But Sussex broker’s profit margin jumps up following restructure
Broker Green Insurance has reported flat profitability on the back of falling turnover after withdrawing from unprofitable lines as part of its ongoing company restructure.
Commission income at East Sussex based broker dropped 14.8% to £4.1m in the year ending March 2013, according to results filed this week at Companies House.
Earnings before interest, tax, depreciation, amortisation and exceptional items (EBITDAE) decreased marginally from £1.4m to £1.3m – boosting its margin from 28.8% to 32.5%.
The broker said margins improved after it “managed out unprofitable lines of business” and reduced expenses by consolidating its operations.
In April it closed its Worthing office and moved the business into Crowborough, and in July it sold an office in Lyminge, Kent, for £180,000.
Despite the £717,804 reduction in net commissions, Green said the underlying trend was for growth, and predicted growth of 1.5% to 2% in the current financial year.
Additionally, the broker believes the EBITDA will increase to around £2m from its current £1.4m by March 2014 thanks to improved commission earnings.
“Apart from further expense management and anticipated earnings growth the company during 2013/14 is forecast to significantly build cash reserves,” managing director Duncan Coleman wrote.
“The group has in play a few acquisition opportunities. Now that much of the group restructuring is completed and that group finances are on a stronger footing, the appetite to grow through this method has returned.”