Chief executive insists broker had “best performance of all the consolidators”
Giles Insurance Brokers hit back at a paper loss of £22.6m this week, saying: “Our results are the best of the consolidators.” Chief executive Chris Giles also reiterated his commitment to an exit strategy, saying the board had thrashed out a three-year plan that would lead to a sale or flotation by 2012.
Despite a £22.6m pre-tax loss in 2009, Giles said the banks and private equity backer Charterhouse were more interested in earnings before interest, tax, depreciation and amortisation, which increased 60%, from £14.9m to £23.8m. “We have had a fantastic year. It is the best performance of all the consolidators by some way.”
He emphasised Giles had no problem servicing its debt interest payments, which came to £31.4m, adding: “We are trading very well. We are trading within the covenants. It is where we want to be.”
He played down suggestions that Charterhouse was putting pressure on him to seal a transformational deal, saying there was no time frame for acquisitions. “The economy has been incredibly difficult. Everybody has been slowed down by a year to a year and a half.
From that point of view, I think we are on track. Charterhouse remains incredibly supportive. They just want to see us do it the right way.”
He would not be drawn on whether he would buy Jelf, but said: “We are interested in acquiring broking assets. We are set up to buy other players, so of course any asset that becomes available, we will be interested in.”
On the exit plan, he said: “We have a three-year date from 1 September. It is a plan we put together last year and we brought in Charterhouse. It takes us to August 2012. We envisage our exit around that time. For us to achieve an exit in 2012, it would clearly have to be profitable for shareholders.”
Giles confirmed that the consolidator is placing some of the business sourced through its new affinity partnership with National Australia Bank with its own underwriting agency, Ink.
See analysis: The house Giles built.