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IFP Ifg Group Plc

193.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Ifg Group Plc LSE:IFP London Ordinary Share IE0002325243 ORD EUR0.12
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 193.00 192.00 194.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

IFG Group plc: Strategy and Trading Update (757517)

13/12/2018 7:02am

UK Regulatory


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 IFG Group plc (IFP) 
IFG Group plc: Strategy and Trading Update 
 
13-Dec-2018 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
                                                 Strategy and Trading Update 
 
                                                            13 December 2018 
 
                              This announcement contains inside information. 
 
  This announcement outlines the strategies for both businesses and provides 
                                               an update on current trading. 
 
Key Highlights 
 
                                                             Strategy Update 
 
· The Group is focused on developing and optimising two strong and 
self-reliant businesses which will enhance its strategic optionality. 
 
· Providing clarity on, and resolving, legacy issues remains a priority 
for the Group. 
 
· James Hay is enhancing its platform solution to support expansion into 
the wider investment platform market, including General Investment 
Accounts ("GIA"s) and Investment Savings Accounts ("ISA"s) which are 
expected to represent approximately one third of new business AUA by 2021. 
 
· James Hay is targeting c.7% annual growth in revenue over the next three 
years, with operating margin improving from c.19% in the first half of 
2018 to c.25% by 2021. 
 
· Saunderson House is continuing to expand its addressable market by 
leveraging its discretionary managed service ("DMS") offering to attract 
younger clients and clients outside its traditional segments of lawyer and 
accountants. 
 
· Saunderson House is targeting c.9% annual growth in revenue over the 
next three years, with improving operating margin over the same period. 
 
                                                              Trading Update 
 
· The Group continues to deliver robust results and is trading in line 
with our expectations. 
 
· The Group maintains a strong balance sheet, retaining cash to cover the 
worst-case outcomes in respect of Elysian and other legacy matters that 
are yet to be resolved. 
 
· James Hay's new client wins of c.4,000 to 31 October 2018 are c.22% down 
on the first ten months of 2017, driven by equity market volatility and 
the slowdown in defined benefit transfers impacting the SIPP market. 
Assets under Administration at 31 October 2018 were GBP26bn, up 2% from 31 
October 2017, with net inflows largely offset by adverse market movements. 
 
· Saunderson House's new client wins were 208 to 31 October 2018, broadly 
in line with the first ten months of 2017. Assets under Advice at 31 
October 2018 were GBP5bn, broadly unchanged from 31 October 2017, with net 
inflows offset by adverse market movements. 
 
                           Kathryn Purves, Group Chief Executive, commented: 
 
          "We believe that in developing strong, deliverable strategies with 
  attractive growth profiles for each of James Hay and Saunderson House, and 
  minimising Group costs, we are enhancing longer term strategic optionality 
for the Group. Our businesses continue to deliver strong results, trading in 
       line with expectations. I am encouraged by the opportunities for both 
 businesses and expect this to translate into real value for shareholders in 
                                                           the medium term." 
 
                                                                  Enquiries: 
 
                   Kathryn Purves, Group Chief Executive, +44(0) 203 8876181 
 
             Gavin Howard, Group Chief Financial Officer, +44(0) 203 8876181 
 
Group 
 
  We continue to make good progress on the key areas identified as near-term 
   priorities in the Interim Results, each of which enhances the longer-term 
                                        strategic optionality for the Group. 
 
 We remain focussed on developing two attractively positioned, self-reliant, 
     independent businesses by putting comprehensive business plans in place 
  (including setting more granular and ambitious targets), strengthening the 
  management teams and transferring certain group resources (compliance/risk 
      areas) into the respective businesses. As part of this, Simon Jackson, 
previously at Brooks MacDonald, will join Saunderson House as CFO in January 
    2019 and Gavin Howard, Group CFO, has taken on the role of James Hay CFO 
                                                   alongside his Group role. 
 
IFG Group continues to focus on delivering operational and cost efficiencies 
    within the group function. As previously announced we have significantly 
reduced the size of the Board, we continue to make further reductions in the 
      costs of the group executive/central team and are reviewing options to 
  sublet excess property. The Group remains on target to achieve annual cost 
 savings of GBP1m, with the full impact of these savings visible in the second 
                                                               half of 2019. 
 
 Resolution of legacy matters within James Hay remains a priority. The Group 
 has continued its engagement with HMRC to attempt to address their concerns 
        (and the associated, previously reported, protective assessments) in 
relation to Elysian Fuels. However, there remains significant uncertainty as 
 to potential outcomes and this issue will take further time to resolve. The 
  wider reviews of NSIs and SSAS Loanbacks are now substantially progressed. 
        Discussions with HMRC in relation to associated sanction charges are 
progressing and these are expected to fall within existing provisions. James 
   Hay continues to engage with the FCA, and its insurers, and is addressing 
          any potential customer detriment in relation to the NSI book - the 
    remediation of this book is presently expected to be covered by existing 
           provisions. The review of the legacy dual trustee SIPP/SSAS book, 
  highlighted in the interim results, is progressing and we expect to update 
  the market on the scale of the exposure in the year end results. Following 
   this, we believe we will have reviewed all material risk areas within the 
              two businesses, providing a robust position for future growth. 
 
      We are seeing increased market volatility and political uncertainty in 
    relation to Brexit. Equity market volatility may continue for some time, 
        however, the direct impact on both Saunderson House and James Hay is 
      expected to be relatively limited. Saunderson House's revenue, despite 
 growth in DMS, remains heavily weighted to time and materials, and in times 
         of volatility can typically increase, and James Hay's fees are only 
partially driven by market values. However, continued uncertainty may impact 
       clients' willingness to invest and any economic slowdown could have a 
                                         negative impact on both businesses. 
 
James Hay 
 
                                                                      Review 
 
  The platform market continues to be an attractive growing market supported 
     by long-term structural growth drivers. James Hay has a strong position 
    within the high net worth, trusted adviser-led SIPP platform market with 
        significantly higher than average case sizes and a powerful brand in 
       relation to pension expertise. The business will continue to focus on 
 developing its pricing and proposition to retain and attract high net worth 
    clients through a distribution strategy focussed on a defined segment of 
                                                              core advisers. 
 
    Building on its strong base, James Hay plans to develop from its current 
     position as a trusted SIPP expert to address the wider platform market, 
         supporting client through their investment life cycle. This will be 
   delivered through accelerating James Hay's expansion into the GIA and ISA 
                    market, significantly increasing its addressable market. 
 
              Over the next three years, MiPlan, James Hay's market leading, 
platform-based product, which typically delivers higher margins, is expected 
   to increase from c.50% of AUA currently to more than two thirds of AUA by 
 2021. The older, more complex business lines within James Hay will comprise 
      a decreasing proportion of the overall book, with a number of products 
         already closed to new business. This will result in an increasingly 
              efficient, higher margin business with fewer manual processes. 
 
   James Hay expects to maintain its spend on IT systems and its platform in 
 line with historical levels, underpinning its product expansion, supporting 
   growth prospects and building out its investment platform. This continued 
    investment is expected to deliver robust and scalable systems and create 
      substantial efficiency through streamlining and automating operational 
                    processes, resulting in an improvement in cost per case. 
 
                                                           Financial Targets 
 
We anticipate strong growth in the wider investment market, with GIA and ISA 
expected to account for approximately one third of new business AUA by 2021. 
James Hay is expected to deliver approximately 7% annual revenue growth over 
    the next three years and an improvement in operating margin to over 25%, 
 driven by capturing increased revenues through its expanded proposition and 
                                               delivering cost efficiencies. 
 
                                                             Current Trading 
 
  New client wins continue at a lower level than in 2017 with c.4,000 in the 
first ten months of the year, c.22% down on the first ten months of 2017. We 
  believe this reflects equity market volatility and the slowdown in defined 
 benefit transfers impacting the SIPP market. Assets under Administration at 
 31 October 2018 were GBP26bn, up 2% from 31 October 2017. The increase in the 
    Bank of England Base Rate announced in August 2018 has flowed through to 
 improved revenues due to interest income increasing from GBP5.5m in the first 
half to a projected GBP6.5m in the second half, despite lower cash balances in 
                                                            the second half. 
 
Saunderson House 
 
                                                                      Review 
 
 The UK wealth management sector, particularly in relation to high net worth 
 clients, remains an attractive and growing market. Saunderson House is well 
         positioned within this sector and is focussed on providing a wholly 
      independent, full service wealth management offering. It is a leading, 
trusted adviser to high earning professional services executives in which it 
          has an attractive and differentiated advisory and DMS proposition. 
 
   Saunderson House plans to continue to increase penetration within its key 
accounts whilst at the same time expanding its addressable market to younger 
                clients in the wealth accumulation stage, capturing expected 
intergenerational wealth transfers and targeting wider professional services 
                                         and additional horizontal segments. 
 
 Over the next three years, Saunderson House's DMS offering, making up c.60% 
 of new clients currently, is expected to continue to grow strongly. The DMS 
 offering has enabled Saunderson House to attract younger clients who are at 
   the wealth accumulation stage of their life; and the number of clients in 
       the 35 to 50 age group has more than doubled since the launch of DMS, 
  building a long term, diversified and robust client bank. This strategy is 
      expected to embed long term value in the business, notwithstanding the 
     short-term impact on average AUM per client, due to the fact that these 
      clients are accumulating wealth with Saunderson House. With Saunderson 
House's exceptionally high client retention rates these clients are expected 
               to remain with the business for a significant period of time. 
 
      Intergenerational wealth transfers are also a key focus for Saunderson 
  House, building relationships with clients' wider families in a structured 
 way. Saunderson House now has over 1,000 dependent clients (not included in 
     core client numbers), which should ensure that Saunderson House is well 
        positioned as the wealth they manage is handed down the generations. 
 
           Saunderson House will continue to expand its marketing into wider 
  professional services beyond lawyers and accountants. Whilst it takes time 
to build brand awareness and traction in wider segments, Saunderson House is 
  starting to see the results of this focus with c.50% of new client wins in 
    2018 being generated from outside London accountancy and law firms. This 
 contributes to the development of a more diversified and robust client base 
and expands the reach of Saunderson House's brand. Traditionally, Saunderson 
 House has developed its own advisers. However, the management team believes 
  that there are likely to be opportunities to recruit individuals or teams, 
with existing assets under management, to accelerate growth, particularly in 
         a segment which is increasingly competitive and which is subject to 
                                            increasing regulatory overheads. 
 
Saunderson House has invested in technology to support its growth with a new 
         portfolio management system ("PMS") built to support its investment 
 offering. This has already been introduced for the DMS offering, enabling a 
 significant increase in DMS clients with no corresponding increase in staff 
   numbers. There are further opportunities for Saunderson House to optimise 
 efficiency by rolling the PMS out to the advisory service. This is expected 
    to be delivered in H2 of 2019 with the benefits being realised from 2020 
                                                                    onwards. 
 
                                                           Financial Targets 
 
     Saunderson House is expected to deliver approximately 9% annual revenue 
  growth over the next three years by growing clients number to almost 3,000 
       clients, with improving operating margin over the same period. DMS is 
      projected to continue its strong growth trajectory and is projected to 
                             represent over 20% of AUA and revenues by 2021. 
 
                                                             Current Trading 
 
      Saunderson House achieved 208 new client wins across both advisory and 
     discretionary management services in the ten months to 31 October 2018, 
 broadly in line with the same period in 2017, and now serves 2,321 clients, 
  up c.10% from 31 October 2017. Assets under Advice at 31 October 2018 were 
      GBP5bn broadly unchanged from 31 October 2017 with net inflows offset by 
                                                   adverse market movements. 
 
ISIN:           IE0002325243 
Category Code:  TST 
TIDM:           IFP 
LEI Code:       213800DDLICUJ14JTY47 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   6871 
EQS News ID:    757517 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

December 13, 2018 02:02 ET (07:02 GMT)

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