IFG Group PLC - Preliminary results

RNS Number:0264S
IFG Group PLC
10 April 2008

IFG Group plc
Preliminary Results for the year ended 31st December 2007
Highlights

IFG Group plc today (April 10th 2008) released its preliminary statement for the
year to 31st December 2007. Key highlights include:

• Turnover of €128.8 million, up by 20%
• Adjusted operating profit of €22.0 million, up by 42%
• Operating profit of €17.3 million, up by 21%
• Adjusted EPS in cent per share of 24.17, up by 43%
• EPS in cent per share of 17.42, up by 16%
• Dividend in cent per share of 3.63, up by 10%
• Total assets under administration and advice of circa €59 billion
• Two substantial acquisitions in the year under review successfully
integrated into the business
• Strong balance sheet management with reduced debt levels

Commenting on the results, Mark Bourke, CEO of IFG Group plc said,

"This has been a year of exceptional growth across all of our businesses.

Our strategy of building the assets under our control and expanding the advisory
services to our client base is clearly delivering. We now estimate the value of
these assets at circa €59 billion.

We believe that even in today's challenging business environment, with our
strategy, the geographical spread of our businesses and the repeat nature of our
income streams, we will attain the ambitious targets we have set ourselves."

For reference:

Mark Bourke, Orla Benson
Group CEO Karen Ferris
IFG Group plc Drury Communications
Tel: 01 275 2800 Tel: 01 260 5000
IFG GROUP PLC

PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2007

Adjusted Adjusted Total Total
measures measures IFRS IFRS
2007 2006 2007 2006
€'000 €'000 Notes €'000 €'000

Revenue n/a n/a 128,829 107,792

Operating profit 22,018 15,543 1 17,342 14,326

Profit before income tax 19,796 13,499 1 15,120 12,282

Adjusted earnings per ordinary share - in cent 24.17 16.88 2 n/a n/a

Basic earnings per ordinary share - in cent n/a n/a 17.42 15.01

Group net debt 19,436 18,953

Dividend per ordinary share - in cent 3.63 3.30

Notes:

1. Adjusted profit before income tax and adjusted earnings per share are
stated before exceptional items, amortisation of intangible assets and
share based payment compensation.

2. Reconciliation of adjusted earnings:

Year ended Year ended
31 Dec 2007 31 Dec 2006
Per share cent Earnings Per share cent Earnings
€'000 €'000

Profit attributable to equity holders 17.42 12,069 15.01 9,743
Exceptional adjustments (net of tax) - - (0.70) (452)
Amortisation of intangible assets 2.85 1,976 0.61 394
Share based payment compensation 3.90 2,700 1.96 1,275
Adjusted earnings 24.17 16,745 16.88 10,960

Group Performance

2007 saw an excellent performance by the Group with strong growth in both its
business segments and across all business divisions (Ireland, UK and
International).

This builds on the rapid progress seen in recent years and is a result of the
strategic direction chosen, the strong management team and a disciplined
approach to the Group's capital resources.

The Group balance sheet is now degeared, and strong cash generation is being
reinvested with three significant acquisitions in our International business in
the past 18 months. We are delivering on ambitious targets through a
combination of organic growth and acquisition.

Total operating Total operating
profit/(loss) profit/(loss)
2007 2006
Restated
€'000 €'000
Trustee & Corporate Services
International Trustee & Corporate Services 9,654 6,282

Financial Services & Unallocated
Pensioneer Trustee - UK 3,672 3,573
Financial Services - UK 3,788 1,445
Mortgage and Title Insurance - Ireland 5,166 4,668
Financial Services including Central Overhead - Ireland (262) (425)

Adjusted operating profit 22,018 15,543

Exceptional items - Financial Services - 452
Share based payment compensation - Trustee & Corporate Services (442) (96)
- Financial Services (2,258) (1,179)
Amortisation of intangibles - Trustee & Corporate Services (1,722) (271)
- Financial Services (254) (123)

Total operating profit 17,342 14,326

Operating profit - Trustee & Corporate Services 7,490 5,915
- Financial Services & Unallocated 9,852 8,411

Total operating profit 17,342 14,326

Trustee and Corporate Services

We continue to deliver exceptional results in our International Division with
profits of €9.7 million (2006: €6.3 million) an increase of 54%. This reflects
an underlying organic growth of 21% when the 2006 and 2007 acquisitions of
Langtry Trust in Jersey, Northern Trust in Isle of Man, Corfiser in BVI and
Gestinor in Switzerland are stripped out.

The International business has c. €50 billion of assets under administration
across its five centres of operation. Although fundamentally a time charge and
fee per structure business, this statistic is increasingly important both in
terms of the service offering and the capability of our business to grow.

We continue to build the level of administrative services with the introduction
of fund administration through the acquisition of Northern Trust during the year
and are expanding the competencies provided to our clients. In 2008 we plan to
develop advisory capacity in both fund administration and family office services
for the ultra high net worth client.

Financial Services

Pensioneer Trustee UK

Growth of the Pensioneer Trustee business continued at a rapid pace with a 23%
increase in the number of SIPPs (Self Invested Pension Plan) under
administration. With strong growth in the number of new SIPPs being maintained
the profitability will follow in the coming periods as the Group leverages the
structures and assets under its administration. We estimate the current assets
under administration in the business are c. €4 billion.

Whilst the long awaited consolidation of this market has started, the
opportunities for acquisition do not as yet match the opportunities elsewhere in
the Group in terms of return on capital.

Legal & General has announced that it intends to make an offer of €80 million
for Suffolk Life and this demonstrates that SIPPs are at the focal point of the
middle and high net worth advisory market. Our excellent reputation, technical
competence, service standards and market position as one of the leading
providers of specialist SIPPs is the basis for our optimism in this market.

Financial Services UK

The performance of the UK Financial Services business, rising 162% to €3.8
million (2006: €1.4 million) operating profit is an exceptional result. This
rise continues an improving pattern of results from €0.9 million of operating
profit in 2005 and an operating loss of €1.5 million in 2004.

The growth in 2007 was primarily driven by the fee based advisory business
Saunderson House, which had an excellent year. The fee business is key to our
Group strategy and proves the proposition that a high quality, purely fee based
independent advisory service has significant potential when targeted at high net
worth market segments. Management believe that there is opportunity to build in
addition to and beyond the legal and accounting partners in city firms they have
mainly advised to date.

Siddalls (which advises UK nationals moving permanently offshore) has now
entered into the new geographies of Spain and Australia and expects to expand
further in 2008 and 2009. IFG Financial Services produced another profitable
year. In total, assets under advice in our UK advisory business are c. €2.8
billion.

Financial Services - Ireland

Mortgage & Title Insurance - Ireland

In Ireland, the Property Service Division grew its contribution to €5.2 million
(2006: €4.7 million). This 11% growth was an exceptional performance given
current market conditions. The prime business lender cheques issued for the year
fell by 9% from €1.55 billion to €1.41 billion. The Group's ability to maintain
and grow profitability is primarily due to the contribution from our Title
Insurance (remortgage conveyancing) service.

The other Irish unit, Group and Individual Advisory (where we have c. €2 billion
assets under advice) and Specialist Broking also performed well.

We believe the downward pressure on volume and margin in the Property business
will continue in 2008 and in that light we are targeting to maintain our
profitability but with a significantly different mix of products.

Group Financing
As at 31 December 2007 As at 31 December 2006
Core Investment Total Core Investment Total
€'m €'m €'m €'m €'m €'m

Total net borrowings 16.5 2.9 19.4 16.1 2.9 19.0

Contingent consideration 10.4 10.3

Total net commitment 29.8 29.3

The Group's net cash generated from operating activities was €18.1 million
(2006: €14.6 million). Of this, €12.7 million was reinvested, primarily in the
International business to fund the acquisitions of Langtry Trust, Gestinor,
Corfiser and Northern Trust.

As reported previously the Group banking was restructured at the beginning of
2007 with the repayment of Sterling bonds and the establishment of a club
facility attracting a margin of 1.5%. The margin will fall at the half year to
0.95%. The Group has also negotiated committed lines for investment and
acquisition at a margin which is on a par with the existing arrangement should
the opportunity arise.

Dividends

Your Board is recommending a final dividend of 2.47 cent per share which when
added to the interim dividend already paid, makes a total of 3.63 cent per
share, an increase of 10% on the previous year. Subject to shareholder
approval, the final dividend will be paid on 18 July 2008 to shareholders on the
Register on 04 July 2008.

Consolidated Income Statement
Year Ended 31 December 2007

2007 2006
Restated
Notes €'000 €'000

Revenue 3 128,829 107,792
Cost of sales (4,775) (4,662)

Gross profit 124,054 103,130

Administrative expenses (104,736) (88,862)
Other income - 452
Other expenses (1,976) (394)

Operating profit 3 17,342 14,326

Operating profit before exceptional items 17,342 13,874
Exceptional items - 452
Operating profit 17,342 14,326

Finance income 876 655
Finance costs (3,347) (2,861)
Share of profit of associates and joint ventures 249 162

Profit before income tax 3 15,120 12,282
Income tax expense 4 (2,686) (1,367)

Profit for the year 12,434 10,915

Profit for year attributable to:
Equity holders of the company 12,069 9,743
Minority interest 365 1,172
12,434 10,915

Earnings per ordinary share (cent)

Basic 5 17.42 15.01

Diluted 5 16.46 14.27

Consolidated Balance Sheet
As at 31 December 2007

2007 2006
Restated
Notes €'000 €'000
Assets
Non-current assets
Property, plant & equipment 5,558 6,135
Intangible assets 75,308 71,946
Investments in associates and joint ventures 3 299 300
Deferred income tax assets 1,178 1,481
Available-for-sale financial assets 87 87
Total non-current assets 82,430 79,949

Current Assets
Trade and other receivables 44,254 39,180
Current income tax asset 517 62
Cash and cash equivalents 25,842 26,715
Total current assets 70,613 65,957

Total assets 3 153,043 145,906

Liabilities
Non-current liabilities
Borrowings 35,052 23,808
Deferred income tax liabilities 3,172 2,425
Retirement benefit obligations 407 687
Provisions for other liabilities 4,015 6,698
Other non-current liabilities 1,250 1,250
Total non-current liabilities 43,896 34,868

Current liabilities
Trade and other payables 40,604 40,361
Current income tax liabilities 2,684 1,946
Borrowings 10,226 21,860
Provisions for other liabilities 8,698 6,680
Total current liabilities 62,212 70,847

Total liabilities 3 106,108 105,715

Net assets 46,935 40,191

Equity
Capital & reserves attributable to equity holders of the
company
Share capital 8,360 8,239
Share premium 53,032 52,300
Other reserves (6,247) (2,079)
Retained earnings (10,172) (19,864)
44,973 38,596
Minority interest 1,962 1,595

Total equity 46,935 40,191

Consolidated Cash Flow Statement
Year Ended 31 December 2007

2007 2006
Restated

Notes €'000 €'000
Cash flows from operating activities
Cash generated from operations 6 20,156 15,070
Interest received 876 860
Income taxes paid (2,928) (1,378)

Net cash generated from operating activities 18,104 14,552

Cash flows from investing activities
Purchase of property, plant and equipment (1,876) (2,739)
Sale of property, plant and equipment 59 10
Purchase of subsidiary undertakings net of cash acquired (5,979) (4,029)
Deferred and contingent consideration on prior year (4,088) -
acquisitions
Purchase of other intangibles (986) -
Purchase of interest in joint venture - (118)
Dividend received from associate / joint venture 174 -
Sale of available-for-sale financial assets - 124
Sale of interest in associates - 960

Net cash used in investing activities (12,696) (5,792)

Cash flows from financing activities
Dividends paid (2,476) (1,986)
Interest paid (2,576) (2,793)
Dividends paid to minority interests - (851)
Proceeds from issue of share capital 818 7,850
Repayment of debt (5,221) (20,950)
Proceeds from long-term borrowings 17,153 26,869
Senior unsecured notes repaid (12,616) (5,951)
Payment of finance lease liabilities (71) (115)

Net cash (used) / generated in financing activities (4,989) 2,073

Net increase in cash and cash equivalents 419 10,833

Cash and cash equivalents at the beginning of the year 25,421 14,336
Effect of foreign exchange rate changes (1,549) 252

Cash and cash equivalents at end of year 24,291 25,421

Cash and cash equivalents are comprised of cash and short term deposits net of
bank overdrafts that are repayable on demand. For the purpose of the cash flow
statement cash and cash equivalents include the following:

2007 2006
€'000 €'000

Cash and short term deposits 7 25,842 26,715
Bank overdrafts 7 (1,551) (1,294)

24,291 25,421

Consolidated Statement of Changes in Equity

Share Share Other Retained Attributable Minority Total
capital premium reserves earnings to equity interest equity
holders

€'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January 2006 7,828 44,861 (4,048) (27,615) 21,026 1,274 22,300

Currency translation adjustments - - 928 - 928 - 928
Net investment hedge - - (354) - (354) - (354)
Recycling of fair value movements to
the income statement - Sale of
available-for-sale financial assets - - 153 - 153 - 153

Net income recognised directly in - - 727 - 727 - 727
equity
Profit for the year - - - 9,743 9,743 1,172 10,915

Total recognised income for 2006 - - 727 9,743 10,470 1,172 11,642

Dividends - - - (1,992) (1,992) (851) (2,843)
Issue of share capital 411 7,439 - - 7,850 - 7,850
Share based payment compensation:
-Value of employee services-share - - 468 - 468 - 468
options
-Value of employee services-LTIP - - 774 - 774 - 774

411 7,439 1,242 (1,992) 7,100 (851) 6,249

At 31 December 2006 8,239 52,300 (2,079) (19,864) 38,596 1,595 40,191

Currency translation adjustments - - (6,771) - (6,771) 2 (6,769)
Net investment hedge - - (62) - (62) - (62)

Net income recognised directly in - - (6,833) - (6,833) 2 (6,831)
equity
Profit for the year - - - 12,069 12,069 365 12,434

Total recognised income for 2007 - - (6,833) 12,069 5,236 367 5,603

Dividends - - - (2,377) (2,377) - (2,377)
Issue of share capital 121 732 (35) - 818 - 818
Share based payment compensation:
-Value of employee services-share - - 450 - 450 - 450
options
-Value of employee services-LTIP - - 2,250 - 2,250 - 2,250

121 732 2,665 (2,377) 1,141 - 1,141

At 31 December 2007 8,360 53,032 (6,247) (10,172) 44,973 1,962 46,935

Notes to the preliminary results

1. General information

IFG Group plc and its subsidiaries (together the Group) are engaged in the
provision of financial advisory services and international corporate and trustee
services. The Company is a public company, listed on the Irish Stock Exchange
(ISE), and is incorporated and domiciled in the Republic of Ireland. The address
of its registered office is IFG House, Booterstown Hall, Booterstown, County
Dublin, Ireland. The financial statements have been approved for issue by the
Board of Directors on 10 April 2008.

2. Basis of preparation

The consolidated financial statements of IFG Group plc are required to be
prepared in accordance with EU adopted International Financial Reporting
Standards (IFRS), IFRIC interpretations and parts of the Companies Acts 1963 to
2006 applicable to companies reporting under IFRS. The consolidated financial
statements have been prepared under the historical cost convention, as modified
by the revaluation of certain financial assets and liabilities.

The preliminary results for the year to 31 December 2007 have been prepared in
accordance with the Listing Rules of the Irish Stock Exchange. The Group's
financial information has been prepared in accordance with the accounting
policies used in the preparation of the Group financial statements. This
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Group's
accounting policies. These assumptions affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities
at the date of the financial statements. If in the future such estimates and
assumptions, which are based on management's best judgement at the date of the
financial statements, deviate from the actual outcome, the original estimates
and assumptions will be modified as appropriate in the year in which the
circumstances change.

The financial information in this preliminary announcement is not the statutory
accounts of the company, a copy of which is required to be annexed to the
company's annual return to the Companies Registration Office in Ireland. A copy
of the statutory accounts required to be annexed to the company's annual return
in respect of the year ended 31 December 2006 has in fact been so annexed. A
copy of the statutory accounts in respect of the year ended 31 December 2007
will be annexed to the company's annual return for 2007.

3. Segment information

Primary reporting format-business segments

At 31 December 2007, the Group is organised on a worldwide basis into two main
business segments:

- Provision of financial services
- Provision of trustee and corporate services incorporating back office
services

The segment results for the year ended 31 December 2007 are as follows:

Financial Trustee & Unallocated Total
corporate
services services
€'000 €'000 €'000 €'000

Revenue 87,864 40,965 - 128,829

Operating profit / (loss) 10,302 7,490 (450) 17,342
Finance costs (net) - - - (2,471)
Share of profit of associates and joint venture 249 - - 249

Profit before income tax 15,120
Income tax expense (2,686)

Profit for the year 12,434

The segment results for the year ended 31 December 2006 are as follows
(restated):

Financial Trustee & Unallocated Total
services corporate
services
€'000 €'000 €'000 €'000

Revenue 81,353 26,439 - 107,792

Operating profit / (loss) 9,648 5,915 (1,237) 14,326
Finance costs (net) - - - (2,206)
Share of profit /(loss) of associates and joint 172 - (10) 162
venture

Profit before income tax 12,282
Income tax expense (1,367)

Profit for the year 10,915

Other non-cash segment items included in the income statement are as follows:

2007 2006
Financial Trustee & Unallocated Total Financial Trustee & Unallocated Total
services corporate services corporate
services services
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000

Depreciation 742 888 234 1,864 750 590 218 1,558

Amortisation of 210 1,722 44 1,976 63 271 60 394
intangibles

Impairment provision for 1,918 385 251 2,554 312 73 340 725
doubtful receivables

The segment assets and liabilities at 31 December 2007 and capital expenditure
for the year then ended are as follows:

2007 2006
Financial Trustee & Unallocated Total Financial Trustee & Unallocated Total
services corporate services corporate
services services

€'000 €'000
€'000 €'000
€'000 €'000 €'000 €'000

Assets 85,290 59,974 7,480 152,744 81,845 49,762 13,999 145,606
Investment in equity 299 - - 299 291 - 9 300
method associates
85,589 59,974 7,480 153,043 82,136 49,762 14,008 145,906

Liabilities (17,491) (31,582) (57,035) (106,108) (13,180) (31,864) (60,671) (105,715)

Capital expenditure 1,429 12,952 165 14,546 2,444 17,409 60 19,913

Segment assets consist primarily of property, plant & equipment, intangible
assets, trade receivables and cash. They exclude income tax, deferred tax and
investments. Segment liabilities comprise operating liabilities. They exclude
items such as taxation and corporate borrowings.

Capital expenditure comprised additions to property, plant and equipment and
intangible assets, including additions resulting from acquisitions through
business combinations

Secondary reporting format-geographical segments

The Group's two main business segments operate in three main geographical areas.

The home country of the company is Ireland.

Revenue 2007 2006
Restated
€'000 €'000

Ireland 47,416 45,594
UK 41,017 34,838
IOM & Jersey 35,509 25,395
Other countries 4,887 1,965

128,829 107,792
Revenue is allocated based on the country where the customer is located.

Total assets 2007 2006
€'000 €'000

Ireland 34,431 35,548
UK 60,533 58,498
IOM & Jersey 46,576 49,292
Other countries 11,204 2,268

152,744 145,606
Associates and joint ventures 299 300

153,043 145,906
Total assets are allocated based on where the assets are located.

Capital Expenditure 2007 2006
€'000 €'000

Ireland 1,642 1,091
UK 969 1,258
IOM & Jersey 3,138 17,404
Other countries 8,797 160

14,546 19,913

Capital expenditure is allocated based on where the assets are located.

4. Income tax expense

2007 2006
€'000 €'000
Current tax
Irish (at 12.5%):
- current year 561 587
- prior year 47 79

UK and other (primarily at 30%):
- current year 2,582 1,524
- prior year (471) (642)
2,719 1,548

Deferred tax
Irish:
- current year 60 (164)

UK and other:
- current year (93) (17)

2,686 1,367

5. Earnings per ordinary share
2007 2006

Basic
Profit after income tax and minority interest (€'000) 12,069 9,743

Weighted average number of ordinary shares in issue for the calculation of earnings per 69,268,010 64,895,171
share

Basic earnings per share (cent) 17.42 15.01

Diluted
Profit after income tax and minority interest (€'000) 12,069 9,743

Weighted average number of ordinary shares in issue for the calculation of earnings per 69,268,010 64,895,171
share
Dilutive effect of share options and warrants 2,314,029 2,616,837
Dilutive effect of long term incentive plan 1,720,833 750,000

Weighted average number of ordinary shares for the calculation of diluted earnings per 73,302,872 68,262,008
share

Diluted earnings per share (cent) 16.46 14.27

The number of shares used in the calculation of basic earnings per share and
diluted earnings per share has been calculated in accordance with International
Accounting Standard No.33.

Diluted earnings per share are based on the weighted average number of ordinary
shares used in the basic earnings per share calculation, with an adjustment to
reflect:

• the bonus element of the average number of options and warrants outstanding
during the year. The bonus element arises when the exercise price is lower
than the average market price during the year;
• the number of shares earned under the Long Term Incentive Plan (LTIP) which
have not been issued.

At 31 December 2007 shares earned by some Directors, under the LTIP, approved by
the shareholders on 28 September 2006 but not yet issued amount to 1,720,833
shares (2006:750,000).

6. Cash generated from operations
2007 2006
€'000 €'000

Profit before income tax 15,120 12,282
Depreciation and amortisation 3,850 2,132
(Gain)/loss on sale of property, plant and equipment (1) 8
Finance costs 3,347 2,861
Finance income (876) (655)
Group share of profit of associates and joint venture (249) (162)
Foreign exchange loss/(gain) 205 (51)
Non-cash share based payment compensation charges 2,700 1,275
Increase in trade & other receivables (4,887) (2,499)
Profit on sale of investment in associates - (452)
Loss on sale of available-for-sale financial assets - 24
Loan from associates and joint venture 31 34
Increase in trade & other payables 916 273

Cash generated from operations 20,156 15,070

7. Analysis of net debt

Opening Cash flow Acquisitions Other Closing
balance non cash balance
changes
€'000 €'000 €'000 €'000 €'000

Cash and short term deposits 26,715 6,589 (5,979) (1,483) 25,842
Overdrafts (1,294) (191) - (66) (1,551)
25,421 6,398 (5,979) (1,549) 24,291

Loans due within one year (7,936) - - - (7,936)
Loans due after one year (22,093) (11,932) - (47) (34,072)
Senior unsecured notes due < 1 yr (12,553) 11,926 - (63) (690)
Senior unsecured notes due > 1 yr (1,601) 690 - (9) (920)
Finance leases (191) 71 - 11 (109)

Total (18,953) 7,153 (5,979) (1,657) (19,436)

This information is provided by RNS
The company news service from the London Stock Exchange
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