IFG Group Management Statement

IFG has achieved its critical volume growth target of over 250 new SIPP accounts in a month (258 in October). It has delivered on the integration of James Hay and wasable, as promised, to start delivering some volume growth. The market remains challenging, but hitting this target is critical to investor sentiment. The IMS also confirmed expected trends in terms of the strong balance sheet allowing the buyback, new client growth and strong utilisation rates in Saunderson House, challenging conditions in Ireland but some opportunities as well. Our estimates are unchanged from our report of earlier this month. There is an investor day on 29 November.

Following the disposal of the international business, the key driver to IFG is its SIPP business. This was transformed by the James Hay acquisition, but that brought its own issues. In particular, James Hay had been an early leader in the SIPP business, but then lost management focus under previous ownership. As a consequence, its book of business was more mature than peers (and hence had a much larger age attrition than peers), but also its share of new business was well below stock. Having completed the physical integration of systems ahead of schedule, it was and is imperative that the business can grow again and to achieve this it was necessary to accelerate new SIPPs to over 3,000 pa (or 250 pm). This was achieved for the first time in October (258 new SIPPs) after an average of 213 in Q312 and well up from the 148 in Q411. The market remains challenging (especially with a trend away from James Hay’s historic core of higher-margin bespoke SIPPs), but it has now delivered on executing the integration and starting to deliver volume growth, both of which we believe are critical to investors having confidence in the stock.

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