22 Jan 2010 07:00
For immediate release
22 January 2010
Charles Taylor Consulting plc
TRADING STATEMENT
Charles Taylor Consulting plc ("CTC" or the "Company") announces a trading update for the year ended 31 December 2009.
2009 RESULTS
A stronger than anticipated result from the run-off division and a record performance from the adjusting division is likely to be counterbalanced by a slightly weaker than anticipated result from our other divisions for the last part of 2009. Overall, profit before tax is likely to be in line with management's expectations but the existence of minority interests within the run-off division and the weaker performance from the Management and Support Services divisions means that earnings per share are likely to be marginally lower than management's expectations.
The key factors underlying 2009 trading largely mirror the description in the Interim Management Statement published on 19 November 2009. In summary these are as follows.
Management Division
US recession adversely impacted Signal and Captive Management.
Adjusting Division
Record revenue and profits achieved.
Insurance Support Services Division
Cost savings secured.
Refocusing on "live" market.
Insurance Companies Run-off Division
Strong overall performance.
An exceptional performance from Cardrow, but the benefits to the Group were muted due to the substantial minority interests.
Minority Interests and Tax
The strong performance of the insurance companies run-off division in 2009 is likely to lead to an increase in minority interests and a higher tax charge, with the tax charge also being increased by tax adjustments to prior years.
OUTLOOK
Management Division
Standard Clubs
A significant rise in tonnage entered since 20 February 2009 renewal, from 83m to 95m gt, underlines the strong relative position of these mutual insurance associations whose continued prosperity remains at the heart of the Group's operations.
Signal Mutual
The prospects for 2010 will clearly be affected by the strength of any recovery in the US economy but there are indications that container shipping activity is increasing in various key US ports. There have also been further new members joining Signal including a notable Gulf Coast shipyard on 1 January. Any continuation of these trends during 2010 will help to ensure a significantly better result from this operation in 2010 than in the previous year.
Public Authority Sector
2010 will see increased activity here, with indications of interest received from a variety of sources as local authorities consider exercising the powers granted to them to set up new mutual insurance associations.
Adjusting Division
We anticipate that the final results for 2009 will show record revenues and operating profits for the Adjusting division. The business has a very strong base for 2010, although the results will, as always, depend on the extent to which new instructions are received from existing and new clients.
Insurance Support Services Division
CTC Axiom is to be renamed Charles Taylor Insurance Services and its reorganisation is now largely complete. Significant cost savings have been secured and the focus in 2010 will be on attracting new service contracts. The Group also sees potentially attractive opportunities for developing a managing agency at Lloyd's which will act as a "Turn key" advisor for those wishing to set up syndicates at Lloyd's. The range of capabilities within this division makes it ideally placed to do this.
Insurance Companies Run-off Division
This division is budgeted to make a satisfactory contribution in 2010 although it is unlikely to match the exceptional results anticipated for 2009. During 2009 one company in particular, Cardrow, generated very positive results, although the existence of substantial minority interest limits the impact as far as the Group is concerned.
As always, the Group will look at making acquisitions where it is clear that they will be beneficial to group earnings.
SUMMARY
The Board believe that the Company operates a strong portfolio of complementary insurance-related businesses for whose services there is strong demand and which are well positioned for further growth during the 2010 financial year. There remain opportunities for both organic and acquisitive development and acquisition opportunities continue to be reviewed.
CTC will be holding a presentation for analysts and investors today at 11:00 am (UK time) at the following address:
CTC Axiom Consulting Limited Lloyds Chambers1 Portsoken StreetLondonE1 8BT
CTC will announce its preliminary results for the year ended 31 December 2009 towards the end of March 2010.
For further information, please contact:
John Rowe, Chief Executive
020 3320 2200
john.rowe@ctcplc.com
NOTES TO EDITORS
1. CTC serves global insurance markets. It provides services to mutual and captive insurers (whether still underwriting or closed to new business), insurance intermediaries and insured ship owners, and also owns life and non-life insurance companies which are closed to new business. Further information on the group can be found at www.charlestaylorconsulting.com.
2. This statement is based on information sourced from management accounts.
3. 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.