Irish-founded financial services group IFG has said the Bank of England’s recent interest rate rise will boost revenues and operating margins next year.
In its latest trading update for the first 10 months of the year, the group, now solely focused on the UK financial advisory and pensions market, reiterated confidence for its financial improvement next year after being blighted by restructuring and legal costs in 2017.
While it said the rise from 0.25% to 0.5% in UK interest rates won’t have a material impact on its specialist pension unit James Hay this year, it will improve revenues and the operating margin in 2018.
IFG also said assets under administration and advice have topped the £30bn mark and its total customer base now numbers more than 60,000 people.
At the end of August IFG reported a first half operating loss of £100,000, down from a profit of £4m a year earlier due to exceptional costs of £2.7m relating to legal and remediation costs connected to a probe into an investment scheme sold to James Hay clients.
However, management also, at the time, expressed confidence of seeing a marked financial improvement next year.
Yesterday’s update, however, said no further progress has been made with Britain’s revenue authorities over the so-called Elysian Fuels investment scheme sold to James Hay customers. IFG had said that it hoped to resolve the issue before the end of this year.
Merrion analyst Darren McKinley said IFG’s update was upbeat relative to recent editions and “a positive surprise”.