LONDON (Alliance News) - Charles Taylor PLC on Wednesday reported a large drop in interim profit despite rising revenue, hiking its dividend amid confidence full-year results to be in line with expectations.
The insurance market professional services provider's statutory pretax profit decreased to GBP200,000 in the six months to the end of June from GBP4.8 million a year before. However, adjusted pretax profit increased 9.0% to GBP8.5 million from GBP7.8 million.
Charles Taylor's revenue rose 21% to GBP123.4 million from GBP102.3 million.
The company said its statutory pretax profit decreased, largely, because of the increase in amortisation of intangible assets arising from acquisitions.
Charles Taylor said this decrease is a "natural consequence of purchasing people-based, asset light businesses".
Deferred consideration following the acquisitions of Inworx, Criterion and Aasgard Summit, which are accounted for as employee remuneration, totalled GBP1.5 million in the half.
Charles Taylor also suffered a GBP2.4 million one-off cost related to the company relocating three London offices into one location.
In total, non-recurring costs in the period increased to GBP5.0 million from GBP700,000 a year before.
Two of the company's three divisions posted a rise in revenue, with the third being flat. Insurance Support Services revenue increased in the first half to GBP52.4 million from GBP37.4 million.
Adjusting Services revenue increased to GBP40.2 million from GBP35.2 million and Management Services revenue was flat at GBP29.4 million.
The Insurance Support Services segment's "exceptional" first half stemmed from the division securing a "major" contract with Lloyd's of London to deliver delegated authority solutions to Lloyd's and related London company insurance markets.
The company also acquired Inworx, a Latin American-based insurance focused technology consultancy and software provider, which boosted the division's growth.
Charles Taylor declared an interim dividend of 3.48 pence per share, up 5.1% from 3.31p paid last year.
Looking ahead, the professional services provider anticipates its full year performance for the 2018 financial year will be in line with expectations.
In 2017, the company posted revenue of GBP210.8 million and statutory pretax profit of GBP7.4 million.
Chief Executive Officer David Marock said: "Charles Taylor has delivered strong revenue growth combined with a solid increase in adjusted profit before tax - after the investments we have made to deliver our growth strategy. These initiatives are showing great promise with our Insurance Support Services business winning high-profile business and our Adjusting Services business showing steady progress in its ambition to increase profits and margin. Underpinning this performance is Management Services, which provides a solid core to our business with deep, long-standing client relationships and steady, reliable growth.
"We are confident that our growth strategy offers shareholders the greatest potential for long-term growth in the group's share price, along with rising income over time. We anticipate that our full year performance will be in line with the board's expectations".
Shares in Charles Taylor were down 1.8% Wednesday at 270.00 pence each.
