Oval earnings and revenues drop after “tough” year

Broking group Oval reported total revenue of £96m for the year to 31 May 2010, down 8% from the £104.6m it made in the 2008/2009 financial year.

The company attributed the drop largely to the impact of the recession on its client base. It added, however, that client retention in its insurance broking business remained at “market leading” levels and income in its financial services business remained stable.

Earnings before interest, tax, depreciation, amortisation and exceptional items (EBITDAE) fell 12% to £16.5m in the 2009/2010 financial year from £18.7m the previous year.

After £9.4m goodwill and other amortisation and £3.7m of exceptional restructuring costs, Oval’s loss before tax for the year was £3.5m.

“2009/10 was a tough year for Oval, as it was for many advisory businesses, and we have felt the combined effects of the continued economic difficulties and soft general insurance market,” said Oval chief executive Phillip Hodson in a statement. “However, Oval’s underlying performance compared favourably with many of its competitors.”

Oval said its operating cash flow remained strong, with the business generating £15.1m from its operating activities in spite of the restructuring costs.

The company repaid £15m of bank debt was during the year. Senior net debt has fallen by £11.2m to £43.2m. Oval said its borrowing levels compare very favourably with its peers.

To read more from Phillip Hodson, click: Oval optimistic despite 3.5m pre-tax loss.