Financial services group IFG said pretax profit jumped 61 per cent in the first half of 2006 as finance costs declined and its fee-based business grew in the UK.

Profit before tax rose to €7.1 million from €4.4 million in the first six months of last year. The company's revenue climbed 20 per cent to €50.8 million. IFG posted basic per-share earnings of €8.90 cent, up from €5.13 cent a year earlier. Finance costs dropped 34 per cent as the company focused on cutting debt.

"Our performance continues to improve in each division and we remain optimistic that we will deliver to expectations," said Mark Bourke, IFG's chief executive. IFG told shareholders last month it was confident of posting growth for the whole of 2006. Mr Bourke, who was appointed chief executive in June, said then IFG was on track to deliver growth of 20-25 per cent in earnings per share this year.

In the UK, where IFG generates most of its profits from pensions and trustee activities, its financial services business had an operating profit of €780,000 in the first half, up from €253,000 a year earlier. The pensioner trustee business saw operating profit rise slightly to €1.623 million from €1.605 million, held back by the British government's decision to exclude residential property from self-invested personal pensions (SIPPs).

However, at IFG's mortgage intermediary business in Ireland, its title insurance operation posted a "disappointing result" because of margin erosion due to a change in the sales mix and poorer-than-expected sales figures. As a result, operating profit at the mortgage and title business fell to €1.79 million in the first half from €1.82 million in the same period a year earlier.

"In a booming mortgage market with refinancings taking off, this business should be growing profits at a rate of at least 30 per cent per annum," analysts at Davy Stockbrokers said.

IFG's financial services business in the Republic turned to an operating profit of €495,000, compared with a year-earlier loss of €429,000 after it benefited from the sale of its investment management business and a turnaround in the pensions division.

Shares in IFG closed unchanged at €1.98 yesterday.