One-off sale gain boosts Miller profit

Broking group Miller Insurance Services made a profit before tax of £8.4m for the year to 30 April 2011, up 13% on the £7.4m it made the previous financial year.

Total revenues, comprising broking turnover and investment income, increased 9% to £83.8m (2009/2010: £77.1m). This was offset by a 12% jump in administrative expenses to £78.4m, resulting in a 25% year-on-year fall in operating profit to £5.4m (2009/2020: £7.2m).

Miller attributed the increased expenses to staff costs, including performance-related bonuses.

However, the company enjoyed a one-off gain of £2.3m from the sale of its stake in Malaysian non-life insurer Jerneh Asia Berhad.

This gain, coupled with other income, boosted the 2010/2011 profit before tax above the previous year’s level.

“It was another very strong year,” Miller chief executive Graham Clarke told Insurance Times. “Revenue is up, which is really as a result of the significant investment we have made over the last couple of years.”

Commenting on the increased expenses, Clarke said: “Miller is a privately owned company and we pay out the majority of our profits in bonuses. [The expense increase] is a combination of reward and strengthening the balance sheet.”

Miller’s shareholders’ equity increased 30% to £31.4m (2009/2010: £24.1m).

Clarke is also sanguine about the results for the next financial year. “We have had a very strong period for the first six months of this financial year, so I am very confident that the pattern is going to continue,” he said.

Miller 2010/2011 results in £m (compared with 2009/2010)

• Turrnover:  83.5 (76.9)
• Investment income: 0.26 (0.22)
• Administrative expenses: 78.4 (69.9)
• Operating profit: 5.4 (7.2)
• Profit before tax: 8.4 (7.4)