Towergate returns to loss in Q1

UK-based insurance intermediary Towergate Insurance recorded a loss before interest, taxes, depreciation and amortisation in the first quarter of 2017 after a profit in the same period a year ago.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were a negative £1.8 million in the first quarter of 2017 compared to a profit of £2.8 million a year ago.

Income increased 1 percent year-on-year to £77.9 million in the first quarter. Staff related expenses fell 14 percent to £39.9 million over the period. At the same time, operating expenses increased 8 percent to £18.6 million.

“Revenues have continued to improve to a point where we are reporting organic income growth once again,” said Towergate CEO David Ross. “We have also delivered the third consecutive quarter of year-on-year growth in Adjusted EBITDA, a reflection of just how far this business has come in a relatively short span of time.”

EBITDA adjusted for exceptional items plus run-rate savings from middle & back office cost saving initiatives was £19.4 million in the first quarter compared to £13.6 million in the same period a year ago.

“Of particular note is the profit improvement in Insurance Broking where we have reported an 85 percent increase in Adjusted EBITDA,” Ross said. “Similarly, Paymentshield has benefited from strong growth in new business and Panel sales, delivering a strong improvement in profitability, while there are positive signs of stabilisation and improved retention in Underwriting.”

The Insurance Broking arm recorded an adjusted EBITDA of £10.5 million in the first quarter compared to £5.7 million in the same period a year ago. Paymentshields, which provides specialist insurance products to mortgage brokers, has improved its adjusted EBITDA to £6.8 million from £5.9 million over the period. In Underwriting, adjusted EBITDA grew to £2.7 million from £2.6 million.

“The team’s unrelenting focus on cost efficiency will continue, while at the same time investing in our staff and high calibre new hires, along with the best infrastructure to support them, including our new flagship Bishopsgate headquarters in the City of London,” Ross said.

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