18 May 2009 07:00
IFG Group plc - Interim Management Statement
18th May 2009
IFG Group plc, the financial advice and administrative services firm, issues the following update covering its business year to date and expected performance in 2009.
Performance and outlook
Performance at group level is satisfactory year to date. Following four months of trading and cognisant of fluctuations in the value of sterling, we expect to meet full year 2009 market expectations of 18-20 cent adjusted earnings per share.
The international and UK businesses continue to perform well despite challenging trading conditions. Cash generation and working capital management are key priorities across all divisions.
Divisional update
The International division (2008: 61% of profits), which provides trustee and corporate services, is performing well in tough markets. Proposed changes to international tax rules are likely to increase business activity in well-regulated centres such as those in which we operate (e.g. Isle of Man, Jersey, Switzerland and Cyprus). In addition, changes in the competitive landscape are likely to present expansion opportunities for our business as others withdraw. Although our revenues are generated on a flat-fee and time-charge basis, as asset values have fallen over the past 18 months our clients have become more cost-sensitive with the inevitable pressure on fees. However, on balance the division is performing in line with our expectations.
Both businesses in the UK (2008: 34% of profits) enjoyed a solid start to the year. Our pensioneer trustee business, which specialises in the administration of bespoke personal pension plans, continues to grow its SIPP book at a rate which is at least in line with the market rate for this segment, with in excess of 100 net new SIPPs added per month. Within UK financial advisory, Saunderson House continues to benefit from its position as a purely independent fee-based IFA. While we expect recent fiscal changes in the UK budget to have a limited impact overall on the UK division, we are somewhat cautious in terms of our outlook for the remainder of the year given these changes and the challenging economic and market conditions.
Trading conditions are extremely difficult in Ireland, which now accounts for less than 5% of profits. We have fully integrated the two pension administration businesses acquired in the latter part of last year and we are making good progress in the corporate pensions market, particularly in winning new business. The focus in our property business continues to be on cost management and this has been achieved through greater use of technology as well as headcount reduction. We expect this business to be marginally loss-making in the first half of the year with breakeven point at operational level expected to be reached in the second half.
Financial Management
Our strategy of building diversified recurring revenue streams is proving resilient. High levels of repeat income coupled with tight cost management and low working capital needs translate into good internal cash generation. The focus for management continues to be on generating cash, reducing costs and ultimately paying down debt.
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