Consolidator and network gets £7m injection from investor

Cobra Holdings will continue to cut costs after having to draw down £6m in funding from Wainford Holding last year and a further £1m in July, it said as it revealed it had scraped back in profit.

The consolidator published 12-month results to the end of March having accounted for 15-months previously to change its financial year. The results show a pre-tax profit of £305,000 on a turnover of £23m.

Financial highlights (previous 15 months in brackets)

  • Revenues £23m (£18.6m)
  • Adjusted EBITDA £2.7m (£1.3m)
  • Profit before Tax £305,000 (loss of £702,016)
  • Profit after Tax £44,000 (loss of £519,414)

Focus on reducing expenditure

The company said: “We continue to focus on reducing our expenditure in all companies, whilst concentrating on organic growth across the Group.

“In our 2008 results we reported that progress in revitalising Cobra London Markets, our Lloyd’s broker, was slower than expected. We are now pleased to announce that following a re-structuring exercise, significant reductions in expenditure have resulted in an improvement in operating profits.

“Cobra Network continues to grow against the back drop of increased competition. The Network offering was completely re-vamped in January 2009, allowing us to increase revenues from four distinct facilities. This now allows us to cater for the start-up operation (Cobra Genesis), the market standard network (Cobra Classic), a managed income target network (Cobra Choice) and a finance option with network benefits (Cobra Capital Release). The results of these additional initiatives have created a substantial amount of interest in our services from potential new broker members.

Wainford’s investments

“The Group has benefitted from the significant investment from Wainford Holdings ("Wainford"), who have allowed us to draw down £6m during the financial year and a further £1m during July, by way of an convertible loan. This has enabled us to significantly reduce our bank borrowings to £0.6m from £2.4m in 2008. In addition Wainford's investment has allowed us to expand our network facilities and provide an equity release scheme for members.

“The balance sheet at 31 March 2009 includes debt with a fair value of approximately £19.7m of which 38.5% has been negotiated on advantageous interest free and/or deferred terms. Whilst the charge for finance costs of £1.2m reflects our debt level it is important to realise that approximately 45% of our finance charge is non-cash accounting adjustments and our debt service costs in cash terms are considerably lower than the impact on our profits under relevant International Financial Reporting Standards.”

Key operational points

  • Cobra Network signs up its 145th member (2008: 130th member)
  • Cobra Underwriting premiums increased to £10m (2008: £4m)
  • Cobra London Markets returns to profit
  • Organic growth within Cobra Insurance Brokers
  • Acquisition of Giles (Alton)
  • Acquisition of Thornway Insurance Services
  • Acquisition of GDK Insurance
  • Acquisition of County Schemes
  • Acquisition of J.K Lee Insurance Brokers
  • Acquisition of Opal Mortgage, Life and Pensions