Insurers, eager to boost efficiencies by adopting new tools and outsourcing work, flocked to Charles Taylor (CTR) in the first half of 2016. Strong demand, coupled with management's own efficiency drive, drove adjusted operating profit up 4 per cent to £7m.
Sales of management services grew 8 per cent as the group oversaw the ascent of specialist shipping insurer, The Standard Club - which Charles Taylor has managed since its founding in 1884 - to the number four ranking among protection and indemnity insurers globally. Revenues rose and profits doubled in the adjusting services segment, as the strengthening US dollar and operational improvements outweighed a tough market backdrop. However, it wasn't all plain sailing; operating profits fell in the insurance support services division, largely due to investments in new initiatives such as launching InsureTech, an insurance technology business.
Management improved the group's technical capabilities and added several blue-chip customers by acquiring CEGA, which provides services such as medical assistance and travel claims management to insurers. It also finalised a major software and services deal with Fadata, the insurance software group it invested in late last year.
Broker Peel Hunt expects adjusted pre-tax profits of £15.9m for the December year-end, giving EPS of 21.7p (up from £14.2m and 21.0p in 2015).
| CHARLES TAYLOR (CTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 289p | MARKET VALUE: | £194m | |
| TOUCH: | 270-290p | 12-MONTH HIGH: | 295p | LOW: 220p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 87p* | NET CASH: | £3.3m | |
| Half-yearto 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 69.2 | 5.2 | 7.6 | 3.00 |
| 2016 | 74.0 | 5.3 | 7.2 | 3.15 |
| % change | +7 | +2 | -5 | +5 |
Ex-div: 13 Oct Payment: 11 Nov *Includes intangible assets of £63.3m, or 94p a share †Adjusted for 3-for-7 rights issue in Apr 2015 | ||||
