Broker makes operating loss after incurring expenses from Gallagher takeover
Broker Heath Lambert Limited’s profit after tax almost doubled to £14.1m in 2011 (2010: £7.1m), a Companies House filing reveals.
The result was driven by a £19.6m dividend it received from subsidiary Heath Lambert Overseas, however. The dividend from the subsidiary was just £3.3m in 2010.
The company’s operating result, which excludes the effect of the dividend, swung to a £7.9m loss in 2011 from a £6.2m profit in 2010. The 2011 loss includes a £1.1m one-off cost related to the loss made on the sale of assets.
The operating loss came as turnover dropped 10% to £70.1m (2010: £77.9m) and administrative expenses increased 7% to £78.7m (2010: £73.3).
Insurance Times understands the revenue reduction and additional expenses were caused by Heath Lambert’s acquisition by US broking group Arthur J Gallagher in May 2011.
The integration is understood to have resulted in £20m of one-off costs across the Gallagher International operation that Heath Lambert became part of. But the costs are believed to be in line with expectations.
The reduction in turnover at Heath Lambert was caused by exiting less profitable business, the reporting of premium financing and aggregator fees, and an accounting change for the recognition of supplementary commissions in revenues.
Heath Lambert Limited 2011 results in £m (compared with 2010)
- Turnover: 70.1 (77.9)
- Total income: 71.9 (79.5)
- Total administrative expenses: 78.7 (73.3)
- Operating result after exceptional items: -7.9 (+6.2)
- Dividends from subsidiaries: 19.6 (3.3)
- Result after tax: +14.1 (+7.1)
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