Reduction is admin expenses boosted operating profit to £15.6m
Endsleigh Insurance Services posted a big spike in net profit in 2009 after costs relating to the closure of the Zurich-owned broker’s branch retail network depressed 2008 earnings.
Profit after tax for the year ended 31 December 2009 was £11.6m, up 183% on 2008’s £4.1m. The closure of the 119 retail branches, Endsleigh effectively becoming a web-based broker, resulted in an exceptional cost of £6.9m.
However, improvement in 2009 was not solely related to the lack of the one-off charge. Operating profit before the exceptional item increased 61.2% to £15.6m in 2009, from £9.7m in 2008, despite lower 2009 turnover of £58.3m versus £60.2m in 2008. The improvement was largely thanks to a 15.2% reduction in administrative expenses to £44m from £51.9m.
The company declined to comment on the results.
Earnings before interest, taxes, depreciation and amortisation, which Endsleigh considers an important measure of shareholder value, increased to £18.5m in 2009 from £7.6m in 2008 including the exceptional item, or £14.5m without it.