Ifg Regulatory News (IFP)

IFG Group plc - Interim Management Statement

18 November 2011

Highlights:

·; James Hay Partnership new business initiatives underway with attrition better than planned

·; Total number of SIPPs under administration of 38,513 at end October 2011

·; Saunderson House new client wins to date ahead of prior full year (Dec 2010: 100)

·; IFG International impacted by difficult market conditions but annual fees proving resilient

·; Financial position further strengthened as net debt is expected to be in the mid-single digit millions (GBP) by year end (Dec 2010: £12.7m).

IFG Group plc, the financial advice and administrative services group and leading provider of bespoke SIPPs (self-invested personal pensions) issues the following update covering its business year to date. 

Group Performance

The Group is delivering a steady performance against the backdrop of difficult economic conditions. Driven by a strong first half and a marginally lower second half, (predominantly due to the International division), the Group is on track for the year as a whole.

Revenues have held up well demonstrating the resilience our recurring income streams and leading positions in our chosen market segments. Progress continues to be made on our net debt position and we expect net debt to be a mid-single digit GBP million amount by year end (December 2010: £12.7m).

Divisional Update

UK

Trading in the UK business segment (57% of 2010 profits) is good with operating profit year to date ahead of the equivalent prior year period in our two principal businesses, namely James Hay Partnership (Pensions Administration) and Saunderson House (Independent Financial Advisory).

Pensions Administration

The key priorities and progress within James Hay Partnership include:

·; SIPP Book Performance: increasing sales, marketing and distribution has entailed launching new competitive products, re-habilitating the James Hay brand and re-engaging with the IFA network through targeted marketing programmes.

o While the total number of SIPPs of 38,513 at end October is in line with expectations, the impact on new business volumes of the above initiatives has yet to be felt.

o Sales of new SIPPs to end October were 1,861.

o Compensating for this, the rate of attrition of 9.5% on the James Hay book is slightly better than expected. As disclosed previously the planned attrition level is 10% for the legacy James Hay book, of which 7% is driven by the more seasoned demographic client profile.

o Although increased interest margin was expected in the second half, the operating performance in the current year has offset the shortfall due to the continued low UK interest rate environment. It should, however, be noted that the outlook for a UK interest rate increase looks unlikely for the foreseeable future.

·; Service levels: having structurally changed our business model to a team-based approach to better service IFAs, client servicing and satisfaction levels have improved with recognition from industry bodies such as Defacqto (5* SIPP) and Moneyfacts Awards (2nd place, highly commended).

As widely reported, regulatory oversight within the SIPP industry has increased. In the medium term, we believe the increased regulatory burden is likely to drive industry consolidation. James Hay Partnership plans to be well-positioned should well-timed and priced opportunities present themselves.

Independent Financial Advisory

Saunderson House, our fee-based financial advisor continues to deliver an impressive performance with revenue and operating profit ahead of the equivalent prior period. New client wins year to date have exceeded the 100 new clients gained in full year 2010. As a pure fee-based advisor, the business generates revenue on a time-charge basis with targeted recovery rates of billable hours of greater than 80%. This has been achieved year to date. Saunderson House's proposition of conflict-free transparent financial advice resonates well with its target market (Legal and Accounting Professionals) and is well-placed given the introduction of the Retail Distribution Review in 2013.

International

The International business segment (43% of 2010 profits) which provides Trust and Corporate Services is operating in difficult market conditions and its performance is reflective of this. While annual administration fees and 'maintenance' revenues have supported revenue (together these components traditionally contribute c. 70% of the Division's revenue), client activity has remain subdued.

Business development efforts have focused on newer markets such as Emerging Markets, developing higher value-add solutions for professional intermediaries and marketing promotions. These initiatives are a necessary investment in the business for the longer term. While these initiatives are taking place, the Division has also targeted £0.5m of cost-savings in response to the lower client activity levels.

Ireland

Despite the economic challenges and uncertainty, our Corporate Pensions and Individual Advisory business has performed well in terms of client wins and profitability. Widening distribution and promotion of the proposition have gained traction.

The focus in the General Broking business remains on achieving neutral contribution as market conditions, capital constraints and minimal transactions curtail activity.

Financial Management

As always cash generation and cost management are priorities. Our Balance Sheet continues to strengthen, such that net debt is now negligible. We are expecting our net debt, in GBP millions, to be mid-single digit by year end. This financial strength gives us the scope to pursue our growth plans balanced with a progressive dividend policy. The interim dividend of 1.5 cent per share will be paid to qualifying shareholders on the register at the close of business on 2nd December 2011. Dividend warrants will be posted on 16th December 2011.

Ends.

For furtherinformation 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

Media enquiries:

FTI Consulting (formerly Financial Dynamics)

Ed Gascoigne-Pees / Laura Pope

Tel: +44 (0)20 7269 7132

IFG Group plc

Booterstown Hall

Booterstown

Co Dublin

www.ifggroup.com