Towergate halves post-tax loss to £14.2m

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2010 EBITDA up 18%

Towergate made an after-tax loss of £14.2m in 2010, half the £28m loss it made in 2009.

The improvement was driven largely by a £39m (12%) increase in group turnover to £359.6m from £320.8m.

Net debt is now £463.8m and in 2009 was £480.1m, a reduction of £16.3m.

The turnover increase was partially offset by an increase in administrative expenses to £249m from £241.2m and an increase in amortisation of intangible assets to £53.2m from £44.5m.

Earnings before interest, tax, depreciation and amortisation and exceptional items (EBITDA) increased 18% to £138.8m in 2010 from £117.7m.

The EBITDA increase was largely driven by Towergate’s mortgage broking solutions division, whose EBITDA increased to £45.2m from £22.7m. 2010 EBITDA in both broking and underwriting divisions were almost flat compared with 2009 (see table below).

Towergate chairman Peter Cullum praised the results in a tough environment marked by reduced investment income and “unsustainably low” premium rates. “Against this backdrop, I am pleased to report that Towergate’s performance was highly satisfactory. We achieved sound results fully in line with our budgeted expectations.”

Towergate refinanced its debt and redeemed its preference shares in February 2011. Under the restructuring Towergate received a £200m equity investment from private equity firm Advent, issued £520m of bonds and secured a £410m senior debt facility from Lloyds Bank Corporate Markets.

Towergate 2010 EBITDA breakdown in £m (compared with 2009)