LONDON (Alliance News) - Charles Taylor PLC on Thursday said its management services and insurance support services operations drove its pretax profit higher in 2015, more than offsetting a weaker figure for the side of its business that specialises in settling large, complex losses amid a lack of natural disasters.
Pretax profit from continuing operations increased to GBP12.8 million in 2015, Charles Taylor said, up 32% from GBP9.7 million in 2014. It lifted its final dividend to 7.0 pence from 6.57p, meaning the full-year pay rises to 10p from 9.42p. The stock was up 8.1% at 249.81p on Thursday morning.
Revenue from professional services rose by 17% to GBP138.6 million from GBP118.6 million. Net revenue from owned insurance companies, namely life insurance businesses which are primarily in run-off, rose to GBP4.8 million from GBP3.9 million.
Charles Taylor, which raised GBP28.9 million after expenses in a right issue in April 2015, used the money to cut debt to GBP9.9 million from GBP32.6 million over the course of the year and also for the acquisition of a stake in the owner of insurance software provider Fadata AD.
Introducing new products helped to boost the results, according to David Marock, chief executive officer of Charles Taylor since 2011 and the former chief operating officer of FTSE 250 non-life insurer Beazley PLC.
"Revenue and profit before tax increased strongly as we delivered numerous growth initiatives. These included launching the group's turn-key managing agency business, focusing on the development of our insurance technology business and securing a new management contract from a marine mutual insurer. We also completed a rights issue to enable further acquisitions, joint ventures and business investments," Marock said.
Charles Taylor's management services unit generated GBP50.7 million in revenue, up 16% year on year, and produced an operating profit of GBP8.8 million, up 14%. The unit, which manages underwriting and claims, as well as providing other services, to insurance companies and associations, is "performing well" so far in 2016, the company said.
Its insurance services unit, which provides turn-key managing agency services and technical services for clients, grew revenue to GBP32.1 million from GBP21.8 million and operating profit to GBP4.5 million from GBP2.0 million. New business initiatives helped to drive the improvement, Charles Taylor said, having introduced new products and services for non-life insurers.
Conditions remain tough for adjusting services. Operating profit for the unit fell to GBP1.7 million in 2015, from GBP2.3 million in 2014. The unit increased revenue by 5.3% to GBP59.0 million, partially through recruiting additional senior loss adjusters and opening new offices.
"Much to the surprise of the global insurance market, the claims environment continued to be benign. This, combined with the investment for growth, reduced the business' profitability. Adjusting Services is well positioned to benefit as and when global insurance claims activity returns to more normal levels," Marock said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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