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Cofunds saw profits slow last year

Cofunds saw profits slow last year

Cofunds saw profits before tax slow last year, but its chief executive David Hobbs was confident this would improve following the takeover by Aegon.

The platform giant reported profits before tax of £73,000 last year, down from the £7.7m scooped up in 2014.

Mr Hobbs said it has been clear for “some time” that a platform of Cofunds’ scale needs to be more efficient and profitable, which he said remains the company’s focus.

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Last month Aegon announced it had struck a deal with Legal & General to buy Cofunds for £140m.

In light of this, Mr Hobbs said: “We feel in a strong position to continue the transformation of the business that we’ve been working hard to secure,” adding the acquisition will improve the benefits to clients.

According to its financial statement for 2015, Cofunds also saw a slight decrease in turnover, hitting £78.3m, from £78.9m reported in 2014.

However, the net cash generated by the business increased by a third to £5.3m, from £4m, which Mr Hobbs said shows the progress the business made last year, particularly on cost control.

He also said it was a good indication of the health of the business on a current trading basis.

“As we passed our 15th birthday, 2015 was another solid year for the business,” he said, pointing to the flows of new business seen throughout the year and increased assets under administration.

In the first six months of the year, however, Cofunds suffered outflows of £700m, which some platform rivals blamed on the bout of uncertainty over the ownership of the business.

But Mr Hobbs was broadly positive about the future of the platform, pointing out the firm has made efforts to support clients through regulatory-driven change, such as helping with compliance in the wake of the so-called ‘sunset clause’.

katherine.denham@ft.com