News blog
CBG Group
- BY: Andrew Hore |
- POSTED: 24/08/2009 |
Corporate failures and tough market conditions meant that CBG Group reported a fall in interim profits.
The insurance broker’s revenues fell from £5.66mto £4.86m in the six months to June 2009. Stripping out the effect of acquisitions, the fall was around 20%. Pre-amortisation profits declined from £1.23m to £536,000. The financial services business swung from profit to loss. Cost savings have been made but they won’t show through until the second half.
The business is still generating cash. Net debt has risen to £2.47m because of deferred consideration payments. There is a further £1.71m of deferred consideration to be paid in the next 12 months.
CBG has struck a deal with Close Premium Finance, which will de-risk the Exius business. Exius will still generate income but working capital will be released. There is more than £2m in debtors in the balance sheet relating to Exius. The majority of that should be turned into cash before the end of the year.
CBG is having success in the sports market and it hopes to repeat that success in the life sciences sector.
The figures indicated what a low rating the shares were trading on and they recovered 13.5p to 65p each, which values CBG at £10.1m. The shares have still fallen by nearly one-third over the past three months and 60% over the year.
Daniel Stewart intends to start to cover CBG.
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