IFG'S THREE DIVISIONS ALL SEE PROFIT GROWTH IN 2007 - Results from financial services group IFG show that its profits before tax were up 23% at €15m, and revenues up 20% at €128.8m. IFG said its adjusted earnings per share rose by 43% to 24.17 cent and that its total assets under administration and advice are about €59 billion. Three quarters of its business is done overseas, and though small, one of its best known Irish brands is Seniors Money.
Mark Bourke, IFG's chief executive, says the good figures are as a result of a combination of 'terrific' results across all of its three divisions. The firm's international division saw profits rise by 54% to nearly €10m. In the UK, where the company operates as pension administration service providers and independent financial advisors, profits were up 50% at €7.5m. Irish profits were up 10% - the company operates as both mortgage and financial advisors here. He says that what is really driving the momentum in the company is the importance of quality and independent advice. He also says the good performance is due to IFG's capacity to build distribution, which it has done both organically and by acquisition. In the last year, the company had made two acquisitions in Jersey and Switzerland and these have been successfully integrated into the group.
Mr Bourke says that, without a doubt, the credit crunch and the slowdown in the Irish property market, in which the company has a significant mortgage business, has had an impact on its Irish operations. However, he says that its ability to continue to grow profits - albeit at a slower rate - is due to the fact that independent advice is still much sought after. He says that 80% of IFG's profit in non-Irish and is essentially in sterling.
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STERLING AT NEW EURO LOW AHEAD OF EXPECTED UK RATES CUT - Sterling is hitting new lows against the euro in anticipation of a rates change today at the Bank of England. The European Central Bank meets today but a rates change is unexpected. AIB's chief economist John Beggs says that sterling is likely to weaken further in the weeks ahead.
The economist says that the Bank of England may even look at a half a percentage rate cut in UK interest rates today. While the mostly likely outcome is a quarter point cut today, he says that as UK base rates are so high at 5.25% and the outlook for the global economy is weakening so dramatically he would not be surprised if a rate cut of 0.5% could occur. Given the high level of current inflation in the euro zone, he adds that he is not expecting the European Central Bank to cut rates today.
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MORNING BRIEFS - There was another report from the IMF yesterday. A report on Tuesday estimated the fallout from the credit crisis would mount to over $1 trillion, and yesterday's report said the world economy will grow much more slowly in the next two years because of the credit crunch. The downturn will be led by the US, which the IMF believes will go into a mild recession this year; and it feels that growth in the Irish economy will be less than 2% this year.
*** The IDA is set to announce 140 new jobs in Longford at a firm called Cameron, which makes technology for use in the oil and gas business. But 60 jobs are to be lost in the town as Kimball Electronics moves its European operations to Poland.
*** The World Bank says high food prices are threatening recent gains in overcoming poverty and malnutrition, and they are likely to persist. Its new report says increases in global wheat prices reached 181% over the 36 months to February 2008, and overall global food prices increased by 83%. The World Bank expects food crop prices to remain high this year and next, and then fall but it says they are likely to remain well above 2004 levels for the next seven years for most food crops. The World Bank predicts more food riots, like those seen in Haiti and Ivory Coast this week.
*** Aer Lingus holds an Extraordinary General Meeting, relating to the proposed purchase of 12 long haul aircraft from Airbus.
*** On the currency markets this morning, the euro is trading at $1.5849 and after the pound hit an all-time low against the euro yesterday it is still rising and is now trading at 80.15 pence.
