Home > Investor Relations > Interim Results Commentary 2003
Interim Results Commentary 2003
Print this page: 
The directors report that operating profit before goodwill amortisation in respect of continuing activities for the six months ended 30 June 2003 was €6.26 million compared with €7.24 million in the previous year. Profit before taxation was €1.15 million compared with a loss of (€21.35) million in the previous year. Adjusted earnings per share were 5.53 cent (2002HY 6.29 cent). Basic earnings per share were 1.27 cent (2002HY (33.03)). These figures are before the following exceptional items-
- losses on continuing Pension release activities of €0.66 million
- losses on continuing restructured activities of €0.19 million
- losses on discontinued investment activities of €0.20 million
- losses on the sale of a UK business of €0.22 million
- profits on the sale of a property investment of €0.06 million
Recurring income credited, a key measurement for the future of the company, was €10.68 million from continuing operations, an increase of 17.5% on the 2002 comparative figure of €9.09 million. Recurring income includes insurance renewals, trustee fees, actuarial fees and fund management fees, which recur over a long period.
The Board has decided to pay an interim dividend of 0.73 cent per share subject to withholding tax at 20% (2002HY 0.73 cent). The dividend will be paid to qualifying shareholders on the Register at the close of business on 21 November 2003. Dividend warrants will be posted on 5 December 2003.
The Group's International, UK Actuarial and Irish businesses performed well with an overall increase in profits of 40%, an increase of €1.54 million on €3.89 million profit for the previous year. The UK IFA business traded profitably in a difficult market. The Group's Pension Release business however, produced negligible profit. This has resulted from an ongoing compliance driven restructuring of the business.
Debt
Significant progress has been made over the past year resulting in a reduction of our total commitment as follows:
| Half year 30-Jun-03 € m |
Year end 31-Dec-02 € m |
Half Year 30-Jun-02 € m |
|
| Core Debt | 45.4 | 47.3 | 51.9 |
| Contingent Deferred Consideration | 11.4 | 18.9 | 27.1 |
| 56.8 | 66.2 | 79.0 | |
| Investment Debt | 6.0 | 19.4 | 49.8 |
| 62.8 | 85.6 | 128.8 |
Core Debt
The Group's banking and deferred consideration commitments at the half year are further analysed as follows:
| Core € m |
Investment € m |
Total € m |
|
| Net Debt per balance sheet | 24.5 | 6.0 | 30.5 |
| Bank Guaranteed Deferred Consideration | 20.9 | - | 20.9 |
| 45.4 | 6.0 |
51.4 |
The core debt of the business is thus €45.4 million of which €20.9 million is shown in the balance sheet as part of deferred consideration.
Investment Debt
€6.0 million of the company's debt is secured by the investment division's assets and are "ring fenced" or isolated from the core trading business. The investment related debt of €6.0 million is offset by the following assets:
| € m | |
| Debtors for the sale and surrender of endowment policies | 2.3 |
| Remaining Assets | 6.3 |
| 8.6 |
Divisional Performance The Group continues to focus on providing independent financial advisory and administrative services to clients in the following areas:
- Trustee and Corporate Services - non-advisory administrative services in IOM, Jersey and Geneva;
- Actuarial & Pensioneer Trustee - self administered and self invested pension plans for companies and individuals; " Financial Services - independent advisory services for corporate and private clients;
- Pension Release - pension transfer;
- Mortgage Intermediary - commercial and residential mortgage broking (Ireland).
Group Performance The performance of the Group in the first half year, split between its main activities, was as follows:
| Cont. activities 6 months ended 30 Jun 03 Unaudited |
Cont. activities 6 months ended 30 Jun 03 Restated |
Total operating profit 30 Jun 03 |
Total Operating Profit |
|
| € '000 | €'000 | €'000 | €'000 | |
| International | ||||
| Trustee & Corporate Services | 2,283 | 1,707 | 2,283 | 1,707 |
| UK | ||||
| Actuarial & Pensioneer Services | 1,855 | 1,569 | 1,855 | 1,569 |
| Financial Services | ||||
| - subject to restructuring | - | (606) | - | (606) |
| - not subject to restructuring | 791 | 1,416 | 591 | 820 |
| Pension release and Discount Brokerage | 34 | 2,543 | (629) | 2,543 |
| Investment | - | - | (77) | (269) |
| Ireland | ||||
| Mortgage Intermediary | 890 | 561 | 890 | 561 |
| Financial Services including Central Overhead | 402 | 50 | 402 | 50 |
| Operating Profit before Goodwill amortisation | 6,255 | 7,240 | 5.315 | 6,375 |
| Goodwill amortisation | (1,305) | (2,342) | (1,305) | (2,342) |
| Operating Profit | 4,950 | 4,898 | 4,010 | 4,033 |
The International Trustee and Corporate services division achieved a 34% increase in operating profit to €2.28 million. The Isle of Man business performed particularly well. This business continues to develop its multicentre platform as a provider of administration services.
The actuarial and pensioneer trustee division is made up of IPS, an acquisition made during the first half of 2002 based in Bristol, and businesses in London and Manchester. These businesses which continue to hold 10% of the SSAS and 5% of the SSIP market, are now being integrated. The integration of management and the scope for increased efficiency of resource allocation will allow us to continue to exploit the market.
In the UK, our IFA business continues to suffer from a tough business environment. We are seeing the benefit from the work of the last two years. Trading in our City based business continues to grow. Our other UK business centres were slow but profitable. As previously stated however, pension release is currently undergoing a compliance driven restructuring and this has sharply affected profitability.
In the Irish business, the Mortgage Intermediary business continued to grow. Cheque issues on behalf of clients amounted to €352 million, an increase of 45% on the same period last year.
The Irish Financial Services business continues to expand its client base in the pensions market. Performance across our Title Insurance, Credit Insurance broking and Individual Wealth Management has exceeded expectation.
Outlook
The Group programme of debt reduction continues. The outlook for the Actuarial and Pensioneer Trustee business remains good. The UK IFA business is improving and continued growth is expected in our International and Irish businesses.
Registered in the Republic of Ireland No. 21010
Registered Office: IFG House, Booterstown Hall, Booterstown, Co. Dublin
Tel: + 353 (0)1 2752800 | Fax: + 353 (0)1 2752801
Email: group@ifg.ie