Dublin-listed IFG targets to prompt earnings upgrades

Revenue at James Hay division projected to grow by 7% over the next three years

The market value of IFG has fallen by 28 per cent in the past 12 months to €156.5 million

The market value of IFG has fallen by 28 per cent in the past 12 months to €156.5 million


Dublin-listed financial services company IFG Group, whose business is now solely in the UK, outlined ambitious revenues targets for its two units on Thursday, which is set to lead to analysts raising their earnings estimates.

Group chief executive Kathryn Purves, who took on the role in August, forecast that revenue at its James Hay division, a provider of self-investment pension plans (SIPPs) in the UK, would grow by 7 per cent per annum over the next three years. Operating margins in the businesses are expected to expand from 19 per cent to 25 per cent over the period.

Revenues at Saunderson House, an investment adviser traditionally focused on professionals in the City of London that was the subject of an abortive sale plan earlier this year, are set to grow by 9 per cent a year over the same period.

Margins in Saunderson House are also expected to improve, according to IFG, as it seeks to “attract younger clients and clients outside its traditional segments of lawyers and accountants”.

“We believe that in developing strong, deliverable strategies with attractive growth profiles for each of James Hay and Saunderson House, and minimising group costs, we are enhancing longer term strategic optionality for the group,” said Ms Purves. “I am encouraged by the opportunities for both businesses and expect this to translate into real value for shareholders in the medium term.”

A Goodbody Stockbrokers analyst said in a note to clients that he may raise his 2020 and 2021 earnings estimates for the group by 10 per cent and 20 per cent, respectively.

The market value of IFG has fallen by 28 per cent in the past 12 months to €156.5 million. The company said in early February it was incurring significant legal and remediation costs linked to a UK revenue investigation into Elysian Fuels, a structure investment in biofuel businesses it initiated between 2011 and 2015.

“The group maintains a strong balance sheet, retaining cash to cover the worst-case outcomes in respect of Elysian and other legacy matters that are yet to be resolved,” IFG said on Thursday.

Although IFG remains domiciled in Ireland and its shares are listed on the Dublin exchange, it moved its corporate headquarters to London in 2016.