Broker’s 2011 review $20m over budget
Global broking group Willis made a net profit of $219m in 2011, down 52% on the $455m it made in 2010.
The broker also revealed that the bill for its 2011 operational review came in at $180m – $20m more than the original estimate of $160m.
Willis attributed the increased restructuring bill to “increased head-count and facility consolidation in response to the continued economic pressures globally”.
Total 2011 revenues at Willis increased by 3.6% to $3.5bn (2010: $3.3bn). Organic growth in commissions and fees was 2% for the year.
Commenting on the full-year results, Willis chief executive Joe Plumeri said: “We’re obviously not satisfied with results that show low organic growth and declining adjusted operating margins, especially given the peerless record we’ve established in prior years for such measures.”
However, Plumeri was optimistic that the changes to the company initiated by the operational review would yield better results. The review is expected to generate $135m of cost savings annually.
“We are working towards delivering improvements in adjusted earnings per share and adjusted operating margin in 2012, recognising the unpredictability of macroeconomic factors such as interest rates, UK economic weakness and the eurozone crisis, and the impact of those factors on our financial results,” Plumeri said. “By any measure, we expect our results in 2012 to be significantly better than 2011.”
Willis also announced that it would be buying back $100m of its own shares in 2012. It increased its dividend payout to 27 cents a share from 26 cents a share.
“The announcement of our intention to buy back shares and the increase in our quarterly dividend are reflections of the confidence that our entire organization has in our business model, our strong balance sheet and our ability to continue to generate significant operating cash flows,” Plumeri said.
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