IFG Group, the owners of SIPP company James Hay Partnership, has announced a £400,000 loss in the last year, compared to profits of £6.4m for 2016.  

The City firm blamed the loss on “increased exceptional costs” totalling £8.8m, which had “offset the underlying performance of the business in 2017.”

The extra expenditure was comprised of “a combination of remediation and legal costs and provisions for client redress, together with previously announced reorganisation costs,” the company said.

As a result of its focus on resolving legacy issues, IFG’s board decided not to pay a dividend.

The figures for assets under administration were rosier, climbing 15% from £26.7bn to £30.6bn.

The company also insisted its balance sheet “remains strong with net cash of £24.6 million (2016: £28.2 million) and no debt.”

A summary of the results, released today, also revealed it was considering disposing of Saunderson House if accelerated shareholder value can be achieved.

James Hay’s performance showed increased net inflows, up to £3.4bn from £2.6bn, with assets under administration up 15% to £25.5bn from £22.1bn.

Meanwhile James Hay also added 6,100 new clients.

Saunderson House’s assets under advice grew by 11% to £5.1bn from £4.6bn in 2016, and added 247 new clients, taking the total to 2,121.

Other highlights from the report included:

• Revenue from James Hay and Saunderson House combined remained constant, despite £5.9 million reduction in interest income, £78.4 million (2016: £78.5 million).
• Adjusted operating profit increased 5% to £10.5 million (2016: £10.0 million) due to repricing in James Hay undertaken in H2 2017 and a focus on cost management.
• Adjusted EPS increased by 10% to 8.34 pence (2016: 7.57 pence); basic loss per share of 0.32 pence (2016: earnings 4.98 pence).
• The group has regulatory capital resources of £49.5 million (2016: £47.6 million compared to its Pillar 1 requirement of £6.6 million (2016: £6.8 million).

John Cotter, chief executive of IFG Group, said: “We have made substantive progress in improving our businesses, increasing assets under administration and advice, growing the client base, expanding our product offering and enhancing our capability.

“The changes to our pricing models and the improving interest rate environment, mean we are well positioned to deliver sustainable growth and improved financial performance.
“We are committed to bringing closure to legacy issues, which may continue to impact financial performance, in order to return to paying a progressive dividend and delivering increasing value to our shareholders.”