Insurecom cost-cutting boosts results

Insurecom’s £482,000 increase in pre-tax profit for 2010 is mainly a result of cost cutting, close analysis of the results reveals.

The insurance software firm’s result was also boosted by a higher payment from its Bermudan parent in return for unspecified research and development work.

Insurecom made a pre-tax profit of £958,000 for 2010, compared with £476,000 in 2009. However, revenues remained flat at £5.6m.

While administrative expenses increased by £51,000, the company reported a £64,000 cut in cost of sales and a £242,000 reduction in distribution expenses.

The company also received £643,042 from parent company Insurecom (Bermuda) for research and development services, up £222,574 on 2009.

The company declined to comment the nature of the services or the reason for the increase.

Insurecom’s profit after tax was £1.4m, boosted by the release of a £454,000 deferred tax asset.

Deferred tax assets are tax benefits that a company delays using until a later tax period.

The company said EBITDA came in at £1.03m, up from £565,000 in 2009 and a negative EBITDA of £381,000 in 2008.

Insurecom head of finance Nicola Howe said: “Insurecom are delighted with the financial results for the past year and these results will allow the company to continue to invest in research and development.

“The record EBITDA result for the company during 2010, exceeding £1m, has been produced by managing the business better and improving processes within the company.

“Insurecom recognises the need for continued development of its software in an industry that is beginning to adopt a significantly larger appetite for technology to lower costs and provide better value to its end customers.”

Insurecom’s board is now made of chairman John C Head III, an American venture capitalist, chief executive Phillip J Walter and John C Head IV.

Walter has resigned as chief executive and is due to leave in May 2011. His replacement will be David Daiches, currently chief operations officer.

Walter said he was parachuted into Insurecom in 2005 to turn the business round and drive up profits, and added: “By and large, job done.”

John Head IV was appointed as a director on 20 September 2010, the same day that chief financial officer Rod Britton resigned.