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Cofunds says L&G deal may delay break-even

Cofunds says the cost of new business after launching new products with L&G could delay its break-even date although losses of 16m last year were in line with predictions.

This year, the platform has seen assets under management increase by 1.8bn from 3.5bn to 5.3bn. The loss for the 12 months to December is down from 23m in 2003. It plans to launch life and pension products by the end of 2006.

In February, it emerged that the cost of systems to support the addition of bond and pension wrappers following the platform’s tie-up with L&G would cost millions.

Turnover last year more than doubled from 4.3m in 2003 to 8.8m.

Spokesman Dick Eats says: “2007 is still a working assumption, depending on both the level of the stockmarket and on inflows. If we are much more successful than we think, profitability will be deferred a bit. If this happens, short-term costs would be greater but our long-term profitability will be much higher.”

“Assets under management have increased from 3.5bn to 5.3bn and with L&G, we are just launching a new suite of products which we hope will be fairly successful. The current predictions are based on sensible assumptions.”

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