people compared with 522 last year as James Hay employees were shed.
The company, which announced a series of senior management changes yesterday, aims to reduce staff numbers to 350 next year.
IFG's Irish business recorded a loss of €1.4m as the property business struggled and it shifted to life annuities.
It raised its dividend by 6pc to 1.35 cents a share.