Ifg Regulatory News (IFP)

IFG Group plc

Preliminary statement of results for the year ended 31 December 2014

Business Highlights

· Group restructured with sale of five businesses including the Irish pension and advisory business

· Business is now focussed on the UK wealth platform and high net worth advice markets, with strong growth momentum and an enhanced capital position

· Assets under advice and administration at year end up 9% to £20.1 billion compared to £18.5 billion at year end 2013

· James Hay achieved net inflows of £1.0 billion, up 67% year on year, with assets under administration now reaching £16.4 billion. New SIPP sales up 24% to 6,303 (2013: 5,071) driving a 9% increase in total schemes to 47,079 at year end (2013: 43,154)

· Saunderson House added 247 new clients, up 60% on 154 added in 2013. Revenue grew by 18% and assets under advice grew by 16% to £3.7 billion at year end (2013: £3.2 billion)

Financial Highlights

· Sale of businesses generated £19.8 million, including £7.3 million in contingent consideration

· Revenue from James Hay and Saunderson House combined increased 6% to £61.2 million (2013: £57.7 million)

· Adjusted operating profit from continuing businesses of £7.9 million compared to £9.2 million in 2013

· Profit before tax from continuing operations of £4.6 million (2013: £5.0 million)

· Adjusted EPS of 5.40 pence (2013 re-presented: 6.82 pence); basic EPS of 0.64 pence (2013 re-presented: 4.69 pence) with the decrease due to tax write-offs on restructuring

· Final dividend proposed of 2.73 pence per share, maintaining Sterling dividend pay-out

· Balance sheet strengthened with net cash of £22.7 million (2013: £17.0 million)

Commenting on the results Paul McNamara, CEO of IFG Group plc, said:

"2014 marked a fundamental transformation of IFG Group as we exited non-core businesses and continued to invest for growth in James Hay and Saunderson House. We are strongly positioned with two profitable businesses in attractive markets and a strong liquid balance sheet to support further growth and investment. Based on our award-winning propositions to customers and the delivery of business efficiencies, we expect 2015 to deliver meaningful growth in Group profitability."

 -ends-

Paul McNamara John Cotter Niamh Hore

Group CEO Group Finance Director Investor Relations & Corporate Development

IFG Group plc IFG Group plc IFG Group plc

Tel: 01 632 4800 Tel: 01 632 4800 Tel: 01 632 4800

Chairman's Statement

IFG Group plc ("IFG" or "the Group") is pleased to announce its results for the year ended 31 December 2014. 

IFG set out a plan for 2014 to divest non-core activities, to build a new management team and, in line with our clear strategic direction, to re-position the Group to focus on our two core UK businesses, James Hay and Saunderson House.

These objectives were achieved in 2014. The sales of IFG UK Financial Services in the UK, the Irish pension and advisory businesses and other smaller advisory and administration businesses in Ireland, France and Asia were completed. The proceeds from those sales have strengthened our balance sheet and provided financial flexibility for the Group. We have also changed the reporting structure so that our individual businesses are standalone and there is clarity as to the central Group function, which will be responsible for growth and identifying potential new opportunities. The Group now has a clearly defined structure and is focussed on our core markets in the UK.

The presentation of these results reflects the revised reporting structure. In our continuing businesses, assets under advice and administration have grown by 9% from £18.5 billion to £20.1 billion and revenue for the year increased 3% to £65.1 million, compared to £63.3 million in the prior year. Operating profit from continuing businesses for the year was £4.8 million compared to £5.4m in 2013, with short term profitability impacted by continued investment in building our core businesses, lower margins on new business and lower interest income in James Hay. After allowing for the effects of the divestments, including the materially higher effective tax rate that resulted, profit attributable to the owners of the parent company was £0.7 million in 2014 (2013: £4.9 million).

The Group delivered basic earnings per share of 0.64 pence in 2014 compared to 4.69 pence in 2013. On an adjusted basis, which better reflects the underlying performance of the core businesses, the earnings per share were 5.40 pence (2013 re-presented: 6.82 pence).

RETURNS TO SHAREHOLDERS

Following the restructuring of the Group in 2014, the Board has confirmed it will adopt a more progressive approach to dividends and will recommend dividends in Sterling, in line with the functional currency of the Group. The Board is recommending a final dividend of 2.73 pence per share. This final dividend, when added to the interim dividend of 1.31 pence paid on 28 November 2014, makes a total dividend of 4.04 pence per share. Shareholders may elect to receive dividends in a Euro equivalent.

Subject to Shareholder approval, the final dividend will be paid on 30 May 2015 to Shareholders on the register on 8 May 2015.

GROUP STRATEGY AND PROSPECTS

The Group is now redefined with two standalone businesses and with the central Group function clearly identified. This places the Group in a position for future growth and at the same time provides a clear line of sight to the underlying value of the two businesses James Hay and Saunderson House.

We have invested in James Hay to be a full service platform. It is now well positioned as a retirement planning specialist to support clients with a broader choice of investment options following the reforms to private pensions in the UK this year. Saunderson House continues to increase client numbers, reflecting the investment in the business, a relentless adherence to its core client-focussed principles and also its robust investment process for asset allocation recommendations. 

IFG Group is now in a position to further invest for growth in our chosen markets, positioning its two core businesses as market leaders. We have an experienced management team focussed on driving growth, with a strengthened balance sheet. I believe the Group will deliver medium and long-term growth and value following the significant restructuring in 2014. 

GOVERNANCE, MANAGEMENT AND STAFF

The Group has strengthened its executive management team, having appointed John Cotter as Group Finance Director in December 2013 and Paul McNamara as Group Chief Executive in July 2014, replacing Mark Bourke who left the Group in April 2014. The ongoing investment in people is supported by strong governance.

Gary Owens resigned from the Board on 28 August 2014. This was in line with the agreed sale of the Irish pension and advisory business to Willis Ireland. 

I would like to thank all of our people in IFG for their hard work and their commitment to our business and to clients, in a year of significant change for the Group and I look forward to continued growth and progress in 2015.

Strategic Report

GROUP STRATEGY AND BUSINESS MODEL

IFG Group plc is headquartered in Dublin with full market listings on the London and Irish stock exchanges. IFG's strategy is to develop a focussed market leading financial services firm, offering multi-class asset administration and Independent Financial Advisory (IFA) services. We are well positioned in attractive segments of the UK wealth management market. Our core businesses are James Hay, a full-service platform with a specialism in retirement planning, and Saunderson House, a provider of financial advice and investment planning services for high net worth clients. The Group has evolved in 2014, with a significant reorganisation of the business portfolio leading to sharper strategic focus on the two core businesses.

The sale of the Irish pension and advisory businesses to Willis Ireland for a consideration of £10.8 million (€13.5 million) was completed on 11 December 2014. The sale of the traditional UK IFA business, IFG UK Financial Services (IFGFS), to Ascot Lloyd Financial Services for a consideration of up to £8.0 million was completed on 8 September 2014. Additionally, we divested of Siddalls France (a French-based IFA) to Blevins Franks, One Network (an Irish broker) and IFG Asia (a Japanese-based IFA), to their respective management teams.

The contingent consideration is dependent on the future revenues of the businesses sold. We have recognised £5.3 million of the total of £7.3 million in the 2014 results.

These disposals have streamlined the Group, enhanced our capital position by converting goodwill to cash and delivered a group which is focussed on its core propositions, with growing and profitable businesses in attractive parts of the UK financial services market.

Following these disposals, it was determined that our financial reporting structure has two segments: our Platform business James Hay and our Independent wealth management business Saunderson House.

Operating independently, James Hay and Saunderson House are each recognised as market leaders in their chosen segments. Both businesses reflect the overall IFG proposition and are based on:

· long term relationships with clients and intermediaries;

· un-conflicted high quality advice and administrative services;

· growing recurring revenue streams; and

· scalable businesses, growing both organically and by acquisition.

Our strategy in James Hay is to expand and develop the business from being a focussed SIPP provider to being a full service platform with a broader capability in retirement wealth investment administration. From a position of financial strength, our growth strategy will be delivered through an enhanced product proposition, an efficient operating model and high quality service delivered by technology-enabled solutions. Our marketing and distribution resources adopt a segmented approach utilising key account management and relationship-based teams. Our focus will remain on financial advisers as the primary distribution channel. We remain accessible for direct to consumer business and continue to develop our technological capability to widen our target market and drive efficiencies. In 2015 we expect to rebuild profitability as the benefits of our investment programme take hold.

Saunderson House provides financial and investment planning to high net-worth individuals and an investment proposition based on macroeconomic research and active asset allocation, with an emphasis on transparency of process and pricing. Our strategy is to continue to grow the business by increasing the number of clients and the value of assets under advice. This is yielding results, with increased revenues and operating profit. We will build on this momentum through a combination of broadening our market offering, raising brand awareness and increasing the number of client-winning executives. The Group has a proven team-based operating model with best-in-class client service delivered by high quality professionals. Client service will be further enhanced through greater use of client-facing technology.

The Group has a robust process for the identification and management of risk across the business. We monitor four main risk areas: strategic risk, operational risk, regulatory risk and financial risk. See note 4 for a detailed review of the principal risks and uncertainties.

Operationally, the Group deploys a decentralised business model with strong management, functional capability and infrastructure within each core business. Strong central oversight is exercised by Group management. This structure facilitates effective performance management, strong governance, focussed strategy formulation and discrete capital and investment allocation.

BUSINESS OVERVIEW

The Group set out its strategic intent to simplify its structure following the sale of the International business segment in 2012. During 2014, we disposed of our IFG UK Financial Services and Irish pension and advisory business and a number of other non-core businesses and continued our investment in James Hay and Saunderson House. At the end of 2014, IFG Group is a simpler and more sharply focussed business.

The benefits from the disposals include the conversion of goodwill to cash, a more concentrated geographical presence and a sharper focus on the remaining businesses. In the short term, our financial performance has been impacted by investment in the ongoing businesses, lower interest income, lower margins on new products in James Hay and costs associated with the reorganisation of the Group, particularly on the tax line. The Group's remaining businesses are profitable, well-positioned for growth in attractive market segments and supported by a strong and liquid balance sheet. Our primary growth strategy remains organic, but we are open to selective acquisitions or strategic alliances which can accelerate and enhance the development of those businesses.

During 2014, James Hay and Saunderson House have both maintained their growth trajectory, increasing their client and asset bases. In James Hay, we added 6,303 new SIPPs in 2014 (2013: 5,071). Net inflows of assets of £1.0 billion were up 67% on the previous year. In Saunderson House, the number of new client wins of 247 represented an increase of 60% year on year and follows a 54% increase in 2013.

GROUP PERFORMANCE

Revenue from James Hay and Saunderson House, increased 6% to £61.2 million in 2014. Total revenue was £65.1 million, compared to £63.3 million in the prior year. The growth was driven by Saunderson House which recorded an 18% increase in revenue while James Hay's revenue was broadly consistent with 2013. Revenue of £3.9 million from IFG UK Financial Services and Siddalls France is included in reported continuing revenue to the point of sale, while a full year's contribution is included in 2013.

Operating profit of £4.8 million (2013: £5.4 million) was lower and impacted by a challenging environment for revenue and interest margins in James Hay as well as investments in people and technology, as we build sustainable and scalable businesses.

On an adjusted basis, which we believe more accurately reflects the performance of the Group, operating profit of £7.9 million compared to £9.2 million in 2013 (see note 5) and adjusted earnings were £5.7 million (2013 re-presented: £7.1 million). In 2014, the Group incurred exceptional charges of £1.4 million (2013: £2.0 million). These consist of restructuring costs associated with the divestments and termination costs related to senior staff departures, including the former Group CEO.

The release of the fair value provision on finalisation of the completion of the International segment disposal of £0.5 million and a small book loss on the sale of the Irish pension and advisory businesses, were recorded in the discontinued line. See note 8 for further details.

The tax charge in 2014, at a headline rate of 72%, is particularly high and relates to non-deductible restructuring costs associated with the divestments as well as the write-off of substantial deferred tax assets in the businesses sold. A more normalised tax rate, in line with the UK corporate tax rate, is expected going forward.

The loss after tax from discontinued operations was £0.5 million compared to a profit of £0.5 million in 2013.

Profit for the year was £0.8 million (2013: £5.0 million).

In 2014, the Group delivered basic earnings per share (EPS) of 0.64 pence which compares to a re-presented 4.69 pence in 2013. The costs of restructuring the Group, particularly the tax impact of divestments, impacted EPS. On an adjusted basis, EPS decreased to 5.40 pence compared to a re-presented 6.82 pence in the previous year.

The Group Balance Sheet has been strengthened by the disposals with increased cash, lower goodwill and an improved capital position.

Market overview

With ageing demographics, extended life expectancy, supportive fiscal incentives and increased consumer demands, the fundamentals of the UK wealth management and retirement planning market are favourable. However, change continues to be a feature. From a regulatory and legislative perspective, we see the drivers of change and their impact as follows:

The Retail Distribution Review ("RDR"): based on the principles of separation of advice, product manufacture/platform and investments, the RDR set about to remove commission bias, increase price transparency and raise the level of professionalism within the financial advisory industry. While other players have had to re-engineer their business models, the impact on our businesses was minimal. James Hay ensured its clients and their advisers were prepared for RDR by providing RDR-compliant products well in advance of the new regulation and continues to facilitate flexible and competitive charging structures. Saunderson House, a fee-based adviser, has always operated with transparency, independence and putting the client at the heart of the business.

Budget 2014 changes include:

· annuity reforms: removing the annuity compulsory purchase requirement will lead to a greater need for advice and flexibility;

· pension taxation: changes to taxation limits will require more proactive monitoring and advice;

· NISA regime: changes to limits and allowable assets will increase the attractiveness of NISAs which are increasingly being used for retirement planning.

Overall, we believe the changes are a positive development in terms of increasing market access and demand as well as providing greater flexibility to clients. Our investment in technology has strongly positioned the Group ahead of these impending changes to pension legislation in April 2015, and we are already fully prepared with those changes. As advisers and administrators, our objective remains to service our clients in a way that optimises their choices in wealth and retirement planning.

Other themes reflective of the ongoing change in wealth management markets include:

· a stronger code for conduct: end client interests and their outcomes must be at the forefront of business strategy;

· globalising capital markets: wealthy clients need access to global asset classes for diversification and performance;

· adoption of technology: change in hardware, software, information transmission, consumer devices and behaviours is accelerating fast;

· industry consolidation: industry players are seeking returns through scale and/or scope, and the consolidation of legacy products.

We have invested in our core businesses over the last few years mindful of these changes and believe our businesses are well positioned to benefit from changes in the competitive landscape.

With increased transparency and enhanced technology, consumer behaviour and attitudes to wealth management and retirement planning will change. However, the underlying demand for financial planning, investment management and asset administration continues to grow. Market forecasts predict an increase in assets on platforms to circa £900 billion by 2019. Through organic growth and, where appropriate, acquisitions, we plan to be a major participant in this growth.

Platform - James Hay Partnership

James Hay delivered £5.8 million adjusted operating profit (re-presented 2013: £8.0 million). The 2013 re-presented basis excludes the allocation of £1.2 million of central overheads, which is now included in Group/Other, and so reflects the underlying business performance.

The business has continued to evolve from being solely a SIPP provider to become a retirement wealth platform as evidenced by the launch of the new Modular iPlan in 2014. Despite volume and asset growth, revenue was marginally down on the previous year. This was due to a number of factors:

· Interest income: revenue includes interest margin earned on client funds held. A regulatory change affecting the rates which banks pay for deposits reduced revenue by £1.0m. While this had an industry-wide impact we have made changes to our banking arrangements which substantially mitigate any further near-term reductions.

· Timing lag of new business: following the initial setting-up of a new scheme, there is a timing delay until the scheme becomes fully fee generating.

· Modular approach: our fair and flexible modular approach to pricing means that customers only pay for the services they use when they use them. This has led to lower income on new schemes as more complex modules, such as property, experienced lower take-up. We continue to review our pricing model but believe transparent, unbundled pricing is in the best interests of the clients and is a competitive differentiator.

Adjusted operating profit has been impacted by continued investment in the business as we developed the infrastructure, digital capability, product range and distribution to support our strategy of becoming a full service platform provider. Headcount in the business increased by 8%, and we invested circa £4.0 million in platform developments as well as our digital capability and processes. The full year impact of prior year investments, particularly in people, also impacted current year financial performance. Whilst we will continue to invest in the business, the level of investment has peaked, as we near the end of a three year investment programme.

Growth momentum has been maintained with total new SIPP sales of 6,303 (2013: 5,071) including 878 from the Capita transaction. On a MiSIPP equivalent basis (recognising the diverse product and pricing range), total scheme numbers increased 12% with 4,951 equivalent MiSIPP versus 4,406 in the previous year. This improved profile of new business reflects our decision to balance the need for volume growth with focus on individual asset levels and margin management.

Attrition remains at historically low rates at 6% across the book and this combined with new business contributed to 9% net book growth (2013: 5%). Our objective is to accelerate the growth trajectory, maintain reduced attrition levels and focus on achieving good quality margin and average asset values. In 2014 net inflows were £1.0 billion, up 67% on the previous year, with assets under administration of £16.4 billion at the end of December 2014. This ranks James Hay as the 7th largest platform in the UK, according to Platforum's Q1 2015 Adviser Platform report.

Supported by our investment programme, the development of the James Hay proposition continued in 2014 with some key highlights below:

· Provision of a broader product range, beyond solely pensions to include Individual Savings Account (ISA) and General Investment Account (GIA) with the launch of Modular iPlan, a New ISA (NISA) and cash panel and development of an investment manager models proposition.

· Systems development and preparation for the April 2015 pension legislative changes. Our clients will be able to enjoy the full breadth of new pension freedoms from the start of the new tax year.

· Selected by Capita as their preferred partner to take over their SIPP books. Investment in automating our on-boarding capability will support similar opportunities in the future.

· 1,395 new funds added to the James Hay Investment Centre, bringing the total to 3,500. Research shows that investment choice is a key criteria for platform selection by IFAs.

· Increased digital capability and improved processes, including greater use of automation, to enhance the adviser/client experience and drive operational efficiency. For example, 40% of new applications are now accepted online with electronic signatures.

Key performance indicators

The Group uses a variety of performance measures which are detailed below in its review of our Platform business, James Hay.

Strategy

Having evolved from being solely a SIPP provider, our goal in James Hay is to build on our heritage as a complex pensions' administrator and develop our proposition and position as a market leading platform in the UK wealth management market. Our investment programme, which peaked in 2014, is delivering results and while we continue to advance our strategy, the fundamentals remain consistent with those already communicated with the primary areas of focus for investment and development in:

· distribution and marketing

- focus on key financial adviser relationships

- ensuring 'strategic fit' with James Hay Partnership

- targeted marketing and promotion of platform proposition

· efficiency

- streamlined processes

- enhanced automation

- extend online access

· platform development

- extend functionality and platform

- digital capability

- enhanced product offering

- direct to customer (D2C) capability

Future developments

2015 will be a year of significant change for the UK wealth management market, particularly in the pensions' arena. Having further developed our operational capability in 2014, James Hay is ready for the introduction of new pension changes such as the removal of compulsory annuity purchase, increased flexibility on drawdown and the transfer of pension assets across generations.

Overall, the changes represent an opportunity for our business with increased longevity predicted and increased client service expectations playing to the strengths of our service and product offering. We look forward to providing our clients and their advisers with the full breadth of new pension freedoms and flexibility on day one of the new rules taking effect.

Underpinning all of this is our modular product structure, a fair and flexible approach for clients. We believe that an unbundled approach is the fairest and most appropriate charging basis for clients both from a regulatory and competitive perspective.

In 2014 we expanded the product range to include non-pension specific tax wrappers and we intend to further promote products such as NISAs and GIAs as part of our wider marketing programme, raising the profile of James Hay as a full service platform.

Our marketing strategy will be more focussed on increased penetration of targeted advisers, including the development of key strategic partnerships. In doing so, we believe we will achieve increased sales of higher margin products.

To build and embed these relationships, we will continue to invest in our platform technology and operational capability while simultaneously driving efficiencies and lower unit servicing costs in the business.

The investments we have made in James Hay position it very well for sustainable growth in its core market. We see potential for accelerated organic growth but will also look at acquisitions and strategic alliances where we believe there is value-enhancing opportunities.

Awards

· Gold Service Rating from Money Marketing

· 5 star rating from Defaqto

· 'Excellent' rating for Platform Profitability from FinalytiQ

· Highly Commended from Investment Life & Pensions Moneyfacts awards

Independent wealth management

 Adjusted operating profit

Our independent wealth management business now consists solely of Saunderson House following the divestments of our IFG UK Financial Services and Siddalls France businesses. The sold businesses were included in the Group's financial performance up to the point of their disposal in Q3 2014 while the comparative period is on a full year basis. The disposed-of businesses delivered credible performances in 2014 and we wish our former colleagues and the new owners every success for the future.

Saunderson House

Saunderson House delivered a 13% increase in adjusted operating profit to £5.4 million (re-presented 2013: £4.8 million). The 2013 re-presented basis excludes an allocation of £1.1 million of central overheads, which is now included in Group/Other, and so reflects the underlying performance of the business. Revenue growth of 18% was achieved with a broadly stable operating margin of 22% notwithstanding further investment in the business.

The business is essentially activity-based around the number of new and existing clients. Our growth strategy, predicated on excellent client service and investment proposition coupled with focussed client recruitment, is yielding results with 247 new clients in 2014. This 60% increase year on year compares to 154 in 2013 and 100 in 2012. The positive momentum has been driven by:

· increasing the number of client-winners to 27 from 7 in 2011;

· referrals from existing clients;

· more focussed targeting of prospective clients in traditional core legal and accounting segments; and

· expansion into new/adjacent segments which exhibit similar characteristics to our core segments.

Client attrition remains at de minimus levels of less than 1%. With strong retention and positive new client recruitment, the client base has grown to over 1,600. Assets under advice have increased by 16% to £3.7 billion at the end of 2014 compared to £3.2 billion in 2013. The increase is evenly driven by new assets and investment returns.

Saunderson House's success is built on its team-based business model, first class advisory capability and an adherence to its core values of being client-centric. Its investment proposition is based on macroeconomic research and active asset allocation with an emphasis on transparency of process. We have continued to deliver benchmark-beating returns to our clients, outperforming comparative portfolios with lower levels of volatility. The continued success of the investment proposition and performance track record is a key competitive advantage.

With a strengthened management team and clear strategic direction, Saunderson House is delivering results. It continues to build on its achievements with some key highlights of 2014 below:

· top quartile investment performance over a 3 and 5 year timeframe. In 2014 Saunderson House became an associate member of Asset Risk Consultants Private Client Indices underlining the credibility of our investment proposition by providing authoritative, third party performance data for clients, prospects and peers;

· 60% growth in client wins to 247 bringing total clients to over 1,600;

· investment in technology to deliver a new online client proposition in 2015;

· development of a new discretionary management offering with a launch of a pilot programme in 2015;

· implementation of a focussed marketing strategy to drive increased brand recognition:

o Brand refresh successfully rolled out, enhanced marketing and on-line toolkit to assist business development.

o External communications have included high profile sponsorship such as the FT's Innovative Lawyer, top events such as the Global Law Summit and links with key business associations, such as the Management Consultancies Association.

o Formalising our corporate & social responsibility agenda with the setting up of a 'Make a difference' committee and partnering with the charity 'Action for Children'.

Key performance indicators

The Group uses a variety of performance measures, which are detailed below, in its review of independent wealth management.

Strategy

Saunderson House has a premium offering that is competitively and transparently priced and provided by qualified, trained advisers and investment professionals operating in a client-focussed culture. Our goal is to nurture these qualities while investing in the business so that it can achieve its growth ambitions. The growth strategy, as previously outlined, is focussed on expanding the client and asset base, which will increase profitability, and is supported by investment in three key areas:

· people

- strengthen business development capability

- achieve industry leading professional qualifications

- continuous talent development

· efficiency and client service

- develop digital capability in client reporting

- automate and streamline processes

- enhanced investment proposition

· marketing

- build corporate brand awareness

- demonstrate our capability through marketing initiatives and activities

- use all client contact to promote the proposition

Future development

The quality of our people is key to the delivery of a first class service to clients and sets Saunderson House apart from its competitors. Continuing to develop our people, maintaining our excellent investment process and proposition and enhancing the client experience will deliver continued growth for Saunderson House.

In 2015 we intend to deliver further enhancements to our operating capabilities and streamline processes and operations. This will include simplification and greater integration of the technologies and platforms that the business depends on to deliver its services to clients. We expect to launch an online client reporting portal later this year.

The Saunderson House investment process and proposition have delivered an impressive performance track record due to its research-driven approach to client asset allocation, backed by a rigorous and independent fund selection and review process. We believe this is a competitive differentiator which will be further enhanced by the development of a discretionary managed offering which will be progressively rolled out in 2015.

Our marketing strategy is focussed on our core and adjacent markets where significant potential for new client recruitment exists. While we have deep penetration in some of the top legal and accountancy firms, there is still substantial opportunity for growth in this space. We also see opportunity in adjacent markets where client characteristics are similar. The increased profile of Saunderson House will, we believe, support our initiatives in these adjacent markets.

The focus for Saunderson House is to continue to grow organically, however, we will continue to monitor opportunities for acquisitions or strategic alliances but only where there is a clear and compelling cultural fit with Saunderson House.

Awards

· Awarded the Gold Standard Award for independent financial advice

· Named best City Firm for Complex Wealth Management in the Wealth & Money Management Awards

· Won Adviser Firm of the Year 2014 at the Money Marketing Awards

· Won Best Advisory Service 2014 at the City of London Wealth Management Awards

· In 2014, 2013 and 2012, Saunderson House was a finalist at the Chartered Financial Planners of the Year Awards

· Named one of Top 25 IFA Companies by Private Client Practitioner for the last five years

Group/Other

Following the sale of the Irish pension and advisory businesses to Willis Ireland, the Group retains its majority 70% shareholding in ARB, an Irish general insurance business which provides agency underwriting, retail brokerage services and a low-cost online direct offering. We have been clear that this business is not part of our core strategy and we continue to explore opportunities to divest. Therefore the business is treated as discontinued and held for sale in the financial statements. The business performed well in 2014 and is profitable.

Group costs include costs associated with our Dublin head office, the Board of Directors and other costs associated with being a publicly listed company.

GROUP FINANCING

Group net cash/(debt) is summarised and compared to 2013 year end below.

*excludes cash held in disposal group

The Group is in a strong financial position with net cash of £22.7 million (excluding £0.7 million cash classified within the disposal group held for sale). During 2014 the businesses generated £5.9 million of operating cash flow which was utilised to fund finance and investing activities of £9.5 million. The businesses sold generated initial cash consideration of £8.6 million, net of costs.

The principal elements of finance and investments outgoings were tax, dividend payments, termination payments and platform related capital expenditure, predominantly in James Hay Partnership.

DIVIDEND

The Board is recommending a final dividend of 2.73 pence per share. This final dividend, when added to the interim dividend of 1.31 pence paid on 28 November 2014, makes a total of 4.04 pence per share.

The last few years have seen significant changes to the Group, notably in 2014. We have invested considerably in growing our capability, and positioning the Group for growth. Going forward, we expect to adopt a progressive dividend policy that will reflect the earnings and cash flow potential of the Group, as well as the Group's investment and capital requirements.

BOARD CHANGES

The former Group Chief Executive, Mark Bourke, left the Group in April 2014. He was replaced on an interim basis by John Cotter, Group Finance Director, until the appointment of Paul McNamara as Group Chief Executive on 29 July 2014.

Gary Owens resigned from the Board after the agreement was reached on 28 August 2014 for the sale of Irish pension and advisory business to Willis Ireland.

STAFF

The staff who work at IFG Group plc are key to its continued success. The gender of our staff at 31 December 2014 was as follows:

OUTLOOK

The Group is strongly positioned with profitable businesses in attractive markets and has a clear strategy to grow and develop its capability and offering. We continue to invest in the business in terms of technology and people, and the momentum being achieved, as a result of the investments we have made, will support continued growth of revenues and meaningful growth in Group profitability.

Consolidated Income Statement

Year Ended 31 December 2014

Consolidated Statement of Comprehensive Income

Year Ended 31 December 2014

Consolidated Balance Sheet

As at 31 December 2014

Consolidated Cash Flow Statement

Year Ended 31 December 2014

Consolidated Statement of Changes in Equity

Notes to the Group Financial Statements

1. General information

IFG Group plc provide a range of financial solutions including pension's administration and independent financial advice. The company is a public company, listed on the Irish and London Stock Exchanges and is incorporated and domiciled in the Republic of Ireland. The address of its registered office is The Oval, Shelbourne Road, Ballsbridge, Dublin 4, Ireland.

2. Basis of preparation

The consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), adopted by the European Union (EU) and in accordance with Irish law.

The financial information in this report has been prepared in accordance with the listing rules of the Irish Stock Exchange and in accordance with Group accounting policies. Full details of the accounting policies adopted by the Group are contained in the consolidated financial statements included in the company's annual report for the year ended 31 December 2013, which is available on the Group's website at www.ifggroup.com.

The accounting policies and methods of computation and presentation adopted in the preparation of the Group financial information are consistent with those described and applied in the annual report for the year ended 31 December 2013. No new standards, amendments or interpretations, which became effective in 2013, have had a material effect on the Group financial statements.

The financial information presented in this preliminary release does not constitute "full group accounts" under Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations, 1992. The preliminary release was approved by the Board of Directors. The annual report and accounts have also been approved by the Board of Directors and audited by the external auditors. The financial information has been extracted from the audited annual report and accounts. The full Group accounts will be laid before the AGM on 12 May 2015 and distributed to Shareholders in advance. They will be filed with the Irish Registrar of Companies following the AGM.

Full Group accounts for the year ended 31 December 2013 received an unqualified audit report and have been filed with the Irish Registrar of Companies.

Going concern

The Directors report that they have satisfied themselves that the Group is a going concern, having adequate resources to continue in operational existence for the foreseeable future.

In forming this view, the Directors have reviewed the Group's solvency and liquidity position by reviewing the 2015 budget, the medium term plans as set out in the strategic plan approved by the Board in December 2014 and have taken into account the cash flow implications of the plan, which include a sensitivity analysis based on the key business risks identified by the Group. They have also considered surplus cash available to the Group, the availability of credit facilities, the review of the Group's committed borrowing facilities and the forecasted banking covenants.

Having assessed the company's relevant business risks, the Directors believe that the Group is well-placed to manage these risks successfully and have a reasonable expectation that the company and the Group, as a whole, have adequate resources to continue in operational existence for the foreseeable future.

For these reasons, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

3. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

a) Goodwill impairment

In accordance with the accounting policy, the Group tests annually whether goodwill has been impaired. The recoverable amounts of groups of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of significant estimates with regards to discount rates, long term growth rates and the estimated cash flows for the four year period 2015 to 2018.

b) Non goodwill intangible assets

The estimated useful lives of intangibles are determined at acquisition date and reviewed at each balance sheet date. The estimated useful lives currently range from three to fifteen years. Intangibles are tested for impairment if impairment indicators are identified. In 2014, the amortisation charge was £3,011,000 (2013: £3,086,000). If, in 2014, the amortisation period was shortened by one year for all categories of intangibles, other than goodwill, it would have resulted in an additional continuing amortisation charge in the year of £613,000 (2013: £385,000).

c) Provision for impairment of trade and other receivables

Management reviews the recoverability of receivables taking into account objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. At 31 December 2014, a provision of £585,000 (2013: £809,000) was held.

d) Provision for legal and other claims

The financial statements include provisions to cover certain legal and other claims brought against some subsidiaries of the Group. The provisions recorded represent management's best estimate of the exposures based on information available at the time of the approval of the accounts. These estimates will, by definition, differ from the related actual outturn.

e) Working capital adjustment on International segment disposal

The terms of the International segment sale agreement provided for a working capital adjustment to the £70.0 million disposal consideration received based on a completion balance sheet. The valuation of the completion balance sheet has been agreed and settled as at the date of the approval of the financial statements. Residual risk under the terms of the sale remains until July 2015, and £0.4 million of the initial provision of £3.5 million has therefore been retained. This is management's best estimate of the adjustment that may be required in order to finalise the process with regards to the disposal of the segment. 

f) Exceptional Items

Management also exercise judgment in determining the revenue and expenses disclosed as exceptional items. Note 6 of the financial statements include a table outlining details of the items classified as exceptional for the current and prior year.

g) Deferred tax

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that future taxable profits will be available, against which the losses can be utilised. Judgement is required to determine the value of the deferred tax asset, based upon the timing and level of future taxable profits. The quality of these estimates is highly dependent upon management's ability to properly project future earnings from activities that may apply loss carry forward positions against future income taxes.

h) Contingent consideration

Certain disposals involve the receipt of contingent consideration. Such contingent consideration is usually based on the future revenue performance of the businesses sold. At the reporting date immediately after disposal, management make estimates of the likely amount of contingent consideration to be received based on the known performance of those businesses at the time of approving the financial statements, together with an estimate of the likely future performance of those businesses. The contingent consideration is then discounted using a rate applicable to the risk associated with the receivable and recognised in the profit and loss account and treated as an exceptional item or through the discontinued line. To the extent that in subsequent accounting periods the actual performance differs from the estimates, or estimates are revised based on more current information, any adjustment will be dealt with through the profit and loss account of the relevant period, and treated as an exceptional item or through the discontinued line, consistent with the original treatment of the relevant transaction.

4. Principal Risks and Uncertainties

The markets, in which the Group operates, may be affected by numerous factors, many of which are outside the Group's control and the impact of which cannot be accurately predicted. The Board is responsible for the Group's riskmanagement systems, which are designed to identify, manage and mitigate potential material risks to the achievementof the Group's strategic and business objectives.

In accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the Directors note that the principal risks and uncertainties facing the Group include the following areas:

5. Segmental information

In line with the requirements of IFRS 8, 'Operating segments', the Group has identified its CODM. The Group has identified the Group Chief Executive Officer (Group CEO) of the Company as its CODM. The Group CEO reviews the Group's internal reporting in order to assess the performance of the Group and allocate resources. The operating segments have been identified based on these reports.

At the start of the year, the Group CEO consideredthe business from a largely geographic perspective, based on two reporting segments: UK and Ireland. The segments were managed by Executive Directors who reported to the Group CEO and the Board of Directors. The Group CEO had responsibility for the UK segment. 

Following the significant restructuring of the Group in 2014 including the sale of five businesses, the internal reporting of financial performance was amended to reflect the new structure of the business. As a result, it was decided that in the future the business should be reported in two segments: the Platform business James Hay and the Independent wealth management business Saunderson House.

The Group CEO assesses the performance of the segments based on a measure of adjusted earnings. He reviews working capital and overall balance sheet performance on a Group wide basis.

The Group earns its revenues in these segments by way of fees from the provision of services and commissions earned in the intermediation of financial service products.

Goodwill is allocated to cash-generating units on a reporting segment level and that is the level at which it is assessed for impairment.

The information provided to the Group CEO for the reportable segments, for the year ended 31 December 2014,is as follows:

The re-presented 2013 comparatives, excluding discontinued operations, are as follows:

Breakdown of revenue by country of operation is as follows:

The home country of IFG Group plc is Ireland. The Group's continuing revenues are derived from the following countries:

Revenue in the table above has been allocated based on the country where the customer is located.

Analysis of revenue by category

During the year there were no revenues derived from a single customer that represent 10% or more of total revenues.

Analysis of total non-current assets at the year-end by geographical region

The total non-current assets (excluding deferred tax assets, available for sale assets), at the year-end split by geographical region are as follows:

6. Exceptional items

Exceptional items charged against operating profit

2014 Restructuring costs

During the year, £1.3 million of costs were incurred in relation to redundancy and termination related costs, of which £0.5 million related to the UK and £0.8 million related to Group/Other.

The prior year redundancy and restructuring costs were £0.9 million, of which £0.6 million related to the UK and £0.3 million related to Group/Other.

Loss on disposal of IFG UK Financial Services

On 12 March 2014, we announced the sale of our traditional UK IFA business (IFG UK Financial Services) to Ascot Lloyd Financial Services Ltd for an initial consideration of £2.5 million, which was paid on completion on 8 September 2014, and additional consideration of up to a maximum of £5.5 million in contingent consideration, dependent upon future revenue targets. See note 13.

Gain on disposal of Siddalls France

On 31 October 2014 the Group completed the sale of Siddalls France to Blevins Franks. The gain on this transaction was £0.5 million. See note 13.

2013

Provision against receivable from associate

In assessing the carrying value of a £1.1 million receivable due from Rayband (an associate of the Group) in 2013, management reassessed the value of the underlying assets, primarily land, owing to the land not being designated as development land as previously expected. This resulted in an impairment provision of £1.1 million against the full value of the receivable.

7. Income tax expense/(credit)

8. (Loss)/Profit from discontinued operations (net of income tax)

On 28 August 2014, the Board announced that it had signed an agreement for the sale of its Irish pension and advisory businesses to Willis Ireland for a maximum cash consideration of £10.8 million (€13.5 million) to be adjusted by a working capital adjustment on finalisation of the completion accounts. This transaction closed on 11 December 2014. £1.5 million (€2.0 million) of the consideration is deferred for two years. In the 2014 financial statements we have recognised £1.3 million (€1.6 million) of this consideration reflecting the contingent consideration discounted using a rate applicable to the risk associated with the receivable.

For the purpose of the financial information, management has classified the Irish segment as discontinued as it:

· represents a separate major line of business and geographical area of operations; and

· is part of a single co-ordinated plan to dispose of a separate major line of business and geographical area of operations.

The results of the Irish segment are presented in the financial information as discontinued operations. The Consolidated Income Statement distinguishes discontinued operations from continuing operations.

Financial information relating to the discontinued operations is set out below:

Income statement

Details on the loss on sale of the Irish segment

The loss on sale of the Irish segment has been calculated as follows:

Effect of disposal on the financial position of the Group

Release of working capital provision - International segment disposal 2012

During 2013, a settlement was made to AnaCap Financial Partners II LP as required by the completion accounts related deed. This was the final settlement with regards to the net asset delivery on the sale of the International segment. Management also released an amount of £1.4 million of the working capital provision in 2013 as the completion deed has been agreed and settled and therefore this component of the provision was no longer required.

During 2014 an additional £0.5 million has been released and is recorded in discontinued operations in the Consolidated Income Statement. The remaining provision is £0.4 million after further insurance costs of £0.2 million were paid as agreed as part of the sale agreement.

9. Earnings per ordinary share