Ifg Regulatory News (IFP)

IFG Group plc - Interim Management Statement

17 May 2013

Highlights:

·; James Hay Partnership - Q1 new sales up 125% on prior year

·; Net growth in SIPP numbers achieved with total number of SIPPs under administration of 37,848 at end March 2013 compared to 37,342 at December 2012

·; Saunderson House Q1 revenue and operating profit ahead of prior year; 43 new client wins

·; In Ireland, IFG Corporate Pensions shows continued growth - FUM at March 2013 of €810m v. Dec 2012 €725m

·; Strong financial position with surplus cash in excess of regulatory and working capital needs

IFG Group plc ("the Group"), one of the leading provider of SIPPs (self-invested personal pensions) and transparent fee based financial advice in the UK and Ireland issues the following update covering its business for the first quarter of 2013 unless otherwise stated. 

Group Performance

The Group continues to make progress driven by sound business fundamentals. Although our businesses are not directly exposed to investment market movements, an improvement in investor sentiment has led to more positive conditions for the wider UK wealth management market.

Trading Update

Pensions Administration

James Hay Partnership administers over 40,000 self-directed pension schemes in SIPPs, SSAS's (small self administered schemes) and Wraps with circa £14.5bn assets under administration.

Since completing our initial integration, post-acquisition of the James Hay business, our focus has been on building sales. In addition to yearly targets for new SIPPs we also had a minimum target of 250 new SIPPs per month (i.e. at that run rate new business exceeds the natural attrition on an annualised basis). This was achieved in October 2012 and has been sustained in every successive month thereafter.

At the end of March 2013, James Hay Partnership had 37,848 SIPPs under administration compared to 37,342 at the end of December 2012.

New SIPP sales in the quarter of 1,260 represent an increase of 125% on the prior year first quarter (Q1 2012: 560; Q4 2012: 848). While March is typically a busy month in the run up to the UK tax deadline, the momentum in new business trends continued in April with a further 483 SIPPs added. Our newly launched Modular iSIPP has proved to be very popular and it, together with continued improvements in the sales management process, has helped drive growth. Retention levels are running ahead of expected levels with attrition (partly a function of demographics) below the annual operating assumption of 10%pa.

Management continue to focus on distribution, sales and marketing initiatives along with the continued investment in and development of our IT infrastructure and offering. The arrival of Alastair Conway as CEO has brought new impetus to the business.

Independent Financial Advisory

Saunderson House continues to deliver a solid performance with Q1 revenue and operating profit ahead of the prior year period. As a pure fee-based advisor, Saunderson House generates revenue on a time-charged basis with targeted recovery rates of billable hours of greater than 80%. This has been achieved through the first quarter.

The team-based business model has proved to be robust with new client wins of 43 for the first three months (FY 2012: 100). Under the management of Tony Overy and his team, Saunderson House continues to win clients by offering excellent personal service, competitive fees and a best in class investment process and performance. We have plans underway to grow the business through people development and streamlining IT and operations.

With an open and transparent advice proposition in place for many years, the introduction of the Retail Distribution Review did not necessitate any fundamental change in the business model.

Ireland

Our core businesses in Ireland, namely IFG Corporate Pensions and IFG Private Clients are delivering a steady performance given the difficult market backdrop.

In Corporate Pensions we are achieving good growth in total funds under management and have secured 16 new client wins in the first quarter bringing the total numbers of schemes to over 500 with FUM at March 2013 of €810m v. Dec 2012 €725m. 

Financial Management

The Group is in a solid financial position. Cash generation and tight cost control continue to be priorities for management. Net cash at the half year stage is expected to be circa £20-£21m (Dec 2012: £20.6m) following the expected trend of a slight reduction in the first half with cash building in the second half. The Group has surplus cash in excess of its regulatory and working capital needs both currently and under proposed capital adequacy rules for SIPP providers.

With internally generated capital and an appropriate banking facility in place, we are well positioned to allocate capital to invest in and grow our businesses. Our uses of capital will be driven by the strategic rationale and the ability to generate and return shareholder value.

While the near term outlook for earnings growth is constrained by the effect of prior year attrition and the lag effect of new business in James Hay Partnership along with investment spend and the low profitability of our non-core businesses, we are confident of delivering growth in the medium term.

As stated previously, we will continue to invest in our core advisory and administration business. Our balance sheet strength, proven management team and recognised brands give us a unique opportunity to fulfil the potential of our business.

Ends.

For furtherinformation please contact:

Mark Bourke Niamh Hore

Chief Executive Investor Relations & Corporate Development

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