Firm expects better second half with cost cuts and hardening market
Revenue for the CBG Group dropped to £4.86m for the first half of 2009, from the £5.66m for the same period last year. Earnings before interest, taxes and depreciation also dropped to £831,000 from the £1.43m of 2008.
The results were announced after the broker consolidated offices and reduced its headcount in Manchester by 173 to 146.
“CBG has responded positively and quickly to the current economic slowdown. The recent period has seen earnings decline in many lines … we have put in place a significant cost-reduction programme, which has been focused on the reorganisation of core functions,” chairman Laurie Turnbull said.
Daniel Stewart analyst Justin Bates said that the cost cuts should yield benefits in the latter half of this year and into next year. He also said that fewer SME failures and a hardening insurance market should lead to an improved second half and a stronger underlying performance next year.
CBG’s adjusted diluted earnings per share dropped to 2.93p for the first half of 2009 from the 6.26p it reported in 2008. But the cash the group generated by operations increased to £613,000, up from £525,000 in 2008.
Net assets grew to £12.44m from the £10.53m of 2008, but was not up by much from the 2008 full-year results of £12.28m.
CBG Group managing director Michael Askew said the results were a reversal of the normal state of affairs. “But in light of the economy and the wider picture, we are fairly pleased.”