Giles keeps sights on flotation despite 13% slump in earnings

Giles suffered a 13% decline in underlying earnings as the consolidator struggled in a “challenging year”.

Giles’s earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped from £23.8m in 2009 to £20.8m last year. Turnover declined 3% from £72.1m to £70.3m.

Sources suggested that any broker gunning for a flotation would need EBITDA of at least £50m to interest investors.

The private equity-backed consolidator has plans to float in 2012. Insurance Times understands that Giles is still keen to make a transformational deal.

Chief executive Chris Giles said: “2010 has continued to be a challenging year for the industry.”

But he added: “At Giles we are pleased to have maintained an industry-leading margin and to have seen the group develop through key acquisitions in the UK and in new territories, such as the Channel Islands and Isle of Man.

“2011 will be a tough year across the insurance industry. However, Giles is well positioned for the coming year.”

Meanwhile, Giles has continued on the acquisition trail with its largest buy-out to date, of Channel Islands broker RA Rossborough. It also snapped up Northern Ireland insurance broker CJ Higgins & Co for an undisclosed sum.

Giles said the latter acquisition had “significantly strengthened” the broker’s presence in the Belfast area. “This is a great opportunity to enhance our reputation in Northern Ireland, where we have only had a presence since last year but which is already enjoying success under the management of Niall McFerran,” he said.

“This opportunity represents an attractive route into a key market for Giles and will allow us to grow and develop the business for the benefit of existing and new customers over the coming years.”

Following completion of the takeover, the combined business will operate from Higgins’ existing offices in the Titanic Quarter of Belfast. It will trade under the Giles name.

Higgins was formed by Con Higgins, now chairman, more than 40 years ago.

Higgins, who will stay with Giles in a consultancy capacity, said: “We see an opportunity for our business to develop and continue to grow through the ownership of Giles.

“As part of a larger broker, this will offer additional benefits and infrastructure to our clients. It will secure a firm footing for the future.”