It’s coming up to three years since the Towergate-owned e-trading business was brought onto the market. Is it about time it moved into the black?
PowerPlace seems to have had a disproportionate amount of news coverage in recent months, for such a small part of the overall Towergate empire.
This morning saw the departure of PowerPlace chief executive Simon Ball. The news comes shortly after the announcement earlier this month that PowerPlace was redeploying a quarter of its sales team. In December, sales and marketing director Darren Rowe left the company.
Ball’s role is being covered by commercial director Nick Giddings for the time being, but the group will eventually usher in a permanent replacement.
PowerPlace’s most recent accounts for the nine months to 30 September 2011 were also newsworthy.
The firm’s adjusted EBITDA for the period showed a loss of £2.37m, making it the only customer-facing Towergate business in the red.
This figure is significant because it does not include any interest payments on debt.
Towergate’s total adjusted EBITDA for that period was £100.2m, so PowerPlace’s performance is unlikely to have any real impact on the rest of the empire or its planned flotation.
But the question is: when will the business start making money? Most new businesses are not expected to turn a profit until three years of trading, but the clock is ticking on PowerPlace.
The business officially launched on 2 April 2009 after a trial with Countrywide Brokers, so the end of the three years is coming up this spring.
On the positive side, the use of e-trading by brokers is growing and expected to keep growing as the technology behind it develops.
PowerPlace is likely to be gunning for new products and higher premiums to rake in the commissions. PowerPlace staff will probably focus on pushing relations harder with existing partners, rather than investing time and money into attempts to persuade brokers to uproot their existing software systems.
Towergate chief executive Mark Hodges could be banking on these changes to turn the corner for the business.
What next for flood funding?
The government has acknowledged the need for urgent action on flood defence funding in a report published today.
The Climate Change Risk Assessment Report predicts that annual flood losses in England and Wales could soar from around £1.2bn to £12bn by the 2080s, if the problem goes untreated.
The ABI is in discussions with the government now to tackle the problem.
The trade body has no shortage of ideas from the industry, such as Marsh’s Project Noah, which already has a ‘critical mass’ of insurers backing it.
In theory, this is very appealing to the government, as Project Noah is a private sector idea that would not be a burden on government coffers.
But what the government will choose remains to be seen, and all eyes remain trained on Whitehall.
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