Hastings has high hopes for 2011

Hastings Direct has now turned a corner, posting a much stronger profit in the 2009/2010 year of account and with expected earnings before interest, taxes, depreciation, and amortisation( EDITDA) of £20m for 2011. The company also has big plans, and is looking to float on the London Stock Exchange’s main market in 2012.

Hastings chief executive Edward Fitzmaurice explains how he plans to continue growing and the reasons behind the firm’s new corporate structure.

Q: Hastings Insurance Services’ turnover increased 21% in the year to 30 June 2010. How was this achieved?

A: Over the last year and a half, we have doubled the customer base, and when we ended the financial year in June we had increased the base to just over 650,000 customers. A lot of our growth has been around working with our panel members and then getting the right execution for our customers.

We have also kept a good control of the costs of the business, and a lot of the extra revenue has been driven just by getting better at customer service and getting more customers on board.

We have done three key things. The first thing is that we have broadened the range of insurance products we are selling, so historically we were mainly motor, but now household, commercial vehicles and bike is becoming a much more substantial part of our mix.

The second thing that’s helping us to grow is we have started to develop different routes to market. Not only do we sell on the internet through the direct website and aggregators, we are also getting much more active in terms of direct marketing – using our customer database and how we target our customers there.

The final part of that is we are getting better at attracting customers. We have started to grow our partnerships business, which is our affinity business, and started to work with people to get access to different customers.

Q: Hastings restructured during the previous financial year, which included the creation of the new Hastings 888 holding company and the transfer of Renew Insurance Services to Hastings Insurance Services. Why was this done?

A: It is about making sure we have the right kind of corporate structure that gives us the flexibility to do more activities and grow in the future.

Q: You said in October that you had an EBITDA target for the current financial year of £20m. How will you achieve this?

A: We are still on track for doing that. We are doing it by investing an awful lot in the business in terms of new telephone systems and new control rooms. We have put a lot of effort into our anti-fraud activities to make sure that the customers we take on board are lower risk so we can protect our insurance partners. We are also continuing to enhance the day-to-day running of the business.

Q: Are you also still on target for your planned 2012 flotation?

A: We think 2012 is the right time for us to do an IPO [initial public offering] and we have started the work on preparing the company for a public listing.

There is a lot that needs to be done in converting a private company into a public company. It will take us up to a year. We need to get all the infrastructure in place and get everything done and dusted.

There is everything from corporate governance structures, the board structures, the advisers we will need. As a public business, we would need to be much more visible about our corporate social responsibility and the things we do there.

It is about bringing our current business into a structure that will work as a public business. There are a lot of structures you need as a public business that are not required as a private business.

Q: Where will you list?

A: At this stage, it would be a London listing for us. We haven’t necessarily considered any other options. People understand the business we are building in London and the UK market, which will make it better for us.