IFG shares down 6% on news of losses

SHARES in IFG slid 6% yesterday after the troubled financial services group announced pre-tax losses of €6.7 million for the year to December.

This compared with profits of €1.6m in 2003 and was largely driven by exceptional losses of almost €9m.

The results failed to meet market expectations.

The write-offs mainly related to the closure of Berkeley Jacobs, the group’s struggling pension release business in Britain, which landed IFG in trouble with the British financial regulator in recent years.

The business had provided a way for customers to unlock some of the value in their pension funds before they retired, but suffered a €250,000 hit last year after being fined for mis-selling.

Chief executive Richard Hayes was upbeat about the group’s future and yesterday said IFG would invest in areas where there was “material long-term potential.”

The firm plans to grow revenues from its remaining mortgage advisory and corporate trustee businesses and repay its debt to avoid ongoing interest costs.

Total debt-related commitments fell from €58m to €37m during the year, while bank debt tumbled from €47m to €34m.

The company said there was a steady performance from its Irish mortgage advisory business and core operations in Britain. IFG mortgage clients borrowed €1.2 billion during the year, 35% more than in 2003, but the division’s operating profits fell 13% to €1.8m as sales of life insurance failed to take off.

International trustee services had a good year, with profits increasing from €4.2m to €5.3m.

The independent financial advisory business in London performed well but similar activities in the rest of Britain suffered, dragging profits down from €1.9m to just €0.6m.

The British pension trustee business had an “unsatisfactory” year and saw profits dive 14% to €2.5m.