CompaniesMar 12 2012

Lighthouse revenues decline as adviser numbers fall

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National IFA firm Lighthouse Group reported a slight fall in revenue for 2011 following the departure of approximately 100 advisers, with the company reporting a loss for the year due to costs relating to its recent restructuring.

Revenue for 2011 was £60.4m, down from £63.1m in 2010, which the company executive chairman attributed to “less productive advisers leaving the group” and reducing overall average adviser numbers from 800 to about 700.

However, interest before tax, depreciation, amortisation and non-recurring operating expenses was up £300,000 to £1.6m for the year and gross profits as a percentage of revenues remained steady.

In early 2011, the group announced its intention to reduce group activity to a single regulated body, Lighthouse Advisory Services. In the interim statement of September 2011, the chairman revealed that group subsidiary Falcon was being wound down along with FSAS, a subsidiary of merged adviser company Sumus. Both have now effectively ceased trading.

At the same time last year it emerged that certain aspects of Falcon’s historical trading had come under review, resulting in a one-off closure charge of more than £2.9m by the company’s board. This has been increased by £440,000 to approximately £3.4m.

David Hickey, executive chairman of Lighthouse Group, said: “Trading again progressed well during the period, with EBITDA rising for the sixth consecutive results announcement.

“The proportion of recurring revenues now exceeds 30 per cent of the group’s total and continues to rise. Average revenue per adviser rose noticeably and the group’s operations continue to generate significant cash.

“The group balance sheet remains strong with substantial cash deposits. As the industry approaches the introduction of the Retail Distribution Review, it is increasingly evident that operational scale and financial strength are becoming key differentiators in the industry.”