Broker blames exceptional costs for loss as turnover rises 16%

Oval has posted a loss of £400,000 for the year ended 31 May 2009, compared to a £4.6m profit the previous year.

The consolidator blamed the loss on “exceptional” restructuring costs and the cost of amortisation and debt.

It saw turnover for the period increase by 16% to £104.6m, and EBITDA, most consolidators’ preferred measure, up 7% to £18.7m.

Oval has recently been linked with Marsh, although chief executive Philip Hodson dismissed talk of a deal as “absolutely absurd”. The broker recently received a loan of nearly £10m from minority shareholder RSA.

Chairman Oliver Stocken said: “For most of us in the business community, the last 12 months have been probably the most difficult any of us have encountered in our careers.

“While it will probably be another 12 months before we see the UK economy growing again, during the past year we have been able to supplement our resources with £15m of new capital from our existing shareholders. This has allowed us to both reduce debt and invest in future opportunities.

“I have no doubt that the resources in place, combined with the team we have built, leaves Oval well placed to share in the economic recovery when it comes and as a result create value for shareholders.”

Hodson said: “2008/9 was a tough year for Oval, as it was for many advisory businesses. As a corporate Insurance Broker, the company felt the effects of client downsizing and, in a few instances, outright liquidations. As a financial services advisor, it suffered from the collapse in confidence in investment markets in 2008.

“In such a recession, as we have experienced, any company is as good as the quality of its people. In this regard, we are very fortunate to have some of the best people in the industry. They know that the key to success is two-fold – high retention rates and a successful new business strategy. Oval has some of the best results in the broking sector in both these areas, and we are determined to do even better in the months and years to come.

“I am sure that Oval will emerge stronger from the recession and will be in a strong position to take advantage of the economic upturn when it occurs.”