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| Date/Time | Headline | Source |
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| 04-02-10 | RNS |
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RNS Number : 6545G THB Group PLC 04 February 2010
Further to the allotment of shares announced on 2 February 2009, the Board of THB Group plc ('the Company'), the specialist insurance and reinsurance broker, has approved the allotment of a further 151,158 new 10p ordinary shares. The new shares were issued yesterday at 57p to satisfy employment obligations following the acquisition of the business of PWS. An application has been made for the shares to be admitted to trading on AIM and admission is expected to take place on 9 February 2010. Following this allotment, the Company's capital consists of 33,028,433 ordinary shares with voting rights. No ordinary shares are held in treasury. Therefore, the total number of ordinary shares in the Company with voting rights is 33,028,433. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FSA's Disclosure and Transparency Rules. Contact:
Ends This information is provided by RNS The company news service from the London Stock Exchange END
IOEUGUQAPUPUGMW More |
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| 02-02-10 | RNS |
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RNS Number : 5361G
THB Group PLC
02 February 2010
The Board of THB Group plc ('the Company'), the specialist insurance and reinsurance broker, has approved the allotment of 317,544 new 10p ordinary shares. The new shares were issued today at 57p to satisfy employment obligations following the acquisition of the business of PWS. An application has been made for the shares to be admitted to trading on AIM and admission is expected to take place on 5 February 2010. Following this allotment, the Company's capital consists of 32,877,275 ordinary shares with voting rights. No ordinary shares are held in treasury. Therefore, the total number of ordinary shares in the Company with voting rights is 32,877,275. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FSA's Disclosure and Transparency Rules. Contact:
Ends This information is provided by RNS The company news service from the London Stock Exchange END
IOEUGUCAPUPUGGP More |
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| 28-01-10 | RNS |
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This news article is displayed preformatted as it may contain results tables
RNS Number : 2446G
THB Group PLC
28 January 2010
THB GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2009
THB Group plc ("THB" or "the Group"), the specialist insurance and reinsurance broking and risk management group, today announces preliminary results for the year ended 31 October 2009.
Summary of results
200912 monthsAudited 200812 monthsUnaudited 200818 monthsAudited
Fees & commissions £46.2 million £39.0 million £51.9 million
Underlying broking profit * £5.3 million £3.7 million £3.9 million
Underlying broking margin * 11.5% 9.6% 7.6%
Profit before tax £0.6 million £0.6 million £0.9 million
Underlying profit before tax * £3.6 million £3.5 million £4.1 million
Diluted earnings per share 2.42p 0.46p 1.20p
Underlying diluted earnings 9.42p 8.25p 10.11p
per share *
Dividend per share 2.5p 5.6p 6.85p
* Underlying results are before exceptional items, amortisation and impairment of intangibles;
Broking Profit is Fees & commissions less Operating charges
Highlights
* Fees and commissions +18% in spite of markets not hardening
* Broking profit +43% reflecting improved margins
* Underlying profit before tax +2% in spite of significantly lower investment returns
* Benefit of the stronger US dollar expected to contribute in 2010 and beyond
* New CEO and management team completed ambitious strategic review
For further information please contact:
Richard Adams Tel: 020 7623 2368
FWD - PR for THB E-mail: Richard.Adams@fwdpr.co.uk
Simon Leathers Tel: 020 7776 6550
Daniel Stewart & Co - NOMAD E-mail: Simon.Leathers@danielstewart.co.uk
Frank Murphy Tel: 0207 469 0100
THB - Group CEO E-mail: FMurphy@thbgroup.com
Rob Wilkinson Tel: 0207 469 0100
THB - Group FD E-mail: RWilkinson@thbgroup.com
Information is also available on the Company's website at www.thbgroup.com.
CHAIRMAN'S STATEMENT
for the year ended 31 October 2009
Performance
The Group has made very good progress in the year ended 31 October 2009, reporting strong growth in fees and commissions and improving broking margins. The succession of Frank Murphy as Group Chief Executive was carried out seamlessly and these results reflect a promising start to his leadership of the business.
Fee and commission income for the year was £46.2 million (2008 - 18 months: £51.9 million), up by 18% from the comparable year to October 2008 (£39.0 million). This was partly as a result of acquisitions, but also reflected healthy organic growth across a number of classes in the second half of the year, and was achieved in the face of headwinds in insurance markets, as the hard market anticipated by many industry commentators did not materialise.
Broking profit (Fees & Commissions less Operating Charges before exceptional costs) advanced strongly, up 35% to £5.3 million in 2009 (12 months) from £3.9 million reported in the 18 months to October 2008. The result represents a 43% increase on the unaudited twelve months to October 2008. This was achieved by focusing on the cost base, accounting for an improvement in broking profit margin to 11.5% from 9.6%.
Underlying profit before tax, after adjusting for amortisation and impairment of intangibles and goodwill and exceptional costs, for the year to 31 October 2009 was £3.55 million (2008 - 18 months: £4.07 million). Profit before tax was £0.58 million (2008 - 18 months: £0.91 million), reflecting higher exceptional costs associated with the acquisition of the PWS business and lower investment returns due to sharp falls in bank deposit interest rates early in the year.
Underlying diluted earnings per share were 9.42p compared with 10.11p in the 18 months to October 2008, while diluted earnings per share improved from 1.20p to 2.42p.
Strategic review
Following a full business review, the Board has approved a three year strategic plan, which will focus growth on higher margin specialist areas of the insurance market and on achieving greater operational efficiencies in core activities. We believe that the opportunity for margin improvement from this three-year programme is significant.
The Lloyd's broking division will pursue growth both organically and through acquisitions, building particularly on areas of established market leadership. The Unicorn managing general agency business will be further developed, providing a vehicle to incubate talented underwriting entrepreneurs with skills in specialist niches. The Risk Management business had its most successful year to date, with ergonomics and motor fleet health and safety operations merged for future development under a single management team. Internationally, the focus will be on extending the reach of the existing business in the Far East, as well as targeting growth opportunities in the Middle East and South America.
The key assets - our people
I would like to thank all of our staff for their hard work and dedication in the year. We continue to attract and retain highly motivated people who take pride in delivering a first rate service to our clients.
Leadership
Frank Murphy has brought new vigour and determination to the leadership of the executive team. His approach is highly focused and his energy and ability will be key to driving the ambitious plans before us.
Steve Matanle joined the Board in November 2009, having been appointed to lead the Lloyd's broking division from May 2009. He is an experienced insurance broker, with a long and successful career at global broker, Marsh McLennan. His insight and deep understanding of the London and international insurance markets will be of real value in the development of the Group.
The Board has been further strengthened by the appointment of Charles Keay as a non-executive director in May 2009. Charles is an experienced banker, having been a director of N M Rothschild & Sons for many years. His knowledge of financial markets will be an asset to the Group's acquisitive growth plans.
Dividends
The Board is recommending a final dividend of 1.25 pence per share, bringing the total for the year to 2.5 pence (2008: 5.6p). This represents a strategic re-alignment to the previous dividend policy, with greater cash retention in the business to support the Group's future development plan and the prospects for capital growth that will flow from its achievement. Dividends will in future be paid out of profits earned in the year to which they relate and will be determined by reference to underlying earnings per share. The Board recognises the importance of the dividend to shareholders and expects to maintain dividend cover on this basis in the range 3.5 to 4 times. However, this will not preclude the possibility of paying special, one-off dividends in future, as the Company did following the sale of its Provincial Retail business in 2006.
The proposed dividend will be put before the members at the annual general meeting to be held on 16 March 2010. The record date for the dividend will be 5 February 2010 and, subject to shareholder approval, the dividend will be paid on 19 March 2010.
Opportunities
The Board is keenly aware of exciting opportunities in the year ahead, notably to improve margins further and to attract new teams and businesses to complement our strongest areas. In addition, whilst acknowledging the dampening effect of recession generally, we can see that the business has a number of clear upsides. Insurance rates are at historically low levels and although we do not predict any dramatic short term hardening, we believe that the trend of the next few years will be in that direction. This is particularly so for certain classes of business, including motor fleet and professional indemnity. Property rates will inevitably continue to depend on events of a catastrophic nature, which cannot be predicted, but some other classes have reached a point where carriers are finding it difficult to make an underwriting profit without the ability to rely on investment income as in the past.
The recent positive trend in foreign currency exchange rates offers a more certain benefit to the Group. The business continues to be exposed mainly to the conversion of US dollar commissions into sterling. Some 50% of the Group's income is denominated in US dollars, with minimal offsetting dollar costs. Dollar strength in comparison to sterling has had a limited benefit in the last twelve months, because of the policy of forward selling. However, the Group will accrue the benefit of improved conversion rates going forward - every 10 cent improvement in achieved dollar conversion rates is worth £0.8 million to the Group at current business levels. In addition, should interest rates start to increase in the next twelve months, as some commentators are predicting, the Group would expect to generate approximately £0.2 million of investment income for every 1% rise.
The Board anticipates that the combined impact of the new team and the strategic initiatives will enable THB to build on its reputation for professional service and integrity and deliver value to our shareholders, clients and staff.
Nigel Moorhouse
Non Executive Chairman
REVIEW OF OPERATIONS
Market trends
2009 saw insurers benefit from low catastrophe losses and a recovery in their balance sheets after the write-offs of 2008. The injection of government liquidity into financial markets generally and, through AIG, into the insurance market, served to stabilise the position. As a result, the hardening of rates, which was forecast early in 2009 as a means of restoring insurers' balance sheets, was deferred. Initial signs that some classes, such as motor fleet, were turning, in the middle of 2009, proved to be short-lived and rates generally levelled out or indeed continued their downward trajectory.
Business performance - Lloyd's Broker
Under the new leadership of Steve Matanle, appointed CEO of the Lloyd's broker in May 2009, turnover for the Lloyd's Broker was £35.2 million for the year to October 2009 (2008 - 18 months: £41.6 million), up 15% from £30.6 million in the same twelve month period the previous year. Strong business development performances in a number of areas, notably European reinsurance and global professional indemnity, delivered overall good organic growth. Broking margins improved year-on-year, rising from 7.5% in the year to October 2008 to 10.3% in 2009.
Comparing the performance of the different business lines within the Lloyd's Broker in the twelve months to October 2009 against the preceding twelve months, North American income was up by 5%, in spite of continuing soft rates in a further year of low hurricane activity. UK wholesale commercial lines grew in the same period by 2%, with flat rates suggesting that the bottom of the cycle is close. Financial lines, professional indemnity and directors' and officers' business continued its dramatic growth trend, up by over 50% in the year, and, perhaps more impressively, this was largely the result of new business wins rather than rate rises. The retail book (mainly sport-related and security industry personal accident) grew strongly for a second consecutive year, rising by 20%. The global facultative reinsurance book, acquired as part of the PWS acquisition, comprising international property, construction, marine, treaty and accident and health, contributed over £9 million of income in the year, compared with less than £6 million in the nine months following its acquisition in the preceding period, assisted by very strong organic growth in the European team operating from its hub in Amsterdam.
The Lloyd's broker will continue to seek complementary acquisitions and to recruit specialist skills to strengthen existing teams. In line with this strategy, a treaty team joined THB in January 2010 and we are aware of other high quality, disaffected brokers and teams that may be added to other divisions during the current year.
Business performance - International (insurance broking)
This division saw some restructuring in the year to October 2009, with the sale of its interests in Korea and closure of the Brazil office, but nonetheless returned a broking profit in the second half. At the core of the division is a strong business based in Singapore, giving access to growing economies in the Far East. In spite of continuing low rates in this region, this business achieved income growth of 10% in the second half of the year and established a new collaborative venture in Hong Kong, which offers the prospect of a relatively low risk inroad into the emerging Chinese market.
This division works closely with teams in the Lloyd's broker to ensure that the right technical expertise is made available to our overseas offices for the benefit of clients wherever they may be in the world.
Business performance - THB UK (risk management and insurer services)
THB UK, led by divisional chief executive director Andy Hawkes, increased turnover for the year to October 2009 to £8.6 million (from £8.5 million for the 18 months to October 2008), a rise of 30% from £6.6 million in the year to October 2008.
Comparing the year to 31 October 2009 with the preceding twelve months, income for Risk Management, now operating under the 'Cardinus' brand, advanced strongly, due to a number of major blue chip contract wins and the acquisition of Property Risk Management, which broadened the product range. This business generates predominantly non-cyclical sterling income and operates in growing markets with an impressive client list of UK and US corporations and an increasingly respected brand name.
THB Risk Solutions' result reflected softer rates in the motor fleet sector as the cycle nears the bottom. This is a cyclical business, which we expect to flourish once the market turns for motor fleet rates, typically the bellwether of the UK insurance industry. This business will then enter a period of real opportunity and we continue to stand by last year's prediction that 2009 would be a low point for this business, with 2010 expected to show improvement.
During 2009, Unicorn Underwriting established itself as a new managing general agency ('MGA') and successfully grew and sold a bloodstock underwriting book. The sale contributed to growth in income from £0.6 million to £1.8 million in the year. The Unicorn model offers an attractive opportunity to entrepreneurial underwriters and we intend to recruit new teams with specialist skills in defined niches to underwrite risks on behalf of selected carriers.
Outlook
The new team has started positively and we intend to build on the momentum created. A hardening of rates in our core insurance markets is possible but beyond our control and we intend to focus rather on securing further organic growth and margin improvement from planned operational efficiency gains. Better hedged conversion rates for the US dollar will further contribute to trading performance this year. There are also numerous consolidation and team acquisition opportunities in our markets and these will be carefully assessed to maximise return on investment. It promises to be a busy year, but I have confidence that the team will deliver.
Frank Murphy
Group Chief Executive
CONSOLIDATED INCOME STATEMENT
for the year ended 31 October 2009
12 months 18 months
2009 2008
Notes £'000 £'000
Fees and commissions 2 46,237 51,899
Investment income 138 1,637
Salaries and associated expenses (31,126) (35,331)
Premises costs (3,123) (2,935)
Other operating charges (8,228) (10,871)
Depreciation, amortisation and impairment charges 3 (2,208) (3,000)
Operating profit 3 1,690 1,399
ANALYSED AS:
Operating profit before exceptional items and
impairment charges 2,769 2,706
Cost of restructuring operations 3 (120) (869)
Exceptional bonuses 3 (1,452) (315)
Impairment credits / (charges), net 493 (123)
Operating profit 3 1,690 1,399
Finance income 66 585
Finance costs (1,171) (1,114)
Net finance cost 4 (1,105) (529)
Share of results of associates after tax (10) 44
Profit before taxation 575 914
Income tax credit / (expense) 5 262 (452)
Profit for the period 837 462
Attributable to:
Shareholders of the Company 822 348
Minority interests 15 114
837 462
Earnings per share
Basic 6 2.54p 1.25p
Diluted 6 2.42p 1.20p
Results all relate to continuing operations.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the year ended 31 October 2009
12 months 18 months
2009 2008
£'000 £'000
Fair value profits / (losses):
- available-for-sale - (173)
- cash flow hedges 3,991 (4,305)
- taxation (1,122) 1,291
Currency translation differences (24) 145
Net profits / (losses) recognised directly in equity 2,845 (3,042)
Net profit 837 462
Total recognised income and expense attributable to 3,682 (2,580)
equity holders
Attributable to:
Shareholders of the Company 3,667 (2,694)
Minority interest 15 114
3,682 (2,580)
CONSOLIDATED BALANCE SHEET at 31 October 2009
2009 2008
Notes £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 4,684 5,001
Goodwill 30,045 26,545
Intangible assets 8,419 9,734
Interests in associates 296 416
Deferred tax assets 1,658 1,596
Available-for-sale financial assets - 112
Derivative financial instruments 621 111
Other receivables 127 345
45,850 43,860
Current assets
Trade and other receivables 15,039 15,712
Current tax recoverable 299 273
Derivative financial instruments 457 29
Cash and cash equivalents 40,362 49,038
56,157 65,052
Total assets 102,007 108,912
EQUITY
Capital and reserves attributable to equity holders
Share capital 3,728 3,680
Share premium 13,227 12,955
Fair value and hedging reserves 915 (1,954)
Capital contribution reserves 1,854 1,854
Cumulative translation reserve 98 122
Retained earnings 4,739 5,042
Shareholders' equity 8 24,561 21,699
Minority interest 236 243
Total equity 24,797 21,942
LIABILITIES
Non-current liabilities
Trade and other payables - -
Borrowings 14,696 16,536
Derivative financial instruments 4 1,317
Deferred tax liabilities 2,895 2,342
Provisions and other liabilities 6,094 5,982
23,689 26,177
Current liabilities
Trade and other payables 49,552 56,109
Current tax liabilities - 72
Borrowings 2,049 1,229
Derivative financial instruments 915 2,656
Provisions and other liabilities 1,005 727
53,521 60,793
Total liabilities 77,210 86,970
Total equity and liabilities 102,007 108,912
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 October 2009
12 months 18 months
2009 2009 2009 2008 2008 2008
Corporate Fiduciary Total Corporate Fiduciary Total
Notes £*000 £*000 £*000 £*000 £*000 £*000
Cash flows from operating
activities
Net cash from operations 10 3,882 156 4,038 (1,212) 3,758 2,546
Interest paid (559) - (559) (746) - (746)
Taxation paid (501) - (501) (1,449) - (1,449)
(Decrease) / increase in (2,678) 2,678 - 909 (909) -
earned brokerage held in
fiduciary accounts
(Decrease) / increase in - (191) (191) - 217 217
insurance broking receivables
(Decrease) / increase in - (7,194) (7,194) - 10,901 10,901
insurance broking payables
Net cash from / (used in) 144 (4,551) (4,407) (2,498) 13,967 11,469
operating activities
Cash flows from investing
activities
Interest received 202 - 202 1,872 - 1,872
Dividends received 2 - 2 14 - 14
Purchase of property, plant (504) - (504) (2,489) - (2,489)
and equipment
Disposal of property, plant - - - 31 - 31
and equipment, net of costs
Acquisition of businesses, net (1,478) - (1,478) (11,601) 8,032 (3,569)
of cash acquired
Disposal of businesses, net of - - - 1,571 - 1,571
cash disposed
Purchase of other investments - - - (168) - (168)
Disposal of other investments 102 - 102 1,108 - 1,108
Net cash (used in) / from (1,676) - (1,676) (9,662) 8,032 (1,630)
investing activities
Cash flows from financing
activities
Equity dividend paid (1,182) - (1,182) (2,109) - (2,109)
Preference dividend paid (448) - (448) - - -
Issue of ordinary shares 320 - 320 3,624 - 3,624
Issue of preference shares - - - 5,605 - 5,605
Issue of loan stock - - - 4,000 - 4,000
Borrowings received - - - 7,755 - 7,755
Borrowings repaid (1,215) - (1,215) (667) - (667)
Net cash used in financing (2,525) - (2,525) 18,208 - 18,208
activities
Net increase / (decrease) in (4,057) (4,551) (8,608) 6,048 21,999 28,047
cash and cash equivalents
Cash and cash equivalents at 7,010 42,028 49,038 1,251 23,787 25,038
start of period
Exchange (gains) / losses on 88 (156) (68) (289) (3,758) (4,047)
cash and cash equivalents
Cash and cash equivalents at 3,041 37,321 40,362 7,010 42,028 49,038
end of period
NOTES TO THE PRELIMINARY RESULTS - 31 October 2009
1. Basis of preparation
This preliminary announcement has been extracted from financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Accordingly, the consolidated financial statements have been prepared under the historical cost convention, as modified to include the revaluation of derivative financial instruments, and using accounting policies and presentation, which comply with IFRS. The principal accounting policies adopted in the preparation of these financial statements will be reproduced in the Annual Report & Accounts for the year ended 31 October 2009.
The consolidated cash flow statement has been prepared showing separately corporate funds, being the Group's own cash balances, and fiduciary funds, being funds held on behalf of clients and insurers in non-statutory trust accounts.
2. Segment information
Primary reporting format - Business segments
The Group is organised into three main segments: Lloyd's Broker, THB UK and International.
The Lloyd's Broker segment is based in London, Amsterdam, Orpington and Cheltenham and engages in insurance broking activities on behalf of UK and international clients, placing risks into London and international markets.
The THB UK segment provides insurance and risk management services to UK insurers, insurance intermediaries and other commercial clients, and is based in London, Peterborough and East Grinstead.
The International segment comprises the Group's interests in insurance broking operations in a number of overseas jurisdictions, including Singapore, Dubai, Brazil, Colombia and Peru.
Segment results
In accordance with IAS 14 Segment Reporting, segment results include the net income or expenses derived from the trading activity of the segment, including interest receivable from insurance trust accounts. The standard specifically excludes the income tax expense from segmental allocation.
Segment assets
Segment assets include non current assets, trade and other receivables, insurance broking receivables and insurance trust cash, but exclude trade investments, investments in associates and deferred tax assets.
Segment liabilities
Segment liabilities include trade and other payables, insurance broking payables, borrowings and provisions for liabilities and charges, but exclude income and deferred tax liabilities.
Investment in associates
The Group's ownership of 50% of US companies, Equisure, Inc. and Rice Place Inc., has been excluded from the segmental analysis of revenue and assets, but is shown separately as part of the Lloyd's Broker segment.
The Group's ownership of 25% of PWS Gulf Insurance Brokers LLC and 30% of PWS Peru Corredores de Reaseguros SAC has been excluded from the segmental analysis of revenue and assets, but is shown separately as part of the International segment.
Segment capital expenditure
Segment capital expenditure includes acquisitions of property, plant and equipment, goodwill and intangible assets.
Year to31 October 2009 Lloyd*s Broker THB UK International Unallocated Group
£*000 £*000 £*000 £*000 £*000
Fees and commissions 35,207 8,625 2,405 - 46,237
Investment income 133 - 5 - 138
Operating charges (31,592) (6,620) (2,445) (248) (40,905)
Exceptional costs (1,452) - (120) - (1,572)
Depreciation, amortisation and (1,071) (501) (405) (231) (2,208)
impairment
Operating profit / (loss) 1,225 1,504 (560) (479) 1,690
Net finance income / (cost) - 12 9 (1,126) (1,105)
Share of results of associates 31 - (41) - (10)
after tax
Profit / (loss) before tax 1,256 1,516 (592) (1,605) 575
Income tax expense (126) (503) (18) 909 262
Net profit / (loss) 1,130 1,013 (610) (696) 837
Goodwill 21,079 7,736 1,230 - 30,045
Intangible assets 4,339 2,881 1,199 - 8,419
Other segment assets 44,855 3,208 3,447 10,568 62,078
Segment assets 70,273 13,825 5,876 10,568 100,542
Investment in associates 266 - 30 - 296
Unallocated assets - - - 1,169 1,169
Total assets 70,539 13,825 5,906 11,737 102,007
Segment liabilities (41,431) (1,614) (2,135) (29,624) (74,804)
Unallocated liabilities - - - (2,406) (2,406)
Total liabilities (41,431) (1,614) (2,135) (32,030) (77,210)
Segment capital expenditure 2,767 925 5 15 3,712
18 months to31 October 2008 Lloyd*s Broker THB UK International Unallocated Group
£*000 £*000 £*000 £*000 £*000
Fees and commissions 41,620 8,492 1,787 - 51,899
Investment income 1,626 - 11 - 1,637
Operating charges (38,807) (7,401) (1,696) (49) (47,953)
Exceptional costs (1,184) - - - (1,184)
Depreciation, amortisation and (1,390) (932) (370) (308) (3,000)
impairment
Operating profit / (loss) 1,865 159 (268) (357) 1,399
Net finance income / (cost) 1 22 11 (563) (529)
Share of results of associates (34) - 78 - 44
after tax
Profit / (loss) before tax 1,832 181 (179) (920) 914
Income tax expense - - (85) (367) (452)
Net profit / (loss) 1,832 181 (264) (1,287) 462
Goodwill 18,308 6,947 1,290 - 26,545
Intangible assets 4,913 3,300 1,521 - 9,734
Other segment assets 50,606 2,097 2,698 14,835 70,236
Segment assets 73,827 12,344 5,509 14,835 106,515
Investment in associates 234 - 182 - 416
Unallocated assets - - 100 1,881 1,981
Total assets 74,061 12,344 5,791 16,716 108,912
Segment liabilities (46,712) (1,649) (1,845) (34,349) (84,555)
Unallocated liabilities - - - (2,415) (2,415)
Total liabilities (46,712) (1,649) (1,845) (36,764) (86,970)
Segment capitalexpenditure 17,820 3,830 3,237 6 24,893
Secondary reporting format - Geographic segments
The Lloyd's Broker is based in the United Kingdom and has operations in the Netherlands. The THB UK segment is based in the United Kingdom. The International division has operations in the Far East, the Middle East and South America. The Lloyd's Broker and International divisions derive fees and commissions from clients located throughout the world. The THB UK division derives income from clients primarily in the United Kingdom and the United States of America. Turnover by location of client, assets by location and capital expenditure based on the location where it was incurred were as follows:
Turnover - Assets Capital expenditure
By location Continuing
£'000 £'000 £'000
Year to 31 October 2009
United Kingdom 16,060 97,209 3,695
United States of America 13,967 648 -
Europe 6,332 127 12
Rest of the world 9,878 4,023 5
46,237 102,007 3,712
18 months to 31 October 2008
United Kingdom 20,985 102,729 21,608
United States of America 17,745 330 -
Europe 3,909 46 48
Rest of the world 9,260 5,807 3,237
51,899 108,912 24,893
3. Operating profit
The following items have been charged / (credited) in arriving at operating profit:
12 months 18 months
2009 2008
£'000 £'000
Realised foreign exchange loss / (gain) 1,908 (184)
Impairment (credit) / charge, intangible assets (552) 211
Change in impairment value, goodwill 59 (88)
Amortisation of intangible assets 1,897 1,850
Depreciation on property, plant and equipment:
- owned assets 723 832
- leased assets under finance leases 81 195
Total depreciation, amortisation and impairment charges 2,208 3,000
Loss on disposal of property, plant and equipment - 5
Operating lease rentals:
- land and buildings 1,451 1,389
- other 296 397
- income from land and buildings (68) (80)
Exceptional Items:
Cost of restructuring operations 120 869
Exceptional bonuses 1,452 315
1,572 1,184
The foreign exchange gain or loss relates to the difference between the actual exchange rate on the sale of fees, commissions and interest received in foreign currencies and the exchange rate at which such income was originally recognised.
The cost of restructuring operations resulted from the acquisition of the business of PWS International. This led to restructuring of both the acquired and the Group's existing Lloyd's broking operations. The exceptional bonuses were in respect of incentivisation agreements with certain key members of the PWS International team to secure their future services following the acquisition, as a form of earnout consideration dependent on the performance of the business in the four years to 30 April 2012. These exceptional bonus payments will depend on the continued employment of the relevant staff and will be satisfied 50% in cash and 50% in new THB shares.
12 months 18 months
2009 2008
£'000 £'000
Total remuneration of auditors (included in Other 237 162
operating charges)
4. Net finance result
12 months 18 months
2009 2008
£'000 £'000
Finance income:
Interest receivable from corporate funds 64 235
Dividend receivable on quoted investments 2 14
Gain on sale of available-for-sale assets - 336
Total finance income 66 585
Finance cost:
Interest on bank borrowings (308) (659)
Interest on finance leases (92) (87)
Interest on loan stock (112) -
Preference dividends (495) -
Notional charge on deferred consideration (118) (158)
Notional charge on loan stock (46) (210)
Total finance cost (1,171) (1,114)
Net finance cost (1,105) (529)
The net result was all reported in the income statement.
5. Income tax expense
12 months 18 months
2009 2008
£'000 £'000
Current tax expense
Current year 165 240
Prior year 229 43
394 283
Deferred tax (credit) / expense
Current year (656) 169
(656) 169
Total income tax (credit) / expense (262) 452
The Company is not a close company within the meaning of the Income and Corporation Taxes Act 1988.
The tax on the Group's profit before tax differs from the standard rate of UK corporation tax applicable as follows:
12 months 18 months
2009 2008
£'000 £'000
Profit before tax on continuing operations 575 914
Profit before taxation multiplied by standard rates of
corporation tax at 28.0% (2008: 32.5%) 161 299
Excess/(shortfall) of depreciation over capital 4 (57)
allowance
Expenses disallowable for corporation tax 161 330
Adjustment to allowable goodwill amortisation (202) (397)
Effect of UK and non-UK tax rate differences 58 (27)
Non taxable income 15 (82)
Non-recovery of losses in subsidiaries (15) 165
Prior year adjustment 229 43
Other (19) 178
Deferred tax credit arising from previously
unrecognised tax losses (1,081) -
Deferred tax expense relating to the origination and
reversal of temporary differences 427 -
Total income tax (credit) / expense (262) 452
6. Earnings per share
Basic earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted average number of shares in issue during the period.
Diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the adjusted weighted average number of shares in issue during the period. There was no dilutive effect in the year to 31 October 2009 (2008: no dilutive effect) in respect of the options subsisting at that date, for which the subscription price was below the Company's share price. There was a dilutive effect of 1,627,727 shares in the year to 31 October 2009 (2008: 1,102,825) for the estimated number of shares to be issued in relation to the acquisitions of FiSure Holdings Limited, Globesure Holdings Limited and Property Risk Management Limited. There was no dilutive effect for the estimated number of shares to be issued on conversion of preference shares, for which the conversion price was below the Company's share price.
12 months 18 months
2009 2008
Number of shares Number of shares
Weighted average number of ordinary 32,340,733 27,816,356
shares in issue
Effect of deferred share consideration 1,627,727 1,102,825
Adjusted weighted average number of
ordinary shares in issue 33,968,460 28,919,181
Earnings reconciliation
12 months 12 months 12 months 18 months 18 months 18 months
2009 2009 2009 2008 2008 2008
Basic Diluted pence per Basic Diluted pence per
pence share pence share
per per
share share
£'000 £'000
Continuing operations:
Underlying profit 3,198 9.89 9.42 2,923 10.51 10.11
Amortisation of intangibles (1,897) (5.87) (5.58) (1,850) (6.65) (6.40)
Impairment credit/(charge) 493 1.53 1.45 (123) (0.44) (0.42)
Deferred tax release on
amortisation and impairment 160 0.49 0.46 244 0.88 0.84
Exceptional costs (net of tax) (1,132) (3.50) (3.33) (846) (3.05) (2.93)
Profit attributable to 822 2.54 2.42 348 1.25 1.20
shareholders
7. Dividends
12 months 18 months
2009 2008
£'000 £'000
Second interim dividend in respect of 2007 of 3.2p per - 869
share
Final dividend in respect of 2008 of 2.4p per share 777 -
Interim dividend in respect of 2009 of 1.25p per share 405 349
(2008: 1.25p)
Second interim dividend in respect of 2008 of 3.2p per - 891
share
1,182 2,109
A final dividend in respect of 2009 of 1.25p per share, amounting to a total of £407,000, is proposed by the Board. The dividend proposed will not be accounted for until it has been paid.
8. Changes in shareholders' equity
For the year to31 October 2009 Share capital Share premium Fair value & hedging Capital contribution Cumulative Retainedearnings Totalequity
reserves reserves translationreserve
£*000 £*000 £*000 £*000 £*000 £*000 £*000
Balance at 1 November 2008 3,680 12,955 (1,954) 1,854 122 5,042 21,699
Fair value profits net of - - 2,869 - - - 2,869
tax:- cash flow hedges
Currency translation - - - - (24) - (24)
differences
Net profit - - - - - 822 822
Total recognised income and - - 2,869 - (24) 822 3,667
expense for the year
Dividends paid - - - - - (1,182) (1,182)
Issue of ordinary share 48 272 - - - - 320
capital
Equity settled share based - - - - - 57 57
payments
Balance at 31 October 2009 3,728 13,227 915 1,854 98 4,739 24,561
For the period to31 October Share capital Share premium Fair value & hedging Capital contribution Cumulative Retainedearnings Total equity
2008 reserves reserves translation reserve
£*000 £*000 £*000 £*000 £*000 £*000 £*000
Balance at 1 May 2007 2,716 9,823 1,233 1,004 (23) 6,836 21,589
Fair value profits net of --- --- (121)(3,090)24 --- --- --- (121)(3,090)24
tax:- available-for-sale- cash
flow hedges- property
Currency translation - - - - 145 - 145
differences
Net profit - - - - - 348 348
Total recognised income and - - (3,187) - 145 348 (2,694)
expense for the period
Dividends paid - - - - - (2,109) (2,109)
Issue of ordinary share 492 3,132 - - - - 3,624
capital
Equity element of preference 472 - - - - - 472
share capital issued
Equity settled share based - - - 850 - (33) 817
payments
Balance at 31 October 2008 3,680 12,955 (1,954) 1,854 122 5,042 21,699
Capital contribution reserves at 31 October 2009 include £1,004,000 (2008: £1,004,000) for options granted by V H Thompson in connection with the acquisition of FiSure Holdings Limited in August 2006 and £850,000 (2008: £850,000) for a gift of shares by V H Thompson to an unconnected company, Guilford Services Limited, in connection with the acquisition of the business of PWS International Ltd in January 2008.
9. Business combinations
a) Globesure Holdings Limited
On 18 December 2008, the Company acquired the entire share capital of Globesure Holdings Limited, a newly established insurance broker, which since March 2007 has provided facultative reinsurance broking services for international clients.
Initial consideration of £250,000 was paid at completion. Further consideration will be payable on an earnout based on the performance of the acquired business over the period to 31 October 2013. The maximum earnout consideration is capped at £10 million and will be settled as to two-thirds in THB ordinary shares and one-third in loan notes.
£'000
Debtors 22
Cash at bank 42
Creditors due within one year (1,692)
Net liabilities (1,628)
Fair value adjustment - deferred taxation (34)
Goodwill arising on acquisition 2,420
Total cost of acquisition 758
Satisfied by:
Cash paid 250
Deferred earnout consideration 379
Costs of acquisition 129
Total cost of acquisition 758
Goodwill arising on the acquisition reflects the benefits expected to accrue from access to the services of the Globesure team.
In the period since acquisition, the acquired business contributed turnover of £2,196,000. It is impractical to calculate the profit before tax contributed since acquisition, as the business has been fully integrated into the Group's existing operations. The result would not have been materially different if the business had been acquired on 1 November 2008.
b) Property Risk Management Limited
On 10 June 2009, the Group acquired the entire share capital of Property Risk Management Limited, a newly established business, which provides risk management services to the property industry.
Consideration of £200,000 has been paid since completion. Further consideration will be payable on an earnout based on the performance of the acquired business over the period to 31 October 2014. The maximum earnout consideration is capped at £10 million and will be settled as to two-thirds in THB ordinary shares and one-third in loan notes.
The following assets and liabilities were acquired in the transaction:
£'000
Debtors 64
Cash at bank 23
Creditors due within one year (90)
Net assets (3)
Goodwill arising on acquisition 694
Total cost of acquisition 691
Satisfied by:
Cash paid 200
Deferred earnout consideration 374
Costs of acquisition 117
Total cost of acquisition 691
Goodwill arising on the acquisition reflects the benefits expected to accrue from access to the services of the Property Risk Management team.
In the period since acquisition, the acquired business contributed turnover of £194,000 and has contributed a loss before tax of £11,000. The result would not have been materially different if the business had been acquired on 1 November 2008.
10. Notes to the consolidated cash flow statement
Reconciliation of profit before tax to cash generated from operations:
:
2009 2008
£'000 £'000
Cash flows from operating activities
Profit before tax 575 914
Investment income receivable (204) (1,886)
Interest payable on bank loans, loan notes and finance leases 676 1,114
Preference dividends paid 495 -
Depreciation, amortisation and impairment charges 2,208 3,000
Share-based payment expense / (credit) 57 (33)
Loss on disposal of property, plant and equipment - 5
Loss/(profit) on disposal of investments 10 (336)
Profit on sale of businesses - -
Share of results of associate undertaking (10) (44)
Increase in receivables - excluding insurance broking (546) (2,601)
balances
Increase / (decrease) in payables - excluding insurance 969 (1,219)
broking balances
Decrease in provisions for liabilities and charges (260) (415)
Unrealised foreign exchange gain 68 4,047
Net cash inflows / (outflows) from operations 4,038 2,546
11. Other information
The financial information contained in this preliminary announcement does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The consolidated balance sheet as at 31 October 2009 and the consolidated income statement, consolidated cash flow statement, and consolidated statement of recognised income and expense and associated notes for the year then ended have been extracted from the Group's financial statements, upon which the auditors' opinion is unqualified and does not include any statement under Section 237 of the Companies Act 1985. Those financial statements have not yet been delivered to the Registrar of Companies.
The full text of the annual report & accounts for the year ended 31 October 2009 is available on the Company's website. Unaudited results for the 12 months ended 31 October 2008 are disclosed in the Financial Review in the Company's annual report.
The printed annual report & accounts will be posted to shareholders no later than 22 February 2010 and delivered to the Registrar of Companies following the Annual General Meeting on 16 March 2010.
The preliminary announcement was approved by the board of directors on 27 January 2010. Copies of this announcement (and statutory accounts when available) may be obtained from the Secretary at the registered office.
SHAREHOLDER INFORMATION
See the Group's website at www.thbgroup.com for information about the Group and other shareholder information including a link to the latest share price.
Registered office: Directors:
Murray House N J Moorhouse - non executive chairman
Murray Road F M Murphy - chief executive
Orpington, Kent C L A F Bennett - group human resources director
BR5 3QY J Goldsmith - non executive director
Tel: 01689 883500 C R Keay - non executive director
S L R Matanle - chief executive, Lloyd's broking
operations
A J Preston - group operations director
R S Wilkinson - finance director
Company registration number:
1514749
Financial calendar:
16 March 2010 AGM
19 March 2010 Final 2009 dividend payable
June 2010 Interim 2010 results announced
August 2010 Interim 2010 dividend payable
January 2011 Final 2010 results announced
March 2011 Final 2010 dividend payable
Registrars: Stockbroker:
Capita Registrars Daniel Stewart & Co Limited
Northern House Becket House
Woodsome Park 36 Old Jewry
Fenay Bridge, Huddersfield London
West Yorkshire HD8 0LA EC2R 8DD
Tel: 0870 1623100 Tel: 020 7776 6550
www.capita-irg.com www.danielstewart.co.uk
Auditors: Group bankers:
Mazars LLP Allied Irish Bank plc
National Westminster Bank plc
Legal advisers: Bank of America
Clyde & Co
This information is provided by RNS
The company news service from the London Stock Exchange
END
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| 01-07-09 | ||||
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I have held this share for a bit over 4 years.Have had some decent divis and is modestly increased in value but the divis are going down and I feel is fully valued.Dont altogether share your buy rating but happy to be proved wrong.
I must admit this is the only share I have where the finance director writes out and signs the divi cheque by hand! |
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| 01-07-09 | ||||
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A heavenly investment ! Lots of divs and more cap gains before the decade et fini....over.
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yes definitely good company its expanding and has good pe and yield
obviusly overlooked by institutions looks like the price is picking up but v small volume still |
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| 15-06-05 | ||||
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I think this share is worthy of some discussion
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The contents of the postings summarised here represents the opinions of the authors and not of Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
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