Ifg Regulatory News (IFP)

IFG Group plc

Half-yearly financial report for the six months ended 30 June 2015

STRATEGIC FOCUS DELIVERING GROWTH AND PERFORMANCE

IFG Group plc is pleased to announce its half-yearly financial report for the six months to 30 June 2015.

Financial highlights

· Revenue from James Hay and Saunderson House up 10% to £34.5 million (H1 2014: £31.2 million)

· Adjusted operating profit from James Hay and Saunderson House (after Group/Other costs) increased by 12% to £4.4 million (H1 2014: £4.0 million), despite increased regulatory fees, which will not reoccur in H2 2015

· Continued investment has driven increased revenues and profits in James Hay, which are 13% and 26% respectively ahead of H1 2014

· Saunderson House revenues grew by 7% but profitability was impacted by £1.1 million charge for regulatory fees (£0.3 million in H1 2014)

· Residual exceptional costs relating to previous disposals have been provided in full

· Adjusted earnings per share of 2.87 pence (H1 2014: 2.80 pence)

· Strong balance sheet following recent disposals, with increased profits and strong cash generation expected in H2 2015

· Interim dividend up 10% to 1.44 pence per share (interim 2014: 1.31 pence)

Business highlights

· Total assets under administration and advice in continuing businesses up 11% to £21.5 billion (H1 2014: £19.4 billion)

· James Hay delivered strong growth with new SIPPs up 26% to 3,781 (H1 2014: 2,998) and net additions up 27% to 2,265 (H1 2014: 1,784)

· James Hay assets under administration of £17.5 billion (H1 2014: £15.9 billion) up 10% with net inflows in H1 of £0.8 billion (2014: £0.5 billion)

· Previously announced agreements with Capita and Towry will further boost growth in H2, with 6,500 clients to join in addition to organic growth. Over 5,000 SIPPs added in H2 so far, with Towry transaction progressing

· Saunderson House continues to grow, with 166 new clients (H1 2014: 133) up 25% year-on-year, and assets under advice up 12% to £3.9 billion (H1 2014: £3.5 billion)

· Sale of Irish general insurance business agreed and expected to close in Q4 2015, subject to Irish regulatory consent

Paul McNamara, Chief Executive of IFG Group plc, commented:

'Our sharp strategic focus on the retirement wealth market is delivering growth and improved performance. James Hay and Saunderson House have distinctive propositions, which we continue to invest in to enhance clients' service and sustain profitable growth. Our financial strength is further enhanced by the completion of the Group restructuring, which started in 2014. With positive momentum in our businesses, and a strong balance sheet, we are well positioned for the future.'

For reference:

Paul McNamara John Cotter Niamh Hore

Group Chief Executive Group Finance Director Investor Relations & Corporate Development

IFG Group plc IFG Group plc IFG Group plc

Tel: +353 (0)1 632 4800 Tel: +353 (0)1 632 4800 Tel: +353 (0)1 632 4816

Interim Management Report

The sale of the Irish general insurance business, subject to regulatory approval, concludes the restructuring of the Group, which started in 2013, and leaves the Group with a sharp strategic focus on two growing businesses in attractive market segments. Our strategy now focuses on the development of James Hay and Saunderson House, and is delivering growth in revenue, clients, assets and operating profits. James Hay is a leading platform provider in the retirement and wealth planning space. Saunderson House is an award-winning financial adviser to high net-worth clients, with a reputation for excellence in client service and investment performance.

The investments we have made, and continue to make in people, technology and client proposition, will deliver meaningful growth as we go forward into the second half of 2015 and beyond.

In the first half of the year, revenue from continuing businesses was £34.5 million with James Hay contributing £20.9 million (2014: £18.5 million) and Saunderson House contributing £13.7 million (2014: £12.8 million). Revenue of £34.1 million in 2014 included £2.9 million from IFG Financial Services (IFG FS), which was sold in H2 2014. Adjusting for IFG FS, revenue increased by 10% compared to H1 2014, with James Hay increasing by 13% and Saunderson House by 7%.

James Hay new business momentum has continued, and Self Invested Personal Pension (SIPP) sales, in the first six months of the year, were 3,781 (H1 2014: 2,998), an increase of 26% on H1 2014. The success of the modular MiPlan is driving growth. With attrition remaining at circa 6% per annum, net additions of 2,265 SIPPs were 27% ahead of 2014. Assets under administration in James Hay increased from £15.9 billion in June 2014 to £17.5 billion, an increase of 10% in the year. James Hay now serves more than 52,000 clients compared to 47,000 clients in June 2014, an increase of 10%, with average assets per client of £0.35 million. The James Hay adjusted operating profit (before amortisation of intangibles) increased by 26% to £3.8 million, as the benefits of investment, disciplined cost and margin management and increased new client take-on translates into revenue growth and operating leverage. The James Hay leadership team has been strengthened in 2015 with a new chief financial officer, chief operating officer and chief commercial officer.

The Towry and Capita strategic arrangements will deliver circa 6,500 new clients in H2 (H1 2015: 1,384), in addition to ongoing organic growth. As of now more than 5,000 new SIPPs have already been added in H2, bringing the year to date additions to more than 8,800 compared to 6,300 for the whole of 2014. We see further such transactions, which have underpinned the material increase in net additions in 2015, as a continued growth opportunity, leveraging the capability of our products and systems. Organic growth remains broadly consistent with 2014.

Saunderson House revenues increased by 7% in H1 2015 compared to H1 2014, and the number of new clients grew by 25% to 166. Saunderson House now serves over 1,750 clients with assets under advice of £3.9 billion (H1 2014: £3.5 billion). Average revenue from new clients is lower than existing clients, as the focus on acquiring new clients earlier in their career is building longer term client relationships at lower initial fees. This affects short-term margins but will benefit future revenue growth. The significant increase in the FSCS levy, together with our continued investment in the business, has increased the cost base. As a result the adjusted operating profit for Saunderson House decreased by 11% to £2.7 million (H1 2014: £3.1 million). The delivery of the new client portal, and the launch of the Discretionary Fund Management offering, both in H2 2015, will improve client service and expand the client offering.

The Group operating profit from continuing businesses was £2.2 million in H1 2015, compared to £2.3 million in H1 2014. H1 2014 included a contribution of £0.4 million from IFG FS, which was sold in H2 2014. The FCA fees and FSCS levy (£1.1 million total cost v £0.3 million in H1 2014), fully expensed in H1 2015 due to accounting requirements, has materially impacted the H1 operating profit, but will not reoccur in H2. Operating profit is stated after charging exceptional costs of £1.4 million, which principally relate to the disposals made in 2014 and reflect the re-estimation of provisions for ongoing costs in those transactions as we close down legal structures, unwind regulatory permissions and deal with residual litigation. The current provision reflects our estimate of all residual costs to complete these transactions.

There are no changes to our assumptions on the amount of contingent consideration we expect to receive in relation to the sale transactions in 2014 and, therefore, we have not adjusted those numbers. The first tranche of contingent consideration becomes payable in Q4 2015.

The profit for the period attributable to the owners of the Company was £1.3 million compared to £0.7 million in H1 2014, an increase of 99%. Basic earnings per share was 1.26 pence compared to 0.64 pence in 2014, an increase of 97%.

Adjusted operating profit for H1 2015 was £4.4 million compared to £4.3 million in H1 2014, an increase of 2%. Adjusting for the contribution in H1 2014 of £0.4 million, from businesses disposed of in H2 2014, adjusted operating profits increased by more than 12%. James Hay profits increased by 26% to £3.8 million, Saunderson House reduced to £2.7 million versus £3.1 million in H1 2014 (reflecting the impact of the increased FSCS levy), and Group costs were consistent at £2.1 million.

GROUP PERFORMANCE

* 2014 comparatives for Independent wealth management include businesses disposed of in H2 2014

Adjusted earnings per share from continuing businesses (note 2) was 2.87 pence compared to 2.80 pence in 2014, an increase of 3%. The increased operating profit reflects the benefits of revenue growth and a focus on cost management, whilst continuing to invest in people, product and technology.

Platform - James Hay

Progress continues in James Hay, as the business transitions from being a SIPP-only provider to being a platform for retirement wealth planning. The MiPlan Product, launched in 2014, was a key component in the ability to execute the transactions with Capita and Towry and now underpins the majority of new client activity. We see continued UK Government led changes in the pension landscape. This is leading to increased demand from clients with larger pension funds, looking at investment and drawdown options in light of increased flexibility and the removal of the requirement to convert to annuities. Overall, we believe these changes are positive for James Hay, which is focused on the higher end of the retirement wealth planning market and offers full flexibility to clients and advisers to avail of the new pension freedoms.

In the first half of 2015, revenue increased by 13%, which reflects increased client numbers, changes to pricing made in 2015, and improved interest income. In addition to interest income, the components of revenue are annual fees, transaction charges and asset-based platform charges. The operating profit improvement is driven by the increase in revenue and a focus on cost management. Headcount in the business is at a similar level to 2014, demonstrating the ability of the business to absorb new business with improved marginal contribution. The second half of 2015 will see the benefits of the recent transactions and we expect to add upwards of 8,500 new clients, of which more than 5,000 have already been added, in H2 2015. 

At the end of June 2015, James Hay administered 45,613 SIPPs (H1 2014: 41,289) and served over 52,000 individual clients. The rate of new business acquisitions and attrition is shown below:

The launch of the innovative MiPlan in 2014 has broadened our product offering. Through a re-organised sales and servicing model, we offer advisers a high quality service, technical expertise, and competitive and innovative products whilst ensuring they and their clients experience the highest standards of administration, online access and expanded functionality across SIPPs, Individual Savings Accounts (ISAs) and General Investment Accounts (GIAs). 

Attrition has increased slightly as we seek to rationalise some lower margin legacy products. With new business momentum maintained, attrition remaining at low levels and our enhanced product offering including ISAs and GIAs, we believe we have the components necessary to continue the development of James Hay as a leading platform provider. We will continue to invest in our capability, focused on three key areas:

· investment in sales, marketing and distribution; we have appointed a new chief commercial officer in 2015;

· investment in operational efficiency and capability; absorbing growth in clients and assets within existing headcount; and

· investment in platform development; providing advisers and clients a broader range of services.

With this investment, increasing sales and further strategic alliances, we see a strong basis for continued growth. We expect to add more than 8,500 SIPPs in H2 (5,000 already added), with the benefit of the Capita and Towry transactions, together with organic sales. We will continue to monitor the competitive landscape for acquisition opportunities and strategic partnerships, which make operational, financial and regulatory sense.

Independent wealth management

Saunderson House revenues grew 7% versus H1 2014, with the benefit of client additions from 2014 increasing revenue run rates. New client additions of 166 in H1 2015 were 25% ahead of the same period in 2014 (H1 2014: 133) and more than the total clients added in all of 2013 (154). Saunderson House now has over 1,750 clients with average annual fee income of circa £15,000 per client, which is broadly in line with 2014, although average income on newer clients is less than historic averages. Attrition rates remain de minimis, reflecting the quality of service, depth of relationships and performance of the investment proposition.

The investment in people, and in particular in growing the number of client winning resources, has contributed to the positive trend in new client recruitment and is enhanced by a strong rate of referrals from existing clients. Simultaneously, the investment in marketing has raised the profile of Saunderson House and increased brand recognition. The business won numerous awards during the period including:

· best Complex Wealth Management Firm UK at the 2015 Wealth & Money Management Awards;

· best for HNWI Retirement Planning UK at the 2015 Wealth & Money Management Awards; and

· awarded the 'Investors in People' Silver Standard 2015

The investment in technology and products, the addition of further resources to the graduate programme, and significantly increasing regulatory fees and levies (all recognised in H1 due to accounting requirements) have resulted in a reduced contribution compared with H1 2014. Billable hours have been impacted, reflecting increased efforts on marketing and client winning activities. The development of Saunderson House's profile in adjacent markets will, we believe, contribute to a stronger growth trajectory in the medium and longer term. As the organisation matures, and newly qualified staff become more productive, we expect recovery rates, and therefore operating margin, to return to its long-term norm.

With seven client teams now fully functioning, the business continues to expand in its core market, whilst also focusing on adjacent markets. We believe there is substantial growth potential in Saunderson House. We will also selectively look at acquisition opportunities, where the cultural, financial and client dynamic fit with our existing model.

We continue to invest in people and technology, with a specific focus on streamlining the number of platforms used in the business. This will drive efficiency and scalability as well as an improved client experience through our online applications being launched in H2 2015.

Group/Other

Group costs principally relate to the Group executive directors, head office and central functions in Ireland, as well as the Group risk function in the UK which support both businesses as well as the Group governance and control agenda. Included in Group costs (note 14) are costs of key management personnel of £0.5 million.

GROUP FINANCING

*excludes cash of £1.1 million held in disposal group (December 2014: £0.7 million and June 2014: £1.8 million)

The business consumed cash in H1 due principally to the payment of dividends and 2014 bonuses. This reverses in H2, which has a lower dividend payment and no bonus payments. The business will generate cash in H2, and we expect the year-end cash position to be in excess of the cash position at December 2014.

Net finance cost

The net finance cost, for the six month period to 30 June 2015, is £nil (H1 2014: £0.2 million). The interest expense of £0.2 million (2014: £0.3 million) is offset by interest income of £0.2 million (2014: £0.1 million).

SHAREHOLDER RETURNS

A final dividend for 2014 of 2.73 pence per share was approved by the shareholders on the 12 May 2015 and was paid on 8 June 2015. The Board declares an interim dividend of 1.44 pence per share, which is an increase of 10% on 2014, and reflects the progressive dividend policy and momentum in earnings.

BOARD CHANGES

There have been no changes to the Board in the first half of the year.

OUTLOOK

The platform and high-end advisory markets continue to benefit from strong growth in an ever-changing regulatory landscape. Liberalisation of markets and client needs for flexibility, choice and service quality, provide excellent growth opportunities for our businesses. We are well placed to take advantage of these opportunities.

Our investments and strategic alliances will support further growth in revenues, assets, clients and profitability in H2 and into 2016. We will continue to focus on organic growth whilst exploring opportunities to accelerate growth through acquisition, should opportunities offer scope to leverage our capabilities.

We have further invested in senior management in our businesses, which is important to ensure we continue to execute and deliver our growth strategy, leverage the capabilities in our businesses and improve operating performance. We see continued momentum in profitability in H2, together with strong cash generation.

PRINCIPAL RISKS AND UNCERTAINTIES

The Transparency (Directive 2004/109/EC) Regulations 2007 require disclosure of the principal risks and uncertainties, which could have a material impact on the Group's performance over the remainder of the financial year. The risks and uncertainties affecting IFG Group plc in the six month period to 30 June 2015 are unchanged from those for the year ended 31 December 2014. The principal risks and uncertainties facing the Group are set out in detail in the 2014 Annual Report and Accounts at http://www.ifggroup.com/Libraries/Annual_Reports/IFG_Annual_Report_2014.sflb.ashx

The explanations, given in the 2014 Annual Report and Accounts, highlighted the following principal strategic and operational risks for IFG Group plc:

· environment and market conditions - risk that changes in macroeconomic factors may affect demand for the Group's services;

· competitor activity - exposure to increasing competition;

· acquisitions/disposals - risk that strategic acquisitions/disposals may not meet expectations;

· loss of key customers/intermediaries - risk of financial impact on the Group;

· loss of key management resources - ability to attract and retain highly skilled employees and executives is critical to the Group's continued success;

· customer claims experience - ability to contain level of loss arising from complaints from customers; and

· information technology systems - ability to avoid disruption to key information technology systems.

In addition, other risk areas such as regulatory, compliance and financial risks were highlighted in the 2014 Annual Report and Accounts and financial statements as follows:

· regulation and tax, including conduct considerations - risk of regulatory actions and fines;

· fraud - risk of fraud and cybercrime fraud;

· capital markets, interest rates and treasury - exposure to the unpredictability of financial markets; and

· credit risk - exposure to financial loss as a result of a default by customers or counterparties with which the Group transacts business, including in relation to contingent consideration on businesses sold.

Condensed Consolidated Income Statement

Six months ended 30 June 2015

Condensed Consolidated Statement of Other Comprehensive Income

Six months ended 30 June 2015

Condensed Consolidated Statement of Financial Position

As at 30 June 2015

Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2015

Cash and cash equivalents, for the purpose of the condensed consolidated statement of cash flows, are comprised of cash and short-term deposits net of bank overdrafts. They include the following:

Condensed Consolidated Statement of Changes in Equity

Notes to the condensed set of financial statements

1. General information

IFG Group plc provides a range of financial solutions including pension administration and independent financial advice. The Company is a public company, listed on the Irish and London Stock Exchanges and is incorporated and domiciled in the Republic of Ireland. The address of its registered office is The Oval, Shelbourne Road, Ballsbridge, Dublin 4, Ireland. This condensed set of financial statements (financial information) was approved for issue by the board of directors (the 'Directors'), on 26 August 2015. This financial information has been reviewed, not audited.

The half-yearly financial information is considered non-statutory financial statements for the purposes of the Companies Act 2014 and in compliance with section 340(4) of that Act we state that:

· the financial information for the half year to 30 June 2015 has been prepared to meet our obligation to do so under the listing rules of the main securities market of the Irish Stock Exchange and S.I. No. 277 of 2007;

· the financial information for the half year to 30 June 2015 does not constitute the statutory financial statements of the Company;

· the statutory financial statements for the financial year ended 31 December 2014 have been annexed to the annual return and filed with the Companies Registration Office in Ireland;

· the statutory auditors of the Company have made a report under section 193 Companies Act 1990; and

· the matters referred to in the statutory auditors' report were unqualified, and did not include a reference to any matters to which the statutory auditors drew attention by way of emphasis without qualifying the report.

2. Basis of preparation

This financial information, for the six months ended 30 June 2015, has been prepared in accordance with the Transparency Regulations 2007, the Transparency Rules of the Central Bank of Ireland and International Accounting Standard 34 'Interim Financial Reporting' as adopted by the EU. This financial information should be read in conjunction with the financial statements for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

The accounting policies applied are consistent with those used to prepare the financial statements for the year ended 31 December 2014.

Going concern

The Directors consider it appropriate to adopt the going concern basis of accounting in preparing the half-yearly financial information and have not identified any material uncertainties to the Group's ability to continue to do so over a period of at least twelve months from the date of approval of the half-yearly financial report.

In forming this view, the Directors have reviewed the Group's solvency and liquidity position by reviewing the budget for a period not less than 12 months, which takes into account the cash flow implications and includes a sensitivity analysis based on the key business risks identified by the Group. The Directors have also considered surplus cash available to the Group, the availability of credit facilities, the review of the Group's committed borrowing facilities and the forecasted banking covenants.

Having assessed the Group's plans and relevant business risks, the Directors believe that the Group is well placed to manage these risks successfully and have a reasonable expectation that the Company, and the Group as a whole, have adequate resources to continue in operational existence for the foreseeable future.

For these reasons, the Directors continue to adopt the going concern basis in preparing the condensed consolidated half-yearly financial report.

Adoption of IFRS and IFRS Interpretations Committee (IFRS IC) Interpretations

Except for IFRIC 21 'Levies', there are no new IFRS standards effective from 1 January 2015 that have a material effect on the condensed set of half-yearly financial statements.

IFRIC 21, which applies to levies charged by public authorities, requires the recognition in full of levies charged at the point the obligation to pay is triggered. As a result, the 2015/2016 FSCS levy, which was billed in July 2015 for the year commencing 1 April 2015, is required to be recognised in full in the half year 2015 results. The total expensed in the half year, including one quarter of the previous year's cost, is £1.1 million, compared to £0.3 million in H1 2014. This expense is treated as a normal operating expense but, due to its size and impact, is separately highlighted.

Critical accounting estimates and judgements

In the six months ended 30 June 2015, there were no significant changes to the Group's approach to, and method of, making critical accounting estimates and judgements compared to those disclosed in note 4 of the 2014 Annual Report and Accounts.

Use of non-GAAP measures

The Group has identified certain measures that it believes will assist in the understanding of the performance of the business. These measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted measures. These non-GAAP measures are not intended to be a substitute for, or superior to, any IFRS measures of performance but management have included them as they consider them to be important comparables and key measures used within the business for assessing performance.

The following are key non-GAAP measures identified by the Group and used in the Group financial statements and in the financial information presented herein.

Adjusted operating profit

Adjusted operating profit is defined as operating profit, excluding amortisation of acquisition related intangible assets, exceptional items and discontinued operations. Management believes that excluding exceptional items and discontinued operations from the calculation of operating profit, on a non-GAAP basis, is useful because management excludes items that are not comparable when measuring operating profitability, evaluating performance trends, and setting performance objectives. It allows investors to evaluate the Group's performance for different periods on a more comparable basis by excluding items that impact comparability.

The reconciliation of adjusted operating profit to profit before income tax has been disclosed in note 3.

Adjusted earnings and adjusted earnings per share

Adjusted earnings is defined as profit attributable to the owners of the parent Company before amortisation of acquisition related intangible assets, exceptional items, discontinued operations and unwinding of discount applicable to contingent consideration, net of tax where applicable.

Adjusted earnings per share is defined as the continuing basic earnings per ordinary share adjusted for amortisation of acquisition related intangible assets, exceptional items, discontinued operations and unwinding of discount applicable to contingent consideration, net of tax where applicable.

The table below shows a reconciliation from basic earnings per share to adjusted earnings per share and a reconciliation from profit attributable to owners of the parent Company to adjusted earnings.

The Group uses adjusted operating profit and adjusted earnings as measures of performance to eliminate the impact of items it does not consider indicative of ongoing operating performance.

Net cash/(debt)

Net cash/(debt) is calculated as cash and cash equivalents less total debt. Total debt includes loans and borrowings, overdrafts and obligations under finance leases. The Group believes that the presentation of net cash/(debt) provides useful information to investors because management reviews net cash/(debt) as part of the management of overall liquidity, financial flexibility, capital structure and leverage (note 10).

3. Segmental information

In line with the requirements of IFRS 8 'Operating segments', the Group has identified its Chief Operating Decision Maker (CODM). The Group has identified the Group chief executive as its CODM. The Group chief executive reviews the Group's internal reporting in order to assess the performance of the Group and allocate resources. The operating segments have been identified based on these reports and are as described in the interim management report.

At the start of 2014, the Group was managed from a largely geographic perspective based on two reporting segments: UK and Ireland. However, following the significant restructuring of the Group in 2014, including the sale of five businesses, the internal reporting of financial performance was amended to reflect the new structure of the business. As a result, it was decided that in the future the business performance should be reported in two segments: the Platform business, James Hay, and the Independent wealth management business, Saunderson House.

The Group chief executive assesses the performance of the segments based on a measure of adjusted operating profits. He reviews working capital and overall statement of financial position performance on a Group wide basis.

The Group earned its revenues in these segments by way of fees from the provision of services and commissions earned in the intermediation of financial services products.

The segment information provided to the Group chief executive for reportable segments, for the period ended 30 June 2015, is as follows:

The segment results, for the period ended 30 June 2014, have been re-presented to reflect the change in adjusted operating profit. The results are as follows:

4. Exceptional items

The Group's accounting policy defines exceptional items as those items of income and expense that the Group considers to be material and/or of such a nature that their separate disclosure is relevant to a better understanding of the Group's financial performance.

The exceptional items for the six month period to 30 June 2015 relates to the provision for ongoing costs for businesses sold in 2014, principally in relation to the sale of IFG FS. We have revised the estimate of all costs associated with unwinding the legal entity structure and associated regulatory and legal costs of IFG FS. The total loss, including the loss of £0.6 million in 2014, is £1.9 million, subject to any amendments to the contingent consideration.

In H1 2014, termination and restructuring costs principally related to the exit of the former Group chief executive, in April 2014, and costs associated with other senior staff departures.

5. Discontinued operations

Financial information relating to discontinued operations is set out below. The 2014 comparative includes the entirety of the Irish segment, the majority of which was disposed of in 2014. The 2015 numbers relate principally to the residual general insurance business, which was sold, subject to regulatory approval, on 24 July 2015.

6. Income tax expense

The charge for taxation for the six months to 30 June 2015 is based on the estimated effective rate of taxation for the year.

The tax charge of £0.8 million (2014: £1.0 million) represents an effective tax rate of 37.2% (2014: 48.3%). The effective tax rate is higher than both the UK and Irish statutory tax rates of 20.25% (2014: 21.5%) and 12.5%, respectively, mainly due to non-deductible expenses. We expect the tax charge to normalise over time, towards the UK effective corporate tax rate.

7. Dividends

A final dividend for 2014 of 2.73 pence per share was approved by the shareholders on 12 May 2015 and was paid on 8 June 2015. The Board has declared an interim dividend of 1.44 pence, a 10% increase on 2014.

8. Disposal group held for sale

The assets and liabilities related to the following entities were presented at the end of 2014 as held for sale, following the approval of the Board to sell the entities:

· ARB Underwriting Limited

· A.R. Brassington & Co Limited

· IFG McGivern Flynn Teoranta t/a Insure4Less

These businesses were sold on 24 July 2015, subject to regulatory approval, and will finalise in Q4 2015. This transaction will complete the Group's exit from its Irish businesses. We will maintain our headquarters in Ireland, as well as our current market listing arrangements.

The assets and liabilities of the disposal group held for sale are presented in note 5.

9. Cash generated/(used) in operations

10. Analysis of net cash/(debt)

Other movements

Other movements of £0.3 million include the impact of exchange rate movements of £0.2 million arising on balances denominated in currencies other than Sterling and the non-cash impact of unamortised borrowing transaction costs of £0.1 million.

11. Financial risk management and financial instruments

Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk and foreign currency risk), credit risk and liquidity risk.

The financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2014. There have been no changes in any risk management policies adopted by the Group.

Liquidity and capital resources

Compared to the year ended 31 December 2014, there was no material change in the contractual undiscounted cash outflows for financial liabilities. The Group has in place a £20.0 million facility with Barclays, with £7.0 million currently utilised. There have been no scheduled repayments of the new borrowings in the six month period to 30 June 2015. The next repayment of £7.0 million is due in November 2016.

Fair value estimation

All financial instruments, for which fair value is recognised or disclosed, are categorised within the fair value hierarchy (described as follows) based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities.

Level 2 - Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable).

Level 3 - Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable).

For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

At 30 June 2015, level 2 financial instruments at fair value were £0.2 million (31 December 2014: £nil). There was no change in the valuation method of financial instrument assets or liabilities, carried at fair value, during the six month period to 30 June 2015.

The fair value of the Group's financial assets and liabilities approximates their carrying amount.

12. Share capital and share premium

The number of share options exercised under the terms of the IFG 2000 and 2010 Share Option Plans, during the period ended 30 June 2015, were 423,000.

On 12 May 2015, at an EGM that followed the 2014 AGM, the shareholders of the Company voted to establish the IFG 2015 Share Option Plan.

13. Other statement of financial position items

Property, plant and equipment (PPE) and intangible assets

In the half year to 30 June 2015, the Group spent £2.3 million (H1 2014: £1.8 million) on PPE and intangible assets, including computer software to continue to enhance product capability and operational efficiency, in both businesses. The Group also charged amortisation and depreciation expense of £2.3 million (H1 2014: £1.9 million) in relation to continuing operations. Foreign exchange movement for these balances, in the period, was £nil.

At 30 June 2015, amounts authorised by the Directors as capital commitments, but not contracted for, were £4.4 million (31 December 2014: £6.6 million).

Trade and other receivables

The increase in trade and other receivables from £19.1 million as at 31 December 2014 to £22.0 million as at 30 June 2015 is mainly due to the movement of work in progress in the six month period.

Trade and other payables

The decrease in trade and other payables from £20.7 million as at 31 December 2014 to £17.2 million as at 30 June 2015 is due principally to the payment of 2014 bonuses in Q1 2015.

Other reserves

The other reserves balance increased by £0.6 million from £13.4 million as at 31 December 2014 to £14.0 million as at 30 June 2015. This movement is mainly attributable to the half year charge for share options of £0.1 million, the transfer of vested share based payments to retained earnings of £0.5 million and a £0.2 million loss on the translation of the non-sterling foreign operations and intangible assets.

14. Related party transactions

Key management personnel compensation

As per IAS 24 'Related party disclosures', the Group has defined the term 'key management personnel' as its Directors. In addition to their salaries, the Group also provides non-cash benefits to Directors and contributes to post-employment plans on behalf of certain Directors.

 Transactions and balances with joint ventures and associates

At 30 June 2015, a Group company was owed £0.4 million (H2 2014: £0.4 million) by Rayband Limited, an Irish unlisted company and an associate of the Group. This receivable is unsecured, interest free and has no fixed repayment date. Management have reviewed the recoverability of the balance and a provision for the full amount, made in 2013, remains appropriate.

Transactions involving entities in which key management have an interest

During the six month period to 30 June 2015, Group companies earned £22,000 (H1 2014: £19,000) from key management personnel for services provided. All fees were charged on an arm's length basis within our normal terms and conditions. At 30 June 2015, Group companies were owed £7,000 (H1 2014: £7,000). A Group company acts as a pension trustee in the normal course of its business for certain Directors.

During the six month period to 30 June 2015, Group companies earned £nil (H1 2014: £nil) from Peajmor Limited, a legal entity which Patrick Joseph Moran, a former Director, controls. Cara Ryan is also a director of this entity and has a beneficial interest of 5%. At the period ended 30 June 2015, Group companies were owed £50,000 (H1 2014: £50,000) for services provided to Peajmor Limited. This amount was provided for, in line with the treatment of other investors who received similar services as Peajmor Limited.

15. Commitments, contingencies and guarantees

Given the nature of the business, the Group has a number of claims against it. The Group has procedures in place to assess the veracity of the claims and provision has been made to cover its best estimate of the exposure in respect of these matters. No provisions have been recorded for other contingencies, as the Group's obligations under them are not probable and estimable.

The Company, along with some of its subsidiaries, has guaranteed Group borrowings of £7.0 million (December 2014: £7.0 million). There are pledges over certain shares in some subsidiary companies under the bank facility agreement.

The Company has provided rental guarantees, to landlords of Group occupied premises, totalling £1.1 million over the period to 2017 (H1 2014: £1.5 million).

16. Events after reporting period

The Group has sold its Irish general insurance business on 24 July 2015, subject to regulatory approval. The sale is expected to close in Q4 2015.

17. Statement of Directors' responsibilities

The Directors are responsible for preparing the half-yearly financial report in accordance with the transparency (directive 2004/109/EC) regulations 2007, the related transparency rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the EU.

The Directors are required to prepare the half-yearly financial report on a going concern basis unless it is not appropriate. Since the Directors are satisfied that the Group has the resources to continue in business for the foreseeable future, the financial information continues to be prepared on the going concern basis.

Each of the Directors, whose names and functions are outlined below, confirm that to the best of each persons' knowledge and belief:

· the half-yearly set of financial statements, comprising the condensed consolidated income statement, the condensed consolidated statement of other comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of cash flows, the condensed consolidated statement of changes in equity and the related notes, have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the EU; and

· the financial information includes a fair review of the information required by:

(a) regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period and any changes in the related party transactions described in the last Annual Report that could do so.

The names and functions of the Directors as of 30 June 2015 are listed below:

Colm Barrington - Non-Executive

Evelyn Bourke - Non-Executive

John Cotter - Group Finance Director

John Gallagher - Chairman

Paul McNamara - Group Chief Executive

David Paige - Non-Executive

Robin Phipps - Non-Executive

Peter Priestley - Non-Executive

Cara Ryan - Non-Executive

On behalf of the Board

P McNamara D Paige

Group Chief Executive Non-Executive Director

26 August 2015

Forward-looking statements

Certain statements in this report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no guarantee that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no commitment to update any forward-looking statements whether as a result of new information, future events or otherwise.

INDEPENDENT REVIEW REPORT TO IFG GROUP PLC

We have been engaged by the Company to review the Group condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprise the condensed consolidated income statement, condensed consolidated statement of other comprehensive income, consolidated condensed statement of financial position, consolidated condensed statement of cash flows, consolidated condensed statement of changes in equity and related notes 1 to 17. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Group condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the transparency (directive 2004/109/EC) regulations 2007 and the transparency rules of the Central Bank of Ireland.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Group condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union, the transparency (directive 2004/109/EC) regulations 2007 and the transparency rules of the Central Bank of Ireland.

Deloitte

Chartered Accountants

Dublin

26 August 2015