Charles Taylor poised for growth

Charles Taylor's loss adjusting business, which accounts for almost two-fifths of profit, has been a major focus of its expansion. The company has focused on diversifying the business to make it less sensitive to fluctuating demand while also focusing on less working-capital-hungry parts of the market. Acquisitions have been key to this expansion. Midway through last year Charles Taylor bought medical claims and assistance business CEGA for £29.8m, which it has since been winning new clients for. In August it announced it would spend up to £13m on Criterion Adjusters, taking it into antique and fine art loss adjusting. 

The group's support services division has also recently been given a boost through the acquisition of Metro Risk Management for just under £2m. The main focus for growth in support services, which accounts for about 28 per cent of group profits, is its investment in insurance technology. The recent appointment of Charles Taylor as preferred bidder by London Markets Group to standardise vast amounts of data for claims and underwriting activity could point to a big future win for this business. Meanwhile, the group's business offering end-to-end outsourcing for mutual insurance groups continues to perform well, although some investors have been disappointed with the time it has taken to recruit new mutuals to use the service.

The growth push and acquisitions have not come cheap. The group has moved from a net cash position to having annual average of £30.1m in net debt last year. In addition, the group has a £44.8m pension deficit. However, management is comfortable with debt levels as it seems are Charles Taylor's banks, which recently, on improved terms, increased its revolving credit facility from £40m to £70m and its accordion facility from £10m to £25m. This will support business development, and in particular the recent acquisitions of Criterion and Metro.