17 Nov 2016 07:00
IFG Group plc
Interim Management Statement -17th November 2016
IFG Group plc is a focused financial services group with full market listings in London and Dublin. The company provides a range of financial solutions through its subsidiaries, James Hay and Saunderson House. James Hay is a market leading UK retirement wealth planning platform and Saunderson House is an award winning independent financial adviser. IFG Group plc issues the following update covering its business from 1 January to 31 October 2016.
Highlights
· Overall the Group continues to perform in line with management expectations as outlined in our interim results statement for H1 2016.
· Total Assets under Administration and Advice have increased to £26.4bn, up 8% since 30 June 2016 (£24.4bn) and up 12% since December 2015 (£23.5bn).
· Assets under Administration in James Hay, as of October 31st increased to £21.9bn (December 2015 - £19.5bn), with net inflows of £1.4bn in the 10 months to 31 October. The growth in Assets under Administration has been achieved despite slower than projected growth in client numbers, reflecting the increase in case sizes together with additional contributions from existing clients. Client numbers are materially unchanged, with additions (8.0% annualised) and attrition (6.8% annualised) broadly offsetting.
· As indicated in our Interim Report the lowering of the UK base rate will impact James Hay revenue in H2 2016 by £1.5m.
· We are conducting a review of pricing for 2017 to ensure we continue to provide a safe and secure service for our clients, as well as an appropriate return for shareholders.
· Saunderson House continues to grow and now serves 1,945 clients, up from 1,809 in December 2015, with new client wins year to date of 182, and with attrition remaining at immaterial levels.
· Assets under Advice in Saunderson House are now £4.5bn, up from £4.0bn in December 2015.
· We continue to invest in both businesses, despite softer market conditions and short-term challenges to our revenue growth trajectory, to ensure we continue to improve the capabilities of both businesses and position them for long-term growth.
· The interim dividend of 1.60 pence per share will be paid on 25 November to shareholders on the register on 4 November.
John Cotter, Group Chief Executive, commented:
"The Group is on course to deliver a solid set of results. In aggregate, the Group is performing in line with 2015, with the quality of new business continuing to drive growth in Assets under Administration and Advice. Continuing market uncertainty, the impact of Brexit on client activity, and changes to interest rates are impacting the Group revenue growth trajectory. In particular, revenue growth has slowed in James Hay compared to 2015, and our continued investment in that business, together with the fall in interest rates, has lowered its profits compared to the prior year. Saunderson House continues to deliver meaningful growth in assets, clients, revenues and profits.
Our strategic focus remains unchanged. The Group is well positioned with two profitable businesses, each serving clients with distinctive propositions in attractive segments of markets with strong underlying fundamentals. As we move into 2017 we are looking to accelerate the implementation of our strategy and will continue to invest in both businesses to position the Group for future growth."
Enquiries:
John Cotter | Group Chief Executive | Tel: +353 (0)1 632 4800 |
Darren Byrne | Investor Relations | Tel: +353 (0)1 632 4800 |
James Hay
James Hay provides a platform for retirement wealth planning, underpinned by a specialist capability in pension administration. James Hay administers self-directed pension schemes for more than 55,000 clients, in addition to offering ISAs and general investment accounts in the Modular iPlan ("MiPlan"). As of 31 October 2016 it has £21.9bn in Assets under Administration (December 2015 - £19.5bn), with net inflows of £1.4bn in the 10-month period to October 2016.
James Hay has added more than 3,500 new clients in 2016, principally to the MiPlan product which has attracted new business due to its transparent pricing and flexibility. MiPlan, which was launched in 2013, now represents £8.6bn of the Assets under Administration across more than 23,000 clients.
As discussed in our Interim Report, we have increased investment in the operational and change capability of the business in 2016, which increased the cost base compared to 2015. We believe these investments are necessary to ensure continued improvement in the business, particularly focusing on our clients, to ensure James Hay provides a first class capability and compelling proposition.
Our growth focus will remain on the primary distribution channel of financial advisers, though we are seeing some growth in our direct offering, as clients take advantage of our digital capability to open new accounts on-line.
Saunderson House
Saunderson House offers award winning financial planning and investment advice with Assets under Advice, as of October 31st 2016, of £4.5bn (December 2015 - £4.0bn). It provides holistic financial and investment planning to high net-worth individuals and an investment proposition based on macroeconomic research, rigorous due diligence of fund managers and active asset allocation, with an emphasis on transparency of process. This investment approach continues to deliver excellent investment performance to clients.
Saunderson House has continued to attract new clients, whilst attrition remains at de-minimus levels. In the period from January to October 2016 we have added 182 new clients, and now have 1,945 clients (December 2015 - 1,809). Income per client remains in line with 2015, and revenues and profits are, as a result, meaningfully ahead of last year.
Whilst our primary focus will be on organic growth in both the advisory and discretionary offerings, we continue to monitor the competitive landscape for acquisition opportunities which fit with the culture and operating characteristics of Saunderson House.