CBG defends personal lines sale after revenue plunges 11.6%

CBG Group’s revenue fell 11.6% following the sale of a chunk of its personal lines unit to Swinton for £281,000 in February.

The broker’s revenue fell to £4.09m for the 2010 half year, compared with £4.63m in the same period last year. Meanwhile, operating profit (before amortisation, depreciation, exceptional operating expenses and share option charges) increased 34.1% to £798,000, up from £595,000 last year.

Chairman Robin Slinger said: “The strategic disposal of non-core activities has had an adverse impact on our comparative revenues.

“This action, however, alongside a programme of cost reduction, ensured we successfully reduced the level of risk within the business.

“We have a clear, focused strategy and our performance, together with the decisions we have taken over the past two years to strengthen our balance sheet, has placed us in a strong financial position and provided a solid foundation for future growth.”

The Manchester-based company’s broking profit margin increased to 23.6% – it was 16.4% in 2009 – while net debt reduced to £891,000 compared with £1.14m in the previous year.

CBG said earlier this year that it was interested in acquisitions but, announcing the half-year results, Slinger said prices were too high.

He said: “While we continue to evaluate acquisition opportunities, valuation multiples expected by vendors in many cases remain uneconomic and do not provide long-term value for our business.”

The interim statement said that CBG had trimmed staff numbers in several areas because of the recession.

Interim results were originally scheduled for an earlier date in the summer, but had to be postponed to September following an accounting error.

As well as broking, CBG provides employee benefits, financial planning and specialist sports injury insurance services to companies and private clients.

Earlier this year, it completed a company revamp, launching a website and overhauling the corporate branding across its divisions.