Independent giant expands into trade credit market

Yorkshire-based Henderson Insurance Brokers, one of the largest independent brokers in the UK, has unveiled plans to expand into the credit insurance market with an acquisition.

The news comes as the broker, which last year was linked with selling a stake to private equity firms, targets £200m gross written premium (GWP) after reporting a 12% increase in turnover in its latest full-year results.

Henderson this month acquired UK Credit Insurance Specialists Ltd (UK Credit), a broker specialising in trade credit insurance. UK Credit, which has GWP of more than £10m, is based in Marlow, Buckinghamshire, and will allow Henderson to establish a presence in north London. The deal is subject to FSA approval.

Henderson chief executive Joe Henderson said UK Credit was the largest privately owned trade credit broker in the UK. “It complements all of the other services we have,” he said. “It’s part of the jigsaw.”

He said the company was currently considering two further acquisitions. “The prices are realistic now. All these consolidators have paid too much for poor businesses,” Henderson added.

In the firm’s full-year results for the year ending 30 April 2009, revenue increased 12% to £15.5m and the company posted a pre-tax profit of £1.8m, a 29% decline on the previous year.

“The results are very encouraging, considering we have not made an acquisition for three years,” Henderson said.

“The pre-tax profit figure takes into consideration more than £1.5m of our own funds in establishing offices in Manchester, Leeds and Ipswich, and risk management and surety services businesses.”

He said the downturn had damaged the company’s construction business, with turnover and premiums falling, but that it had been selective by only working with “financially strong” clients.

“[Construction] is one of the sectors that has been badly hit,” he said, adding that he expected the financial crisis to ease in the next 18 months “at the earliest”.

Henderson said that he hoped turnover would increase to £20m by next year and that the UK Credit deal, with other initiatives, would propel GWP from £150m to £200m.

He also insisted the company would remain independent, despite the link with private equity backing. “That has never been on the agenda,” he said. “We’ve never had any approaches … it is really boring.”

The Henderson portfolio consists of 10 UK commercial broking offices, as well as its specialist Lloyd’s business, Contractsure, and further divisions for surety services, risk management, healthcare and real estate development.

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