IFG Group is a financial services company that operates in two core areas. The main business is the provision of independent financial advisory services and fund management in Ireland and Britain. It also provides international and trustee corporate services and operates from the Isle of Man, Jersey, Cyprus and Switzerland.

Its services include offering life assurance, pensions and investment broking, mortgage broking, title insurance management, endowment policy trading and actuarial services. The company’s share price has suffered a high degree of volatility in recent years, dragged down by underperforming UK assets, some of which were acquired as part of an aggressive expansion of the business.

IFG surprised the market last week by announcing that Richard Hayes, its chief executive and the driving force behind the company since it was founded in 1989, had stepped down with immediate effect. Mark Bourke has taken over on an interim basis. The company will publish full-year results on April 12.

The two experts below have been selected for their skills in several investment areas. They, or the funds they manage, may hold shares in the companies or sectors discussed.

David Odlum, financials analyst, NCB Stockbrokers

IN spite of the rebound in IFG’s share price, we remain positive about the group given its growth prospects. Although the timing of the resignation of chief executive Richard Hayes earlier this week was somewhat unexpected, it follows two to three years of restructuring at the group.

IFG has taken strong action to improve financial results after several years of poor returns for shareholders. Restructuring has been or is being undertaken in its UK business, which accounts for 26% of profits, while the domestic operation is benefiting from the robust Irish mortgage market.

IFG is responsible for about 5% of gross mortgage lending in Ireland. This business should benefit from additional initiatives, such as title insurance on properties and the non-conforming mortgage product (loans to those with bad credit ratings) developed in partnership with GE Capital. These should help to drive future profitability.

The international trustee and corporate services sector has been a stellar performer with a compounded annual growth rate in profits of 32% over the past five years. It looks likely to carry on being the largest contributor to the group’s bottom line.

Continued demand for a high level of service in an increasingly regulated environment will remain the key factor driving this business.

IFG’s specialist time-share trustee operation is in good shape too and is on course to benefit from new income streams such as credit card and maintenance fee collection.

The company has made significant progress in reducing its net debt position, which has declined from €129m in June 2002 to €38.6m at the end of June 2005.

In terms of valuation, IFG is cheap, trading on 11 times our 2007 earnings estimate, which is undemanding given the outlook for earnings. We forecast 28% earnings growth in 2006 and 21% in 2007.

Overall, we are positive on IFG given its earnings recovery. Its core operating businesses are set to show strong profit growth in future years, which will be bolstered by a reduction in loss-making activities and a declining interest charge. The focus for management remains on maximising returns.

Judgment: buy

Kevin McConnell, head of research, Bloxham Stockbrokers

Richard Hayes brought his stewardship of IFG to an end last week after what could be described as a rollercoaster ride for the company over the past three years.

To his credit he stepped down at a time when IFG is riding high with the best-performing financial stock in the Irish market over the past year. The share price has risen more than 100%, which is more than three times that of the financial sector in the same period.

Having weathered the storm triggered by UK pension reforms, the company now looks in much stronger financial shape. With growing confidence in earnings visibility, investors have pushed aside memories of IFG’s problematic past, including profit warnings, credibility issues and regulatory concerns.

Although the recent acquisition of Bank of Scotland Trust in Jersey was contrary to the new direction, management was keen to stress that this was a strategic fit and they are not to embarking on a new acquisition path.

As the largest independent mortgage intermediary in Ireland through Mortgage Broker Solutions (MBS), IFG is uniquely positioned to benefit from increasing activity within the remortgaging market. IFG forecasts the remortgaging segment will represent 40% (currently 25%) of the total mortgage market within three years, which should also lead to increased demand for the group’s title insurance business.

In other divisions, the international trustee and corporate services business, which represents 47% of group’s profit, is on target for consistent double-digit earnings growth through the awarding of some lucrative contracts. The UK actuarial and pension trustee unit, which contributes 26% of profits, should see a material uplift from the upcoming UK pension reforms.

Full-year results on April 12 should demonstrate the benefits of concentrating on its core areas and the restructuring of the UK IFA business, which has been a drag on profitability for a number of years. The shares currently trade on 14 times 2006 consensus earnings and 13 times 2007 earnings, a fairly full valuation despite its earnings growth prospects of 21% and 15% respectively.

Judgment: hold