TIDMIFP
RNS Number : 2096P
IFG Group PLC
30 August 2017
2017 Interim Report
and condensed consolidated financial statements
for the six months ended 30 June 2017
Contents
IFG Group plc ('IFG' or 'the Group') is pleased to announce its
half-yearly financial report for the six-month period ended 30 June
2017.
Page
Interim Management Report 1
Condensed Consolidated Income Statement 12
Condensed Consolidated Statement of Comprehensive Income 13
Condensed Consolidated Statement of Financial Position 14
Condensed Consolidated Statement of Cash Flows 15
Condensed Consolidated Statement of Changes in Equity 16
Notes to the Condensed Consolidated Financial Statements 18
Responsibility Statement 27
Independent Review Report to IFG Group plc 28
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.
Interim management report
Strong growth fundamentals in both businesses
-- Assets under administration and advice more than GBP29
billion, a 19% increase in the last 12 months, demonstrating
momentum in both businesses
-- Strong new client activity, with James Hay adding more than
3,000 new clients, up 50% on H1 2016, and Saunderson House adding
144 new clients compared to 126 in H1 2016, benefiting from better
than expected demand for our discretionary management service
-- Revenues down 4% (GBP1.4m), reflecting the significant impact
of the previously reported GBP3.3m reduction in interest revenue in
James Hay versus H1 2016. This has resulted in lower operating
profit and adjusted operating profit
-- Exceptional costs of GBP2.7m (H1 2016: GBP0.8m) relating to
legal and remediation costs principally driven by "Elysian Fuels",
as well as H1 restructuring costs in James Hay to accelerate
efficiency gains. A further GBP1.0 million of restructuring costs
is anticipated in H2
-- Ongoing dialogue with HMRC in relation to Elysian Fuels
matter, but uncertainty as to timing of conclusion and impact of
any negotiated settlement, which could be material to the reported
results for the year
-- Interim dividend at 1.60 pence remains unchanged, but the
Board remains committed to a progressive dividend policy
Business highlights
Six months Six months
ended ended Movement
30 June 2017 30 June 2016 %
--------------------------------------------- ------------- ---------------------------------- --------
Assets under administration and advice
- Group GBP29.1bn GBP24.4bn +19%
Total SIPPs - James Hay 53,765 51,875 +4%
New SIPPs - James Hay 3,075 2,053 +50%
SIPP attrition rate - James Hay (annualised) 6.2% 6.8% (9%)
Total clients - Saunderson House 2,056 1,895 +8%
New clients - Saunderson House 144 126 +14%
Financial highlights
Six months Six months
ended ended Movement
30 June 2017 30 June 2016 %
------------------------------- ------------- --------------------------------- --------
Revenue GBP38.5m GBP39.9m (4%)
Operating (loss)/ profit (GBP0.1m) GBP4.0m (103%)
Adjusted operating profit GBP3.7m GBP5.8m (37%)
Basic EPS 0.01p 2.63p (100%)
Adjusted EPS 2.98p 4.05p (26%)
Interim dividend 1.60p 1.60p -
Twelve months Twelve months
ended ended Movement
30 June 2017 30 June 2016 %
------------------------------- ------------- --------------------------------- --------
Free cash flow - Twelve months GBP7.5m GBP10.2m (26%)
John Cotter, Chief Executive of IFG Group plc, commented;
'Both businesses are delivering strong growth in clients and
assets, reflecting the quality propositions that they offer our
clients, and our ability to compete successfully in our chosen
markets. Whilst short-term financial performance is being impacted
by the low interest rate environment, restructuring costs and the
resolution of legacy issues, we expect a much improved second half
underlying performance, particularly in James Hay as the effects of
repricing and restructuring start to bear fruit. We are confident
that both businesses are on a strong growth trajectory and that the
underlying performance will translate into a much improved
financial performance in 2018.'
Enquiries:
John Cotter Group Chief Executive Tel: +44 203 887 6181
Andrew Price Group Chief Financial Officer Tel: +44 203 887
6181
Chief Executive's statement
Strategy and Performance
The Group's strategy remains unchanged, focused on the organic
growth and development of both our businesses. Whilst H1 2017 has
been challenging from a financial standpoint and impacted by the
ongoing legacy issues and restructuring costs, the underlying
businesses have performed strongly, growing assets and clients
ahead of our forecasts, and materially ahead of the same period in
2016. We now administer or advise more than GBP29 billion of assets
for over 59,000 clients across both businesses. Legacy issues have
impacted profits due to costs in H1 2017, and we also took the
decision to accelerate restructuring in James Hay, which will have
a further short-term financial impact in H2, but reflects our
confidence in the changes we are making to the business. No
provision for the additional reorganisation costs has been
reflected in these figures and will be recognised in the second
half. This will deliver efficiency gains going forward, which will
translate into better outcomes for customers and improving
operating margins. The legacy issue in James Hay, Elysian Fuels, is
complex and the extent of any exposure to the Group is uncertain at
this stage, and hence has not been provided for, except in relation
to known legal and remediation costs which have been incurred. We
are focused on resolving and clarifying any financial exposure
prior to the year end.
Assets under administration and advice (AUA) increased from
GBP24.4 billion to GBP29.1 billion in the 12 months to 30 June
2017, with James Hay now administering more than GBP24.2 billion of
client assets and Saunderson House advising on just under GBP5.0
billion of assets. Revenue decreased by 4%. Client and asset growth
were strong in James Hay and much of the lost interest revenue will
be offset from repricing undertaken in late H1 in the second half.
In Saunderson House the growth of the discretionary management
service was ahead of forecast, but due to the timing of asset
take-on, the full revenue benefits of this performance will only be
seen in H2.
Group adjusted operating profit decreased by 37%, from GBP5.8
million to GBP3.7 million. Adjusting for the GBP3.3 million
reduction in interest revenue versus H1 2016, both revenues and
adjusted operating profits would have been ahead of H1 2016. The
underlying performance of the businesses will translate into
revenue and profit growth in H2 2017, and position the Group
strongly as we go into 2018.
Profit attributable to the equity Shareholders of the parent
company decreased from GBP2.8 million to GBP0.01 million, largely
arising from exceptional costs incurred.
The Group delivered earnings per share (EPS) of 0.01 pence in H1
2017 compared to 2.63 pence in H1 2016.
The Group delivered adjusted EPS of 2.98 pence in H1 2017
compared to 4.05 pence in H1 2016, a decrease of 26%.
The detailed financial performance of the Group is outlined in
the Financial Review on pages 4 to 7. The individual performance of
the two businesses are discussed in more detail on pages 8 to
11.
Market and Environment
Despite macro-political uncertainty, the environment for both
our businesses remains favourable. Stock markets continue in
positive mode, and in the UK specifically, the need for financial
advice, and the increasing pace of pension flows into the
self-managed space, underpin both businesses, particularly at the
high-end of the wealth management market in which both businesses
operate. Regulatory challenges are increasing, including the
Markets in Financial Instruments Directive (MiFID) II, General Data
Protection Regulation (GDPR) and the new Senior Managers and
Certification Regime (SMCR) together with the recently announced
review into the Platform industry. However, the Group is well
placed to manage the impacts of these changes within the ongoing
development plans for our businesses.
In James Hay, there has been a growing trend of clients moving
out of defined benefit and corporate schemes into self-managed
plans, as the recent changes to pension rules manifest themselves
into increased client activity. This has contributed to a 50%
increase in organic growth of clients in H1 2017 compared to H1
2016, and importantly, helped by our focused distribution strategy,
with materially higher average asset levels. The growth in James
Hay AUA in H1 2017 was GBP2.1 billion, of which GBP1.4 billion was
incremental investments from new and existing clients. Inflows in
the 12 months to 30 June were GBP3.0 billion. The distribution
strategy to focus on a smaller number of higher-quality advisor
relationships has contributed to this growth in clients, and with a
materially increased average case size, is further enhancing James
Hay's leading position at the high-end of the pension market.
Attrition at 6.2% is lower than in 2016 (30 June 2016: 6.8%), but
we expect a marginal uptick in H2, as our pricing changes take
effect. As most of the growth is in the flagship MiPlan product,
the overall proportion of clients and assets in this product
continues to increase to 46% (H1 2016 - 36%), and is likely to
exceed 50% of the total book in early 2018. The changes we made to
our pricing models will offset much of the revenue lost in H1 due
to a material fall in interest revenue, and ensure the business
continues to be correctly compensated for the value it provides to
its clients. This together with the acceleration of changes to
deliver improved operational efficiency, positions the business
strongly as we go forward. The accelerated changes to the
infrastructure in James Hay, facilitated by the technology
investments in the business over the last few years, will drive
growth in clients and revenues at lower unit cost. This will
support good customer outcomes and deliver improved operating
margins, which we expect will increase to close to 20% in 2018.
In Saunderson House we have seen continued growth in clients and
assets under advice, translating into marginally increased revenues
and increased operating margin and profit, compared to H1 2016. The
discretionary management offering, launched in 2016, broadens the
available market opportunity for Saunderson House, specifically for
clients for whom the advisory model is not necessarily appropriate
initially, but who wish to avail themselves of the first-class
investment proposition that Saunderson House offers. The number of
discretionary clients added in H1 2017 is ahead of our forecast,
and reflects the strength and appeal of this offering for
sophisticated clients who do not yet need the full advisory
proposition. We see this offering underpinning an increased growth
trajectory going forward.
The revenue profile on the discretionary product differs from
the advisory proposition, both in terms of size and timing. Fees
are earned only after assets are transferred, which can be several
months after the client take-on. In addition, we have recently
amended our pricing structure for this service to include an
initial fee at inception. Therefore H1 2017 does not show the full
revenue benefits from clients added in the period, as these will
largely accrue in H2. However, once assets are on-boarded, revenues
are earned on an ad valorem basis, and will increase as clients of
the discretionary product, who tend to be in the wealth
accumulation phase, add further assets over time.
In the markets we operate in, providing a safe and secure
environment for client assets, and offering high quality products,
excellent service as well as first-class investment advice as part
of a trusted partner relationship, are crucial to the long-term
success of our business. IFG Group's businesses compete
successfully against much larger firms in both the advisory and
platform and administration markets in which we operate. We will
continue to invest in the capability of our businesses, which will
support existing clients and attract new clients, who seek a
differentiated offering.
SHAREHOLDER RETURNS
A final dividend of 3.35 pence per share was approved by
Shareholders on 9 May 2017 and was paid on 20 June 2017. The Board
declares an interim dividend of 1.60 pence per share (2016 - 1.60
pence per share), in line with the Group's prior year interim
dividend.
Board Changes
There have been no changes to the Board in the period under
review.
Outlook
The financial performance of the business has been impacted, in
H1 2017, by reduced interest revenue and exceptional costs relating
to legal and remediation expenditure on legacy matters, as well as
an accelerated restructuring within James Hay. We see underlying
business performance continuing to improve in H2 2017, with strong
momentum into 2018. However, the resolution of the Elysian Fuels
matter remains uncertain and could materially impact reported
results in H2 2017, but we are focused on reaching a satisfactory
conclusion. The restructuring changes in James Hay will complete in
H2 2017.
Both businesses are in a materially stronger position than in
prior years, reflecting a positive operating environment which is
supportive of growth, despite ongoing volatility and uncertainty
relating to Brexit negotiations. The benefits of our investment to
improve the capability of the businesses is supporting growth and
ensuring a secure and stable platform. Client demand for
high-quality advice and investment performance is in increasing
demand in complex market conditions. More and more clients are
taking personal ownership of retirement planning, and increasingly
self-managing, with advice support, their retirement assets across
pensions and other asset classes. These factors provide opportunity
for both of our businesses, and we are confident that both are well
positioned, to continue to grow and develop on an accelerated
trajectory as we go forward into 2018.
Financial review
cOMMENTARY On THE RESULTS
Revenue
Six months ended Six months ended
30 June 2017 30 June 2016
GBP'000 GBP'000
============================== ================ ================
Platform 22,259 24,032
Independent wealth management 16,243 15,869
============================== ================ ================
Total revenue 38,502 39,901
============================== ================ ================
Total revenues for the six months to 30 June 2017 of GBP38.5
million were GBP1.4 million (4%) down on the same period in 2016,
primarily driven by the loss of interest revenue of GBP3.3 million
in James Hay as a result of lower interest rates. Client and asset
growth were strong in James Hay and much of the lost interest
revenue will be offset by the repricing undertaken in late H1, in
the second half. In Saunderson House the growth of the
discretionary management service was ahead of forecast but due to
the timing of asset take-on, the full revenue benefits of this
performance will only be seen in H2.
Assets under administration and advice
Six months ended
Six months ended 31 December Six months ended
30 June 2017 2016 30 June 2016
GBP'billion GBP'billion GBP'billion
============================== ================ ================ ================
Opening 26.7 24.4 23.5
Net inflows 1.5 1.5 0.8
Market movement 0.9 0.8 0.1
============================== ================ ================ ================
Closing 29.1 26.7 24.4
============================== ================ ================ ================
Platform 24.2 22.1 20.3
Independent wealth management 4.9 4.6 4.1
------------------------------ ---------------- ---------------- ----------------
Total 29.1 26.7 24.4
------------------------------ ---------------- ---------------- ----------------
During the period of 12 months to 30 June 2017, the total value
of assets under administration and advice increased by GBP4.7
billion (19%) from GBP24.4 billion to GBP29.1 billion, with James
Hay now administering more than GBP24 billion of client assets and
Saunderson House approaching GBP5.0 billion of assets under advice.
The Group continued to achieve strong net new business inflows of
GBP1.5 billion in H1 2017, reflecting the level of new client wins
in both businesses and the strength of the Group's proposition.
Operating profit and adjusted operating profit
Six months ended Six months ended
30 June 2017 30 June 2016
GBP'000 GBP'000
------------------------------------- ---------------- ----------------
Platform 1,795 4,242
Independent wealth management 3,908 3,632
Group/other (2,035) (2,054)
===================================== ================ ================
Total adjusted operating profit 3,668 5,820
Amortisation of acquired intangibles (1,073) (989)
Exceptional items (2,729) (799)
===================================== ================ ================
Operating (loss)/profit (134) 4,032
Finance income 33 255
Finance costs - (251)
===================================== ================ ================
(Loss)/Profit before income tax (101) 4,036
Income tax credit/(expense) 116 (1,269)
===================================== ================ ================
Profit for the period 15 2,767
===================================== ================ ================
Adjusted operating profit, before amortisation of acquired
intangibles and exceptional items, decreased by 37% to GBP3.7
million from GBP5.8 million in H1 2016. The Group operating profit
decreased by 103% to a loss of GBP0.1 million. The decrease in
operating margin was largely driven by the fall in interest rates
which came into effect in H2 2016, impacting James Hay. Our changes
to the pricing model implemented late in H1 2017, will increase fee
revenues and significantly improve margins for the platform
business in H2 and beyond.
Group/Other
Group costs include costs for our London based Group team, the
Board of Directors and other costs associated with being a publicly
listed company. Residual costs relating to the finalisation of the
relocation of the Group functions from Dublin to London, which
concluded in May 2017 are included in exceptional items.
Exceptional items
Exceptional items of GBP2.7 million (30 June 2016: GBP0.8
million) reflect GBP1.8 million of legal and related remediation
costs principally driven by the ongoing Elysian Fuels
investigation, GBP0.7 million of restructuring costs in James Hay
and GBP0.2 million of closure costs of the Dublin and Swavesey
offices including the sale of the premises in Swavesey.
Taxation
The reported Group tax credit of GBP116,000 represents an
effective tax rate of 115%, significantly in excess of the current
UK corporate tax rate of 19%. This was mainly driven by adjustments
relating to the closure of the Irish office and the
non-deductibility of certain exceptional costs, which
disproportionally impact the rate due to the level of profits. The
underlying effective tax rate is closer to the UK corporate tax
rate.
Adjusted EPS and adjusted earnings
Six months
Six months ended ended
30 June 2017 30 June 2016
-------------- ----------------------------------------------------- -----------------------------------------------
Per share Earnings Per share Earnings
pence GBP'000 pence GBP'000
============== ========= ========================================== =================================== ==========
Profit
attributable
to owners of
the parent
company 0.01 15 2.63 2,767
Amortisation
of
acquisition
related
intangible
assets 0.86 911 0.79 836
Exceptional
items 2.11 2,220 0.76 799
Unwinding of
discount
applicable
to contingent
consideration - - (0.13) (133)
============== ========= ========================================== =================================== ==========
Adjusted
earnings 2.98 3,146 4.05 4,269
============== ========= ========================================== =================================== ==========
The Group uses adjusted operating profit and adjusted earnings
as measures of performance to eliminate the impact of items it does
not consider indicative of ongoing underlying performance due to
their unusual, exceptional or non-recurring nature or because they
result from an event of a similar nature. The above amounts are net
of tax if applicable. Definitions of these measures are included in
note 2.
Summary of cash flows
Six months Six months
ended ended
30 June 2017 30 June 2016
GBP'000 GBP'000
============================================== ============= =============
Cash flows (used in)/generated from operating
activities (1,342) 1,330
Net capital expenditure (2,085) (2,023)
---------------------------------------------- ------------- -------------
Free cash flow (3,427) (693)
Interest and tax (1,161) (210)
Disposals of subsidiaries - (66)
Deferred consideration 4,037 -
Dividends paid (3,123) (3,025)
Head office restructuring & exceptional costs
paid (4,084) -
Share issues - 162
============================================== ============= =============
Net decrease in cash and cash equivalents (7,758) (3,832)
============================================== ============= =============
The Group's financial position remains strong. Net cash of
GBP20.6 million decreased by GBP2.8 million in the 12 months to 30
June 2017, which included the repayment of the GBP7.0 million drawn
facility in November 2016. Consistent with prior years, the Group
has consumed cash in H1 2017 mainly due to the payment of the final
dividend and 2016 bonuses. In Q1 2017, the Group received the final
deferred consideration totalling GBP4.0 million relating to the
sales of IFG FS UK and the Irish pension and advisory businesses.
This was offset by cash payments for exceptional items totalling
GBP4.1 million, specifically the closure of the Dublin headquarters
and Swavesey office (GBP0.9 million), costs associated with the
lease break on the former Group headquarters in Booterstown, Co
Dublin (GBP0.9 million), legal and remediation payments principally
driven by Elysian Fuels (GBP1.6 million) and redundancy payments
(GBP0.7 million).
Financial and capital position
The Group repaid a GBP7.0 million drawn funding facility in
November 2016 and has no debt. The Group entered into a GBP5.0
million overdraft facility agreement with Barclays Bank Ireland plc
in December 2016.
The Pillar 1 regulatory capital resources for the Group as at 31
December 2016 were GBP47.6 million. The Group continues to maintain
a level of regulatory capital resources which significantly exceeds
both the regulatory capital requirements and working capital
requirements of the Group. Further disclosures are published in the
Pillar 3 document on the Group's website at www.ifggroup.com.
Dividend
The Board has declared an interim dividend of 1.60 pence per
share (H1 2016: 1.60 pence per share). The Board is committed to
its progressive dividend policy and the full year dividend will
reflect the financial performance in H2. A final dividend for 2016
of 3.35 pence per share was approved by the shareholders on 9 May
2017 and was paid on 20 June 2017.
Share price and market capitalisation
The Company's shares traded between a range of 131 pence and 166
pence during the period. The share price at 30 June 2017 was 161
pence (30 June 2016: 174 pence), reflecting a decrease of 7% in the
12-month period to 30 June 2017 and an increase of 4% since 31
December 2016. The market capitalisation at 30 June 2017 was
GBP169.7 million (30 June 2016: GBP183.4 million). There were
105,405,665 shares in issue as at 30 June 2017.
Return on capital employed
Return on capital employed is calculated as earnings before
interest and tax divided by capital employed. The return on capital
employed was (0.17%) versus 9.4% in H1 2016, as a result of a
challenging H1 financial performance.
Related party transactions
There were no material changes in the related party transactions
during the financial period. Transactions disclosed in note 11 are
consistent in nature with the disclosure in note 31 of the 2016
Annual Report and Accounts.
Going concern
The Directors report that they have satisfied themselves the
Group is a going concern, having adequate financial and regulatory
resources to continue in operational existence for a period
exceeding 12 months from the date the condensed interim financial
statements were approved.
In forming this view, the Directors have reviewed the Group's
solvency and liquidity position by reviewing the latest forecasts
and the medium term plans as set out in the strategic plan approved
by the Board in December 2016 and have taken into account the
cashflow implications of the plan, including a sensitivity analysis
based on the key business risks identified. They have also
considered surplus cash available to the Group, including credit
facilities. The Group is regulated by the FCA and performs annual
capital adequacy assessments, including modelling of certain
extreme stress scenarios. The Group publishes its annual Pillar 3
on its website, where further details of its regulatory capital
resources and requirements are contained.
Having assessed the Group's relevant business risks, the
Directors believe that the Group is well placed to manage these
risks successfully.
Taking all of the above into account, the Directors continue to
adopt the going concern basis of accounting in preparing the
condensed consolidated interim financial statements.
Principal risks and uncertainties
The detailed review of the principal risks and uncertainties
which could impact the Group are detailed on pages 34 to 37 of the
Group's 2016 Annual Report and Accounts, a copy of which is
available on the Group's website www.ifggroup.com. The key risks
and uncertainties have not materially changed and are not expected
to materially change in the second half of the 2017 financial
year.
We consider it premature to speculate on the potential longer
term impact of Brexit until the basis of the UK's exit from the EU
is clarified. In the meantime, the short-term impact to the
businesses has been mainly felt in reduced interest rates and
increased market volatility. The Board have continued to monitor
and review the principal risks and uncertainties of the Group
throughout the accounting period.
The table below shows a summary of the principal key risks and
uncertainties which could impact the Group for the remainder of the
financial year.
Strategic Risks
======================================================================
1. Changing market conditions and increased competition
======================================================================
The Group operates in a highly competitive environment in which
economic, technological and other macro factors can negatively
impact on the demand for services. In addition, as a result
of tax and regulatory changes, market competition has increased
which could result in a decline in market share and/or profitability,
including where the Group fails to offer compliant products
that meet the increasingly sophisticated needs of customers.
======================================================================
2. Acquisitions & disposals
======================================================================
In respect of acquisitions, failures in selecting appropriate
investment targets, failing to integrate them into existing
businesses and successfully realising the growth expected from
such transactions may have an adverse impact on the Group. In
addition, financial and strategic risks related to business
disposals could lead to material warranty and indemnity claims.
======================================================================
Operational risks
======================================================================
3. Loss of key customers/intermediaries
======================================================================
Loss of key customers or intermediaries due to poor customer
outcomes, competitor activity or other factors, may have an
adverse effect on the Group's results.
======================================================================
4. Loss of key management resources
======================================================================
Strong and effective management is fundamental to the Group's
success. Failure to attract and retain highly skilled employees
and executives may have a material adverse effect on the Group's
operations and implementation of strategy.
======================================================================
5. Disruption to Information technology systems
======================================================================
Catastrophic loss of systems, undiscovered systems errors or
other external events could cause disruption to our businesses
and result in inability to perform core business activities
or reduction in client services.
======================================================================
6. Cybercrime, fraud or security breaches in respect of the
Group's data, software or information technology systems
======================================================================
Failure to protect our information technology systems against
the increasing sophistication of cybercrime attacks, fraud or
security breaches could result in loss of data or disruption
to business.
======================================================================
Financial Risks
======================================================================
7. Regulation and conduct considerations
======================================================================
Ongoing changes to regulation and the legislative environment
applicable to the Group's activities, operating model or business
opportunities may result in implementation costs, disruption
to our businesses and increased levels of risk transfer by regulators
to platform and advisory businesses. The Group could face a
loss arising from customer complaints or a failure to deliver
good customer outcomes, fines including HMRC sanction charges
and/or regulatory censure from failure to comply with applicable
regulations and taxation obligations and guidance in respect
of both current and legacy business practices, as well as constraints
in the ability to charge appropriate risk premiums for the Group's
business.
======================================================================
8. Fluctuations in capital markets
======================================================================
Volatility within capital markets may adversely impact on the
value of assets under administration and advice or management
held by our underlying businesses which may affect revenues.
======================================================================
9. Liquidity
======================================================================
Lack of sufficient, readily realisable financial resources to
meet the Group's obligations as they fall due or lack of access
to liquid funds on commercially viable terms could lead to inability
to pay clients and suppliers and to regulatory breaches.
======================================================================
10. Interest rates
======================================================================
Legacy over dependency on interest revenue giving rise to continuing
potential vulnerabilities in the short to medium term financial
performance driven by macro-economic factors.
======================================================================
11. Credit risk
======================================================================
The exposure to a financial loss as a result of a default by
customers or counterparties with which the Group transacts business,
including failure to receive deferred or contingent consideration
on businesses sold.
======================================================================
Divisional performance
James Hay
Six months Six months
ended ended Movement
30 June 2017 30 June 2016 %
---------------------------------- ------------- --------------------------------- --------
Revenue GBP22.3m GBP24.0m (7%)
Operating (loss)/profit (GBP1.5m) GBP4.2m (135%)
Adjusted operating profit GBP1.8m GBP4.2m (57%)
Assets under administration GBP24.2bn GBP20.3bn +19%
Total SIPPs 53,765 51,875 +4%
New SIPPs 3,075 2,053 +50%
SIPP attrition rates (annualised) 6.2% 6.8% (9%)
Industry overview
Assets in the broader platform market grew by over GBP30 billion
in Q1, taking the total assets on platforms through the GBP500
billion barrier for the first time. Projected growth sees the
market breaking the GBP600 billion barrier by year-end. We have
continued to observe strong flows during H1 2017. Advised sales
still account for the largest proportion of new business (70%) and
pensions were responsible for 44% of net new business. More than
90% of James Hay business is through advisors, reflecting the fact
that wealthier clients tend to use advisers in respect of such
financial decisions.
The regulatory environment remains active with both the MiFID II
and GDPR projects under way, while preliminary work continues to
assess the work required to meet the impact of the Senior Managers'
and Certification Regime.
Business review
The first half of 2017 includes a number of significant business
achievements but also financial challenges. This was reflected in
the adjusted operating profit before exceptional costs of GBP1.8
million down 57% on 2016. A number of factors contributed to the
lower adjusted operating profit but principally the interest
revenue reduction of GBP3.3 million, which directly translated to
the bottom line profit and a lower operating margin of 8.1% (30
June 2016: 17.5%). This was as anticipated and the pricing changes
implemented late in H1 2017 will offset much of this impact in H2
2017.
A number of exceptional items have been incurred during H1 2017,
including legal and remediation costs, principally driven by
Elysian Fuels, (GBP1.6m) and restructuring costs (GBP0.7m)
producing an operating loss after exceptional items of GBP1.5m,
down 135% on H1 2016.
Assets under Administration (AuA) continued to increase, up 19%
on H1 2016 at GBP24.2 billion, supported by strong new business
flows, existing client contributions and market value
increases.
-- Assets held in the investment centre, trading through James
Hay, reached GBP5.5bn (23% of AuA)
-- MiPlan now accounts for 46% of AuA (36% in H1 2016)
Attrition has reduced by 9% to 6.2% (H1 2016 - 6.8%) in line
with the expected rate. We anticipate a modest increase to
attrition levels in H2 2017, as the changes to pricing are
implemented.
New client wins of 3,075 (50% ahead of 2016) reflected the
success of our continued focus on strategic partnerships with the
top 250 advisors, supported by favourable market conditions. New
business has contributed GBP1.1 billion of AuA averaging almost
GBP420,000 per case, an increase of 14% on H1 2016, reflecting the
increasing quality of flows from our IFA partners.
We continue to add to the quality of the senior management team,
with Julia Warrack joining in April 2017 as COO, responsible for
Operations and Technology, replacing the Heads of IT and Operations
who departed. We have also seen a number of other senior
departures, as we look to reinvigorate the leadership team to meet
the challenges ahead.
The business has successfully delivered on a number of
initiatives during H1:
-- Implementation of the new pricing structure, providing value
for investors whilst decreasing the firm's sensitivity to interest
rate changes. This is expected to increase revenues by around
GBP2.0 million in H2.
-- Structural and processing changes across the operations
function, focusing on improved efficiency and service levels, the
benefits of which will be seen in 2018.
-- The first phase of restructuring during H1 has delivered an
overall headcount reduction of 36 (-5%). In doing so, exceptional
costs of GBP0.7 million were incurred. Additional organisational
reviews are underway, with an expected cost of GBP1.0 million in
H2, which we anticipate will deliver more than GBP2.0 million
annual cost savings in 2018.
-- There has been substantial resource allocated to the review
and remediation of legacy products including NSIs, with one-off
remediation and external legal costs being incurred in H1,
principally related to Elysian Fuels. Some of the ongoing legal
costs may be covered by the Group's insurance.
-- In January, James Hay withdrew from offering Non-Standard
Investments (NSIs) to new SIPP clients and from May, to existing
clients. We will continue to administer existing NSIs which are
less than 1% of total assets under administration.
Key achievements
-- James Hay retained their position as 8th largest platform in
the UK, based on Platforum Adviser Platform Research Q1 2017
-- Strong financial strength rating maintained, rated "B" by AKG
-- Awarded a 5 star Defaqto rating for the adviser platform
-- Achieved 'Excellent' FinalytiQ rating for SIPP financial stability
-- Added five new discretionary managers to the managed portfolio panel
Strategy
The focus continues to be on further developing our 'digital
platform' for the future and, in response to adviser and investor
demand, continuing the development programme started in 2016 to
bring on stream a range of new online services. The relationships
with key IFAs will, we believe, deliver more consistent and
higher-quality new business flows, and enhance our ability to drive
efficiency gains through the increasing usage of on-line capability
and reduced paper-based activity. In H1 2017, 93% of new clients
used our on-line functionality to open their accounts. The
distribution strategy remains to identify and maximise high value
quality IFA and customer relationships while looking to enhance
customer service, increase efficiency and make better use of
digital and self-serve. These all feed into increasing scalability
and efficiency, a rationalisation of legacy products, improving the
business' cash generation and continuing our journey to becoming a
fully functional cross-asset platform for retirement wealth
planning.
Saunderson House
Six months Six months
ended ended Movement
30 June 2017 30 June 2016 %
----------------------- ------------- ----------------------------------- --------
Revenue GBP16.2m GBP15.9m +2%
Operating profit GBP3.9m GBP3.6m +8%
Assets under advice GBP4.9bn GBP4.1bn +20%
Total clients 2,056 1,895 +8%
New clients 144 126 +14%
Attrition (annualised) 2% 4% (50%)
Industry overview
Political events continue to dominate media coverage and create
uncertainty for investors. This provides Saunderson House with the
opportunity to add value to client portfolios through
research-driven asset allocation and fund selection decisions.
Furthermore, demand for our services is supported by the sustained
low interest rate environment which, coupled with increasing
inflation, continues to erode the real value of cash savings and
encourages investors to seek greater returns through financial
markets. Increasing frequency of life events (such as career or
location changes) and an evolving pensions landscape are also
promoting demand for holistic financial advisory services.
Regulatory initiatives, such as MiFID II, GDPR and the SMCR,
have required industry-wide responses. These bring both benefits to
the industry's reputation in the eyes of its clients, but also
require allocation of resources to achieve compliance.
We remain attuned to high levels of industry competitiveness,
including new entrants exploiting technological capabilities and a
continuing trend of consolidation. There has also been increased
service development activity, with competitors expanding their
propositions to include digital offerings, banking services and
enhancing their financial advisory and discretionary management
capabilities. Saunderson House remains a differentiated proposition
to attract and profitably service our chosen market segments.
Research conducted during H1 2017 endorsed how our tailored
offering and trusted relationships with clients ensure we continue
to attract and retain clients who value our differentiated
offering.
Business review
Total revenues have increased by 2% compared to H1 2016 and
operating profits have risen by 8%, increasing the operating margin
to 24%. The restructuring of the client facing teams, focusing more
explicitly on winning new clients and serving existing clients,
will deliver a more focused service model, which, together with
investment in technology, will make the business more scalable and
deliver improved operating margins. Assets under advice increased
to GBP4.9 billion, and Saunderson House now serves over 2,000
clients. New client wins have increased this year, with 144 new
clients won compared to 126 clients during H1 2016. In 2016 the
business benefitted from increased investment activity due to
Brexit, increasing demand for advice from existing clients, which
was not repeated in 2017.
Our discretionary management service, launched at the beginning
of 2016, has exceeded our initial expectations. We anticipated that
the discretionary offering would be attractive to those clients
with lower initial value portfolios, yet it has also seen
encouraging demand from our traditional client segments, as well as
from existing advisory clients. This is positive for the long-term
development of the service, although does have a short-term impact
on revenues, as there is an inherent lag in the generation of
income from our discretionary service in comparison to that of our
advisory service. We have also recently amended our pricing
structure for this service to include an initial fee at inception.
As a result, the new business in H1 2017 will only start to deliver
meaningful revenue from H2 2017.
Our ongoing client feedback programme has confirmed high
satisfaction ratings amongst our client base, with an average
client advocacy score of 9.3 out of 10. Amongst other improvement
initiatives, clients have benefitted from the continued development
of our digital offering, Saunderson House Online. This has included
the implementation of a number of new features further enabling
clients to use the portal as a secure repository for their
financial information. The portal provides a way for clients and
families to gain an up-to-date insight into their wealth and,
through the ability to group accounts together, recognises and
accommodates the intergenerational relationships that they often
have with Saunderson House.
To ensure a solid and secure platform for future growth, we have
maintained investment in our IT capabilities and infrastructure,
particularly in relation to the discretionary offering to ensure we
can scale our business for an increased trajectory of new clients.
We have made improvements to our governance model, with the
introduction of new personnel to the business in key areas, such as
risk and compliance oversight. We have also redefined a number of
management roles to ensure clear accountability for service
development, business operations and business development outcomes.
Amanda Davidson, a former Director of the FCA, was appointed to the
Saunderson House Board in July 2017, subject to FCA approval.
Key achievements
We are proud to have been independently recognised for the
following awards during the year:
-- Best Wealth Management Adviser - Money Marketing Awards 2017
-- Best Pension Planning Firm at the 2017 Wealth & Money Management Awards
-- Silver award for Best Use of Technology (joint with our
client portal provider) - UK Financial Services Experience Awards
2017.
Investment proposition
Over the last decade, our Wealth Accumulation Balanced Model has
delivered a total return of more than 82%, outperforming the
appropriate Asset Risk Consultants (ARC) comparator by over 23%. In
monetary terms, based on a starting portfolio value of GBP1.0
million, this equates to more than GBP230,000 of additional value
when compared with the ARC peer group. Disciplined adherence to our
straightforward, value-based transparent process has enabled us to
generate returns in excess of our peers over one, three, five and
ten years. Performance has also comfortably outpaced inflation,
delivering an average real return (i.e. adjusted for inflation) of
3.8% per annum over ten years.
Strategy
Saunderson House's focus remains on delivering a high quality,
highly tailored service to clients with complex financial needs. We
utilise technology to support our relationship-led offering by
improving client access to information, efficiently managing client
assets and providing transparency over how their wealth is managed.
In addition to our award-winning investment proposition, our
expertise in specific market segments enables us to deliver value
to clients through understanding and addressing their needs better
than our competitors. We take a systematic approach to business
development and continue to build our presence in complementary
market segments.
Our service development strategy is focussed on meeting and
exceeding the ever-evolving needs of our clients and markets.
Strategic projects to improve our portfolio management technology
and the expansion of our middle office function are expected to
drive operational efficiencies over the medium-term.
Condensed Consolidated Income Statement (unaudited)
Six months ended 30 June 2017
Six months
ended Six months
30 June ended
2017 30 June 2016
Re-presented
Unaudited Unaudited
Notes GBP'000 GBP'000
=============================================== ===== ============ =============
Revenue 3 38,502 39,901
Staffing expense (24,102) (24,540)
Depreciation and amortisation (2,565) (2,273)
Other operating expenses (9,240) (8,257)
Other gains 4 - 501
Other losses 4 (2,729) (1,300)
=============================================== ===== ============ =============
Operating (loss)/profit (134) 4,032
=============================================== ===== ============ =============
Analysed as:
Operating profit before exceptional items 2,595 4,831
Exceptional items 4 (2,729) (799)
=============================================== ===== ============ =============
Operating (loss)/profit (134) 4,032
Finance income 33 255
Finance costs - (251)
=============================================== ===== ============ =============
(Loss)/profit before income tax (101) 4,036
Income tax credit/(expense) 5 116 (1,269)
=============================================== ===== ============ =============
Profit for the period 3 15 2,767
=============================================== ===== ============ =============
Profit for financial period attributable to:
Owners of the parent company 15 2,767
Profit for the period 15 2,767
=============================================== ===== ============ =============
Earnings per share attributable to the owners of the Company
during the period:
Six months Six months
ended ended
30 June 2017 30 June 2016
Unaudited Unaudited
============================================ =============== =============
Basic earnings per ordinary share (pence)
From profit for the period 0.01 2.63
============================================= =============== =============
Diluted earnings per ordinary share (pence)
From profit for the period 0.01 2.61
============================================= =============== =============
The accompanying notes form an integral part of the half yearly
report.
Condensed Consolidated Statement of Comprehensive Income
(unaudited)
Six months ended 30 June 2017
Six months Six months
ended ended
30 June 2017 30 June 2016
Unaudited Unaudited
GBP'000 GBP'000
======================================================== ============== =============
Profit for the period 15 2,767
Other comprehensive income:
Items that may be reclassified subsequently to profit
or loss:
Exchange differences on translation of foreign currency
operations 119 270
Reclassification adjustment of exchange reserve upon
strike off of subsidiaries - (516)
Recycled to the condensed Consolidated Income Statement
on disposal of subsidiary - (48)
Other comprehensive income 119 (294)
======================================================== ============== =============
Total comprehensive income for the period 134 2,473
======================================================== ============== =============
Total comprehensive income attributable to:
Owners of the Company 15 2,473
Non-controlling interest - -
======================================================== ============== =============
Total comprehensive income for the period 15 2,473
======================================================== ============== =============
The accompanying notes form an integral part of the half yearly
report.
Condensed Consolidated Statement of Financial Position
(unaudited)
As at 30 June 2017
30 June 30 June
2017 Unaudited 31 December 2016
GBP'000 2016 Audited Unaudited
Notes GBP'000 GBP'000
=================================== ==================== =============== ============= ==========
ASSETS
Non-current assets
Property plant and equipment 10 3,564 4,322 2,844
Intangible assets 10 54,652 55,074 54,828
Deferred income tax asset 9 9 9
Total non-current assets 58,225 59,405 57,681
=================================== ==================== =============== ============= ==========
Current assets
Trade and other receivables 10 18,209 22,828 24,677
Income tax asset - - 18
Cash and cash equivalents 8 20,557 28,226 30,376
=================================== ==================== =============== ============= ==========
Total current assets 38,766 51,054 55,071
=================================== ==================== =============== ============= ==========
Assets classified as held for sale 10 550 - -
=================================== ==================== =============== ============= ==========
Total assets 97,541 110,459 112,752
=================================== ==================== =============== ============= ==========
LIABILITIES
Non-current liabilities
Deferred income tax liabilities 2,360 2,323 2,785
Provisions for other liabilities 1,030 1,032 2,038
=================================== ==================== =============== ============= ==========
Total non-current liabilities 3,390 3,355 4,823
=================================== ==================== =============== ============= ==========
Current liabilities
Trade and other payables 10 16,667 22,551 18,859
Income tax liabilities 58 1,902 1,142
Borrowings - - 6,910
Provisions for other liabilities 262 2,445 1,795
=================================== ==================== =============== ============= ==========
Total current liabilities 16,987 26,898 28,706
=================================== ==================== =============== ============= ==========
Total liabilities 20,377 30,253 33,529
=================================== ==================== =============== ============= ==========
Net assets 77,164 80,206 79,223
=================================== ==================== =============== ============= ==========
EQUITY
Share capital 10,093 10,093 10,093
Share premium 82,404 82,404 82,404
Other reserves 10 (14,151) (14,054) (14,240)
Retained earnings (1,182) 1,763 966
=================================== ==================== =============== ============= ==========
Total equity 77,164 80,206 79,223
=================================== ==================== =============== ============= ==========
The accompanying notes form an integral part of the half yearly
report.
Condensed Consolidated Statement of Cash Flows (unaudited)
Six months ended 30 June 2017
Six months Six months
ended ended
30 June 30 June
2017 2016
Unaudited Unaudited
Notes GBP'000 GBP'000
======================================================= ===== =============== ==========
Cash flows from operating activities
Cash (used in)/generated from operations 7 (1,342) 1,330
Head office restructuring and exceptional (4,084) -
Interest received 31 98
Income taxes paid (1,192) (194)
======================================================= ===== =============== ==========
Net cash (used in)/generated from operating activities (6,587) 1,234
======================================================= ===== =============== ==========
Cash flows from investing activities
Purchase of property, plant and equipment (551) (715)
Purchase of intangible assets (1,534) (1,308)
Disposal of subsidiaries - (66)
Deferred consideration received 4,037 -
Net cash generated from/(used in) investing activities 1,952 (2,089)
======================================================= ===== =============== ==========
Cash flows from financing activities
Dividends paid (3,123) (3,025)
Interest paid - (114)
Proceeds from issue of share capital - 162
======================================================= ===== =============== ==========
Net cash used in financing activities (3,123) (2,977)
======================================================= ===== =============== ==========
Net decrease in cash and cash equivalents (7,758) (3,832)
Cash and cash equivalents at the beginning of
the period 28,226 34,085
Effect of foreign exchange rate changes 89 123
======================================================= ===== =============== ==========
Cash and cash equivalents at the end of the period 8 20,557 30,376
======================================================= ===== =============== ==========
Six months
Six months ended
ended 30 June
30 June 2016
2017 Unaudited Unaudited
Notes GBP'000 GBP'000
======================================================= ===== =============== ==========
Cash and short-term deposits:
- as disclosed on the condensed Consolidated Statement
of Financial Position 20,557 30,376
Cash and cash equivalents at the end of the period 8 20,557 30,376
======================================================= ===== =============== ==========
The accompanying notes form an integral part of the half yearly
report.
Condensed Consolidated Statement of Changes in Equity
(unaudited)
Attributable
to the
owners
Share Share Other Retained of the Non-controlling Total
capital premium reserves earnings parent interest equity
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ---------- ---------- ---------- ---------- ------------ --------------- ----------
At 1 January 2017 10,093 82,404 (14,054) 1,763 80,206 - 80,206
--------------------------- ---------- ---------- ---------- ---------- ------------ --------------- ----------
Profit for the period - - - 15 15 - 15
Other comprehensive income
Currency translation:
- arising in the period - - 119 - 119 - 119
- reclassification
adjustment of
exchange reserve upon
strike off
of subsidiaries - - - - - - -
- recycled to the condensed
Consolidated
Income Statement on
disposal of
subsidiary - - - - - - -
=========================== ========== ========== ========== ========== ============ =============== ==========
Total comprehensive income
for
the period - - 119 15 134 - 134
=========================== ========== ========== ========== ========== ============ =============== ==========
Dividends - - - (3,123) (3,123) - (3,123)
Issue of share capital - - - - - - -
Transfer of vested
share-based
payment - - (163) 163 - - -
Reclassification adjustment
of
exchange reserve upon
strike off
of subsidiaries - - - - - - -
Share-based payment
compensation:
- value of employee
services -
share options - - (53) - (53) - (53)
Transaction with owners - - (216) (2,960) (3,176) - (3,176)
=========================== ========== ========== ========== ========== ============ =============== ==========
At 30 June 2017 10,093 82,404 (14,151) (1,182) 77,164 - 77,164
=========================== ========== ========== ========== ========== ============ =============== ==========
At 1 January 2016 10,078 82,257 (13,766) 629 79,198 - 79,198
=========================== ========== ========== ========== ========== ============ =============== ==========
Profit for the period - - - 2,767 2,767 - 2,767
Other comprehensive income
Currency translation:
- arising in the period - - 270 - 270 - 270
- reclassification
adjustment of
exchange reserve upon
strike off
of subsidiaries - - (516) - (516) - (516)
- recycled to the condensed
Consolidated
Income Statement on
disposal of
subsidiary - - (48) - (48) - (48)
Total comprehensive income
for
the period - - (294) 2,767 2,473 - 2,473
=========================== ========== ========== ========== ========== ============ =============== ==========
Dividends - - - (3,223) (3,223) - (3,223)
Issue of share capital 15 147 - - 162 - 162
Transfer of vested
share-based
payment - - (277) 277 - - -
Reclassification adjustment
of
exchange reserve upon
strike off
of subsidiaries - - - 516 516 - 516
Share-based payment
compensation:
- value of employee
services -
share options - - 97 - 97 - 97
Transaction with owners 15 147 (180) (2,430) (2,448) - (2,448)
=========================== ========== ========== ========== ========== ============ =============== ==========
At 30 June 2016 10,093 82,404 (14,240) 966 79,223 - 79,223
=========================== ========== ========== ========== ========== ============ =============== ==========
Attributable
to the
owners
Share Share Other Retained of the Non-controlling Total
capital premium reserves earnings parent interest equity
Audited Audited Audited Audited Audited Audited Audited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ ======== ======== ============ ========= ============ =============== ========
At 1 January 2016 10,078 82,257 (13,766) 629 79,198 - 79,198
================================ ======== ======== ============ ========= ============ =============== ========
Profit for the period - - - 5,250 5,250 - 5,250
Other comprehensive income
Currency translation:
- arising in the period - - 419 - 419 - 419
reclassification adjustment
of exchange reserve upon strike
off of subsidiaries - - (516) - (516) - (516)
- recycled to the Consolidated
Income Statement on disposal
of subsidiaries - - (48) - (48) - (48)
================================ ======== ======== ============ ========= ============ =============== ========
Total comprehensive income
for the period - - (145) 5,250 5,105 - 5,105
================================ ======== ======== ============ ========= ============ =============== ========
Dividends - - - (4,909) (4,909) - (4,909)
Issue of share capital 15 147 - - 162 - 162
Transfer of vested share-based
payment - - (277) 277 - - -
Reclassification adjustment
of exchange reserve upon strike
off of subsidiaries - - - 516 516 - 516
Share-based payment
compensation:
- value of employee services
- share options - - 134 - 134 - 134
Transaction with owners 15 147 (143) (4,116) (4,097) - (4,097)
================================ ======== ======== ============ ========= ============ =============== ========
At 31 December 2016 10,093 82,404 (14,054) 1,763 80,206 - 80,206
================================ ======== ======== ============ ========= ============ =============== ========
The accompanying notes form an integral part of the half yearly
report.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
1. Reporting entity
IFG Group plc is a public company, listed on the Irish and
London Stock Exchanges and is incorporated and domiciled in the
Republic of Ireland. This condensed set of financial statements
(financial information) comprise the Company and its subsidiaries.
The Group provides a range of financial solutions including full
platform services, pension administration and independent financial
advice.
2. General information
The half-yearly financial information is considered
non-statutory financial statements for the purposes of the
Companies Act 2014 and in compliance with section 340(4) of that
Act we state that:
-- the financial information for the half year to 30 June 2017
has been prepared to meet our obligation to do so under the listing
rules of the main securities market of the Irish Stock Exchange and
S.I. No. 277 of 2007;
-- the financial information for the half year to 30 June 2017
does not constitute the statutory financial statements of the
Company;
-- the statutory financial statements for the financial year
ended 31 December 2016 have been annexed to the annual return and
filed with the Companies Registration Office in Ireland;
-- the statutory auditors of the Company made a report under
section 391 of the Companies Act 2014 in relation to the statutory
financial statement for the year ended 31 December 2016; and
-- the matters referred to in the statutory auditors' report
were unqualified, and did not include a reference to any matters to
which the statutory auditors drew attention by way of emphasis
without qualifying the report.
Basis of preparation
This financial information, for the six months ended 30 June
2017, has been prepared in accordance with the Transparency
(Directive 2004/109/EC) Regulations 2007, as amended, the
Transparency Rules of the Central Bank of Ireland and International
Accounting Standard 34 'Interim Financial Reporting' as adopted by
the EU. This financial information should be read in conjunction
with the financial statements for the year ended 31 December 2016,
which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU.
The accounting policies applied are consistent with those used
to prepare the financial statements for the year ended 31 December
2016 and the financial statements have been prepared on a basis
consistent with that reported for the year ended 31 December
2016.
The consolidated income statement is re-presented for the prior
half year comparatives as expenses have been analysed by nature,
instead of by function.
Updates to technical pronouncements
The following standards and interpretations issued by the
International Accounting Standards Board ('IASB') and the
International Financial Reporting Interpretations Committee
('IFRIC') are effective, for the first time in the current year,
and have been adopted with no significant impact on the Group's
result for the period or financial position.
- Amendments to IAS 7 - 'Disclosure Initiative'
- Amendments to IAS 12 - 'Recognition of Deferred Tax Assets for
Unrealised Losses'
- Annual improvements to IFRS 2014 - 2016 cycle
The following standards, amendments and interpretations have
been issued but are not yet effective for the Group. The Group will
apply the relevant standards from their EU effective dates and is
currently assessing their impact on its financial statements.
- IFRS 9 'Financial Instruments'
This standard addresses the classification, measurement and
recognition of financial instruments and will replace IAS 39
Financial Instruments: Recognition and Measurement. The effective
date is for the period beginning on 1 January 2018. The Group
assessed its business model for holding financial assets as
required by IFRS 9. The Group's financial assets consist of trade
receivables and cash for which amortised cost measurement applies.
The Group does not expect the classification of its financial
assets to change as a result of implementation of IFRS 9. The Group
does not believe that the impact will be material when the new
impairment model is applied. The basis of the Expected Credit Loss
model will be consistent across the Group.
- IFRS 15 'Revenue from contracts with customers'
This standard will replace IAS 18 Revenue, IAS 11 Construction
Contracts and related interpretations. IFRS 15 deals with revenue
recognition, establishing principles for reporting the nature,
amount, timing and uncertainty of revenue and cash flows arising
from an entity's contracts with customers. The Group's revenues are
earned from short-term contracts with relatively small values per
contract, the Group does not have long-term contracts. Based on an
initial assessment of the Group's performance obligations and the
related allocation of transaction price, the Group does not expect
there to be a material impact following the adoption of IFRS
15.
- IFRS 16 'Leases'
This standard deals with recognition, measurement, presentation
and disclosure on leases. The standard provides a single lessee
accounting model, requiring lessees to recognise assets and
liabilities for all leases unless the lease term is 12 months or
less or the underlying asset has a low value. Lessors continue to
classify leases as operating or finance. The Group does not expect
there to be a material impact following the adoption of IFRS
16.
Critical accounting estimates and judgements
In the six months ended 30 June 2017, there were no significant
changes to the Group's approach to, and method of, making critical
accounting estimates and judgements compared to those disclosed in
the Audit Committee report of the 2016 Annual Report and
Accounts.
Use of alternative performance measures
The Group has identified certain measures that it believes will
assist in the understanding of the performance of the business.
These measures are not defined under IFRS and they may not be
directly comparable with other companies' adjusted measures. These
alternative performance measures are not intended to be a
substitute for, or superior to, any IFRS measures of performance
but management have included them as they consider them to be
important comparables and key measures used within the business for
assessing performance.
The following are key alternative performance measures
identified by the Group and used in the Group financial statements
and in the financial information presented herein:
Adjusted operating profit
Adjusted operating profit is defined as operating profit,
excluding acquisition-related amortisation and exceptional items.
Management believes excluding these items from the calculation of
operating profit is useful because management excludes items that
are not comparable when measuring operating profitability,
evaluating performance trends and setting management performance
objectives. It allows investors to evaluate the Group's performance
for different periods on a more comparable basis.
The reconciliation of adjusted operating profit to profit before
income tax has been disclosed in note 3.
Adjusted earnings and adjusted EPS
Adjusted earnings is defined as profit attributable to owners of
the parent company before amortisation of acquired intangibles,
exceptional items and unwinding of discount applicable to
contingent consideration, net of tax where applicable.
Adjusted EPS is defined as basic earnings per ordinary share
adjusted for amortisation of acquired intangibles, exceptional
items and unwinding of discount applicable to contingent
consideration, net of tax where applicable.
The Group uses adjusted operating profit, adjusted earnings and
adjusted EPS as measures of performance to eliminate the impact of
items it does not consider indicative of ongoing operating
performance due to their inherent unusual, exceptional, or
non-recurring nature or because they result from an event of a
similar nature.
A table showing the reconciliation from basic EPS to adjusted
EPS and a reconciliation from profit attributable to owners of the
parent Company to adjusted earnings is included in the Financial
Review.
Free cash flow
Free cash flow represents the cash flow generated from operating
activities less cash used in relation to capital expenditure.
Management considers free cash flow an important measure of the
Group's ability to generate cash and profits. Free cash flow is an
accurate measure of how much cash the Group has generated to
service its debts, pay dividends and further invest in its
operations. The financial review includes a reconciliation of free
cash flow to the net cash flow in the period.
Return on capital employed
Return on capital employed is calculated as earnings before
interest and tax divided by capital employed. It measures how
efficiently the Group generates profits from its capital employed
by comparing it to net profit.
3. Segmental information
In line with the requirements of IFRS 8, 'Operating segments',
the Group has identified the Group Chief Executive of the Company
as its Chief Operating Decision Maker (CODM). The Group Chief
Executive reviews the Group's internal reporting in order to assess
the performance of the Group and allocate resources. The operating
segments have been identified based on these reports.
Throughout the period, the Group Chief Executive considered the
business line perspective, based on two reporting segments:
platform and independent wealth management. The segments were
managed by senior executives who reported to the Group Chief
Executive and to the subsidiary Boards. These segments are
described in the interim management report. Group and other costs
are reported separately.
The Group Chief Executive assessed the performance of the
segments based on a measure of adjusted earnings. He also considers
profit before tax and reviews working capital and overall balance
sheet performance on a Group wide basis but also received reports
on all measures at an individual business level.
The Group earns its revenues in these segments by way of fees
from the provision of services. Intersegment revenue is not
material and thus not subject to separate disclosure.
Goodwill is allocated to cash-generating units on a reporting
segment level and that is the level at which it is assessed for
impairment. Income tax is managed on a centralised basis and is
therefore not allocated between operating segments for the purpose
of presenting information to the CODM. The information provided to
the Group Chief Executive for the reportable segments, for the
period ended 30 June 2017 is as follows:
Six months ended 30 June 2017:
Independent
wealth Group/
Platform management Other Total
GBP'000 GBP'000 GBP'000 GBP'000
===================================== ======== =========== ======== ========
Revenue 22,259 16,243 - 38,502
===================================== ======== =========== ======== ========
Adjusted operating profit/(loss) 1,795 3,908 (2,035) 3,668
Amortisation of acquired intangibles (1,073) - - (1,073)
Exceptional items (2,261) - (468) (2,729)
===================================== ======== =========== ======== ========
Operating (loss)/profit (1,539) 3,908 (2,503) (134)
Finance income 20 - 13 33
Finance costs - - - -
===================================== ======== =========== ======== ========
(Loss)/profit before income tax (1,519) 3,908 (2,490) (101)
Income tax credit 116
===================================== ======== =========== ======== ========
Profit for the period 15
===================================== ======== =========== ======== ========
The prior half year comparatives are as follows:
Independent
wealth Group/
Platform management Other Total
GBP'000 GBP'000 GBP'000 GBP'000
===================================== ======== =========== =========================== ===========================
Revenue 24,032 15,869 - 39,901
===================================== ======== =========== =========================== ===========================
Adjusted operating profit/(loss) 4,242 3,632 (2,054) 5,820
Amortisation of acquired intangibles (989) - - (989)
Exceptional items - 501 (1,300) (799)
------------------------------------- -------- ----------- --------------------------- ---------------------------
Operating profit/(loss) 3,253 4,133 (3,354) 4,032
Finance income 74 91 90 255
Finance costs - - (251) (251)
------------------------------------- -------- ----------- --------------------------- ---------------------------
Profit/(loss) before income tax 3,327 4,224 (3,515) 4,036
Income tax expense (1,269)
===================================== ======== =========== =========================== ===========================
Profit for the period 2,767
===================================== ======== =========== =========================== ===========================
Assets and liabilities as at 30 June 2017
Independent
wealth Group/
Platform management Other Total
GBP'000 GBP'000 GBP'000 GBP'000
=============================================== ======== =========== ======== ========
ASSETS
Segment assets 68,984 18,616 9,932 97,532
Deferred income tax asset 9
Income tax asset -
=============================================== ======== =========== ======== ========
Total assets as reported on the condensed
Consolidated Statement of Financial Position 97,541
=============================================== ======== =========== ======== ========
LIABILITIES
Segment liabilities (9,512) (5,947) (2,500) (17,959)
Deferred income tax liabilities (2,360)
Current income tax liabilities (58)
=============================================== ======== =========== ======== ========
Total liabilities as reported on the
condensed Consolidated Statement of Financial
Position (20,377)
=============================================== ======== =========== ======== ========
Assets and liabilities as at 30 June 2016
Independent
wealth Group/
Platform management Other Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- -------- ----------- -------- --------
ASSETS
Segment assets 77,007 23,554 12,164 112,725
Deferred income tax asset 9
Income tax asset 18
=============================================== ======== =========== ======== ========
Total assets as reported on the condensed
Consolidated Statement of Financial Position 112,752
=============================================== ======== =========== ======== ========
LIABILITIES
Segment liabilities (10,753) (7,299) (11,550) (29,602)
Deferred income tax liabilities (2,785)
Current income tax liabilities (1,142)
Total liabilities as reported on the condensed
Consolidated Statement of Financial Position (33,529)
=============================================== ======== =========== ======== ========
Assets and liabilities as at 31 December
2016
Independent
wealth Group/
Platform management Other Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- -------- ----------- -------- --------
ASSETS
Segment assets 77,237 25,716 7,497 110,450
Deferred income tax asset 9
Income tax asset -
=============================================== ======== =========== ======== ========
Total assets as reported on the condensed
Consolidated Statement of Financial Position 110,459
=============================================== ======== =========== ======== ========
LIABILITIES
Segment liabilities (10,177) (11,417) (4,434) (26,028)
Current income tax liabilities (1,902)
Deferred income tax liabilities (2,323)
=============================================== ======== =========== ======== ========
Total liabilities as reported on the condensed
Consolidated Statement of Financial Position (30,253)
=============================================== ======== =========== ======== ========
4. Exceptional items
Exceptional items charged against operating profit
Six months Six months
ended ended
30 June 2017 30 June 2016
GBP'000 GBP'000
==================================== ============== =============
Disposal of IFG UK FS - 501
Group headquarters relocation costs (224) (1,300)
Legal & remediation costs (1,820) -
James Hay redundancy costs (685) -
Total (2,729) (799)
==================================== ============== =============
2017
Group headquarters relocation costs
A cost of GBP0.1 million related to the impairment of the
Swavesey office which is now recorded as a held for sale asset. A
further GBP0.1 million related to the final costs for the delayed
closure of the Dublin office.
Legal & remediation costs
A cost of GBP1.8 million has been recognised in relation to
remediation and legal costs principally driven by the ongoing
Elysian Fuels investigation.
Redundancy costs
Redundancy costs relating to the restructure of the James Hay
business of GBP0.7 million have been recognised.
2016
Disposal of IFG UK FS
A gain of GBP0.5 million was recognised following the agreement
of the final consideration payable for the IFG UK FS businesses
sold in 2014.
Group headquarters relocation costs
A provision of GBP1.3 million relating to the planned
restructuring of Group headquarters was recognised in the period,
which involved the closure of the Dublin office and legacy UK
finance functions.
5. Income tax credit/(expense)
Six months Six months
ended ended
30 June 2017 30 June 2016
GBP'000 GBP'000
============================================ ============= =============
Current tax
- current period expense (693) (1,374)
- prior period over provision 271 14
============================================ ============= =============
Total current tax expense (422) (1,360)
Movement in deferred tax 28 91
-------------------------------------------- ------------- -------------
Income tax expense before exceptional items (394) (1,269)
Tax effect of exceptional items 510 -
============================================ ============= =============
Income tax credit/(expense) 116 (1,269)
============================================ ============= =============
6. Dividends
A final dividend for 2016 of 3.35 pence per share was approved
by the shareholders on 9 May 2017 and was paid on 20 June 2017. The
Board has declared an interim dividend of 1.60 pence, in line with
2016. The interim dividend will be paid on 27 November 2017 to
shareholders on the register at the close of business on 3 November
2017 with an ex-dividend date of 2 November 2017.
7. Cash (used in)/generated from operations
Six months
ended Six months
30 June ended
2017 30 June 2016
GBP'000 GBP'000
================================================== ========== =============
(Loss)/profit before income tax (101) 4,036
Depreciation and amortisation 2,565 2,273
Disposal of subsidiaries - (48)
Finance costs - 251
Finance income (33) (255)
Foreign exchange movement 42 21
Non-cash share-based payment compensation charges (53) 97
Increase in trade and other receivables 600 (2,098)
Decrease in current and non-current liabilities (4,362) (2,947)
================================================== ========== =============
Cash (used in)/generated from operations (1,342) 1,330
================================================== ========== =============
8. Analysis of net cash
Opening Cash Other Closing
balance flow movements balance
GBP'000 GBP'000 GBP'000 GBP'000
============================= ======== ======== ========== ========
Cash and short-term deposits 28,226 (7,758) 89 20,557
Total 28,226 (7,758) 89 20,557
============================= ======== ======== ========== ========
OTHER MOVEMENTS
Other movements of GBP89,000 relate to the impact of exchange
rate movements arising on balances denominated in currencies other
than Sterling.
9. Financial risk management and financial instruments
Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk (including interest rate risk and foreign
currency risk), credit risk and liquidity risk.
The financial information does not include all financial risk
management information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's 2016 Annual Report and Accounts as at 31 December 2016.
There have been no changes in any risk management policies adopted
by the Group.
Liquidity and capital resources
The Group has a GBP5.0 million overdraft facility agreement with
Barclays Bank Ireland plc.
Fair value estimation
All financial instruments, for which fair value is recognised or
disclosed, are categorised within the fair value hierarchy
(described as follows) based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 - Quoted market prices in an active market (that are
unadjusted) for identical assets or liabilities.
Level 2 - Valuation techniques (for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable).
Level 3 - Valuation techniques (for which the lowest level input
that is significant to the fair value measurement is
unobservable).
For financial instruments that are recognised at fair value on a
recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each
reporting period.
There was no change in the valuation method of financial
instrument assets or liabilities, carried at fair value, during the
six-month period to 30 June 2017.
The fair value of the Group's financial assets and liabilities
approximates their carrying amount.
10. Other statement of financial position items
Property, plant and equipment and intangible assets
In the half year to 30 June 2017, the Group spent GBP2.0 million
(H1 2016: GBP2.0 million) on PPE and intangible assets, including
computer software to continue to enhance product capability and
operational efficiency, in both businesses. The Group also charged
amortisation and depreciation expense of GBP2.6 million (H1 2016:
GBP2.3 million).
At 30 June 2017, amounts authorised by the Directors as capital
commitments, but not contracted for, were GBP5.3 million (31
December 2016: GBP7.3 million).
AVAILABLE FOR SALE assets
At 30 June 2017, the Group had received an offer on the freehold
premises in Swavesey which is now held for sale in the amount of
GBP0.6m (30 June 2016: GBP nil).
Trade and other receivables
The decrease in trade and other receivables from GBP22.8 million
as at 31 December 2016 to GBP18.2 million as at 30 June 2017 was
mainly due to the receipt of deferred consideration in the period
of GBP4.0 million.
Trade and other payables
The decrease in trade and other payables from GBP22.6 million as
at 31 December 2016 to GBP16.7 million as at 30 June 2017 was due
principally to the payment of 2016 bonuses.
Other reserves
The other reserves balance increased by GBP0.1 million from
GBP14.1 million as at 31 December 2016 to GBP14.2 million as at 30
June 2017. This movement was attributable to the half year charge
for share options of GBP0.1 million, transfer of vested share based
payments to retained earnings of GBP0.2 million and movement of
GBP0.1 million on the translation of the non-Sterling foreign
operations.
11. Related party transactions
Key management personnel compensation
As per IAS 24 'Related party disclosures', the Group has defined
the term 'key management personnel' as its Directors. In addition
to their salaries, the Group also provides non-cash benefits to
Directors and contributes to post-employment plans on behalf of
certain Directors.
30 June 30 June
2017 2016
GBP'000 GBP'000
=================================================== ======== ========
Salaries and other short-term benefits 381 486
Post-employment benefits 33 55
Long-term incentives and share-based payments - 19
Charged to Condensed Consolidated Income Statement 414 560
=================================================== ======== ========
Transactions and balances with joint ventures and associates
At 30 June 2017, Group companies were owed GBPnil (31 December
2016: GBPnil) by Rayband Limited, an Irish unlisted company and an
associate of the Group. The Group has no further financial exposure
with Rayband and will look to strike it off.
Transactions involving entities in which key management have an
interest
During the period, Group companies earned GBP31,000 (2016:
GBP41,000) from key management for services provided by the two
businesses. All fees were charged on an arm's-length basis with our
normal terms and conditions. At the end of the period, Group
companies were owed GBP13,000 (2016: GBP27,000).
12. Commitments, contingencies and guarantees
Given the nature of the business, the Group has a number of
claims against it. The Group has procedures in place to assess the
veracity of the claims and provision has been made to cover its
best estimate of the exposure in respect of these matters. No
provisions have been recorded for other contingencies, as the
Group's obligations under them are not probable and estimable.
The Company has provided rental guarantees, to landlords of
Group occupied premises, totalling GBP0.6 million over the period
to 2018 (H1 2016: GBP0.6 million).
In March 2016, the Group received a notice of a claim under the
indemnities provided in the sale of the International Segment
completed in
2012. The claim is considered by the purchaser to be an amount
of up to GBP3.0 million but we do not accept that it is a valid
claim under the terms of the sale agreement, and ongoing
discussions with the counterparty have not yet resolved the
position to our satisfaction. Therefore, in light of our view,
supported by legal advice, that this is not a valid claim, the
Group does not believe a provision is quantifiable, or necessary,
in respect of this matter.
The Group periodically receives customer complaints, or requests
from Revenue Authorities or Regulators arising out of its ongoing
business operations. A small number of these matters, in addition
to the "Elysian Fuels" matter noted below, were under review at the
end of the reporting period. The Group could face a loss arising
from customer complaints, failure to comply with relevant
legislation or failure to deliver good customer outcomes, including
claims, sanctions or penalty charges from Revenue Authorities or
Regulators relating to the advice given on, or the administration
of, our clients' assets. Any potential liability for such matters
can only be determined once the full circumstances are examined and
the status of the relevant regulatory compliance obligations are
determined, such matters remain uncertain until the conclusion of
any internal review processes. Any exposures, once known, are
promptly settled where appropriate, or provided for where the
outcome is known with some certainty. It is not always practical to
reliably estimate the quantum of any liability that may arise
relating to such matters; however, if such claims were to
materialise, they may in any event be mitigated by recoveries
available to the Group. The Group will continue to reassess these
matters and make provision where the outcome is known with
sufficient certainty.
In April 2017, the Group received assessment notices for
sanction charges from HMRC in relation to its investigations into
one non-standard investment known as "Elysian Fuels", which was a
structured investment in biofuel businesses initiated between 2011
and 2015, an equity component of which was held by some investors
through their SIPP. Some of these investors are clients of James
Hay. Around 500 of James Hay's 57,000 clients invested a total of
c.GBP55 million in Elysian Fuels. These sanction charges, relating
to the tax years 2011/2012 and 2012/2013 totalled GBP1.8 million.
The Group has appealed these charges and they are the subject of
ongoing discussions with HMRC. As this matter remains under review
by HMRC and has not been determined, either in terms of liability
or quantum, the extent of any ultimate exposure to the Group, which
could be material, is uncertain at this stage. As a result any
financial effect cannot be reliably estimated at this time, and may
in any event be mitigated by recoveries available to the Group. No
provision has therefore been made in respect of this matter, other
than for actual legal costs incurred to date. Sanction charges can
be levied by HMRC on SIPP providers where there is deemed
unauthorised payments, the amount of which is dependent upon the
individual circumstances of each investor. The Group believes James
Hay acted appropriately and in accordance with its clients'
instructions in relation to these investments.
13. Post balance sheet events
On 20 July 2017, the Group Board approved an acceleration of the
restructuring plan for James Hay. This plan will deliver
improvements to the operational capabilities of the business,
supporting increased efficiency, reduced on-going costs and
improved service levels to clients. It is anticipated that this
restructuring plan will cost an additional GBP1.0 million and this
expense will likely be recognised as an exceptional item in H2
2017.
Responsibility Statement
The Directors are responsible for preparing the half-yearly
financial report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007 as amended, the related transparency
rules of the Central Bank of Ireland and with IAS 34 'Interim
Financial Reporting', as adopted by the EU.
The Directors are required to prepare the half-yearly financial
report on a going concern basis unless it is not appropriate. Since
the Directors are satisfied that the Group has the resources to
continue in business for the foreseeable future, the financial
information continues to be prepared on the going concern
basis.
Each of the Directors, whose names and functions are outlined
below, confirm that to the best of each persons' knowledge and
belief:
- the half-yearly set of financial statements, comprising the
condensed consolidated income statement, the condensed consolidated
statement of comprehensive income, the condensed consolidated
statement of financial position, the condensed consolidated
statement of cash flows, the condensed consolidated statement of
changes in equity and the related notes, have been prepared in
accordance with International Accounting Standard 34 'Interim
Financial Reporting' as adopted by the EU; and
- the financial information includes a fair review of the
information required by:
(a) regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended, being an indication of important
events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements and a description of the principal risks and
uncertainties for the remaining six months of the year; and
(b) regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended, being related party transactions that
have taken place in the first six months of the current financial
year and that have materially affected the financial position or
performance of the Group during that period and any changes in the
related party transactions described in the last Annual Report that
could do so.
The names and functions of the Directors as of 30 June 2017 are
listed below:
John Gallagher - Chairman
John Cotter - Group Chief Executive
David Paige - Senior Independent Director
Colm Barrington - Non-Executive
Robin Phipps - Non-Executive
Peter Priestley - Non-Executive
Kathryn Purves - Non-Executive
Cara Ryan - Non-Executive
On behalf of the Board
J Cotter D Paige
Group Chief Executive Senior Independent Director
29 August 2017
Independent Review Report to IFG Group plc
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 2017, which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated statement of cash
flows, the condensed consolidated statement of changes in equity
and the related notes 1 to 13. 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.
This report is made solely to the company in accordance with
International Standards on Review Engagements 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" as issued by the International Auditing and
Assurance Standards Board. Our work has been undertaken so that we
might state to the company those matters we are required to state
to them in an independent review report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review
work, for this report, or the conclusions we have formed.
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, as
amended and the Transparency Rules of the Central Bank of
Ireland.
As disclosed in the basis of preparation, 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 the half-yearly financial report has been
prepared in accordance with International Accounting Standard 34
"Interim Financial Reporting" as adopted by the European Union.
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.
Scope of review
We conducted our review in accordance with International
Standards on Review Engagements 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" as
issued by the International Auditing and Assurance Standards Board.
A review of interim financial information consists of making
inquiries, 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
(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 2017 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 "Interim Financial
Reporting" as adopted by the European Union, the Transparency
(Directive 2004/109/EC) Regulations 2007, as amended, and the
Transparency Rules of the Central Bank of Ireland.
Deloitte
Chartered Accountants and Statutory Audit Firm
Dublin
29 August 2017
This announcement has been issued through the Companies
Announcement Service of
The Irish Stock Exchange
This information is provided by RNS
The company news service from the London Stock Exchange
END
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