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Lighthouse Group

  • BY: Andrew Hore |
  • POSTED: 27/09/2009 |

IFA Lighthouse Group reported an underlying decline in interim revenues of one-fifth but there are signs of improvement in the market.

Reported revenues include Sumus for six months in the first half of 2009 but not in the comparative period. That is why reported revenues rose 15% to £29.3m. The quality of revenues has improved with mortgage commissions well down. Recurring revenues were nearly one-quarter of the total.

Pre-tax profit fell from £442,000 to £56,000 in the six months to June 2009. Much of that fall came from the lack of interest on the cash pile. Management was quick to cut costs and this will continue to benefit the figures in the rest of the year.

The tough market has made it easier to recruit good IFAs. April and May showed improvement in trading for Lighthouse and confidence is starting to return to the market. There is always a lag in investor confidence when the market starts to recover.

There are opportunities for selective IFA acquisitions but most of the businesses in the sector are too small to make it worthwhile acquiring them. The purchase of Godfrey Pearson in January 2009 brought with it 50 IFAs focused on vets, doctors and dentists. Finding businesses at the right price is still difficult. The Retail Distribution Review will change the IFA market and reduce initial commission revenues so these changes in the market will provide acquisition opportunities as the sector consolidates. 

There was cash of £12.2m in the bank at the end of June 2009.

A dividend of 0.2p a share was announced with the interims. There was no final last year and the latest dividend is half in lieu of that final dividend so the underlying interim is 0.1p a share, suggesting a total dividend for the year of 0.3p a share.

At 10.25p a share, Lighthouse is valued at £13.1m. 

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