Aine McMahon
Financial services group IFG said they are delivering “solid financial performance” despite challenging market conditions. Revenues for the year fell slightly to £76.2m from £77.3 million.
In an interim update, the group said that its financial position had been strengthened by disposing of their International business in 2012 for £70 million while it expects its balance sheet to be further strengthened by further concentration on their core businesses. A total of £30 million was returned to shareholders, while IFG's dividend increased 10 per cent to 4.84 cent per share from 4.40 cent per share in 2011.
Pensions administrator group James Hay reached its three year target of net growth in its SIPP group while Saunderson House continues to grow its client book due to "momentum created under new management."
The group said the Irish Financial services business had a strong year with new business and assets under management showing growth. The group said they have stabilised and continued to reposition their other Irish businesses.
In Ireland its corporate pensions and international advisory business performed well in terms of client wins and an increase in profitability. In 2012 IFG corporate pensions achieved 51 new corporate client wins and a 30 per cent increase in funds under management to € 725 million. However the company noted that there are a number of non core activities which are "subject to strategic review" and that "appropriate provisions" have been taken against these. They said they are well positioned to take advantage of market developments in the pension area and the change from defined benefit to defined contribution.
The UK SIPP market is converging with the more widely defined platform market which includes non pension assets. Its two principal businesses the James Hay Partnership and Saunderson House both recorded good results.
A decision was reached to sell the international segment based on the examination of risk adjusted return on capital. The company said “This decision, effectively ‘Build versus Divest’, was based on the substantial investment that would have been required to build the necessary scale.” The balance sheet will be further strengthened by the sale its international business to AnaCap Partners for £70 million.
Looking ahead, IFG said that it is now considering further concentration in its core business, after disposing of its international business which has strengthened its balance sheet. Commenting on the results Mark Bourke, CEO of IFG group said the company said "will offer substantial return of capital to shareholdesrs" and allow them to "take advantage of growth opportunities as they arise."
