IFG Group's full-year earnings beat analysts' expectations as a robust performance by its international business took the sting out of a loss in Irish mortgage broking.
IFG revealed yesterday it posted a 6pc drop in adjusted earnings per share in 2008 to 22.8c, despite a 16pc slump in the value of sterling, which affects 80pc of the group's earnings. Analysts at NCB Stockbrokers said the result was 10pc ahead of their forecast.
Group revenues fell 15pc to €109.3m, mainly as a result of lower turnover in its now-small Irish property division. IFG said its strategy of building diversified and geographically spread income streams "is proving resilient", though 2009 will be a "very challenging year".
Chief executive Mark Bourke indicated yesterday he was comfortable with consensus market expectations for EPS in 2009 to fall between 17c and 19c.
The group has transformed itself over the past four years by focusing increasingly on the international trustee and fund administration business, where it has spent up to €60m on acquisitions, according to Mr Bourke. Operating profits in this division jumped to €12.2m from €9.6m in 2007. "Two-thirds of the growth came from acquisitions in 2007 and 2008, with the remaining third being organic," he said. Over the past two years, it has bought Swiss-based Gestinor, Northern Trust's fund administration services business in the Isle of Man, and Cyprus-based corporate services provider Excel-Serve.
The international arm accounted for 61pc of operating profits, with a further 34pc by the UK division.
Profits in the UK pensioner trustee business increased 23pc in sterling terms as it benefited from the growth in self-invested personal pension schemes (SIPPS). However, foreign exchanges movements resulted in it translating into a 7pc increase to €3.9m.
Surge
The UK financial services division, which focuses on offerings to high net worth London City types, delivered a 31pc drop in earnings to €2.9m. While its advisory business Saunderson House delivered a 19pc surge in profit in sterling terms, its overseas retirement services business, Siddalls, "struggled in a hugely difficult market". The euro-sterling rate also weighed.
The Irish mortgage broking and title insurance business plunged into a loss of €900,000, compared with a €5.2m profit in 2007. Mr Bourke said that transactions tumbled between 70pc and 90pc in this business as the property market collapsed. As a result, staff levels in the business have fallen by 77pc.