James Hay parent on acquisition hunt as profits rocket

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IFG, the firm behind platform and Sipp provider James Hay, has reported a 48 per cent surge in adjusted operating profit for 2015 as it seeks further Sipp acquisitions.

The firm’s preliminary 2015 results, published this morning, reveal operating profit across the business – excluding any decrease in value of intangible assets and exceptional costs – rose from £7.9m to £11.6m. Non-adjusted pre-tax profits also increased significantly year-on-year, from £4.6m to £8.6m.

James Hay nearly doubled the number of new Sipps it administers during the year, rising from 6,303 to 12,084. This was driven by the acquisition of around 8,000 new Sipp clients from Capita and Towry during the year.

Platform profits surged from £5.8m in 2014 to £9.8m last year.

The firm says: “This growth was achieved with no overall increase in headcount in 2015, demonstrating the scalability of the platform. Our strategy to build deeper strategic relationships with key advisers, will be key to delivering consistency in organic growth.

“We also see further acquisition opportunities similar to the acquisition of books from Capita and Towry, as consolidation in this sector continues.”

Meanwhile Saunderson House, IFG’s awealth management arm, delivered profits of £5.9m, up marginally on the £5.8m figure reported in 2014.

Assets under advice grew 8 per cent, from £3.7bn to £4bn, with 243 new clients added during the year.

However, IFG has taken a hit from the disposal of IFG UK Financial Services, the IFA business it sold to Ascot Lloyd in 2014. The company was bought for £2.5m, potentially rising to £5.5m based on it meeting certain performance criteria.

IFG accounted for a £600,000 loss following disposal of the firm in 2014, but has been forced to add an additional £1.3m to this figure for 2015.

IFG says: “We have revised the estimate of all costs associated with unwinding the legal entity structure and associated regulatory, claims and legal costs of IFG UK Financial Services.

“The total loss, including the loss of £0.6m in 2014, is £1.9m, subject to any amendments to the contingent consideration.”