Is restructure to thank for Bluefin's growth?

AXA-owned Bluefin Insurance Group this morning posted some healthy figures for 2011 as EBITDA rose 17.2% to £17.8m and pre-tax profits jumped 16.4% to £11.6m.

The growth was aided by some tight cost control, which included the restructuring of 17 finance functions at the former Smart & Cook offices last year.

According to chief executive Stuart Reid, the rise in EBITDA was 25% down to overall growth in the broker’s revenues and 75% down to its focus on controlling costs.

The cost-cutting exercise has had a considerable impact on reshaping the business and this is expected to continue throughout 2012. It is hoped to deliver similar benefits come year-end.   

But the move to keep costs under control does highlight continued pressure on brokers’ top lines, which is showing no signs of narrowing.

Network division woes

One area where Bluefin had to swallow a large dose of medicine was in its network division, Bluefin Business Partner Services (BBPS). The divisional contribution of BPPS to group EBITDA dropped 46.6% to £0.8m. Revenue dropped 12.8% to £3.6m and expenses increased 6.5% to £2.8m.

Bluefin is not the only consolidator to have felt pain in the network arena in the past year. Towergate’s network division posted a 14% revenue drop to £8.9m in the first half of this year (H1 2011: £10.3m) and a 17% drop in operating profit to £5.4m (H1 2011: £6.5m).

According to Reid, Bluefin spotted the warning signs in the network arena well ahead of its rivals, and acted by restructuring the business. Come this time next year, it will be clear if Bluefin has reaped the rewards of this.