30th Aug 2018 13:06
LONDON (Alliance News) - IFG Group PLC said Thursday it continues to trade in line of expectation after a "robust" performance in the first half of 2018.
In the six months ended June, the financial services company swung to a pretax profit of GDP1.4 million from a GBP101,000 loss the year before.
Revenue increased 12% to GDP43.0 million from GDP38.5 million the year before.
The rise reflects the company's James Hay business implementing a repricing in 2017 after an interest rate rise in November 2017.
James Hay increased its fee income by 6.3% to GBP20.3 million from GDP19.1 million the year before. Interest income earned on cash balances increasing to GBP5.5 million from GBP3.2 million the year before.
These factors, according to IFG, "delivered significantly improved revenues and profit" in the first half. The company expects the interest margin on cash balances to increase further as a result of the base rate rise announced by the Bank of England earlier this month.
The James Hay business increased revenue 16% to GDP25.9 million from GBP22.3 million the year before, with operating profit increasing to GDP3.4 million from an operating loss of GDP1.5 million the year before.
IFG's Saunderson House business, meanwhile, improved revenue 5.6% to GDP17.1 million from GDP16.2 million.
IFG proposed no interim dividend, compared to 1.60 pence per share a year before. IFG did not pay a final dividend in 2017, and the company said it will "continue to retain capital and liquidity to address potential legacy matters".
IFG also said non-executive directors Colm Barrington and Robin Phipps will step down from the board effective immediately. Phipps will remain as chairman of the Saunderson House board.
Looking ahead, the company expects to reduce annual costs by GBP1.0 million after restructuring - which, IFG said, means the company is "now more clearly defined".
Chief Executive Kathryn Purves commented: "The first four months of 2018 was a challenging period for IFG Group, with assessments from HMRC in relation to Elysian Fuels and the cancelled Saunderson House sales process. Since April we have made good progress on identifying and implementing our near-term priorities; building two self-reliant businesses within an efficient group structure and resolving our legacy issues.
"I am pleased to report that James Hay and Saunderson House have delivered robust results in the first half. James Hay's interest margin on cash balances will increase as a result of the recent base rate rise, although the effect of this will be partially offset by lower cash balances. The group continues to trade in line with our expectations."
Shares in IFG were down 2.5% Thursday at 135.00 pence each.