Financial services group Friends First yesterday reported a 20 per cent jump in 2006 profits to €35.3 million. The company also announced that it is considering entering the health insurance market.
Group chief executive Adrian Hegarty said yesterday that, if an acquisition opportunity arose in the health insurance market, either through the break-up of VHI or another operator coming up for sale, Friends First would look "extremely hard" at entering the market. "We have the muscle and the money," Mr Hegarty said.
The health market was currently in a state of flux, he said, but when the "rules of engagement" are clarified, and if a health insurance provider comes up for sale, Friends First will compete very hard to make an acquisition.
However, an acquisition is unlikely this year unless "something dramatic" happens in the market, he added.
The group is also interested in "bulking up on the life side", Mr Hegarty said, although it had not yet identified any potential acquisition targets.
In relation to its 2006 results, Friends First experienced strong growth across all businesses, except for its IFSC-based securities lending firm Guild Global, which Mr Hegarty said was wound down following the loss of a major client. Profits in the group's life operations rose by 14 per cent to €20.6 million. Single premium products proved to be a key driver of this area, with sales almost doubling to €458.4 million.
Friends First's finance business grew by 28 per cent to €6.8 million, and its loan book swelled by 21 per cent to €509 million. The net loss rate dropped to 1.5 per cent in 2006, the lowest level in a decade.
"Our recent alliance with Rabobank in the area of revolving credit demonstrates our commitment to seize opportunities in this part of the business," Mr Hegarty added.
Friends First's developmental business, which encompasses Liberty Asset Management and a private investment division, grew by 32 per cent to €7.9 million. The finance and developmental businesses now account for over 40 per cent of group profits.
