FCA fine and restructuring costs cut Swinton’s profit by 18.9%

Swinton’s £7.4m FCA fine contributed to an 18.9% fall in the broker’s 2013 pre-tax profit, its latest accounts show.

The company made a pre-tax profit of £23.4m in 2013, down from £28.8m the previous year. This was despite a 1.1% increase in turnover to £306.4m (2012: £301.4m).

The FCA fined Swinton in July 2013 for mis-selling add-ons.

Swinton was also hit by restructuring costs from its three-year plan to overhaul its branch network. Operating profit before exceptional items, which excludes the FCA fine, fell by 10.8% to £32.9m (2012: £36.9m).

The broker has reduced the number of branches it has from 576 in 2012 to 398.

Additionally, Swinton has been investing in its IT and sales channels and has made changes to its sales and monitoring practices.

The company slashed its dividend to £7.2m in 2013 from £27m in 2013.

Swinton chief executive Christophe Bardet was upbeat despite the fall in profit. He said: “The financial result is pleasing in the context of major changes in the insurance market and the regulatory environment in 2013.

“In 2014, we renewed our commitment to our unique multi-channel model and stronger and bigger branches, and returned to national television advertising.

“The ambitious investment programme is contributing to our long-term growth strategy to improve customer outcomes and deepen customer relationships. We are confident that our investment will help us to realise the full potential of the Group over the next three to five years.”