Broking group Giles made a loss after tax of £37.1m in the year to 31 August 2010, compared with a loss of £22.7m in the previous financial year.
According to a Companies House filing for the group’s ultimate holding company – DMWSL 585 Limited – a doubling of goodwill amortisation, a 2% increase in administrative expenses and a 3% drop in turnover all contributed to the consolidator making an operating loss of £6.5m in the year to August 2010. This compares with an operating profit of £8.4m the previous financial year.
Included in the operating loss are acquisition integration costs of £2.9m (2008/2009: £2.7m). During the financial year Giles bought JHIB Holdings, Westinsure and the UK wholesale insurance business of Cooper Gay & Co (formerly FSJ).
The steep jump in goodwill amortisation was caused by a change in Giles’ goodwill amortisation period to 12 years from 20 years. The reduction followed directors’ review of the estimated useful life of goodwill. The company said the amortisation charge in future periods is expected to be higher because of the period reduction.
In addition to the operating loss, Giles paid £30.7m in interest (2008/2009: £31.4m), which after a tax credit of £93,000 (2008/2009: nil) resulted in the £37.1m loss.
The loss pushed Giles’ total shareholders’ deficit up 113% to £70m in 2009/2010 from £32.9m in 2008/2009.
Net debt for 2009/2010 was largely unchanged at £219.3m (2008/2009: £219.6m).
While turnover from existing operations increased 7% to £69.1m from £64.6m, turnover from acquisitions dropped 88% to £893,000 from £7.5m resulting in an overall 3% drop to £70m from £72.1m.
No comments yet