News blog
Lighthouse
- BY: Andrew Hore |
- POSTED: 26/02/2015 |
IFA Lighthouse Group reported an improved 2014 profit despite a dip in revenues.
In 2014, revenues fell from £47.9m to £46.8m, while the profit increased from £74,000 to £557,000 as overheads reduced by £2.7m. Recurring revenues rose to £20m. Revenue per adviser increased from £82,000 to £86,000.
Lower revenues meant that the IFA network business fell into loss. The big improvement in profitability mainly came from the national and affinity-based IFA business. A new direct contract with Unite, which has 1.4 million members, has been secured. This business was previously handled through LV=. A six month pilot scheme is offering online access to advice on ISAs and other investment accounts and another scheme offering mortgage protection products also started at the beginning of this year.
A final dividend of 0.12p a share has been declared taking the total dividend to 0.18p a share. Net cash was £7m at the end of 2014 even though there was a £2.4m cash outflow relating to provisions. Lighthouse requires £5m for regulatory purposes.
The Lighthouse Pension Trust should start to build up momentum as auto-enrolment becomes more widespread. The main focus is businesses with up to 50 employees which have to take up auto-enrolment between 2015 and 2018. The initial costs held back the 2014 figures.
At 5.25p a share, up 0.5p, Lightouse is valued at £6.7m. A 2015 profit of £900,000 is forecast, which puts the shares on nine times prospective earnings. The potential yield is more than 5%.
AIM Journal February 2015 available.
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