CBG seeks buyers

Manchester-based broker CBG Group is up for sale, Insurance Times understands.

CBG, which is listed on AIM, is understood to have made enquiries to potential buyers.

The broker has endured a share price slide from 183p at the end of 2007 to just 20p at close of trading today, suffering in the economic downturn and subsequent loss of faith in small cap stocks.

Last year, CBG made an after-tax loss of £661,000, compared with £186,000 in 2009. However, this included a £944,000 loss from the disposal of its personal lines business in February 2010.

The pre-tax loss from continuing operations, excluding the personal lines loss, was £136,000 in 2010, compared with a profit of £36,000 in the previous year.

In April former CBG director and insurance chief Stephen Darcy left for rival Manchester broker Caunce O’Hara.

Darcy is listed as one of CBG’s main shareholders holding with 4.33% along with Octopus Asset Management (17.6%), Texas Holdings (7.25%), Hiscox Insurance Portfolio Fund (6.3%) and Allianz (4.25%).

Despite the challenges, CBG remains confident it can improve performance. Managing director Mike Askew told Insurance Times in March: “It was a challenging year, but we still find ourselves in a position to maximise the upturn when it arrives.”

The company is looking to boost its revenues this year, spearheaded by the launch of specialist healthcare division called PALM in January.

Net debt is £1.57m at the end of last year, opposed to £891,000 in 2009. The 2010 annual accounts state that CBG has £1.86m in overdraft and rolling credit facilities. Borrowing facilities expire in September 2011 and the board says arrangements will be in place before August 2011.

CBG declined to comment.