16 Nov 2010 07:00
FOR IMMEDIATE RELEASE16 NOVEMBER 2010
Charles Taylor Consulting plc ("CTC")
INTERIM MANAGEMENT STATEMENT
Today's interim management statement for the period 1 July 2010 to 16 November 2010 is made in accordance with the UK Listing Authority's Disclosure and Transparency Rules.
Summary
Business activity during the period has been broadly in line with the expectations contained in our half yearly report. There has been good progress within the Management Services division and Charles Taylor Insurance Services (CTIS), which has been successful in a recent tender involving work for the Lloyd's of London insurance market. As a result of slightly lower earnings from Adjusting Services and Insurance Companies Run-off, 2010 earnings are anticipated to be in line with, but towards the lower end of, management's expectations.
Management Services division
A satisfactory outcome to discussions concerning the 2011 management fee for Standard Bermuda has been reached that takes account of the substantial growth in the entered tonnage and the increased complexity of the regulatory environment in which it operates. New three year management fee arrangements have been concluded with Signal Mutual and SCALA, with effect from 1 October 2010 and 1 January 2011 respectively.
Elsewhere in the division a number of initiatives are under way that should make a positive contribution in 2011. It was previously expected that some of these would have been finalised in the second half of 2010.
Adjusting Services division
There were good results in the marine and non-marine businesses. An investment has been made in Indonesia where a non-marine capability has been added to the group's extensive marine operation. The larger energy business had a lower result than expected. An investment has been made to extend the business's "onshore" capabilities but there have been selective cost reductions elsewhere.
Despite a reasonable level of instructions in Asia for our aviation business, the result has been affected by higher operating costs at the Singapore regional head office due principally to a stronger Singapore Dollar against Sterling.
The underlying strength of the division was recognised by Post Magazine, which rated Charles Taylor adjusting as first overall in an independent survey of the general performance of UK loss adjusters.
Insurance Support Services division
Within CTIS, the regeneration of the business continues with new business from both existing and new clients. Notably, CTIS was selected by the Lloyd's Market Association to provide support services in relation to the approximately 50,000 'non-moving claims' on behalf of Lloyd's Managing Agents, with effect from 1 January 2011.
The group has not made any substantial acquisitions of insurance companies in run-off since 2008 and this continues to affect the level of the associated servicing business.
Insurance Companies Run-off division
The Insurance Companies Run-off division continues to trade satisfactorily overall, although the associated tax charge and the structure of minority interests mean that the earnings attributable to CTC shareholders will be small. Claims experience in the non-life businesses is generally favourable or neutral this year and the life business results are better than originally planned, but, subject to the fourth quarter result, the mix of profits between companies suggests that attributable earnings for the division are likely to be lower than in 2009.
Banking
Net debt at 30 September 2010 was £41.9m, compared to £41.6m at 30 June 2010 and £42.2m at 31 December 2009.
We have recently agreed amendments to the group's Senior Facilities Agreement that offer more flexible conditions and better reflect the changed business mix of the group. The associated fees will be amortised over the remaining three years of the facilities term.
Outlook
The diversity of the group's client base, together with the longevity of its many relationships, the opportunities available to it and the actions taken to improve profitability, provide a solid base on which to build in 2011.
For further information, please contact:
John Rowe, Chief Executive020 3320 2200john.rowe@ctcplc.com NOTES TO EDITORS
Charles Taylor Consulting is a leading provider of insurance services. We manage mutual insurance companies, advise insurers on complex insurance losses and provide administration and consultancy services to insurers and insureds worldwide. We also own life and non-life insurance companies which are closed to new business. Further information on the group can be found at www.charlestaylorconsulting.com.
This statement is based on information sourced from management accounts.
Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.
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