TIDMIFP
RNS Number : 5608E
IFG Group PLC
09 May 2017
This announcement contains inside information
IFG Group plc - Interim Management Statement Q1 2017
IFG Group plc is a focused financial services group with full
market listings in London and Dublin. The company provides a range
of financial solutions through its subsidiaries, James Hay and
Saunderson House. James Hay is a market leading UK retirement
wealth planning platform and Saunderson House is an award winning
independent financial adviser. IFG Group plc issues the following
trading update for the 3-month period to 31 March 2017.
Highlights
-- Total Assets under Administration and Advice have increased
to GBP28.0bn, up 5% since 31 December 2016 (GBP26.7bn) and up 17%
compared to 31 March 2016 (GBP24.0bn).
-- Assets under Administration in James Hay, as at 31 March
increased to GBP23.3bn (31 December 2016 - GBP22.1bn), with inflows
from new and existing clients of GBP0.8bn.
-- New clients in James Hay of 1,600 were 45% ahead of the same
period in 2016 (1,100), with higher average case size,
demonstrating the benefits of the focused distribution strategy.
Attrition remains in line with 2016.
-- The lowering of the UK base rate in Q3 2016 has impacted
James Hay revenues and profits in Q1 2017 by GBP1.6m compared to H1
2016 as previously indicated. Pricing changes will take effect in
H2 2017 leading to an improved revenue and operating margin
trajectory from H2 2017.
-- Saunderson House now serves 2,017 clients, up from 1,956 in
December 2016, with new client wins in Q1 2017 of 86, bolstered by
the success of our new discretionary management service offering,
which is attracting a broader range of clients to Saunderson
House.
-- Assets under Advice in Saunderson House were GBP4.7bn, up from GBP4.6bn in December 2016.
-- The investment spend, which we committed to in James Hay
despite short-term challenges to revenue, has now peaked. We expect
the benefits, together with the pricing changes, reduced run rate
on cost in H2 2017, and strong Q1 client and asset growth, to drive
a much-improved financial performance in H2 2017.
-- We are addressing a legacy issue in James Hay which is
discussed in detail under Other Matters below.
John Cotter, Group Chief Executive, commented:
"The Group has recorded another strong quarter of client and
asset growth. The Group continues to attract an increasing level of
high quality new business which has driven growth in Assets under
Administration and Advice, reflecting the benefits of a focused
distribution strategy in James Hay and the discretionary offering
in Saunderson House. Changes to interest rates in 2016 impacted the
Group revenue trajectory and masked the underlying performance of
the business short-term, but this is being mitigated whilst we
continue to drive improvements to our propositions and operating
capability. The cost base in James Hay will normalise in H2 2017,
as we see the benefits of the efficiency gains from the investment
spend. We expect both businesses to continue to grow, and the
changes we have made will deliver, from H2 2017, improved
underlying financial performance."
Enquiries:
John Cotter Group Chief Executive Tel: +44 203 887 6181
Andrew Price Group Chief Financial Officer Tel: +44 203 887 6181
James Hay
James Hay provides a platform for retirement wealth planning,
underpinned by a specialist capability in pension administration.
James Hay administers self-directed pension schemes, in addition to
offering ISAs and general investment accounts in the Modular iPlan
("MiPlan") for almost 57,000 customers. As of 31 March, it has
GBP23.3bn in Assets under Administration (31 December 2016 -
GBP22.1bn).
James Hay has added more than 1,600 new clients in Q1 2017,
principally to the MiPlan product which has attracted new business
due to its transparent pricing and flexibility. MiPlan, which was
launched in 2013, now represents GBP10.3bn of the Assets under
Administration across almost 26,000 clients.
As disclosed in the 2016 Annual Report, we increased investment
in the operational and change capability of the business over the
last 18 months, which has impacted the cost base. We believe these
investments were necessary to deliver improved capability to the
business, to ensure James Hay provides a compelling proposition for
clients. We are now coming to the end of this increased investment
phase and we will see the run rate on cost reduce in H2 2017, as
this investment delivers efficiency gains, which will translate
into reduced headcount and related costs, by the end of 2017.
Saunderson House
Saunderson House offers award winning financial planning and
investment advice with Assets under Advice, as of 31 March 2017, of
GBP4.7bn (31 December 2016 - GBP4.6bn). It provides holistic
financial and investment advice and discretionary portfolio
management to high net-worth individuals, with an investment
proposition based on macroeconomic research, rigorous due diligence
of fund managers and active asset allocation, with an emphasis on
transparency of process. This investment approach continues to
deliver excellent investment performance to clients.
Saunderson House has continued to attract new clients, whilst
attrition remains at de-minimus levels. In the first quarter, we
added 86 new clients. This is driven in part by the success of the
discretionary offering which is attracting a broader range of
clients to Saunderson House, and is enabling Saunderson House to
compete much more effectively in segments of the market where it
previously did not have a suitable offering.
Other Matters
As has been reported in the media, HMRC is investigating a
non-standard investment known as "Elysian Fuels", which was a
structured investment in biofuel businesses initiated between 2011
and 2015, an equity component of which was held by some investors
through their SIPP. Some of these investors are clients of James
Hay. Around 500 of James Hay's 57,000 clients invested a total of
c.GBP55m in Elysian Fuels.
James Hay did not advise investors in relation to these
investments; it acted solely as pension administrator. James Hay
has received, in April 2017, assessment notices for sanction
charges from HMRC for the tax years 2011/2012 and 2012/2013 in
total for GBP1.8m. These have been appealed and are the subject of
ongoing discussions with HMRC.
The extent of any ultimate exposure to the Group is uncertain at
this stage, and may in any event be mitigated by indemnities
available to us. Sanction charges can be levied by HMRC on SIPP
providers where there is deemed unauthorised payments, the amount
of which is dependent upon the individual circumstances of each
investor. We believe James Hay acted appropriately and in
accordance with its clients' instructions in relation to these
investments. We will be incurring ongoing legal costs in relation
to this issue.
As part of the transfer of the Group's support functions to
London, in order to co-locate with the Company's primary
businesses, the Company's office at The Oval, Shelbourne Road,
Dublin 4 will be closed on the 31 May 2017. Effective the 15(th)
May 2017, the Company's registered office address will change
to:
70 Sir John Rogerson's Quay
Dublin 2
Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUKRNRBWAVRRR
(END) Dow Jones Newswires
May 09, 2017 02:11 ET (06:11 GMT)
Ifg (LSE:IFP)
Historical Stock Chart
From Apr 2024 to May 2024
Ifg (LSE:IFP)
Historical Stock Chart
From May 2023 to May 2024