Charles Taylor (CTR) focused on organic growth during the first half, expanding its claims services business and building scale in ‘InsureTech’, which provides software products for the global insurance technology market. That is not to say previous acquisitive activity did not make its mark. While pre-tax losses narrowed, the group was down by £11m in one-off charges, largely relating to last year’s purchases of FGR and Inworx.
Claims services revenue increased by a fifth to £87m, driven by gains in the ‘adjusting’ segment which provides expert assessment of complex claims. Meanwhile, InsureTech has approached break-even, with management expecting a profit for the full year spurred by contract wins in Europe and Latin America.
Insurance management took a 4 per cent hit to turnover as its largest client, The Standard Club, withdrew from the Lloyd’s insurance market, no longer requiring the group’s managing agency, although a sale of this agency has now been agreed. But improved margins helped boost the division’s adjusted operating profit by a fifth to £5.3m.
Annual average net debt has risen by 40 per cent to £68.5m, reflecting last year’s acquisitions activity. But targeting improved invoicing and payments times in the working-capital-intensive claims services business, net cash from operating activities has almost doubled to £59m.
Bloomberg consensus places cash profits at £34.1m and adjusted EPS at 2.6p for the full year, rising to £36.6m and 2.8p in 2020.
| CHARLES TAYLOR (CTR) | ||||
| ORD PRICE: | 225p | MARKET VALUE: | £175m | |
| TOUCH: | 216-225p | 12-MONTH HIGH: | 279p | LOW: 185p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 99p* | NET DEBT: | 92%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 (Restated) | 123 | -2.51 | -4.22 | 3.48 |
| 2019 | 142 | -2.15 | -4.54 | 3.65 |
| % change | +15 | - | - | +5 |
| Ex-div: | 10 Oct | |||
| Payment: | 8 Nov | |||
| *Includes intangible assets of £123m, or 157p a share, **Exclude lease liabilities of £52m, ***Restated | ||||
