Growth ahead for Charles Taylor?

Charles Taylor’s first-half 2012 results are a further indication of the challenging time loss adjusters are facing and the extent their performance is influenced by powers beyond their control - in this case claims trends.

However, they are also cause for optimism and further proof, were it needed, that it pays not to put all your eggs in one basket.

Charles Taylor’s revenues increased 7.5%, and adjusted profits, excluding certain one-off items, fell 2%. Chief executive David Marock described the performance as steady - a less charitable observer might call them flat.

However, the performance comes despite a 29% drop in profits at Charles Taylor’s core adjusting segment. This was thanks to lower large and complex energy claims across the insurance industry, which in turn caused a reduction in high-value instructions in Charles Taylor’s energy segment.

Despite this, however, the company is in an upbeat mood. The lower level of high-value energy business may have dented profits, but that is all they did. The blow was cushioned by good performance in the other adjusting areas, which include marine and aviation.

Marock says this diversification is a cornerstone of Charles Taylor’s strategy.

Better times ahead

The company is also on the front foot. It says it is on track with its long-term growth plans despite the slow first half. It has been launching new products, such as its MGA service, and opening new offices - it recently set up shop in San Francisco.

The company is also succeeding in eroding its net debt level, which fell by £4.4m year on year to £34.2m. The company will continue to focus on reducing this through profits, reduction in its working capital requirements and by keeping its dividend steady at 3.25p a share.  

The Charles Taylor first-half result may not look great on paper, but the company could have a much brighter future to look forward to if its plans come good.