Broker traded £700,000 loan from chairman Kelliher for capital
Kerry London Ltd has received a capital injection of £1.1m from its parent, Kerry London Group, the broker’s 2009 financials reveal.
The results, filed with Companies House last week, also show that the company renegotiated its bank facilities and is exploring other ways to raise capital in case the broking market remains tough.
Kerry London Ltd, which made a £600,000 loss last year, is the main broking operation of Kerry London Group. The group also includes a financial solutions division, a wholesale underwriting agency and Trade Direct, a specialist broker providing construction insurance to tradesmen.
Kerry London Ltd transferred a £700,000 subordinated loan it received from its chairman, Joe Kelliher, in 2008 to parent entity Kerry London Group, and in return received the £1.1m injection to strengthen its balance sheet.
In August this year, Kerry London Ltd also renegotiated its bank facilities for two years “on substantially unchanged terms” from the previous facility. These expire in August 2012. In addition, the company said that in the event of the trading environment continuing to be challenging for insurance brokers, “the directors have prepared plans to secure other sources of finance and capital should the need arise”.
Kerry London Ltd made an after-tax loss of £599,781 in the year to 31 December 2009, and a loss of £222,000 on an EBITDA (earnings before interest, taxes, depreciation and amortisation) basis. This compares with an after-tax loss of £991,647 and an EBITDA loss of £877,000 in 2008.
The 2009 results were hit by a £701,000 charge relating to the restructuring of the business, in which Kerry London Ltd cut 20% of its workforce. Without the charge, the company says it would have made an EBITDA profit of £497,000.
The accounts also suggest that the restructuring and recapitalisation will put the business on an even keel.
Meanwhile, the company announced last week the appointment of Imogen Coggan as finance director, to replace outgoing director Ian Hamilton. Kerry London Ltd’s group chief executive, Damian Kissane, said: “We are delighted to report that Kerry London is now in a significantly improved financial position after this challenging period.’’
There has been speculation about the company’s future. Market sources have suggested a tie-up with Giles, as the consolidator’s construction book with underwriting agency Ink would fit nicely with Kerry London. However, Giles has so far rejected any suggestions of a bid.
Kerry London declined to comment on the 2009 results, the capital increase or its potential as an acquisition target.