Ifg Regulatory News (IFP)

IFG Group plc

Preliminary statement of results for the year ended 31 December 2015

STRATEGIC FOCUS DELIVERING GROWTH

Business Highlights

· Completion of restructuring in 2015 has delivered a clearly focused and profitable Group

· Sole focus on UK wealth platform and high net worth advice markets, with strong growth momentum

· Total assets under administration and advice at year end up 17% to £23.5 billion (2014: £20.1billion)

· James Hay net flows of £3.1 billion (2014: £1.1 billion), with assets under administration up 19% to £19.5 billion (2014: £16.4 billion)

· New SIPPs up 92% to 12,084 (2014: 6,303) delivering a 20% increase in total SIPPs to 52,101 at year end (2014: 43,348)

· Saunderson House assets under advice grew by 8% to £4.0 billion at year end (2014: £3.7 billion)

· Saunderson House added 243 new clients (2014: 247), growing total clients served by 13% to 1,809 (2014: 1,608)

Financial Highlights

· Revenue from James Hay and Saunderson House combined increased 16% to £71.3 million

· Adjusted operating profit from continuing businesses increased 48% to £11.6 million

· Profit before tax from continuing operations increased 86% to £8.6 million (2014: £4.6 million)

· Adjusted EPS up 51% to 8.14 pence (2014: 5.40 pence); basic EPS of 6.01 pence (2014: 0.64 pence)

· Final dividend proposed of 3.00 pence per share, 2015 total dividend of 4.44 pence up 10% on 2014

· Balance sheet strengthened with net cash of £27.3 million (2014: £23.4 million)

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

"IFG has a very clear strategic focus, especially now the Group restructuring is complete. We have two quality businesses with distinctive propositions in markets where we see continued growth opportunities. We have the capability and resources to meet the evolving needs of our clients, to sustain profitable growth, and deliver long-term Shareholder value."

Contacts:

Paul McNamara John Cotter

Group Chief Executive Group Finance Director

IFG Group plc IFG Group plc

Tel: 01 632 4800 Tel: 01 632 4800

Extract from Chairman's Statement

FOCUSED GROUP WITH STRONG GOVERNANCE

STRATEGY AND PERFORMANCE

Having divested of non-core businesses in 2014, our focus in 2015 was to invest further in our two core UK businesses James Hay and Saunderson House, and to deliver long-term growth and value for Shareholders and customers. It is pleasing that in 2015 the management team, supported by the Board, delivered on this strategy: growing clients, assets, revenues and profits in both businesses. We also completed the sale of our remaining non-core business, the general insurance brokerage business, ARB, in December 2015.

The Group's clear strategic focus is delivering material improvement to both core businesses. Assets under administration and advice have grown by 17% from £20.1 billion to £23.5 billion, we added more than 12,000 clients in James Hay and increased the client base in Saunderson House by 13%. Revenue from the two businesses increased by 16% to £71.3 million, and Group adjusted operating profit increased by 48% from £7.9 million to £11.6 million.

Profit attributable to the Equity Shareholders of the parent Company was £6.3 million (2014: £0.7 million).

The Group delivered adjusted earnings per share of 8.14 pence (2014: 5.40 pence) and basic earnings per share of 6.01 pence (2014: 0.64 pence).

RETURNS TO SHAREHOLDERS

The Group adopted a progressive dividend policy in 2015, which is supported by the Group's strong balance sheet and cash position. In this regard, the Board is recommending a final dividend of 3.00 pence per share. This, when added to the interim dividend of 1.44 pence per share paid on 4 December 2015, would bring the total dividend to 4.44 pence. This represents a 10% increase in total dividend compared with last year's total dividend of 4.04 pence. If approved by the Shareholders, the final dividend will be paid on 20 June 2016 to Shareholders on the register on 27 May 2016.

GOVERNANCE AND OVERSIGHT

There were no changes to the Board during 2015. Conleth O'Reilly, Group Company Secretary, resigned in January 2016 and will be replaced by Lisa Rodriguez in April 2016. I would like to express my thanks to Conleth for his contribution to the Group during his tenure.

The Board reviews and monitors the Group level risks through our own work and the work of our committees, who carry out more detailed work, allowing the Board to focus on overall governance and strategic issues. The Board regularly considers how it operates and the appropriate composition of its members, both to respond to today's challenges and IFG's future strategic direction.

I have been focused on ensuring that we have a Board that is appropriately experienced for the complexity of our businesses, and that it provides necessary challenge to the executives and business management, engages with Shareholders, fosters an open and transparent relationship with regulators and sets the cultural tone for the business.

MANAGEMENT AND STAFF

On behalf of the Board, I would like to thank management and employees for their commitment and contribution to the strong improvement of the performance of the business reported for 2015.

OUTLOOK

IFG Group is well positioned with growing and increasingly profitable businesses with distinctive offerings in attractive markets, supported by a strong and liquid balance sheet. The markets in which we operate remain competitive and will see changing taxation and regulatory requirements which will need to be managed but, at the same time, will create opportunities. With strong management and a focused investment strategy we are well placed to continue to successfully develop our two businesses in the medium term.

Extract from Group Chief Executive's statement

DELIVERING OUR GROWTH STRATEGY

The Group's focused strategy is to invest in our people and technological capability to drive growth in our two key businesses and improve the service to our clients. This has delivered, in 2015, material growth in new clients, total assets under administration and advice, as well as increased revenues, profits and cash generation. The benefits of this focus on James Hay and Saunderson House following the restructuring in 2014, has translated into improvements to the quality of the Group's revenues, earnings, products and importantly, the service offering to our clients. The strength of our business is founded upon the strength of our relationships with clients and advisers, which is reinforced by the quality of the advice and service we offer. In a complex and highly regulated market, the quality of advice and client services is driven by our people and technology which continue to be the key to our success and ability to grow, develop, and create stakeholder value.

MARKET AND ENVIRONMENT

The markets in which we operate, UK high net worth platform and advisory services, are growing in line with economic recovery and structural changes, benefitting from increasing life expectancy and from our clients (actual and prospective) increasingly focusing on managing retirement assets in a more dynamic and integrated manner. Increasing life expectancy, growing freedoms in pension and savings opportunities and changes to tax allowances create a complex environment in which clients continue to seek advice to carefully plan and manage their wealth.

The Board and executive management pay special attention to ensuring that we develop and manage our businesses with the needs and expectations of our clients at the forefront of everything we do. Both of our businesses operate in highly regulated environments, where regulators are focused on conduct and client outcomes. We ensure we run and develop our businesses in a manner which provides our clients quality service and products, appropriately priced and appropriate to their needs and expectations. This in turn ensures we are positioned to remain compelling for clients and to continue our growth over the long term.

COMMENTARY ON KPIs

Results in 2014 were impacted, both financially and operationally, by the significant restructuring of the Group. In 2015 the picture is much clearer, both in the operating businesses and at Group level, with more clarity in the presentation of the results and the strategy.

We are pleased with the performance of the Group in 2015 which is discussed in detail in the Financial Review;

· Revenues in our two core businesses combined increased by 16%, from £61.2 million to £71.3 million.

· Adjusted operating profit increased by 48% from £7.9 million to £11.6 million.

· James Hay added more than 12,000 new clients, nearly doubling what was achieved in 2014, partly driven by two strategic arrangements which saw James Hay successfully assume client portfolios from other providers.

· Saunderson House increased its client base to 1,809, adding 243 new clients, which speaks to the quality of clients' service and the investment performance, which remains a key differentiator.

· The business delivered increased positive cash flow aided by strong working capital management. This cash flow is supporting continued investment in technology and people, as well as the progressive dividend policy implemented in 2015.

· We have continued to strengthen the management teams in our businesses and in the Group functions, which we believe is key to driving continued improvements in our businesses.

THE BUSINESSES

James Hay

James Hay continues to benefit from investment as it evolves from being a specialist SIPP provider to a platform for retirement wealth planning, offering a broader and more tailored client service, including on-line access and expanded investment choice. In 2015, the near-doubling in new SIPPs compared to 2014 was helped by the acquisition of 8,000 new SIPPs from Capita and Towry. We are pleased to see assets under administration and revenue increase by 19% with operating margin improvement resulting in adjusted operating profit increasing by 70%.

This growth was achieved with no overall increase in headcount in 2015, demonstrating the scalability of the platform. Our strategy to build deeper strategic relationships with key advisers, will be key to delivering consistency in organic growth. We also see further acquisition opportunities similar to the acquisition of books from Capita and Towry, as consolidation in this sector continues.

In 2015 we have substantially changed the executive team in James Hay under the leadership of Alastair Conway, welcoming a new finance director, chief operating officer, chief commercial officer and head of human resources. The team is committed to drive continued improvements in the quality of our customer service, the efficiency of our business model and the capability of our people and products.

Saunderson House

Saunderson House continues to grow, having attracted 243 new clients in 2015 and now serves over 1,800 clients. Attrition continues at de-minimus levels, reflecting the strength of our client relationships, the quality of the service offering and the continued out-performance of the investment proposition. We see clear opportunities to continue this growth.

Towards the end of 2015, the business launched a complementary discretionary management service, to meet additional needs of clients at both ends of the Saunderson House target market, at the high-end catering to clients who may wish to manage a portion of their portfolio on a discretionary basis, and, at the lower end, where the full advice offering may be less attractive in the initial stages of wealth accumulation. We see this complementing our current advice proposition and supporting our growth strategy in the coming years.

Whilst we continue to look at opportunities to grow this business inorganically, we will only do so where such opportunities are wholly consistent with our client focus and the values-led culture of our existing business.

PEOPLE

The quality of our people, both in Group functions and in our operating businesses, underpins our success and our future plans. Providing a culture and an environment to support and facilitate performance is a key priority for executive management. In 2015, we have brought more capability into our organisation, as well as developing and promoting talent from within. Our approach to employee reward and development recognises their contribution to our business, aligns senior management compensation and Shareholder interests and, importantly, ensures we support our staff in meeting the current and future needs of our clients.

I would like to thank all colleagues throughout the Group for their professionalism, their commitment to our clients and their contribution to our success in 2015.

LOOKING FORWARD

2015 marked the first year of the new more sharply focused IFG Group, the benefits of which have been seen in the strong performance of the business. We have achieved a great deal over the last two years, repositioning the Group and investing for future growth.

Our market segments remain highly competitive, the taxation and regulatory landscape in the pensions markets is changing rapidly and the service we provide to clients must continue to evolve. I am confident our strategy is robust to continue our growth, as we change and innovate to improve our service to clients whilst driving more efficient delivery of our products and services. Growing the non-SIPP components of our offering in James Hay will be fundamental to growing and transforming the business into a full service platform. Growing our discretionary offering in Saunderson House will similarly be important to meeting new client demand for more efficient and flexible product offerings.

We are investing in organic growth in both businesses, whilst remaining alert to acquisition opportunities, principally in James Hay, which will further accelerate our growth trajectory. We have potential and capability, a desire to support our existing and new clients to achieve their financial goals, and the scale and financial strength to deliver continued growth and increase stakeholder value.

Extract from Financial review

DELIVERING MEANINGFUL GROWTH IN PROFITABILITY

2015 represents the first results of the restructured Group. Following the complexities inherent in the 2014 results, due to the significant restructuring of the Group in that year, the 2015 results as presented more clearly articulate the underlying performance of the Group's two main businesses and the central costs of the Group.

We are pleased with the performance of the Group in 2015 in terms of operating profit growth, cash flow conversion and working capital management. The businesses are delivering strong cash flows to support ongoing investment in technology and people in the businesses, as well as the progressive dividend policy implemented in 2015. The improving operating margin in James Hay in particular, reflects the benefit of recent investment in the business, which positions it for continued growth and development.

The financial review provides an overview of the Group's financial performance for the year ended 31 December 2015 and of the Group's financial position at that date. The review of the Independent wealth management segment, focuses exclusively on the performance of Saunderson House, which was the sole business in that segment in 2015. Revenue and profits relating to the IFG FS business, which was sold in late 2014, are included in the comparative numbers on the statutory tables, but excluded from the commentary in the strategic reports.

REVIEW AND COMMENTARY OF THE RESULTS

· The results for 2015 show growth in the key metrics of revenue, profits, clients, assets under administration and advice and cash flow.

· Revenue in the two businesses grew by 16%, with Saunderson House maintaining its growth trajectory, and James Hay returning to meaningful revenue growth.

· Adjusted operating profit increased by 48%, reflecting an improved operating margin in James Hay in particular, with Saunderson House increasing in absolute terms with the margin maintained despite increased regulatory costs.

· Cash generated from operating businesses funded an increase in proposed dividends of 10% to 4.44 pence, together with the investment in technology and the acquisitions of books of business in James Hay.

· The balance sheet is strong and liquid, and underpins the viability statement.

REVENUE

*2014 Revenue for Independent wealth management includes £3.9 million in respect of IFG FS which was sold in 2014.

Revenue increased in 2015 from £65.1 million to £71.3 million, with James Hay increasing by £7.1 million to £43.8 million and Saunderson House increasing by £3.0 million to £27.5 million.

In James Hay the benefits of net client growth in 2013 and 2014 created an inflexion point, which together with the strong growth of new clients in 2015, and attrition remaining at 6%, drove the meaningful increase in revenues. The completion of the Towry and Capita transactions contributed to revenues and profitability, and some of the pricing changes implemented in 2015 have translated into revenue growth in H2 2015. Average revenue and assets per client are broadly unchanged, and improved usage of our trading platform is contributing to increased transactional revenue.

Saunderson House has also benefited from new client additions in 2014 with a full year's revenue from those clients in 2015, together with continued strong new client activity. Whilst average revenue from new clients in 2015 is below the revenue from more mature clients, the overall average income per client is broadly unchanged. Net of attrition, the number of clients grew from 1,608 in 2014 to 1,809 in 2015. Revenues in 2014 included £3.9 million from IFG Financial Services (IFG FS), which was sold in September 2014.

ADJUSTED OPERATING PROFIT

*2014 Operating profit comparative for Independent wealth management includes £0.5 million in respect of IFG FS which was sold in 2014.

Adjusted operating profit, before amortisation of intangibles and exceptional costs, increased by 48% to £11.6 million from £7.9 million. The benefits of prior period investment, particularly in James Hay, have improved the overall operating margin. In particular James Hay added over 8,700 clients (net of attrition) with a similar level of headcount to 2014, resulting in lower unit cost and improved operating contribution. Saunderson House profitability grew from £5.4 million to £5.9 million, with operating margin maintained, despite increased costs of regulation as well as increased investment in the technology capability of the business.

OPERATING PROFIT

Operating profit, after amortisation of intangibles and exceptional costs, increased by 76% to £8.5 million. Included in exceptional costs is a provision for £1.0 million in relation to costs associated with the sale of the IFG FS businesses in 2014. Amortisation of intangible assets principally relates to the James Hay business, including acquisition costs.

GROUP/OTHER

Group costs include costs associated with our Dublin and London based Group teams, the Board of Directors and other costs associated with being a publicly listed company. The increase in costs is principally related to staff costs including the expanded central risk function.

EXCEPTIONAL COSTS

Exceptional costs of £1.35 million relate to the sale of the IFG FS businesses in 2014. These costs related to regulatory, claims and legal costs, as well as costs of unwinding the legacy legal entity structure of the businesses that were sold.

TAX

The Group effective tax rate has reduced from the very high level in 2014, which principally resulted from the write-off of historic deferred tax assets which were no longer available following the restructuring of the Group. The effective tax rate in 2015 of 22% is principally the UK corporate tax rate of 20%, with adjustments for certain expenses which are not allowable for corporate tax purposes. There are now no material deferred tax balances, other than timing differences relating to the amortisation of intangible assets.

ADJUSTED EPS AND ADJUSTED EARNINGS

The Group uses adjusted operating profit and adjusted earnings as measures of performance to eliminate the impact of items it does not consider indicative of ongoing underlying performance due to their unusual, exceptional or non-recurring nature or because they result from an event of a similar nature.

The table above shows how we calculate adjusted EPS and adjusted earnings. The above amounts are net of tax, if applicable.

The business generated £13.8 million (2014: £8.1 million) from operations, reflecting profits generated offset by increased working capital requirements. In addition we received the first tranche of deferred consideration of £2.2 million from the 2014 sale of IFG FS, offset by cash disposed of as part of the ARB sale. The Group made corporate tax payments totalling £2.2 million. In addition there was an investment in technology of £2.8 million, as part of a total capital spend of £5.2 million. Finally the Group paid total dividends of £4.2 million, as compared to £4.1 million in the previous year.

The business will continue to generate cash to fund dividends and investment, though overall growth in cash may lag the growth in profits due to increased working capital requirements.

RETURN ON CAPITAL EMPLOYED

It is calculated as earnings before interest and tax divided by capital employed. It measures how efficiently the Group generates profits from its capital employed by comparing it to net operating profit.

The return on capital employed in 2015 was 9.9% versus 5.8% in 2014, reflecting the improvement in profitability in our underlying businesses.

FINANCIAL AND CAPITAL POSITION

The Statement of Financial Position remains highly liquid, with net cash increasing from £23.4 million to £27.3 million in the year. The Group also retains a £7.0 million drawn funding facility, which is now treated as a current liability, and an undrawn facility of £10.5 million, which expires in November 2016 and which will be reviewed during 2016. The Group is also due to receive contingent consideration relating to the sales of IFG FS and the Irish pension and advisory businesses of £3.0 million in late 2016.

The Pillar 1 capital resources requirement for the Group has been calculated in accordance with the Bank of England prudential regulations. The Group has regulatory capital resources of £40.5 million (2014: £47.6 million) compared to its Pillar 1 requirement of £5.7 million (2014: £7.9 million), a coverage ratio of over 7:1 (2014: 6:1). The Group has also assessed its Pillar 2 capital resource requirements and confirms that it has sufficient capital resources to meet these requirements for the foreseeable future.

FINANCIAL RISK MANAGEMENT

The Group's finance function oversees the management of the Group's exposure to exchange risk, credit risk, liquidity and interest rate risk, in line with defined policies and procedures. The Group does not trade in financial instruments, except as necessary to hedge foreign currency exposures. The Group does not enter into leveraged derivative transactions. The Group treasury function, under the management of the Group Financial Controller, manages the overall Group funding and liquidity requirements, working closely with the divisional finance teams.

The Group's financial reporting currency is Sterling, reflecting the primary economic environment in which the businesses operate. All of the Group's revenue is earned in Sterling, and the majority of its expenditure is incurred in Sterling. The Group incurs certain Euro denominated costs, principally related to its Irish headquarters. Annual budgeted Euro expenditure is materially hedged to Sterling.

SHARE PRICE AND MARKET CAPITALISATION

The Company's shares traded in a range of between 1.17 pence and 1.71 pence during the year. The share price at 31 December 2015 was 1.71 pence (31 December 2014: 1.18 pence), reflecting an increase of 45% in the year. The market capitalisation at 31 December 2015 was £180 million (2014: £124 million). There were 105,245,665 shares in issue at 31 December 2015.

Extract from operational review - James Hay

Highlights

- Revenue £43.8 million

- Adjusted operating profit £9.8 million

- Assets under administration £19.5 billion

- Total SIPPs 52,101

- Fully compliant with 2015 pension legislative changes

- Successful completion of Capita and Towry transactions

- Increased digital capability and improved processes

- 6th largest platform in the UK as measured by Platforum

Industry overview - platform

Retirement wealth planning in the UK underwent significant change in 2015, most notably through the introduction of new pensions freedom, which came into effect in April 2015. However, the biggest underlying drivers of change were changing customer demographics and technological development, which continued to influence our platform strategy during 2015.

The introduction of pensions freedom resulted in higher than usual levels of drawdown across the pensions market in Q2. Providers who had low average customer case sizes experienced particularly large increases in outflows. These outflows tapered off to more usual levels through Q3 and Q4 as the market normalised.

Improvements to technology and online services remained a prominent theme for the sector, with a number of platform providers announcing their plans to move to upgraded technology solutions and re-platform. Re-platforming will be expensive and create significant distraction for more established providers. We believe our proprietary systems, which are scalable and allow us to control our own development agenda, are an advantage in period of change and increasing advisor and customer demand for tailored solutions.

Changes to regulation and taxation have had a significant impact on the sector. This trend looks set to continue through 2016 and ongoing, with likely changes to taxation on pensions. In addition, the Chancellor announced he will cut the maximum lifetime pension allowance from £1.25 million to £1.0 million in April 2016. This reduction will create a slight drag on new pension contribution levels from the small number of individuals who have existing pension savings close to that level. We see this as an opportunity to facilitate efficient pension pot consolidation, which will continue to be the principal driver of demand in our space.

In addition, from April 2016 the advice and platform market has had to contend with the impact of the Sunset Clause in the Retail Distribution Review, which will see the end of all trail commission. James Hay is not directly affected by these changes, however, platform industry commentators believe there are still significant assets to convert for some traditional fund supermarkets, with new, more keenly priced platforms well positioned to gain from assets being converted. The impact of Sunset has seen advisory firms look to new, more efficient models and propositions to service lower value clients.

With the outputs of the Financial Advice Markets Review expected in 2016 this could see the increase of 'Robo Advice' providing access for many customers who have been disenfranchised post the Retail Distribution Review. This will create a significant opportunity for both advisory firms and platforms to develop more efficient and low cost propositions.

Goal

The goal is to grow a successful and profitable business by supporting advisers and delivering value to clients as they navigate their way through pre-retirement and during retirement. The platform facilitates this by enabling clients to manage their retirement wealth safely and securely via an easy-to-use digital interface.

Business strategy

Our focus continues to be on creating a digital platform for the future and, in response to adviser and client demand, developing a range of new online services and investment options, which will come on stream throughout 2016 and into 2017. Our product offering will also evolve to recognise the differing levels of demand for service and complexity, including the development of varied propositions, reflecting clients' needs and expectations.

James Hay is in the early stages of its evolution from being a complex SIPP provider to becoming a full service platform for retirement assets. In light of ongoing market changes, developing and growing our Individual Savings Accounts ('ISA') and General Investment Accounts ('GIA') will underpin future growth of assets from existing clients and our ability to attract new clients.

Offering multiple products with tax efficient wrappers gives clients the choice and flexibility when planning how to draw income in retirement. James Hay will continue to develop the products available to clients and a good example of this is an initiative to improving our current capital gains tax reporting solutions.

The strategic focus remains on enhancing customer service and increasing efficiency, while making better use of digital and self-serve capability, which will increase scalability and improve customer experience and flexibility as they journey through their retirement wealth planning cycle.

Building on the technical hub website, which was launched in Q3 2015, further adviser support has been provided through the platform's popular technical seminars and webinars. Throughout the year, 866 advisers attended 30 events throughout the country, with more than 1,500 advisers dialling in to 300 webinars.

Business Review

2015 was a year of strong growth in clients and assets, driven by two important acquisitions of books from Towry and Capita. Organic growth was maintained at a similar level to 2014 and we see the distribution strategy to focus on building key large Independent Financial Advisor relationships underpinning future growth of pension and non-pension assets.

The continued government led changes have increased demand from clients with larger pension funds looking at flexible investment and drawdown options. James Hay was one of the first providers to be fully ready for the new pension rules, offering online income management solutions from day one.

PERFORMANCE

· Assets under administration up to £19.5 billion at the end of 2015, with growth of 19%

· Total flows for 2015 were circa £3.5 billion gross

· Total net flows were £3.1 billion

· Total new SIPP cases of 12,084 added during the year

· Stable attrition levels of 6.0%

At the end of December 2015, James Hay administered 52,101 SIPPs (H2 2014: 43,348) and served over 56,000 individual clients with SIPPs, ISAs, GIAs, Wraps and SSASs. The rate of new business acquisitions and attrition is shown below:

KEY ACHIEVEMENTS

· Record annual growth levels in assets and client numbers

· During Q3 2015 James Hay was the fastest growing platform in the UK

· James Hay became the 6th largest platform in the UK

· Launched full Pensions Flexibility successfully

· New key strategic partnerships established (Capita and Towry)

· Launched new Managed Portfolio Panel offering on-platform Discretionary Fund Management services

· Significantly strengthened senior Executive team

· Accreditations: information security ISO 27001 and BS10008 eDoc management

· 5 star rating for modular iSIPP and wrap SIPP (for SIPP and Platform SIPP)

Investment in our People

Professional development continues to be a core element of our plans in James Hay. Many of our employees embark on professional qualifications to further their knowledge and careers within the company. During the year, 58 of our employees have studied for professional exams across a range of pertinent areas of professional expertise.

This is an area which we will continue to invest in and focus on as it is a key driver of providing high quality support to our advisers and customers.

Extract from operational review - Saunderson House

Highlights

- Revenue £27.5 million

- Adjusted operating profit £5.9 million

- Assets under advice £4.0 billion

- 13% growth in clients bringing total clients to over 1,800

- Development of a new discretionary management offering with a launch of a pilot programme in 2015

- Formalising our corporate and social responsibility agenda with the setting up of a 'Make a Difference' committee and partnering with the charity 'Action for Children'

Industry overview - independent wealth management

Economic, demographic, political and taxation trends contribute to a favourable outlook for wealth management firms. Current low interest rates mean that investors seek improved returns from investment markets. Increased access to and flexibility with pensions, greater responsibility on individuals to plan for their financial future and changing legislation around pension contribution and lifetime allowance limits are all increasing the opportunity for wealth managers to support their clients' financial aspirations.

The relative outlook for Saunderson House's client base, city-based professionals, is positive, as the number of high net worth individuals within the capital is forecast to continue rising, as London's leading professional firms maintain profitable growth.

The growing consumer, as well as tax and regulatory emphasis on transparency play to Saunderson House's un-conflicted and straightforward approach to managing wealth. As with the Retail Distribution Review in 2012, we are well positioned in relation to impending regulatory changes from the Market in Financial Instruments Directive ('MiFID') II. Saunderson House continues to respond to demand for improved access to financial information through its launch of 'Saunderson House Online' which will facilitate direct on-line client access to portfolio valuation and analysis.

Although competitor intensity has been heightened by the impact of guided investment propositions from both new entrants and extensions to existing platform product lines, much of this service commoditisation is taking place within the mass-affluent consumer space. Saunderson House's focus on providing a tailored, relationship driven service to individuals with complex financial arrangements remains highly sought after by our clients.

Goal

Our goal is to grow and develop the Saunderson House business founded upon our award winning, value-based investment proposition, and to be recognised by the industry for delivering a superior client service experience.

Clients are at the heart of everything Saunderson House do, and ensuring we offer flexibility in service levels to suit individual clients' needs, remains a priority.

Traditionally our clients have come from the professional services sectors, principally law and accountancy but as we have grown we have broadened our market penetration, and importantly in 2015, our product offering, to now include a discretionary management service.

Business strategy

The success of Saunderson House is founded upon building long and trusted relationships with our clients.

We operate a transparent time-based charging structure for our core advisory proposition thus revenue is earned from chargeable hours undertaken on behalf of clients. Our strategy is to:

· Look after our existing clients by continuing to provide excellent advice and financial management services;

· attract new advisory clients from existing and new markets through referral, targeted marketing and business development initiatives;

· develop our discretionary management service and attract increased clients to this offering, making it a material component of our business over time;

· continue to develop and grow our Chartered Financial Planner base to maintain high quality advice; and

· extend and evolve the scope of our service offering to ensure we remain relevant to clients within our chosen markets.

Business review

2015 was a year of continued growth and development in Saunderson House, increasing the client base from 1,608 to 1,809, maintaining excellent investment performance and launching the new discretionary management service. This service will allow Saunderson House to cater for certain clients who want part or all of their wealth to be managed on a discretionary basis, gaining access to strong investment performance without the necessity to use all of the bespoke services which Saunderson House offers. Organic growth was in line with 2014 with 243 new clients, whilst attrition remained at de-minimus levels, reflecting the strength of relationships which Saunderson House has with its clients.

The macro economic environment and the changing pension and taxation regimes in the UK mean the need for high-quality un-conflicted advice allied to strong investment performance is in increasing demand.

We invest in our people, processes and investment proposition to maintain a culture of continuous improvement. Our efforts have been recognised by numerous accolades including the award for Independent Financial Advice at the Gold Standard Awards 2015 and obtaining ISO 22301 accreditation in 2016. This is the second consecutive year that the firm has been honoured with the Gold Standard award.

PERFORMANCE

· Assets under advice up to £4.0 billion at the end of 2015, from £3.7 billion in 2014;

· 243 new clients joined Saunderson House (2014: 247);

· total clients increased from 1,608 to 1,809;

· revenue increased from £24.5 million to £27.5 million, an increase of 12%;

· profits increased from £5.4 million to £5.9 million, an increase of 10%; and

· operating margin maintained despite increased regulatory fees.

Saunderson House grew clients, assets, revenues and profits in 2015, and maintained its operating margin despite increased regulatory fees and increased investment in the product and technology capability of the business. The billable hours chargeable to clients fell from 86% to 82% as the investment in new resources was in excess of time fully chargeable to clients. We continued to invest in our people, with increased staff numbers focused on serving clients directly. We also invested in our systems and support personnel to ensure we retain a first class scalable business, serving clients as before but with increased capability.

KEY ACHIEVEMENTS

· Launch of discretionary management offering, increasing our capability to support clients;

· maintaining out-performance in our investment proposition in challenging markets; and

· expanding our existing offering into adjacent markets, attracting clients from referrals and from our enhanced reputation for client service and investment performance.

INVESTMENT PROPOSITION

Over the last decade, our Wealth Accumulation Balanced Model has delivered in excess of 106% growth, outperforming the appropriate ARC comparator by over 20%. In monetary terms, based on a starting portfolio value of £1.0 million, this equates to more than £0.2 million of additional value when compared with the ARC peer group.

Furthermore, our model has outperformed inflation by almost 80%. Performance has come close to matching that of the FTSE All Share index despite having an average equity allocation over the 10 years of just 58%, and therefore suffering much less volatility. These results have been achieved by strict adherence to our straightforward and transparent process.

Investment in our People

We maintain a strong focus on the quality of our people and require rigorous professional standards from all our people. We support this through structured learning, personal development and soft-skills training.

As of December 2015, we have a total of 50 Chartered individuals (45 Chartered Financial Planners and 5 Chartered Financial Analysts). We have also grown our business developers, with numbers rising from seven in 2012 to 30 by the end of 2015. Our intention is to develop advisers with the potential to contribute to sustainable business growth. We develop this talent through coaching and business development skills training that aims to maximise their effectiveness in attracting and keeping clients. In March 2015, our efforts to ensure staff involvement were recognised by our award for Investors in People Silver Standard.

Consolidated Income Statement

Year ended 31 December 2015

Consolidated Statement of Other Comprehensive Income

Year ended 31 December 2015

Consolidated Statement of Financial Position

Year ended 31 December 2015

Consolidated Statement of Cash Flows

Year ended 31 December 2015

Consolidated Statement of Changes in Equity

Notes to the Group financial statements

1. General information

IFG Group plc ("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 Group provides a range of financial solutions including pension administration and independent financial advice. The address of its registered office is The Oval, Shelbourne Road, Ballsbridge, Dublin 4, Ireland.

These consolidated financial statements are presented in Sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

2. Basis of preparation

The Group financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS), IFRIC interpretations and those parts of the Companies Act 2014 applicable to companies reporting under IFRS.

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 2014, 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 2014. No new standards, amendments or interpretations, which became effective in 2015, 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 with an unqualified report from 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 11 May 2016 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 2014 received an unqualified audit report and have been filed with the Irish Registrar of Companies.

USE OF NON-IFRS MEASURES IN THE GROUP FINANCIAL STATEMENTS

The Group has identified certain measures that it believes will assist in the understanding of the performance of the business. These measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted measures. These non-IFRS measures are not intended to be a substitute for, or superior to, any IFRS measures of performance but management have included them as they consider them to be important comparables and key measures used within the business for assessing performance.

The following are key non-IFRS measures identified by the Group and used in the Group financial statements and in the financial information presented herein.

Adjusted operating profit

Adjusted operating profit is defined as operating profit, excluding acquisition related amortisation, exceptional items and discontinued operations. Management believes excluding acquisition related amortisation expense, exceptional items and discontinued operations from the calculation of operating profit, on a non-IFRS basis, is useful because management excludes items that are not comparable when measuring operating profitability, evaluating performance trends, and setting performance objectives. It allows investors to evaluate the Group's performance for different periods on a more comparable basis by excluding items that impact comparability.

Adjusted earnings and adjusted earnings per share

Adjusted earnings is defined as profit attributable to owners of the parent company before amortisation of acquisition related intangible assets, exceptional items, discontinued operations and unwinding of discount applicable to contingent consideration, net of tax where applicable.

Adjusted earnings per share ("EPS") is defined as the continuing basic earnings per ordinary share adjusted for amortisation of acquisition related intangible assets, exceptional items, discontinued operations and unwinding of discount applicable to contingent consideration, net of tax where applicable.

The Group uses adjusted operating profit, adjusted earnings and adjusted earnings per share as measures of performance to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, exceptional, or non-recurring nature or because they result from an event of a similar nature.

3. Segmental information

In line with the requirements of IFRS 8, 'Operating segments', the Group has identified its Chief Operating Decision Maker ('CODM'). The Group has identified the Group Chief Executive of the Company as its CODM. The Group Chief Executive 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.

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. Throughout the year, the Group Chief Executive considered the business line perspective, based on two reporting segments: Platform and independent wealth management. The segments were managed by senior executives who reported to the Group Chief Executive and the Board of Directors. These segments are described in the extracts from the Group Chief Executive statement, Financial review and the operational reviews. Further information on these segments will be contained in the strategic report in the 2015 Annual Report.

The Group Chief Executive 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 but also received reports on all measures at an individual business level.

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.

Income tax is managed on a centralised basis and therefore the item is not allocated between operating segments for the purpose of presenting information to the CODM and accordingly is not included in the detailed segmental analysis below.

Intersegment revenue is not material and thus not subject to separate disclosure.

The information provided to the Group Chief Executive for the reportable segments, for the year ended 31 December 2015, is as follows:

The 2014 comparatives, excluding discontinued operations, are as follows:

Breakdown of revenue by country of operation

The home country of IFG Group plc is the Republic of 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 income tax assets and available for sale assets), at the year end, split by geographical region are as follows:

4. Exceptional items

2015

LOSS ON DISPOSAL OF IFG UK FINANCIAL SERVICES

The exceptional item for the period to 31 December 2015 relates to the provision for ongoing costs for businesses sold in 2014, principally in relation to the sale of IFG UK Financial Services. We have revised the estimate of all costs associated with unwinding the legal entity structure and associated regulatory, claims and legal costs of IFG UK Financial Services. The total loss, including the loss of £0.6 million in 2014 (See below), is £1.9 million, subject to any amendments to the contingent consideration.

2014

LOSS ON DISPOSAL OF IFG UK FINANCIAL SERVICES

On 12 March 2014, the Group 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. The loss recognised in 2014 on this transaction was £0.6 million.

RESTRUCTURING COSTS

In 2014, £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.

GAIN ON DISPOSAL OF SIDDALLS FRANCE

On 31 October 2014, the Group completed the sale of Siddalls France to Blevins Franks Financial Management Limited. The pre-tax gain on this transaction was £0.5 million.

5. Income tax expense/(credit)

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows:

The weighted average applicable tax rate for the year was 20.25% (2014: 30.25%). During 2015, the Company re-measured relevant deferred tax balances that were impacted by the change in the UK tax rate substantively enacted at the balance sheet date.

In accordance with the IFRS provisions, the rate of 18.00% is used as a basis for the calculation of the UK deferred taxes.

6. Profit/(loss) from discontinued operations (net of income tax)

Financial information relating to discontinued operations is set out below. The 2014 comparative includes the entirety of the Irish segment, the majority of which was disposed of in 2014. The 2015 numbers relate principally to the residual general insurance brokerage business, ARB, which was sold. Regulatory approval was received on 3 December 2015.

INCOME STATEMENT