Chief executive Hodges said sale was in Towergate’s best interest

Towergate made a £1.2m accounting loss on the sale of Towergate Underwriting’s commercial property division (TUCP) to Peter Cullum-backed consolidator Global Risk Partners (GRP).

The broking group received proceeds of £9.25m from the sale in October last year.

Towergate chief executive Mark Hodges said the sale of the unit, which the company considered as non-core, was “in Towergate’s best interest”.

He said: “We’ve got very disciplined processes around everything we do. We have a well governed board with independent non executive directors that challenge what we do and a clear view on strategy. That decision ticked all of our boxes.”

Hodges added that Towergate was not planning any further disposals.

He pointed out that Towergate has made 299 acquisitions since the company was founded and that “you could count on the fingers of one hand” the disposals it had made in that time.

Towergate said in its annual report to bondholders that it made £2.1m of losses on disposals in 2013. In addition to the £1.2m loss from the TUCP sale, the group also incurred a £902,000 loss as part of the stepped acquisition of Morgan Law in January 2013.  

These losses were partially offset by a £66,000 profit on the disposal of a portfolio from Fusion Insurance Services.

The company also revealed in its bondholder report that it spent £29.8m on acquisitions in 2013.

Towergate made 16 acquisitions in 2013 – eight companies and eight portfolios.

The broking group took on goodwill of £24m in relation to the eight companies it bought in the year. The largest individual amount, £8.2m, relates to its May 2013 purchase of Waveney Insurance Brokers. It also acquired £6.1m of goodwill from its purchase of Morgan Law in January 2013.