Pension problems hit loss adjuster's profitability
GAB Robins' results have been adversely affected by its continuing pension problems. It posted a pre-tax loss of £6.3m for 2005, compared with a £909,000 profit for the previous year.
A defiant GAB Robins chief executive Kieran Rigby said: "We're here to stay and we're not going anywhere."
Its results reflected a surge in staff costs from £19m to £25m. This was caus-ed by a special one-off pension contrbution of £3m resulting from the sale of Sergon BRM and a slight increase in GAB Robins's funding of its pension deficit to £3.03m.
GAB Robins executive vice-president and chief operating officer Philippe Bes confirmed: "The pension remediation is an ongoing programme.
"The schedule is agreed over 10 years and we expect next year's payments to reach £3.75m".
Finance director Paul Brown emphasised these commitments were "over and above our usual payments and designed to address our pension deficit".
And the abortive sales process during 2005, undertaken by former finance director Colin Mason, accounted for a further £434,000 in professional advisers' fees.
Taking into account these adjustments, GAB Robins achieved an adjus-ted profit before tax of £1.47m.
The loss adjuster has also been forced to restate its 2004 earnings to reflect the replacement of SSAP24 accounting standard for pension costs with the FRS17 reporting standard.
GAB Robins's profit as a percentage of turnover remained stable at 4% as a result of turnover falling 7% from £37.3m to £34.7m.
Rigby was confident the loss adjuster's delayed implementation of a digital-based workflow system would reap rewards with "every piece of work digitalised" creating an overall "mobility of file".
He admitted that digitalisation is "not an inconsiderable expenditure" but denied it would create a major hole in GAB Robins's bottomline.
"It could have been a big dent but it's mostly outsourced."