Chief executive Blanc denies that the disposal paves the way for group sale
Oval has entered exclusive discussions to sell its financial services arm.
Group chief executive Peter Blanc told Insurance Times the sale would allow the company to concentrate on insurance broking.
Oval expects to announce the name of the buyer, an independent financial advisory specialist, in the coming weeks.
Blanc said: “We’ve always wanted Oval to become an acclaimed and pure insurance broking business and concentrate on our key strength.”
Turnover at Oval’s financial services division shrank from £16.3m to £12.6m in the year to 31 May 2013, with £3m of the fall caused by exiting three unprofitable business lines.
The division reported negative earnings before interest, tax, depreciation and amortisdation (EBITDA) of £3.2m and a loss before tax of £3.3m.
By contrast, group revenue grew by 1% to £75.8m and EBITDA by 15% to £17.3m in the same period.
Blanc said: “The financial services business hasn’t been particularly profitable, but it’s improved enormously under [managing director] Angela Ward.
“It needs resources and investment to grow and the buyer we’ve found for it will be perfect.”
The sale, which excludes Oval Pension Solutions, is being handled by IMAS corporate finance partners Olly Laughton-Scott and Fred Hansson.
“It was a very competitive process and there was a lot of interest. We’ve found the firm we think are absolutely the best partner and all the management of Oval FS are keen on them,” Blanc added.
Blanc denied that the exit from financial services would pave the way for a sale of Oval’s insurance broking business.
“There is no discussion whatsoever,” he said. “It will make it easier to concentrate on insurance broking and get on with growing that side.”