CBG profits more than halve

Manchester broker CBG Group announced turnover down 20% to £9m, EBITD profits down 47% to £1.4m and pre-tax profits down nearly 55% to £1m.

The company said it continued to focus on operational efficiencies and had reduced borrowings by out-sourcing premium financing operations, significantly de-gearing the group's operations;

It also said it had moved more than 100 staff to Southmoor House, Manchester resulting in £1,400,000 of cost savings and increased cross selling opportunities.

Financial highlights (2008 in brackets)

• Revenue £8,961,000 (£11,148,000);
• Adjusted EBITD £1,386,000 (£2,602,000);
• Adjusted * pre-tax profits £1,026,000 (£2,246,000);
• Diluted adjusted * earnings per share 4.69p (11.00p);
• Net cash inflow from operations £2,998,000 (£3,377,000).

Mike Askew, group managing director said: "In a challenging marketplace we have taken the necessary steps to realign our cost base to ensure that we remain financially strong, and suitably resourced with appropriate technical and operational capability to service our client portfolio.

“We continue to focus on improving our business systems to drive efficiencies and are well positioned to invest in the business through targeted acquisitions."

"Whilst it seems unlikely the broader economy will see significant improvement in the short term I am confident that the underlying strength of CBG will deliver long term, sustainable growth to create value for our shareholders."

Financial turmoil

Chairman Laurie Turnbull said: “Despite the effects of the financial turmoil and consequent recession that has prevailed throughout the period under review, the Group has remained profitable, albeit at lower levels than were achieved in 2008.

“We have managed the business according to these circumstances and also strategically chose not to pursue one component of our business model, namely our acquisition programme.

Cost base

“Regrettably, it was necessary to reduce our cost base in the course of 2009, to mitigate falling revenues, and the full beneficial impact of this action will only be seen in 2010.

“We also took steps to reduce borrowings by out-sourcing our premium financing operations and this has had the effect of significantly de-gearing the Group's operations.

Boardroom shuffle

Non-Exec Robin Slinger, is taking over as non-executive chairman. Stuart Mollekin, currently executive director, becomes a non-executive director and Stephen Rees, managing director of the group's Financial Services division, is appointed financial services operations director.

Insurance broking

Mike Askew said: “Most areas of the insurance business suffered from the effects of the depressed economy and increased competition resulting in margins being squeezed.

“The insurance business continues to operate in an environment where market rates remain soft. There does however, appear to be signs of some hardening of rates as would be expected on the basis of previous pricing cycles.

“Nevertheless, we remain cautious in our budgeting as undoubtedly it will take time to see if these early indicators are part of a wider market trend.