Towergate halves 2009 losses and cuts debt

Towergate has cut its 2010 losses to half 2009’s level despite rising administrative costs, amortisation and interest payments over the year.

The group also reduced its net debt levels by £16.3m to £463.8m during the course of 2010.

Towergate made a loss after tax of £14.2m for 2010, compared with £28m for the previous year.

Its earnings before interest, tax, depreciation, amortisation and exceptional items, which the firm argues is a more accurate reflection of its performance, increased 18% to £139m in 2010 from £118m in 2009.

The improvement was mainly the result of a £38.8m boost in group turnover to £359.6m in 2010 from £320.8m in 2010.

This was driven by the mortgage broking solutions division, whose turnover more than doubled to £63.5m from £30.7m in 2009.

The broker network division’s turnover grew 12% to £16.4m, while that of retail broking – Towergate’s biggest division – rose by 6.5% to £206.1m from £193.5m.

The boost in turnover was offset by a £7.8m increase in administrative expenses to £249m, and an £8.6m increase in amortisation of intangibles to £53.1m. Although Towergate cut its debt in 2010, the company was still hit by an interest bill of £59m – 11% higher than 2009’s £53m.

Towergate overhauled its debt in February 2010, securing £200m in capital from private equity firm Advent, issuing £520m in corporate bonds and establishing a £410m senior debt facility.

The firm said this has reduced its debt by £140m, and it now faced no significant repayments until 2017.