IFG Swings To Annual Pretax Loss, Considers Saunderson House Disposal

LONDON (Alliance News) - Financial services company IFG Group on Wednesday swung to a pretax loss for 2017 mainly due to due exceptional costs on legacy matters and said that it is considering disposal of its advisory business Saunderson House.

IFG, which is dual-listed in Dublin and London, recorded a pretax loss of GBP381,000, compared with pretax profit of GBP6.4 million in the prior year period. Revenue fell marginally to GBP78.4 million from GBP78.5 million.

The pretax loss was attributed to sharply higher exceptional costs, which totaled GBP8.8 million for 2017 versus GBP1.7 million in the previous year.

The company said that the exceptional costs increased materially due to a number of legacy matters "relating to administration and documentation of advice, these costs being a combination of remediation and legal costs and provisions for client redress, together with previously announced reorganisation costs".

IFG said it intends to conclude a range of legacy matters and, as a result, has decided to suspend its final dividend payment for the year. In 2016, IFG paid a final dividend of 3.35 pence per share in 2016. Total dividend for 2017 stood at 1.60p, down sharply from 4.95p paid a year ago.

The company's total cash stood at GBP24.6 million at the period end, compared with GBP28.2 million the year prior.

"The changes to our pricing models and the improving interest rate environment, mean we are well positioned to deliver sustainable growth and improved financial performance. We are committed to bringing closure to legacy issues, which may continue to impact financial performance, in order to return to paying a progressive dividend and delivering increasing value to our shareholders," Chief Executive John Cotter said.

"We have addressed the historic over-reliance on interest income in James Hay through repricing and will also benefit from the recent increases in interest rates. We are also considering the potential disposal of Saunderson House, if it will deliver appropriate shareholder value, benchmarked against the future potential of the business if held within the group. The resolution of legacy matters and the potential disposal of Saunderson House may result in some incremental costs in 2018," Chairman John Gallagher said.

London listed shares of IFG were 0.3% up at 181.50 pence on Wednesday afternoon.