Revenue decline driven by capacity constraints after reduced trading with Southern Rock
Broking group Brightside made a net profit of £7.7m in 2013, down 39% on the £12.7m profit it made in 2012.
The main cause of the profit drop was a 2.9 fall in revenue to £88.6m (2012: £91.2m), which came despite a 2% increase in the number of policies sold to 476,708 (2012: 465,726).
Brightside said revenue fell because of capacity constraints caused by reduced trading with Gibraltar-based insurer Southern Rock, a former sister company, which provided more than 40% of the group’s gross written premium in 2012.
Capacity was also constrained because of last year’s failed takeover of Brightside by insurance group Markerstudy. Brightside said potential capacity providers held off on committing capacity to the company pending the outcome of the deal.
But it added: “However, changes to the insurer panel have resulted in the Group finishing the year with a significantly stronger and more balanced panel, which importantly is not dominated by any one insurer.”
Brightside also said the Markerstudy bid “detracted key management time away from the day to day work proving to be far more disruptive than we would have liked.”
Brightside is now the subject of a £127m bid from private equity house AnaCap.
Brightside finance director Paul Chase-Gardener said: “2013 has been a year of transition for Brightside and whilst the group’s results did not deliver all that was hoped for, a significant amount of fundamental groundwork has been undertaken in the period.”
He added: “The appointment of Paul Williams as our new chief executive officer also marks a significant step forward for Brightside, and we were pleased to welcome him into the group in February 2014.
“Paul brings with him a wealth of market and industry experience and his expertise will ensure that we continue towards our goal of establishing Brightside as the Insurance provider of choice to customers and insurers in the UK market.”