Revenue boost for Lighthouse family of financial advisers

The sector has been hit by the broader economic turmoil as it prepares for major regulatory changes through the Government’s retail distribution review.

But the Aim-listed group, which has a significant operation in Leeds with 250 advisers, managed to increase revenues by four per cent, to £63.1m, while pre-tax profit rose by 38 per cent, to £129,000. Recurring revenues increased by seven per cent, to £17.6m, and now comprise 28 per cent of overall revenues.

David Hickey, executive chairman, said: “The board is pleased with the group’s strong performance during the year. In particular, we have improved profitability and added to our already significant cash resources.”

Net cash balances are up 27 per cent, to £11.2m, at the company, which has a market capitalisation of around £12m.

Mr Hickey added: “During the period we have also focused on improving the quality of earnings by further increasing recurring revenues. We are pursuing both organic growth opportunities through developing our affinity relationships, as well as continuing to assess acquisition opportunities. The board is satisfied that the group remains organically well positioned and financially robust.”

During the year, the group continued its preparations for the retail distribution review and streamlined its operations by reducing administration costs.

It also saw a 10 per cent reduction in the number of contracted IFAs, as advisers retired or deciding to leave the industry ahead of the regulatory changes.

Allan Rosengren, joint chief executive, told the Yorkshire Post that the historically low interest rate, coupled with high inflation, was driving customers away from savings accounts. “Remaining in deposits is going to deplete capital value. We are seeing a lot of people come out of deposits and into real assets. People are getting into equity-based ISAs and are paying more into pensions.”

He was fairly downbeat about the UK’s economic prospects. “It’s challenging in the sense that inflation has ticked up. I expect the economy to probably track along at its current rate for a while longer.”