Broker’s operating profit fell 45.6% in year to 31 March 2015 but pre-tax profit grew to £4.2m as result of property sale
Lucas Fettes is planning to set up a managing general agency (MGA) in order to expand its underwriting capabilities.
The broker also revealed in its latest accounts filed at Companies House for the year to 31 March 2015 that it wants to make small acquisitions.
The broker said: “We intend to expand our underwriting capabilities, increase our scheme initiatives, wholesale proposition, affinity group offerings and move towards setting up an MGA.
“We are keen to look to small acquisition opportunities. We believe that the ever onerous regulatory regime can stifle small businesses and that we can offer an environment where teams and individuals can flourish.”
In the year to 31 March 2015 the broker’s operating profit fell by 45.6% to £552,464 from £1.01m in 2014.
The group’s operating profit includes a charge of £58,611 in relation to employee share options, £2,737 loss on disposal of shares held by our employee benefit trust (EBT) and £225,000 of start-up losses for new divisions.
Administrative expenses also grew by 12.7% to £13.5m in 2015 from £12.1m.
But as a result of a property sale Lucas Fettes’s pre-tax profit shot up five times to £4.2m in 2015 compared with £859,269 in 2014.
During the year the company sold the freehold of its property in Lombard Street for £9m in exchange for a new 15-year lease.
As a result of a book profit of £3.7m, the brokers used the cash to repay all of its borrowings and also paid 50% of its liability to the property share holders with the balance paid in April.
The broker has said that it expects profit margins to improve as a result of the planned business development initiatives.
The broker added: “We enjoy profitable partnerships with our major insurer suppliers, which coupled with our string client relationships and quality of staff has resulted in excellent business retention and an increasing flow of new business.”