CBG Group grew its first half profits by 48%.
The Manchester-based insurance broker reported an increase in profits from £628,000 to £930,000 in the six months to June 2008. Revenues grew from £3.15m to £5.66m. Stripping out acquisitions the organic revenue growth was 12%.
Insurance broking revenues are still three-quarters of the total. Healthcare and employee benefits products provide additional revenues.
Net debt is £3.15m and there is additional deferred consideration of £4.73m over three years. The deferred consideration should be funded out of cash flow. There is still headroom of £800,000 based on existing bank facilities.
The insurance broking consolidator says that its rivals aren’t buying at the moment. That means that there is less competition for acquisitions which means that selling prices are likely to be more realistic. CBG has previously walked away from deals because it won’t pay over the odds.
At the beginning of April, nominated adviser Zeus Capital forecast full year profits of £2.4m, and earnings per share of 12p, this year. That doesn’t include Howgud which was acquired a few days after the report was issued. Howgud generated profits of £220,000 on revenues of £1.17m in the year to March 2007. A nine month contribution from Howgud could add up to 1p a share to earnings.
The shares rose 3p to 161p, valuing CBG at £22.7m. The shares are trading on around 13 times 2008 prospective earnings.
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