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6 Nov 2009 07:00
IFG Group plc
Interim Management Statement
6th November 2009
IFG Group plc, the financial advice and administrative services group, issues the following update covering its business in the four months ended 31st October and year to date, and its expected performance in 2009.
Performance and outlook
Performance at group level is in line with expectations and we are confident of a satisfactory outcome for the current financial year.
Though economic conditions remain difficult, our two principal divisions, namely International and UK, continue to trade satisfactorily. Their resilience is testament to their business models and their robust recurring revenue streams.
Divisional update
Our International division (2008: 61% of profits), which provides trustee and corporate services, is performing well. Following a very strong first half performance, as expected operating profit in the second half of 2009 will be lower. Our flat-fee and time-charge revenue model has ensured revenue has held up well, however, fee pressure continues to be a feature. Additionally, we have incurred some increased cost as we invest for the future by strengthening teams, integrating businesses and improving efficiencies.
Our position as a transparent, high quality independent provider of trust and corporate services with multi-jurisdictional presence in well-regulated centres will allow us to exploit changes in the competitive landscape driven by increased regulation, transparency and supervision. In the short term we are encouraged by the level of new business take-on in recent months.
Against the backdrop of challenging market conditions, the UK division (2008: 34% of profits) is delivering a strong performance. We are particularly pleased with our pensioneer trustee business, which specialises in the administration of bespoke personal pension plans. Scheme numbers continue to grow at an average rate of circa 100 net new SIPPs per month (1,068 net new SIPPs to the end of September). Our fee-based IFA, Saunderson House, is delivering a solid performance with revenues and operating profit for the full year expected to be ahead of last year in local currency.
Over the medium term we remain confident of the expansion opportunities for our International division, pensioneer trustee and fee-based advisory businesses.
Trading conditions in Ireland remain very difficult. Our strategy of building an Irish business which mirrors that of our UK division is progressing well with solid performances from our Group Pensions and Individual Advisory businesses. The well-documented problems of the Irish mortgage market continue to weigh on our mortgage broking business. As indicated at the time of our interim results, we expect this business to be loss-making in the second half of 2009.
Financial Management
In managing our currency exposure, our objective is to minimise volatility and we currently achieve this through the use of forward rate agreements. We will review our hedging strategy towards the end of the year.
Cash generation and tight cost management, with a view to lowering debt, continue to be priorities for management. Having reported net debt of €49.3m at the half year stage, we are comfortable with analyst expectations of year end net debt in the range of low to mid €40 millions. As a cash generative business, we focus both on debt reduction and maintaining an appropriate dividend for our shareholders.
Ends
For further information please contact:
Mark Bourke Niamh Hore
Chief Executive Investor Relations Manager
IFG Group plc IFG Group plc
Tel +353 1 275 2800 Tel: +353 1 275 2866
IFG Group plc,
Booterstown Hall,
Booterstown,
Co Dublin.
www.ifggroup.com
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