26th Feb 2015 09:47
LONDON (Alliance News) - Lighthouse Group PLC saw its shares rise Thursday morning after it reported strong growth in operating earnings due mainly to cost cutting, confirmed its return to paying a dividend after a two-year hiatus, and gave a positive outlook thanks partly to workplace pension rule changes.
The financial advisory group reported a GBP0.6 million pretax profit for 2014 compared with a loss of GBP1.6 million in 2013, despite a drop in revenue to GBP46.8 million, from GBP47.9 million. Its closely-watched earnings before interest, tax, depreciation and amortisation and non-recurring operating expenses rose to GBP1.2 million, from GBP0.2 million, as it cut operating costs by 18% to GBP2.7 million.
It said average revenue production per adviser grew 5% to GBP86,000, from GBP82,000 in 2013, but its gross margin declined to 29% from 31% as more revenue came from larger member firms trading under lower cost terms. Its recurring revenue grew to 46% of the total, from 45% in 2013.
Chairman Richard Last was positive about the company's outlook.
"With the main market for the Lighthouse Pensions Trust coming on stream in the latter part of 2015 and beyond, together with a cost base more closely aligned to the on-going operations of the business and a strong cash balance, operational scale and a robust business model, Lighthouse is well positioned to deliver future growth," he said.
The company announced the launch of the Lighthouse Pensions Trust last month. It is a master trust arrangement through which small and medium-sized enterprises can meet their obligations under auto-enrolment. Under new UK rules set by the government, employers have to provide a workplace pension, even if the employ just one person, and the company is looking to tap into the expected new demand for workplace pension.
The company had previously announced an interim dividend for 2014 of 0.06 pence, its first since 2011, and Thursday said it will pay a final dividend of 0.12 pence.
Lighthouse Group shares were up 10.5% at 5.25 pence Thursday morning, one of the best-performing stocks on the AIM All-Share index. The stock has risen 26% over the past year.
By Steve McGrath; [email protected]; @stevemcgrath1
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