We’re now on the lookout for bargains, says chief executive. Forget the huge deals of the past . . .
Towergate is on the hunt for bargains, says chief executive Andy Homer.
The consolidator, which has renegotiated its banking convenants, also reported its broking and fees commission fees rose 13% during 2008 to about £320m, compared with £297m in 2007. EBITDA is anticipated to be marginally ahead of the £109m of 2007.
Homer said: “We are looking for opportunities where prices are much more reasonable. I am not expecting the huge Towergate deals that we are used to.”
It is understood Towergate has until 2014 to pay back its debts after thrashing out a deal with Lloyds TSB. It currently has loans and facilities of about £500m and is expected to repay some of the money in 2012 and 2013.
Homer had previously denied rumours that KPMG had been called in to help with a debt restructure. It is now understood that Lexicon were the advisers.
This week he said the profit and loss account would be similar to the £14m loss posted in 2007.
“The profit figures are always of great interest to people,” he said. “We are a vehicle for acquisition, so a lot of our profits go to pay interest on loans to buy companies.
“We do not sit back and take profits. We reinvest in our business.”
Towergate said that this year it had record first-quarter new business sales in broking and underwriting divisions.
“Although we are writing a lot of new business and carrying rate increases, income will be pressured from the general state of our customer,” said Homer. “Growth on growth income is a product of the economy, although I do expect a little growth in 2009.”
Executive chairman Peter Cullum said the banking agreement provided further financial stability and ensured that the company was well placed to continue its strategy of growth and value-adding acquisitions.
Bill Cooper, managing director of Lloyds TSB’s financial institutions, said it was delighted to have led a renewal of Towergate’s banking arrangements and so provide the company with the security it needed to continue to develop its business.