Charles Taylor Regulatory News (CTR)

PRESS RELEASE

Charles Taylor plc

Announcement of results for year ended 31 December 2014

Consolidated financial highlights

For the year ended 31 December 2014

Notes:

1. The 2014 adjusted profit before tax figures exclude acquired intangible amortisation charges of £1.5m (2013: £1.2m), pre-tax non-controlling interests of -£0.2m (2013: £0.2m) and non-recurring costs of £0.2m (2013: £1.6m).

2. The second interim dividend is payable on 24 April 2015 to shareholders on the register on 27 March 2015. In the prior year, the dividend was a final dividend.

"Charles Taylor has delivered a strong performance. The Group's results in 2014 reflect the positive progress we have made in delivering our growth strategy."

David Marock

Group Chief Executive Officer

Business highlights

· Increased revenue

· Increased adjusted profit before tax

· Increased statutory profit before tax

· Increased adjusted earnings per share and statutory earnings per share

· Delivered higher Professional Services profit despite benign global claims environment

· Net debt in line with prior year

· Progressed growth initiatives

· Rights issue to raise £30.6m in new equity

· Second interim dividend of 7.50p/full year dividend of 10.75p

Group Chief Executive Officer's Review

Charles Taylor has delivered a strong performance. The Group's results in 2014 reflect the positive progress we have made in delivering our growth strategy.

Group results 2014

Professional Services performance

Owned Insurance Companies performance

1. CER = Constant Exchange rates

2014 performance

Group Results

In a year when the unusually low level of large insured claims across the insurance market led to a fall in the performance of our Adjusting Services business, we have significantly increased overall revenue and adjusted profit before tax. We have successfully extended our range of professional services and invested in new staff, offices and teams. We also completed two carefully targeted acquisitions during the year, and another two in the early part of 2015, with a further acquisition due to complete shortly.

Revenue increased 8.1% to £122.8m (CER £126.3m +11.2%) (2013: £113.6m). Group adjusted profit before tax rose 11.3% to £11.1m (CER £11.4m +14.2%) (2013: £10.0m), while Group statutory profit before tax increased by 38.5% to £9.6m (CER £9.9m +42.7%) (2013: £ 6.9m). Adjusted earnings per share rose by 15.6%% to 23.17p (CER 23.71p +18.3%) (2013: 20.05p). Statutory earnings per share increased 37.0% to 19.48p (CER 20.01p +40.7%) (2013: 14.22p). At the Half Year, we reported that our results had been reduced by the impact of the strength of sterling. This impact is still present, but has been reduced at the year end.

Professional Services

The Group's core professional service businesses performed strongly overall. Revenue increased by 8.8% to £121.8m (CER £125.3m +12.0%) (2013: £111.9m) and operating segment profit was up 16.7% to £12.2m (CER £12.5m +19.6%) (2013: £10.5m.):

- The performance of our Management Services business was strong. The mutuals managed by the Group also performed well on behalf of their members.

- The Adjusting Services business has been affected by the unusually low level of large insured losses across the global insurance market in 2014. Our investment in new offices, teams, systems & processes, and senior staff puts us in a strong position to benefit when insurance claims return to more normal levels.

- The Insurance Support Services business made a positive contribution to the 2014 result, greatly improved from the prior year.

Owned Insurance Companies

Owned Insurance Companies revenue was down 17.5% to £4.2m (CER £4.2m -17.2%) (2013: £5.0m) and operating segment profit was down 32.1% to £0.5m (CER £0.5m -32.2%) (2013: £0.8m).

Dividend

A second interim dividend of 7.50p per share (2013: 6.75p), which replaces the final dividend, will be paid on 24 April 2015 to shareholders on the register on 27 March 2015. When added to the first interim dividend of 3.25p per share (2013: 3.25p), this results in the total dividends per share for the year being 10.75p (2013: 10.00p).

Balance sheet

Net debt rose slightly at the year end to £32.6m (2013: £32.4m) and free cash flow reduced to £3.8m (2013: £5.5m). The 12-month rolling average net debt as at 31 December 2014 was £24.6m, compared to £22.0m at the prior year end. The increase in the 12-month rolling average net debt of £2.6m was largely as a result of our investments in the business to deliver our growth strategy. This includes opening new offices to extend the Group's geographic reach, which we expect will deliver increased revenue once fully established and investing in new IT systems to improve operational efficiency. We achieved a small reduction in the working capital requirement of our Adjusting Services business. We continue to focus on managing our debt while investing for growth.

In common with many companies, the Group's pension deficit rose during the year. The increase in net obligation has been driven by a change in discount rates as a result of a fall in corporate bond yields which have largely been linked to the drop in gilt yields. The Group's net pension liabilities were £41.5m at the year end, compared to £26.7m in 2013.

Management Services

The Management Services business provides end-to-end management services to insurance companies and associations. We deliver a complete outsourced management and operational service to our insurance company clients, reporting directly to their independent boards of directors. Our services can cover every aspect of those companies' operations from underwriting, claims management and delivery of safety services to regulatory, accounting and administrative operations, investment management, customer service, corporate governance and company secretarial services. We manage four mutual insurance companies - The Standard Club, Signal, SCALA and The Strike Club (appointed March 2015). We also provide administration services to the Offshore Pollution Liability Association.

We are remunerated by fees from our mutual insurance company and association clients. Where we provide a full management service, growth in the size of the mutuals, the number and extent of services we deliver and the volume of work involved generally leads to growth in management activities and ultimately the level of management fees. The performance of the managed mutual insurance companies is strong - providing a positive long-term indicator of the Management Services business. The business also seeks to grow through the identification and implementation of opportunities to develop new insurance ventures and by tendering for the management contracts of existing mutual insurance companies and other associations.

Management Services - UK & International

Our Management Services UK and International business performed strongly in 2014. We delivered high quality professional services to our established clients, secured new client relationships, launched new products and services and opened a new office in Brazil.

Delivered services to existing clients

- Standard Club. Charles Taylor has managed the Standard Club since it was founded in 1884. Today it provides protection and indemnity (P&I) insurance to approximately 10% of world shipping. Our work continues to deliver positive results for the club, which had a satisfactory 2014-15 renewal in February 2014. Free reserves rose to a record US$369 million. In July 2014, the club's credit rating was reaffirmed as 'A' (strong) by Standard & Poor's. Insured tonnage stood at 136m gt at 31 December 2014. We have supported the club in setting up a new underwriting syndicate at Lloyd's. We are also establishing a Managing Agency to manage the syndicate.

- The Offshore Pollution Liability Association (OPOL). Charles Taylor was appointed to provide a finance function, administrative, management and IT support to OPOL in December 2013. Over the last year we helped OPOL to improve its performance by developing bespoke IT solutions.

Secured new clients

- The Strike Club. In line with our strategy to achieve growth by securing management contracts with mutual insurance companies, we acquired the business of SC Management, the independent, dedicated management companies of The Strike Club, a marine mutual insurance group, in early 2015. In conjunction with the acquisition, Charles Taylor has been appointed by the Board of the Strike Club, to manage the club. The Strike Club is the only dedicated mutual insurer covering the running costs of vessels delayed by strikes, shore delays, collisions, groundings and other incidents outside an owner's or charterer's control.

Developed new products and services:

- We worked with The Standard Club to establish a new fixed premium product.

- We assisted The Standard Club in providing cover to Turk P&I, a fixed premium P&I insurer for Turkish coastal vessels.

- We supported The Standard Club Asia in establishing a new Singapore War Risks class to insure shipowners against war and related risks, which started underwriting in February 2015.

Extended our office network

- We opened a new office in Brazil to support clients of The Standard Club in Latin America.

Optimised business operations

- We enhanced our end-to-end insurance management system for the Standard Club.

Management Services - Americas

The Management Services Americas business had a very successful year. Through our efforts, Signal Mutual achieved further growth and launched a new Longshoreman Workers' Compensation Small Account program. We also extended the reach of our General Agency and launched new insurance covers.

Secured growth for Mutual insurance clients

- Signal Mutual: Charles Taylor has been the manager of Signal Mutual, the largest provider of Longshore workers' compensation insurance to the US maritime industry, since it was founded in 1986. In 2014 the Association continued to grow under our management. All the members, who were offered terms, renewed in October 2014. Our track record of consistently reducing rates continued, reflecting further improvement in safety management, effective claims adjusting, selective underwriting and efficient management techniques. Eleven new members joined the association and the total membership has now reached 245 companies. The projected payroll of the member companies, on which calls are calculated, reached US$3.81 billion, an increase of 14.1%. Total calls for the year will be around US$230.86 m, up by 9.8% over the previous year. All key performance indicators for the Association are at all-time highs.

- SCALA: Charles Taylor has managed SCALA, which provides marine workers compensation to the majority of Canada's ship owners since 1978. The mutual delivered a steady performance during 2014 under our management. We further improved claims handling processes on behalf of the mutual by making reporting enhancements to the Incident Reporting Database. Total calls for the year were Canadian $4.95m.

Optimised business operations

- We enhanced our claims management systems on behalf of Signal, introduced new medical bill routing systems and enhanced our legal service and billing arrangements, enabling claims services to be delivered more efficiently to the mutual. We introduced reporting enhancements to the Incident Reporting Database, which is an extension of the SCALA Claims system.

Extended services and insurance covers

- We supported the launch in October 2014 and are providing management services to SafeShore, a new Longshoreman Workers' Compensation Small Account programme, backed by Signal Mutual, for businesses whose premiums are too small to join Signal. It was created to meet strong market demand for cost-effective, responsive Longshore cover for the waterfront employers with a smaller exposure to the Longshore Act. Safeshore has already been well received securing 30 new clients with reported payroll of US$12m, to date.

- We created a new Maritime Employers' Liability cover for Signal Members in 2014 and secured new business for the Hull & Machinery cover that was launched at the end of 2013.

Adjusting Services

The Adjusting Services business provides loss adjusting services across the aviation, energy, marine, property & casualty and special risks sectors. It also provides average adjusting services for ship owners. The business primarily focuses on larger and more complex claims arising from major insurance losses.

Our Adjusting Services business has delivered a creditable performance in a year when the number of large insured losses across the global insurance market, which provide work for our adjusters, fell significantly. We marginally increased revenue over the prior year level, although changes in the business mix, investment in new offices and additional senior staff reduced the business's margin. We believe Adjusting Services is in a strong position to deliver growth when large insurance claims return to more normal levels.

Figures reported by major insurers and brokers show that insured losses from natural disasters are running well below the average for recent years. Munich Re NatCatSERVICE statistics show that insured losses in US$ from natural catastrophes in 2014 were down 47% on the 10 year average. Similar figures from SwissRe Sigma and Aon Benfield Impact confirm the decline in large global claim levels.

Statistics published by Munich Re, show that it would be wrong to conclude any trend reversal in insured losses based on the last few years' experience. In its Topics GEO 2015 report, Munich Re says that "the loss trend of the past decades is clearly upwards, primarily driven by the rise in exposed values."

Maintained flow of high quality instructions

Against this background, we received a steady flow of new high-quality instructions from insurers, underlining the strength and depth of our market relationships and reach of our global office network. A notable example is the high volume of work received by our Mexico office following the devastating hurricanes in the country. Our Property, Casualty and Special risks team delivered positive growth and expanded its capabilities in handling financial institutions losses. Aviation was appointed on five of the seven major high profile aviation losses of 2014 in a relatively quiet year for claims. Our Energy team delivered a steady performance while significantly strengthening its senior adjusting team. Marine had a very good end to 2014 with a notable pick up in instructions following a slow start.

Extended our global office network

In line with our business plan, we are expanding our office network into geographies where there is a demand from global and local insurers for our international loss adjusting expertise.

- In 2014 we opened a new office in Rio de Janeiro, Brazil with a senior loss adjuster relocating from our Mexico office to start the operation. We now have offices in two countries in Latin America markets, following the acquisition of our offices in Colombia in 2012, supported by correspondents across the region.

Recruited senior adjusters

Loss adjusting is a people business where our strong market relationships and recognised technical expertise enable us to win additional business. During the year, we have recruited senior adjusters with strong market followings to drive further business growth.

- In North America we appointed two senior Property & Casualty Adjusters in our Calgary office and recruited a Senior Marine Advisor for the Americas, operating out of our Toronto office. We recruited senior executive adjusters and an office manager in our New York office and appointed two senior adjusters in addition to an office manager to grow our Houston operation.

- We significantly enhanced our Energy loss adjusting capability in Asia with the appointment of four senior adjusters in Singapore in early 2015. The appointments give us a highly experienced and respected energy adjusting team with a strong market following.

- In the UK, we recruited five additional Property & Casualty adjusters during the year.

Broadened the range of service from our Adjusting offices

We are capitalising on the strength of our global office network by expanding the range of services available to international insurers.

- In 2014 we expanded our Sydney operation by opening new, larger premises and appointed senior staff to develop Property & Casualty and Energy adjusting capabilities in addition to the office's well-established Aviation abilities.

We established a Property & Casualty adjusting capability in our Singapore office with the addition of a senior adjuster to our team and established a marine adjusting capability in our Doha office. Our recently established Property & Casualty capability in Indonesia is growing well.

Acquired UK loss adjusting business

There is a substantial demand for property & casualty loss adjusting services across the UK by domestic and international insurers. To meet this need, we extended our UK office network in 2014 with the acquisition of Knowles Loss Adjusters, a specialist property and casualty loss adjuster. This added 10 offices to our UK network and around 50 additional staff and enables us to respond effectively to claims across the UK and seek adjusting nominations from insurers underwriting UK property & casualty risks. Knowles has delivered a positive performance in 2014.

Won 'Adviser of the Year Award'

Our commitment to delivering the highest standards of technical adjusting and professional services was recognised at the Insurance Day London Market Awards 2014 where we were named 'Adviser of the Year'. The judges' citation said the award was for our numerous achievements during the year which included our response to the 2013 Calgary Floods. We were finalists in the 2015 Commercial Insurance Awards, Loss Adjuster of the Year category and have been shortlisted for 'Claims Management Team of the Year' at the Modern Claims Awards 2015.

Optimised business operations

- We started rolling-out our new loss adjusting case management system across our network. The new system is already increasing efficiency and reducing the administrative burden for our loss adjusters.

- We have achieved a small reduction in the working capital requirement of our Adjusting Services. We are maintaining our focus on reducing debt and appointed working capital specialists to review our approach to WIP and cash collection in 2014. We expect the appointment of a dedicated manager, along with the introduction of our new loss adjusting case management system will contribute further to our drive to reduce the working capital requirement of the business.

- In late 2014, we appointed a Corporate Development Director to work with our Senior Management Team to identify new business opportunities, support the development of new office locations and assist our Aviation, Marine, Energy and Property & Casualty business lines in their development and growth.

Invested in training the next generation of adjusters

We are committed to investing in training and education to develop the next generation of loss adjusters.

- During the year we seconded adjusters between our London, Hong Kong, Jakarta, Taipei and Liverpool offices to broaden their experience of different markets and further enhance joint working across our office network.

- We are supporting 11 staff based in London, Liverpool, Hong Kong and Jakarta to take the Association of Average Adjusters examinations at this time, with one becoming fully qualified during 2014.

Insurance Support Services

The Insurance Support Services business provides technical services to clients in the Lloyd's, London and international insurance markets. It also delivers life and non-life run-off servicing services from London, Dublin and the Isle of Man. The business is a leading provider of third party life insurance administration on the Isle of Man. It also includes our turn-key managing agency, investment management, captive management, risk consulting and specialty risks business lines. Finally, the Insurance Support Services business acts as the Group's business incubator where we can develop and test new business initiatives.

Our Insurance Support Services business has performed well in 2014. Our Non-life business has achieved strong revenue growth and has made a positive operating segment profit contribution. The Life administration business is performing steadily under the Charles Taylor Insurance Services brand and is progressing the development of its new insurance fund services business.

Insurance Support Services - Non-lifeThe Non- life Insurance Support Services business includes Charles Taylor Insurance Services (CTIS), our captive management, risk consulting and specialty risks business lines. Following the appointment of a Chief Executive Officer of Non-life Insurance Support Services in 2013, we appointed a Chief Operating Officer in 2014 to drive the development of existing and new services and to improve business efficiency.

Charles Taylor Insurance Services is the largest of the Non-life Insurance Support Services business lines. It provides outsourced back office insurance services to the Lloyd's, London and international insurance markets. Over the year we have reduced the business's cost base and increased our focus on developing the most profitable business lines. These initiatives have delivered a welcome improvement in performance.

Developed professional services

- Promoted technology services. We are pro-actively promoting the Group's wide range of insurance technology products and services. This is in response to the growing demand for insurance technology services worldwide. Our capabilities include experts in Software as a Service (SaaS) who have developed bespoke products and market-wide solutions, technical and business consultants who specialise in document management and workflow systems and IT specialists who have developed end-to-end insurance management systems.

- Extended Claims Services. Our new elective claims services, which provide support to Lloyd's managing agents on complex claims, secured new clients during the year. Our recently established volume claims service, marketed under the 'Trax' brand won numerous clients, including its first non-Lloyd's client which marks a promising move into the London insurance companies market.

- Secured additional run-off servicing business. We were appointed as run-off manager for a sizeable general reinsurance business. We believe there is potential to further develop our run-off servicing business as non-life insurers place business into run-off and we will target our services at insurers and run-off aggregators in 2015.

- Identified 'Conduct Risk' services. New 'Conduct Risk' governance rules were introduced by Lloyd's in January 2015. We believe we are well-positioned to capitalise on this development as many of our services, including our claims workflow, diary management, elective claims and audit services as well as our TPA Database could support managing agents meeting managing agents' new obligations under the rules.

- Established Charles Taylor Managing Agency (CTMA). We have been working to establish a turn-key managing agency, to offer new Lloyd's syndicates an end-to-end management service which we anticipate will commence trading in April 2015. This will be one of only a few turn-key managing agencies serving the Lloyd's market and we believe there will be significant demand for the service. We are pleased that the Standard Club has chosen CTMA to support it in establishing Syndicate 1884 which is part of the club's strategic objective of achieving long-term sustainable growth. To support the development of CTMA we now have a corporate name at Lloyd's. The development work to establish CTMA contributed to the increased revenue and operating segment profit of the Insurance Support Services business in 2014.

Other Non-life Insurance Support Services: The Group's other Insurance Support Services businesses performed steadily in 2014. Charles Taylor KnowledgeCenter has benefited from an improved pipeline of new business. The Captive Management business has performed steadily. Our Risk Consulting business acquired a small risk management business in the USA to extend its reach in North America. The investment management business delivered steady returns for its clients. The Group's new TPA service launched in the USA in 2013 has secured new clients.

Insurance Support Services - Life

The international life servicing business performed well in 2014. We rebranded the business under the Charles Taylor Insurance Services name. This initiative has integrated it more fully into the Group and allows it to capitalise on the Group's global presence and reputation. We won a contract to provide life policy administration services to a major Caribbean-based life business. In addition, the acquisition of an international life company by our Owned Insurance Companies business secured additional life policy administration business for CTIS. We launched Charles Taylor Insurance Fund Services to provide specialist fund services for life companies' unitised funds and portfolio bonds. We are actively marketing the business to life companies in the UK and international markets.

Owned Insurance Companies

The Owned Insurance Companies business comprises two parts. It owns and consolidates life insurance businesses which are primarily in run-off, creating value through targeted acquisitions and operational efficiency. It also owns non- life insurance companies which are closed to new business and are running off their liabilities in an orderly manner.

Life insurance

In line with our strategy to seek targeted acquisitions in the international life insurance sector, we acquired an international life insurance business in 2014. Nordea Life & Pensions Limited, an Isle of Man life insurer which is open to new business was acquired in November 2014. In January 2015 we agreed to acquire Scottish Widows International Limited, a closed book life insurer which provides unit-linked life insurance policies and portfolio bonds to individual investors. We intend to transfer both companies into our wholly owned Isle of Man life insurance subsidiary, LCL International Life Assurance Company Limited (LCLI), subject to regulatory and court approvals. We expect the acquisitions to be earnings enhancing in 2015 and to generate an early payback of our investment. The Nordea Life & Pensions acquisition has benefited CTIS in the Isle of Man through an increased run-off servicing contract.

Non-life Run-off

The Group's three non-life insurance companies delivered a small operating loss. We had previously decided not to acquire any further non-life run-off businesses and are exploring our options in this market.

Other business strategy initiatives

In addition to the initiatives to optimise business operations already highlighted in this and the Group's half year report, we also took a number of steps to further strengthen and increase the efficiency of our shared services teams in 2014:

- We expanded our new IT team based in Vietnam to take advantage of the high levels of IT literacy and lower operating costs in Vietnam.

- We made a series of key hires across all our business lines to drive forward our growth strategy. These include the Group Chief Financial Officer and Group Human Resources Director. We also appointed a Performance and Strategy Director for Management Services - UK & International, a Corporate Development Director for Adjusting Services, Chief Operating Officers for Non-life Insurance Support services and our Captive Management business and created the new role of President of Management Services - Americas.

Current trading and outlook

Charles Taylor has had a steady start to 2015 and we are looking forward to another year of positive progress.

In Professional Services:

- We have further strengthened our business operations by enhancing our core capabilities, improving our systems and making key hires in strategically important posts, enabling us to drive forward our growth plans.

- We are delivering growth in the core professional services businesses. Our Management Services and Insurance Support Services businesses are performing well and our Adjusting Service business is poised to benefit when insured losses from large and complex claims return to more normal levels.

- We are executing our plans to create our medium-term strategic options. In particular we are excited about the prospects for the Group's new turn-key managing agency. We are building momentum behind our strategy to make carefully targeted M&A opportunities. Our recent acquisitions are contributing to the performance of our Professional Services business; further, we are exploring other potentially attractive opportunities.

In Owned Insurance Companies, we recently announced the acquisition of a life insurance company - the fourth in three years - and believe that there is potential for further acquisitions.

Rights issue

We are very confident in the future prospects for the Group and are currently exploring a number of further opportunities and initiatives to take forward our business strategy for growth and achieve greater shareholder value. We believe the time is now right to further strengthen the Group's balance sheet to give us the resources to capitalise on these opportunities and have announced a rights issue to raise £30.6m in new equity by way of an offer of three shares for every seven shares held. See Regulatory News Announcement issued to the London Stock Exchange on 18 March 2015.

Our result has been achieved thanks to commitment of our highly professional team and I would like to thank all our staff for their hard work throughout the year.

David MarockGroup Chief Executive Officer17 March 2015

Group Chief Financial Officer's Report

The results for the year are summarised in the table below and explained in more detail in the Group Chief Executive Officer's review.

Note: Small rounding differences arise in the total amounts above.

The above financial measures are adjusted to exclude acquired intangible charges, non-recurring items and non-controlling interests as set out in the table below:

Adjusted profit before tax was £11.1 (2013: £10.0m), due to a strong performance by Professional Services and a satisfactory performance from Owned Insurance Companies.

Statutory profit before tax was up 39.1% at £9.6m (2013: £6.9m). Statutory EPS was up 37.0% at 19.48p (2013: 14.22p) which reflects the higher number of shares in issue during the year.

Net debt, cash flow and financing

Net debt increased by £0.2m over the year to £32.6m (2013: £32.4m) and free cash flow reduced to £3.8m (2013: £5.5m). As stated at the Half Year, we consider that a 12-month rolling average figure is a better way to represent the Group's underlying borrowings. At 31 December 2014, our average net debt was £24.6m, up from £22.0m at 31 December 2013. The increase in the 12-month rolling average net debt of £2.6m was largely as a result of our investments in the business to deliver our growth strategy. This included opening new offices to extend the Group's geographic reach, which we expect will deliver increased revenue once fully established, and investing in new IT systems to improve operational efficiency. We are continuing to focus on managing our debt while investing for growth.

The Group's senior banking facilities were renewed in November 2013 for a five year term. They comprise an amortising senior term loan of £10.0m and a £30.0m revolving credit facility. In addition, the Group has £5.0m uncommitted overdraft facilities in the UK, uncommitted overseas facilities of the local currency equivalent of £3.5m and committed overseas facilities of the local currency equivalent of £3.2m. Total headroom on committed facilities at year-end was £17.0m (including surplus cash). Interest rates are mostly linked to 3 month Libor plus margins of 2.25-2.75%. The senior term loan and revolving credit facility are available until 7 November 2018. The other facilities are renewed on an annual basis.

Retirement benefit schemes

The retirement benefit obligation in the Group balance sheet at 31 December 2014 was £41.5m, compared to £26.7m at the previous year end. The increase in net obligation has been driven by a change in discount rates driven by a fall in corporate bond yields which have largely been linked to the drop in gilt yields. There are multi-year programmes in place to recover pension scheme deficits fully on a regulatory funding basis and funding costs are reflected in management fees charged by the Group where appropriate. Employer contributions in the year were £3.8m (2013: £3.7m).

Dividend

The second interim dividend for 2014 is 7.50p (2013 final dividend: 6.75p) making the total dividend for the year 10.75p.

Foreign exchange

The Group manages its exposure to foreign currency fluctuations by use of forward foreign exchange contracts and options to sell currency in the future. The contracts open during the year and at the year-end were to protect the Group's exposure to movements between £sterling and the US$, the Singapore $ and the Canadian$. The US$ profits of the Group were translated at 1.65 in 2014 (2013: 1.57). The sensitivity of the Group's results to movements in exchange rates is explained in note 25 to the Financial Statements. Results were not materially affected by movements in exchange rates between 2013 and 2014.

Taxation

During 2014, the effective tax rate on statutory profit was 12.2% compared to 19.8% in 2013. The underlying tax rate, which is calculated on adjusted profit and excludes prior year adjustments and the recognition of new deferred tax assets, was 11.0% (2013: 16.1%). The statutory and underlying tax rates are lower because a larger proportion of profits were generated in lower tax countries.

Mark KeoghGroup Chief Financial Officer17 March 2015

Consolidated Income Statement

Adjusted earnings per share figures are shown in the consolidated financial highlights on page 1.

The financial statements were approved by the Board of Directors and authorised for issue on 17 March 2015.

Mark Keogh

Director

17 March 2015

The capital reserve and merger reserve arose on formation of the Group and are non-distributable capital reserves.

Own shares comprise 299,123 (2013: 258,453) shares held by the Charles Taylor Employee Share Ownership Plan Trust (ESOP). The market value of these shares was £747,808 (2013: £651,302) at the balance sheet date.

The trustee of the ESOP is Summit Trust International SA, an independent professional trust company registered in Switzerland. The ESOP is a discretionary trust for the benefit of employees of the Group and provides a source of shares to distribute to the Group's employees (including executive directors and officers) under the Group's various bonus and incentive schemes, at the discretion of the trustee acting on the recommendation of a committee of the Board.

The assets, liabilities, income and costs of the ESOP are incorporated into the consolidated financial statements.

There are no significant restrictions on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans or advances other than company law requirements dealing with distributable profits, and in the case of the insurance companies, regulatory permissions and solvency limits.

1. Accounting policies

Basis of accounting

The financial information set out above does not constitute the statutory accounts of Charles Taylor plc for the year ended 31 December 2014, but is derived from those statutory accounts, which have been prepared in accordance with International Financial Reporting Standards (IFRSs) and also in accordance with IFRSs adopted by the European Union and therefore they comply with Article 4 of the EU IAS Regulation. 

Statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered following the Company's Annual General Meeting. 

The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498 (2) or (3) Companies Act 2006.

2. Segmental information

Identification of segments

For management and internal reporting purposes the Group is currently organised into four operating businesses whose principal activities are as follows:

· Management Services business - mutual management service.

· Adjusting Services business - energy, aviation, non marine and marine (including average) adjusting.

· Insurance Support Services business - non-life and life insurance support services, including captive management, investment management and risk management.

· Owned Insurance Companies business - non-life and life insurance companies.

Management information about these businesses is regularly provided to the Group's chief operating decision maker to assess their performance and to make decisions about the allocation of resources. Accordingly, these businesses correspond with the Group's operating segments under IFRS 8 Operating Segments. Businesses forming part of each business which might otherwise qualify as reportable operating segments have been aggregated where they share similar economic characteristics and meet the other aggregation criteria in IFRS 8.

In the Management Services business, a higher proportion of revenue arises in the second half of the financial year. There is no significant seasonality or cyclicality in the other businesses.

Measurement of segmental results and assets

Transactions between reportable segments are accounted for on the basis of the contractual arrangements in place for the provision of goods or services between segments and in accordance with the Group's accounting policies. Reportable segment results and assets are also measured on a basis consistent with the Group's accounting policies. Operating segment profit includes an allocation of central costs across the four businesses and excludes non-recurring adjusting costs. The prior year operating segment profits and assets have been adjusted to conform to the current year's presentation. Reconciliations of segmental results to the group profit before tax are set out below.

Information about major customers

The Group derived revenue of £35.4m (31 December 2013: £29.8m) from one external customer which accounts for more than 10% of group revenue, and is included within both the Management Services and Insurance Support Services businesses.

1 Excluding deferred tax.

3. Earnings per share

Earnings per ordinary share have been calculated by dividing the profit on ordinary activities after taxation and non-controlling interests for each year by the weighted average number of shares in issue. The shares held by the ESOP have been excluded from the calculation because the trustees have waived the right to dividends on these shares.

The calculation of the statutory basic, statutory diluted and adjusted earnings per share is based on the following data:

4. Acquisition of subsidiaries

KLA Group

On 14 May 2014, the Group acquired 100% of the issued share capital of KLA Holdings Limited and its subsidiary Knowles Loss Adjusters Limited (Knowles). Knowles is a UK loss adjusting business focused on UK property and casualty (P&C) claims, complementing the existing loss adjusting services provided by the Group.

The business contributed £2.4m revenue and £0.1m profit before tax to the Group since the acquisition date. The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:

Nordea Life & Pensions Limited

On 21 November 2014, the Group acquired 100% of the issued share capital of Nordea Life & Pensions Limited Holdings Limited (NLP), an Isle of Man life insurer which provides personalised life insurance products primarily to high net worth individuals, from Nordea Life and Pensions S.A., Luxembourg. The acquisition is part of the Group's strategy to make tactical acquisitions in the international life insurance sector and thereby grow its life insurance business in the Isle of Man. It is intended that the NLP business will be transferred into LCLI, subject to court approval, which would enable surplus reserves to be released.

The business contributed £0.3m revenue and £0.0m profit before tax to the Group since the acquisition date. The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:

If the two acquisitions had been completed on the first day of the financial year the combined revenue for the Group and profit before tax would have been £126.6m and £10.2m respectively.

5. Trade and other receivables

6. Trade and other payables

7. Borrowings

8. Note to the Cash Flow Statement

Additions to tangible fixed assets during the year amounting to £59,000 (2013: £nil) were financed by new finance leases.

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly-liquid investments with a maturity of three months or less. Cash includes client funds of £41.9m (2013: £40.0m).

This Press Release contains certain forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including demand and pricing operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations and other changes in business conditions; the actions of competitors and other factors.