Interim Results

29th Aug 2008 07:00



IFG Group plc

Interim Results for the six months ended 30 June 2008

IFG Group plc today (August 29th 2008) released its interim statement for the six months to 30 June 2008. Key highlights include:

Revenue of €58.0 million (2007: €61.5m)

Adjusted operating profit of €11.0 million (2007: €11.0m)

Adjusted EPS in cent per share of 12.80 (2007: 12.11) up 6%

Adjusted EPS (excluding translation effect) up 20%

EPS in cent per share of 9.34 (2007: 9.13)

Dividend in cent per share of 1.27, up by 10%

Total assets under administration and advice of circa €64 billion

Strategic acquisition of Excel-Serve Management in Cyprus - largest in Group to date (€25.0m)

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

"The Group has performed well in difficult market conditions. This reflects our focus on robust business models which emphasize the benefit of repeat income streams. The underlying rate of profit growth was 12% which was off set by the movement in sterling.

We believe that our strong management, cash flow and balance sheet will enable us to continue to deliver even in these difficult markets."

For reference:

Mark Bourke

Group CEO

IFG Group plc

Tel: 01 275 2800

IFG GROUP PLC 

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2008

	Adjusted measures	Adjusted measures		IFRS	IFRS
	Six months ended	Six months ended		Six months ended	Six months ended
	30 June 2008	30 June 2007		30 June 2008	30 June 2007
	Unaudited	Unaudited		Unaudited	Unaudited
	€'000	€'000	Notes	€'000	€'000
Revenue	n/a	n/a		58,019	61,539
Operating profit	11,000	11,012	1	8,550	8,955
Profit before income tax	9,913	9,940	1	7,463	7,883
Adjusted earnings per ordinary share - in cent	12.80	12.11	2	n/a	n/a
Basic earnings per ordinary share - in cent	n/a	n/a		9.34	9.13
Group net debt				38,789	24,389
Interim dividend per ordinary share - in cent			3	1.27	1.16

Notes:

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

2. Reconciliation of adjusted earnings:

	Six months ended			Six months ended
	30 June 2008			30 June 2007
	Per share cent	Earnings €'000		Per share cent	Earnings €'000
Profit attributable to equity holders	9.34	6,598		9.13	6,294
Amortisation of intangible assets	1.61	1,138		1.15	791
Share based payment compensation	1.85	1,312		1.83	1,266
Adjusted earnings	12.80	9,048		12.11	8,351

3. In accordance with IFRS the interim dividend is not accrued until paid and as such is not included as a reduction in reserves.

Commentary on Interim Results

The directors report that adjusted operating profit for the six months ended 30 June 2008 was €11.0 million compared with €11.0 million in the previous period on revenue of €58.0 million (2007 HY: €61.5m). Adjusted profit before taxation was €9.9m compared with €9.9 million in the previous period.  Adjusted earnings per share were 12.80 cent (2007 HY: 12.11 cent) representing an increase of 6% on the previous period.

The Board has decided to pay an interim dividend of 1.27 cent (2007 HY: 1.16 cent) per share subject to withholding tax at 20%. The dividend, which represents an increase of 10% on the previous period, will be paid to qualifying shareholders on the Register at the close of business on 14 November 2008. Dividend warrants will be posted on 28 November 2008.

Group Performance

The Group earns revenue from two sources:

Fees from the provision of services including, in particular, trustee and corporate services and pensioneer trustee business;

Commissions earned in the intermediation of financial services products.

The Group operates in two business segments:

Trustee and Corporate Services;

Financial Services.

The performance of the Group in the first six months split between its main activities was as follows:

				Operating profit		Operating profit
				Six months ended		Six months ended
				30 June 2008		30 June 2007
				€'000		€'000
Trustee & Corporate Services
International Trustee & Corporate Services				5,559		4,315
Financial Services & Unallocated
Pensioneer Trustee - UK				1,656		1,902
Financial Services - UK				1,781		1,708
Mortgage and Title Insurance - Ireland				1,122		2,435
Financial Services including Central Overhead - Ireland				882		652
Adjusted operating profit				11,000		11,012
*Reconciling items				(2,450)		(2,057)
Total operating profit				8,550		8,955
*Reconciling items
		30 June 2008	30 June 2007
		€'000	€'000
Share based payment compensation - Trustee & Corporate Services		(211)	(236)
Share based payment compensation - Financial Services		(1,101)	(1,030)
Amortisation of intangibles - Trustee & Corporate Services		(1,002)	(715)
Amortisation of intangibles - Financial Services		(136)	(76)
Total reconciling items		(2,450)	(2,057)

Trustee & Corporate Services

The International Trustee and Corporate Services business has shown an increase in adjusted operating profit from €4.3 million to €5.6 million, an increase of 29% on the previous period. On a constant currency basis this growth would be 45% in the first half.

Acquisitions accounted for 10% of this growth as we see a full half year contribution from Gestinor AG (acquired in April of 2007). The Northern Trust International Fund Administration Services (Isle of Man) Limited acquisition of June 2007 remains in the investment phase as our fund administration arm is not expected to become profitable until 2009.

On 30 June 2008 IFG acquired Excel-Serve Management Limited (Excel), a Cyprus based company. Excel was originally the corporate service business of Deloitte which was divested in 2005 in an MBO. The acquisition consideration is a maximum €25.0 million. This acquisition is part of the ongoing execution of the business strategy of developing in the key centres of Isle of Man, Jersey, Cyprus, Switzerland and Ireland. In addition to being completed at an attractive multiple (7 times profit before tax), it also builds the distribution capacity through the ongoing relationship with Deloitte in Cyprus and internationally.

We expect that the acquisition will immediately enhance the divisional earnings with a consequent increase in the Group EPS for the full year.

We continue to look for opportunities with a particular focus on the centres mentioned and the development of the core competencies of wealth administration and advisory services.

Financial Services

Pensioneer Trustee - UK

In the first half we have seen the continued growth of our specialist SIPP portfolio and are rationalising the offering of the London and Bristol businesses. An annualised growth rate in excess of 22% in new business continued through the first half of 2008 with the net increase in the number of SIPPs under administration of 658 in the six month period. We continue to believe that SIPPs will be the principle retirement planning vehicle in the sophisticated middle and high net worth market. The introduction of protected rights transfer to a trustee environment from October and the opportunity for Group SIPPs will also drive growth opportunities.

The recent acquisition by Legal and General of Suffolk Life for Stg£62 million marked the commencement of consolidation in this market. We believe this will continue in the coming 12 to 18 months. It also clearly demonstrates that our views on the importance of the SIPP business are shared by the wider market.

Financial Services - UK

The Advisory business delivered growth on a constant currency basis of 23%. This is an exceptional performance given the market turmoil and again proves the validity of the fee based independent financial advisory model of Saunderson House which grew profit by 38% in the first six months (in sterling terms).

We have continued to develop the Siddalls offering in Spain in the first half. As this required a level of investment in excess of €0.5 million it highlights even further the excellent (underlying) performance of the Financial Advisory Division.

Mortgage & Title Insurance Ireland

The volumes in the prime, sub-prime and title insurance market have continued to drop throughout the year. In both businesses we are implementing new technology that will increase efficiency going forward with the resultant reduction in staff costs.

We are projecting a decrease in volume of at least 40% in prime lending and an even steeper decline in re-mortgaging (60%). Our response to the resulting market change is to use technology to reduce processing costs, to re-invent the broking model, capture significant broker market share and to build profitable distribution going forward.

As a packager we seek to grow market share through low cost processing. As a title insurer we believe that the value of the title insurance can move beyond the remortgaging area to the purchase market.

Financial Services - Ireland

The Group's other Irish Financial Services businesses have, despite difficult markets, delivered a strong performance across life, pensions and our specialist credit insurance and policy broking business, with each contributing positively overall.

Debt

Group net commitment (net debt plus contingent consideration) is summarised and compared to the previous half year and year-end below.

	As at 30 June 2008	As at 31 December 2007	As at 30 June 2007
	€'m	€'m	€'m
Total net debt	38.8	19.4	24.4
Contingent consideration	18.1	10.4	15.7
Total net commitment	56.9	29.8	40.1

During the period acquisition payments and contingent consideration totalling €23.0 million resulted in Group net commitment increasing by €16.4 million (when restricted cash held in escrow of €10.7m is taken into account). Neutral cash generation in the first half is historically consistent if slightly behind 2007 due to significant long term (4 year) bonus payouts in the International Division. The year end will, however, show a marked improvement in banking net debt as has happened in previous periods. 

Principal risks and uncertainties

In accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the directors note the principal risks and uncertainties facing the Group in the six months to 31 December 2008 would include adverse developments in the following areas:

significant rises in interest rates and significant adverse movement in foreign currencies particularly Sterling pounds; 

the performance of its mortgage processing and broking business in Ireland;

the Group's ability to successfully manage its costs and to reduce its costs on a timely basis during periods of declining income;

the maintenance of satisfactory relationships with key customers and intermediaries;

the ability to attract and retain highly skilled employees and executives.

Outlook

The Group has performed well in difficult market conditions. This reflects our focus on robust business models which emphasises the benefit of repeat income streams. The underlying rate of profit growth was 12% which was off set by the movement in sterling. We believe that our strong management, cash flow and balance sheet will enable us to continue to deliver even in these difficult markets.

Consolidated Income Statement

Six months ended 30 June 2008

		Six months ended	Six months ended	Year ended
		30 June 2008	30 June 2007	31 December 2007
		Unaudited	Unaudited	Audited
	Notes	€'000	€'000	€'000
Revenue	5	58,019	61,539	128,829
Cost of sales		(1,628)	(2,628)	(4,775)
Gross profit		56,391	58,911	124,054
Administrative expenses		(46,703)	(49,165)	(104,736)
Other Expenses		(1,138)	(791)	(1,976)
Operating profit	5	8,550	8,955	17,342
Finance income		327	388	876
Finance costs		(1,414)	(1,473)	(3,347)
Share of profit of associates and joint ventures		-	13	249
Profit before income tax		7,463	7,883	15,120
Income tax expense	6	(987)	(1,341)	(2,686)
Profit for the period		6,476	6,542	12,434
Profit for period attributable to:
Equity holders of the Company		6,598	6,294	12,069
Minority interest		(122)	248	365
		6,476	6,542	12,434
Earnings per ordinary share (cent)
Basic	3	9.34	9.13	17.42
Diluted	3	9.10	8.81	16.46

  Consolidated Balance Sheet

As at 30 June 2008

		30 June 2008	30 June 2007	31 December 2007
		Unaudited	Unaudited	Audited
	Notes	€'000	€'000	€'000
ASSETS
Non-current assets
Property, plant & equipment		5,111	6,299	5,558
Intangible assets		93,506	82,589	75,308
Investments in associates and joint ventures		-	313	299
Deferred income tax assets		1,374	1,431	1,178
Available-for-sale financial assets		-	456	87
Total non-current assets		99,991	91,088	82,430
Current assets
Trade and other receivables		46,994	46,580	44,254
Current income tax asset		-	65	517
Restricted cash - held in escrow	4	10,721	-	-
Cash and cash equivalents		26,691	21,156	25,842
Total current assets		84,406	67,801	70,613
Total assets		184,397	158,889	153,043
LIABILITIES
Non-current liabilities
Borrowings		55,557	35,101	35,052
Deferred income tax liabilities		4,476	3,275	3,172
Retirement benefit obligations		441	390	407
Provisions for liabilities		6,665	9,446	4,015
Other non-current liabilities		1,250	1,250	1,250
Total non-current liabilities		68,389	49,462	43,896
Current liabilities
Trade and other payables		30,085	39,155	40,604
Current income tax liabilities		1,668	2,359	2,684
Borrowings		9,923	10,444	10,226
Provisions for liabilities		17,557	9,374	8,698
Total current liabilities		59,233	61,332	62,212
Total liabilities		127,622	110,794	106,108
Net assets		56,775	48,095	46,935
EQUITY
Capital & reserves attributable to equity holders of the company
Share capital	10	8,886	8,344	8,360
Share premium	10	59,826	52,962	53,032
Other reserves		(10,207)	(1,482)	(6,247)
Retained earnings		(3,574)	(13,570)	(10,172)
		54,931	46,254	44,973
Minority interest		1,844	1,841	1,962
Total equity		56,775	48,095	46,935

Consolidated Cash Flow Statement

 Six months ended 30 June 2008

		Six months ended	Six months ended	Year ended
		30 June 2008	30 June 2007	31 December 2007
		Unaudited	Unaudited	Audited
	Notes	€'000	€'000	€'000
Cash flows from operating activities
Cash generated from operations	8	1,418	4,944	20,156
Interest received		327	388	876
Income taxes paid		(1,709)	(1,238)	(2,928)
Net cash generated from operating activities		36	4,094	18,104
Cash flows from investing activities
Purchase of property, plant & equipment		(473)	(923)	(1,876)
Sale of property, plant & equipment		30	8	59
Purchase of available-for-sale financial assets		-	(369)	-
Dividend received from associate / joint venture		241	-	174
Purchase of other intangibles		(912)	(53)	(986)
Sale of investments		100	-	-
Purchase of subsidiary undertakings net of cash acquired		(20,683)	(7,335)	(5,979)
Deferred & contingent consideration on prior year acquisitions		(2,375)	(285)	(4,088)
Net cash used in investing activities		(24,072)	(8,957)	(12,696)
Cash flows from financing activities
Dividends paid		-	-	(2,476)
Interest paid		(1,287)	(1,164)	(2,576)
Proceeds from issue of share capital		7,237	737	818
Repayment of debt		-	(221)	(5,221)
Proceeds from long term borrowings		21,443	12,203	17,153
Senior unsecured notes repaid		(690)	(12,642)	(12,616)
Payment of finance lease liabilities		(36)	(14)	(71)
Net cash generated/(used) in financing activities		26,667	(1,101)	(4,989)
Net increase/(decrease) in cash and cash equivalents		2,631	(5,964)	419
Cash and cash equivalents at the beginning of the period		24,291	25,421	25,421
Effect of foreign exchange rate changes		(1,249)	(81)	(1,549)
Cash and cash equivalents at end of period		25,673	19,376	24,291

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:

		Six months ended	Six months ended	Year ended
		30 June 2008	30 June 2007	31 December 2007
		Unaudited	Unaudited	Audited
		€'000	€'000	€'000
Cash and short term deposits		26,691	21,156	25,842
Bank overdrafts		(1,018)	(1,780)	(1,551)
	9	25,673	19,376	24,291

Consolidated Statement of Changes in Equity

	Share  capital €'000	Share  premium €'000	Other reserves €'000	Retained  earnings €'000	Attributable to equity holders €'000	Minority interest €'000	Total Equity €'000
At 1 January 2008	8,360	53,032	(6,247)	(10,172)	44,973	1,962	46,935
Currency translation adjustments	-	-	(5,189)	-	(5,189)	4	(5,185)
Net expense recognised directly in equity	-	-	(5,189)	-	(5,189)	4	(5,185)
Profit/(loss) for the period	-	-	-	6,598	6,598	(122)	6,476
Total recognised income for the period	-	-	(5,189)	6,598	1,409	(118)	1,291
Issue of share capital	526	6,794	(83)	-	7,237	-	7,237
Share based payment compensation:
- Value of employee services - share option plans	-	-	187	-	187	-	187
- long term incentive plan	-	-	1,125	-	1,125	-	1,125
	526	6,794	1,229	-	8,549	-	8,549
At 30 June 2008	8,886	59,826	(10,207)	(3,574)	54,931	1,844	56,775
At 1 January 2007	8,239	52,300	(2,079)	(19,864)	38,596	1,595	40,191
Currency translation adjustments	-	-	(639)	-	(639)	(2)	(641)
Net expense recognised directly in equity	-	-	(639)	-	(639)	(2)	(641)
Profit for the period	-	-	-	6,294	6,294	248	6,542
Total recognised income for the period	-	-	(639)	6,294	5,655	246	5,901
Issue of share capital	105	662	(30)	-	737	-	737
Share based payment compensation:
- Value of employee services - share option plans	-	-	239	-	239	-	239
- long term incentive plan	-	-	1,027	-	1,027	-	1,027
	105	662	1,236	-	2,003	-	2,003
At 30 June 2007	8,344	52,962	(1,482)	(13,570)	46,254	1,841	48,095
At 1 January 2007	8,239	52,300	(2,079)	(19,864)	38,596	1,595	40,191
Currency translation adjustments	-	-	(6,833)	-	(6,833)	2	(6,831)
Net income recognised directly in equity	-	-	(6,833)	-	(6,833)	2	(6,831)
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 option plans	-	-	450	-	450	-	450
- long term incentive plan	-	-	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 Financial Information

1. General Information

IFG Group 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, incorporated and domiciled in the Republic of Ireland. The address of its registered office is IFG House, Booterstown Hall, Booterstown, County Dublin, Ireland. This financial information statement was approved for issue by the Board of Directors on 28 August 2008.

2. Basis of Preparation

The condensed set of financial statements for the six months ended 30 June 2008 ("financial information") has been prepared in accordance with the Transparency Regulations 2007, the Transparency Rules of the Irish Financial Services Regulations Authority and IAS 34, Interim Financial Reporting.

The accounting policies applied are those the Group expects to adopt for the 2008 year-end which are consistent with the principal accounting policies which were set out in the Group's 2007 consolidated financial statements. The principal accounting policies adopted by the Group for the 2007 year-end, as set out in the Group's 2007 consolidated financial statements, were in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC Interpretations and those parts of the Companies Acts 1963 to 2006 applicable to companies reporting under IFRS.

The following interpretations are mandatory for the first time for the financial year beginning 1 January 2008 but are not currently relevant for the Group: 

- IFRIC 12, 'Service concession arrangements'; and 

- IFRIC 14, 'IAS 19 - the limit on a defined benefit asset, minimum funding requirements and their interaction'. 

The preparation of the financial information includes the use of estimates and assumptions that affect items reported in the Consolidated Balance Sheet and Income Statement and the disclosure of contingent assets and liabilities at the date of the financial information. Although these estimates are based on management's best knowledge of current circumstances and future events and actions, actual results may differ from those estimates, possibly significantly. Management have reviewed the critical accounting estimates and judgements made at year end (disclosed in note 4 to the Notes to the 2007 statutory accounts) and note that there was no significant impact on the result for the half year ended 30 June 2008 as a result of this review. 

The accounts in this interim report are 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 2007 has in fact been so annexed. The auditors of the Company have made a report, without any qualification, on their audit of the statutory accounts of the Company in respect of the year ended 31 December 2007.

  Notes to the Financial Information - continued

3. Earnings per ordinary share

	Six months ended	Six months ended	Year ended
	30 June 2008	30 June 2007	31 December 2007
	Unaudited	Unaudited	Audited
Basic
Profit after income tax and minority interest (€'000)	6,598	6,294	12,069
Weighted average number of ordinary shares in issue for the calculation of earnings per share	70,643,293	68,940,555	69,268,010
Basic earnings per share (cent)	9.34	9.13	17.42
Diluted
Profit after income tax and minority interest (€'000)	6,598	6,294	12,069
Weighted average number of ordinary shares in issue for the calculation of earnings per share	70,643,293	68,940,555	69,268,010
Dilutive effect of share options and warrants	815,618	1,487,461	2,314,029
Dilutive effect of long term incentive plan	1,083,333	1,031,250	1,720,833
Weighted average number of ordinary shares for the calculation of diluted earnings per share	72,542,244	71,459,266	73,302,872
Diluted earnings per share (cent)	9.10	8.81	16.46

4. Business combinations

On 30 June 2008, the Group acquired 100% of the ordinary share capital of Excel-Serve Management Limited (Excel), a Cyprus company. Excel is a specialist corporate services provider offering specialist trust and corporate structures and company administration services to a wide range of personal and corporate clients worldwide. The consideration for Excel will be a maximum of €25,000,000 of which €10,721,547 has been satisfied in cash on completion. Contingent consideration of €10,721,547 has been placed in Escrow, and will be released in equal instalments of 12 and 24 months from the acquisition date subject to the achievement of revenue targets, being achieved for the two years post completion. The balance of the consideration will be paid following confirmation of the final net assets acquired.

The net assets, consideration and goodwill on acquisition of Excel can be analysed as follows:

	Fair  Value €'000
Property, plant and equipment	139
Receivables	4,389
Payables	(1,385)
Deferred tax liability on intangibles	(1,482)
Intangibles on acquisition	14,823
Net assets at acquisition date	16,484
Goodwill on acquisition	8,352
	24,836
Satisfied by:
Cash payments	10,722
Contingent consideration - amount in escrow	10,721
Deferred consideration	3,903
Expenses - estimated	250
	25,596
Cash acquired	(760)
	24,836

  Notes to the Financial Information - continued

Management have estimated that the book values and fair values of the property, plant & equipment, receivables and payables acquired were broadly comparable. These are provisional values and within the next few months management will complete the final valuation and accounting for this transaction. 

If this acquisition had occurred on 1 January 2008, Group revenue would have been €61,377,000 and profit before income tax would have been €8,854,000.

In 2007 the Group acquired 100% of the share capital of Gestinor AG. Contingent consideration was payable by reference to revenue earned in the year ended 31 December 2007 and 2008. The maximum revenue level for 2007 was not attained and an adjustment was made to goodwill to reflect this reduction upon payment of the consideration. The adjustment to goodwill amounted to €346,000.

In 2007 the Group acquired 100% of the share capital of Corfiser Holdings Limited. Contingent consideration was payable by reference to revenue earned in the year ended 31 December 2007 and 2008. The maximum revenue level for 2007 was not attained and an adjustment was made to goodwill to reflect this reduction upon payment of the consideration. The adjustment to goodwill amounted to €154,000.

In 2007, the Group acquired 100% of the share capital of Northern Trust International Fund Administration Services (Isle of Man) Limited and of Earlsfort Manager Limited at which time provisional valuations were undertaken which formed the basis for the accounting for both business combinations for the year ended 31 December 2007. A final valuation was completed during 2008 for both companies resulting in an adjustment of €500,000 between goodwill and intangibles to reflect the increased valuation of identified customer relationships acquired. The intangibles amortisation for the half year was €95,000 higher than would have been the case based on the preliminary valuation as a result of the finalisation of the accounting in respect of these business combinations.

  Notes to the Financial Information - continued

5. Segmental analysis

Primary reporting format-business segments

At 30 June 2008, the Group is organised on a worldwide basis into two main business segments:

- Provision of financial services;

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

The segment results for the period ended 30 June 2008 are as follows:

	Financial  services €'000 Unaudited	Trustee & corporate services €'000 Unaudited	Unallocated €'000 Unaudited	Total €'000 Unaudited
Revenue	38,020	19,999	-	58,019
Operating profit	4,562	4,346	(358)	8,550

The segment results for the period ended 30 June 2007 are as follows:

	Financial  services €'000 Unaudited	Trustee & corporate services €'000 Unaudited	Unallocated €'000 Unaudited	Total €'000 Unaudited
Revenue	43,689	17,850	-	61,539
Operating profit	5,656	3,364	(65)	8,955

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

	Financial  services €'000 Audited	Trustee & corporate services €'000 Audited	Unallocated €'000 Audited	Total €'000 Audited
Revenue	87,864	40,965	-	128,829
Operating profit	10,302	7,490	(450)	17,342

The segment assets at 30 June 2008 are as follows:

	Financial  services €'000 Unaudited	Trustee & corporate services €'000 Unaudited	Unallocated €'000 Unaudited	Total €'000 Unaudited
Assets	80,811	81,293	22,293	184,397

Notes to the Financial Information - continued

The segment assets at 30 June 2007 are as follows:

	Financial  services €'000 Unaudited	Trustee & corporate services €'000 Unaudited	Unallocated €'000 Unaudited	Total €'000 Unaudited
Assets	85,012	62,782	10,782	158,576
Investment in equity method associates	313	-	-	313
	85,325	62,782	10,782	158,889

The segment assets at 31 December 2007 are as follows:

	Financial  services €'000 Audited	Trustee & corporate services €'000 Audited	Unallocated €'000 Audited	Total €'000 Audited
Assets	85,290	59,974	7,480	152,744
Investment in equity method associates	299	-	-	299
	85,589	59,974	7,480	153,043

6. Income tax expense

The charge for taxation for the six months ended 30 June 2008 is based on the estimated effective rate of taxation for the year.

	Six months ended	Six months ended	Year ended
	30 June 2008	30 June 2007	31 December 2007
	Unaudited	Unaudited	Audited
	€'000	€'000	€'000
Current tax - current period expense	1,255	1,350	3,143
Current tax - prior period over provision	-	(45)	(424)
Total current tax	1,255	1,305	2,719
Movement in deferred tax	(268)	36	(33)
Net tax expense	987	1,341	2,686

The total tax charge for the period ending 30 June 2008 includes €1,075,000 (HY 2007: €1,061,000) relating to tax on UK profits.

7. Dividends

	Six months ended	Six months ended	Year ended
	30 June 2008	30 June 2007	31 December 2007
	Unaudited	Unaudited	Audited
	€'000	€'000	€'000
2006 Final dividend paid	-	-	1,474
2007 Interim dividend paid	-	-	903
	-	-	2,377

A final dividend for 2007 of 2.47 cent per share was approved by the shareholders on 1 July 2008. An interim ordinary dividend of 1.27 cent (2007 1.16 cent) has been declared subsequent to 30 June 2008. In accordance with the Group's accounting policy, these amounts are not included in the half year results.

Notes to the Financial Information - continued

8. Cash generated from operations

	Six months ended	Six months ended	Year ended
	30 June 2008	30 June 2007	31 December 2007
	Unaudited	Unaudited	Audited
	€'000	€'000	€'000
Profit before income tax	7,463	7,883	15,120
Depreciation and amortisation	1,953	1,698	3,850
Loss/(gain) on sale of property, plant & equipment	24	2	(1)
Finance costs	1,414	1,473	3,347
Finance income	(327)	(388)	(876)
Group share of profit of associates and joint ventures	-	(13)	(249)
Foreign exchange loss/(gain)	33	(266)	205
Non-cash share based payment compensation charges	1,312	1,266	2,700
Increase in trade & other receivables	(433)	(4,554)	(4,887)
Loan (to)/from associated undertakings	(18)	(32)	31
(Decrease)/increase in trade & other payables	(10,003)	(2,125)	916
	1,418	4,944	20,156

9. Analysis of net debt

	Opening balance €'000	Cash flow €'000	Acquisitions and disposals €'000	Other  non cash changes €'000	Closing  balance €'000
Cash	25,842	1,278	760	(1,189)	26,691
Overdraft	(1,551)	593	-	(60)	(1,018)
	24,291	1,871	760	(1,249)	25,673
Loans due within one year	(7,936)	-	-	-	(7,936)
Loans due after one year	(34,072)	-	(21,443)	-	(55,515)
Senior unsecured notes due < 1 yr	(690)	690	-	(920)	(920)
Senior unsecured notes due > 1 yr	(920)	-	-	920	-
Finance leases	(109)	36	-	(18)	(91)
Total	(19,436)	2,597	(20,683)	(1,267)	(38,789)

10. Share capital and premium

During the period 3,432,958 ordinary shares were issued at a price of €2.10 per share in conjunction with a share placing. Expenses associated with this amounted to €247,000.

Ordinary shares amounting to 687,501 were issued under the Long Term Incentive Plan (LTIP) to the Trust established for this purpose during the period ended 30 June 2008. These shares are held in trust for the executives including some executive directors who are participants in the LTIP. 

Ordinary shares amounting to 261,818 were issued under the terms of the IFG Group Share Option schemes during the period ended 30 June 2008. Theses shares were issued and allotted following the receipt of the subscription price from the subscribers.

 

Notes to the Financial Information - continued

11. Capital Commitment

Committed future expenditure for intangibles (software) as at 30 June 2008 amounted to €1.2 million (31 December 2007: Nil).

12. Related party transactions

Other than the impact of the compensation (including share based payment charges) earned by our Executive Director - Irish Operations of €443,000 in the half year to 30 June 2008 (2007 HY: Nil) there have been no key management compensation charges that have materially affected the financial position of the Group when compared to the six months to 30 June 2007. The Executive Director joined the Group in September 2007.

13. Statement of directors' responsibilities

The Directors confirm to the best of their knowledge that this financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the commentary on the results includes a fair review of the information required by the Transparency Regulations 2007.

The directors of IFG Group plc are listed in the IFG Group plc Annual Report for the year ended 31 December 2007. A list of the current directors is maintained on the IFG Group plc website.

On Behalf of the Board

Mark Bourke Donal Lynch

Chief Executive  Company Secretary

Forward-looking statements

Certain statements in this report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no guarantee that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no commitment to update any forward-looking statements whether as a result of new information, future events or otherwise.

Independent Review Report to IFG Group plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008, which comprises the consolidated income statement, consolidated balance sheet, consolidated statement of changes in equity, consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Irish Financial Services Regulatory Authority.

As disclosed in the notes, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

The maintenance and integrity of the IFG Group plc web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the web site.

Legislation in the Republic of Ireland governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Irish Financial Services Regulatory Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. for use in the United Kingdom and Ireland. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Transparency (Directive 2004/109/EC) Regulations 2007 and the Transparency Rules of the Irish Financial Services Regulatory Authority.

PricewaterhouseCoopers  Chartered Accountants

Dublin

29 August 2008

ENDIR PUUAPRUPRGMR

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