A year of positive achievement Annual Results for the year to 31 - - PowerPoint PPT Presentation

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A year of positive achievement Annual Results for the year to 31 - - PowerPoint PPT Presentation

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A year of positive achievement Annual Results for the year to 31 December 2013 Charles Taylor plc 19 March 2014 Charles Taylor plc Investor Presentation 2013 Results 19 March 2014 Charles Taylor continued positive outlook Strong

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A year of positive achievement

Annual Results for the year to 31 December 2013

Charles Taylor plc 19 March 2014

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 2

Charles Taylor – continued positive outlook

2 2

Strong fundamentals

  • Well established in

the global insurance market.

  • Long-standing, loyal

client relationships.

  • Highly skilled,

technically excellent staff.

Consistently profitable

  • Reliable revenue

streams.

  • Diversified business.
  • Well supported

dividend.

Positive prospects

  • Optimising business
  • perations.
  • Actively managing

financing.

  • Implementing

strategic growth plan.

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 3

Good progress – driven by growth in Professional Services

  • Increased Group revenues.
  • Increased Group adjusted profit before tax and statutory profit

before tax.

  • Delivered higher Professional Services profit, largely driven by

strong Adjusting Services growth.

  • Increased net debt due to growth-related increase in Adjusting

Services working capital, restructuring costs and acquisitions.

  • Renewed the Group’s senior banking facilities for a five year term
  • Progressed growth initiatives.
  • Final dividend of 6.75p, maintaining the full year dividend at

10.00p.

3 3 Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 4

27% 57% 16%

Focused on delivering Professional Services to the global insurance market

4

Professional Services 87% Run-off 13%

Adjusted EPS 20132

14% 49% 37% Management Insurance Support Adjusting

Revenue 20131 Staff breakdown 2013

Adjusting Management Insurance support

Professional Services – revenue principally from fees Run-off

Management Adjusting Insurance Support

Owns and runs off closed insurance companies. End to end insurance company management. Loss adjusting for larger and more complex losses. Stand alone professional insurance support services.

  • 1. Stated before inter-segment eliminations. 2. Excludes acquired intangible amortisation of £1.2m and non-recurring costs of £1.6m.
  • 3. As at 31 December 2013.
  • •
  • • •
  • • •
  • •
  • •
  • • •
  • We have around 1,000 staff in 50 offices in 25 countries worldwide 3.

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 5

Good overall progress from Professional Services

£m Revenue Operating segment profit 2013 2012 2013 2012 Management

41.1 39.0 6.6 6.5

Adjusting

54.9 50.3 4.8 2.7

Insurance Support

15.9 16.7 (0.9) 0.2

Unallocated

  • (0.2)

(0.1)

Professional Services 1, 2

111.9 106.1 10.4 9.3

Run-off

5.0 5.4 0.8 0.3

Eliminations

(3.3) (3.3)

  • Group 1, 2

113.6 108.2 11.2 9.6

5

Group 2013 2012 Adjusted PBT (£m)

10.0 9.1

Statutory PBT (£m)

6.9 6.6

Adjusted EPS (p)

20.05 18.33

Statutory EPS (p)

14.22 15.14

Dividend per share (p)

[10.00] 10.00

1 Small rounding differences arise in the total amounts above 2 2012 figures have been restated for IAS19 (Revised 2011)

Results 2013

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 6

Continued focus on financing

6

At 31 Dec 2013 At 31 Dec 2012 Net debt (£m) 32.4 29.5 Adjusting Services working capital (months) WIP 5.2 5.1 Debtors 4.9 4.3 Working capital months 10.1 9.4 Retirement benefit obligation (£m) 26.7 31.6

Net debt rose due to increase in working capital, acquisitions and restructuring costs. Adjusting Services working capital months rose due to slightly slower cash collections. Pension liabilities reduced due to improved market conditions, employer contributions, investment returns and specific provisions.

Senior banking facilities renewed for five year term

Senior term loan: £10m Revolving credit facility: £30m

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 7

7

Optimise business

  • perations

Create growth in the core Professional Services Explore strategic options

Acquired business and assets of KnowledgeCenter

  • Refinanced debt.
  • Restructured to focus on

growth areas.

  • Developing new IT systems.
  • Introduced new Adjusting

management structure.

  • Completed integration of

GLA life business.

  • Reduced facilities costs.
  • Recruited Vietnam IT team.
  • Secured OPOL contact.
  • Opened new loss adjusting
  • ffices in Saudi Arabia.
  • Recruited senior adjusting

staff to further strengthen existing areas and develop new specialist areas.

  • Registered new office in

Brazil, which will be developed in 2014.

  • Launched new covers for

mutual insurance clients.

  • Launched workers’

compensation claims service in US.

  • Developed new ISS services:

Taylored Claims Management, MGA Service, TPA database for Lloyd’s and onshore captive offering.

Extend reach Broaden offering

Delivered progress in strategy for growth

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 8
  • Non-life claims experience satisfactory.
  • Positive prospects for life business.

Positive start to 2014

8

Professional Services

Management Services Adjusting Services Insurance Support Services

  • Satisfactory Standard Club and strong Signal

Mutual renewals.

  • Positive outlook in UK, Americas and ROW.

Insurers in Run-off

  • Claims volumes being maintained.
  • New senior staff and offices bedding-in.
  • Slow but steady progress continues.
  • Driving promising initiatives.

We are enthusiastic about the potential for growth in the market for insurance services

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 9

Appendices

9 Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Clients

Consistent performance by Management Services business

10

Management Services profile

  • Provides end-to-end management of

insurance companies.

  • Delivers a complete outsourced

management service covering every aspect

  • f the companies’ operations.

Growth opportunities

  • Grow membership of client mutuals.
  • Introduce new products and services for

clients of mutuals.

  • Seek new management contracts.
  • Identify opportunities for new mutuals,

group captives and buying groups.

2013 key points

  • Increased revenue to £41.1m (2012: £39.0m).
  • Delivered consistent Standard Club

performance.

  • Launched Hull and D&O covers.
  • Achieved strong Signal performance.
  • Created North America marine claims

adjusting services.

  • Extended safety management services.
  • Won OPOL administration contract.

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 11

Key business lines

Strong performance by Adjusting Services

11

Adjusting Services profile

  • Provides loss adjusting services across

four main sectors: energy, marine, aviation property and casualty along with marine average adjusting and technical support services.

  • Primarily focuses on larger and more

complex commercial losses arising from major insured incidents. Growth opportunities

  • Expand network into new territories.
  • Extend service offering in each office.
  • Recruit and retain top producing

adjusters in existing offices.

  • Develop and retain next generation.

2013 key points

  • Increased revenue to £54.9m (2012:

£50.3m).

  • Appointed on a steady volume of larger

and more complex claims.

  • Established offices in Saudi Arabia.
  • Appointed new senior adjusters.
  • Progressed development of a new

adjusting claims management system.

  • Enhanced management structure.

Energy Aviation P&C Marine

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 12

Key business lines

Challenging year for Insurance Support Services

12

Insurance Support Services profile

  • Provides stand-alone professional services

which enable our clients to select the specific services they require.

Growth opportunities

  • Expand claims management services.
  • Seek additional investment management

mandates.

  • Develop MGA services.
  • Develop additional technology solutions for

the insurance sector.

  • Secure more run-off servicing contracts.
  • Seek new captive management mandates.
  • Develop risk consulting services.
  • Explore niche insurance opportunities.

Broking and underwriting services Captive management Investment management services MGA services

2013 key points

  • Delivered revenue of £15.9m (2012:

£16.7m).

  • Appointed new head of non-life ISS.
  • Acquired business of KnowledgeCenter.
  • Won Lloyd’s TPA database contact and new

clients for TCM and MGA services.

  • Launched workers’ comp claims service.
  • Developed new insurance covers.
  • Won new captive management contracts.

Niche insurance solutions Specialist IT consultancy services Risk consulting services Run-off services Claims management and technology solutions Document and workflow management solutions

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Owned Insurance Companies

Run-off strategy being implemented

13

Insurers in Run-off profile

  • Owns insurance companies which are

closed to new business and runs off their liabilities in an orderly manner. Growth opportunities

  • Life - Exploring opportunities to acquire

niche offshore life companies in run-off.

  • Non-life - no further non-life

acquisitions to be made. 2013 key points

  • Revenue £5.0m (2012: £5.4m).
  • Completed the business transfer of

Global Life Assurance to LCLI.

  • Non-life companies claims experience

improved compared to the prior year.

LCL International Life Assurance Company (LCLI) (Life) Cardrow Insurance (Non-life) Bestpark International (Non-life) Beech Hill Insurance (Non-life)

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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SLIDE 14

2013 Results

14 Year to 31 December 2013 Professional Services Insurers in Run-off Eliminations/other Total Revenue (£m)

111.9 5.0 (3.3) 113.6

Operating segment profit (£m)

10.4 0.8

  • 11.2

Finance costs/other (£m)

  • (1.5)

(1.5)

Non-controlling interests before tax (£m)

(0.1) 0.3

  • 0.2

Adjusted profit before tax (£m)

10.4 1.1 (1.5) 10.0

Tax (£m)

(1.8) (0.0)

  • (1.8)

Tax on non-controlling interests (£m)

0.0

  • 0.0

Adjusted earnings (£m)

8.6 1.1 (1.5) 8.2

Adjusted earnings per share (p)

21.11 2.63 (3.69) 20.05

Year to 31 December 2012 (restated) Professional Services Insurers in Run-off Eliminations/other Total Revenue (£m)

106.1 5.4 (3.3) 108.2

Operating segment profit (£m)

9.3 0.3

  • 9.6

Finance costs/other (£m)

  • (1.7)

(1.7)

Non-controlling interests before tax (£m)

(0.2) 1.4

  • 1.2

Adjusted profit before tax (£m)

9.2 1.7 (1.7) 9.1

Tax (£m)

(1.8) 0.1

  • (1.7)

Tax on non-controlling interests (£m)

0.0 (0.1)

  • (0.0)

Adjusted earnings (£m)

7.4 1.7 (1.7) 7.4

Adjusted earnings per share (p)

18.40 4.16 (4.23) 18.33 Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Analysis of adjusted profit before tax

15

2013 £m 2012 £m (restated) Statutory profit before tax 6.9 6.6 Amortisation of acquired intangible assets 1.2 1.3 Non-recurring items: Reorganisation costs 1.4

  • Charges related to refinancing

0.3

  • Non-controlling interests before tax

0.2 1.2 Adjusted profit before tax 10.0 9.1

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Segmental results

16

£m Professional Services Run-off Other Group

Year to 31 December 2013

Management Services Adjusting Services Insurance Support Unallocated Total Insurers in Run-off Eliminations Total Revenue from external clients 41.1 54.9 12.5 0.0 108.5 5.0

  • 113.6

Revenue from other operating segments

  • 3.3
  • 3.3
  • (3.3)
  • Total revenue

41.1 54.9 15.9 0.0 111.9 5.0 (3.3) 113.6 Depreciation and amortisation (1.1) (1.2) (0.9)

  • (3.2)

(0.5)

  • (3.7)

Other expenses (33.4) (48.8) (15.8) (0.2) (98.2) (3.7) 3.3 (98.6) Operating segment profit 6.6 4.8 (0.9) (0.2) 10.4 0.8

  • 11.2

Finance costs / other (1.5) Non-controlling interests before tax 0.2 Profit before tax – adjusted 10.0 Amortisation of acquired intangible assets (1.3) Non-recurring costs (1.6) Non-controlling interests before tax (0.2) Profit before tax - statutory 6.9

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Free cash flow

17 17

£m 2013 2012 Operating cash flow before movement in working capital Change in working capital Change in insurance company net assets 13.4 (1.4) (1.7) 12.0 3.4 4.9 Cash flow generated by operations

whereof Professional Services whereof Insurers in Run-off

Income tax paid Interest paid 10.4

10.2 0.2

(1.0) (1.2) 20.3

14.1 6.2

(1.6) (1.6) Net cash flow before movement in client funds Net capital expenditure Deferred consideration payments to third parties Interest received 8.2 (2.7)

  • 0.1

17.1 (2.8) (2.0) 0.1 Free cash flow 5.5 12.4

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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£m 2013 2012 (restated)

Revenue Expenses

113.6 (102.4) 108.2 (98.6)

Operating segment profit Net finance costs /other Non-controlling interests before tax

11.2 (1.5) 0.2 9.6 (1.7) 1.2

Adjusted profit before tax

10.0 9.1

Tax Tax on non-controlling interests

(1.8) 0.0 (1.7) (0.0)

Adjusted earnings

8.2 7.4

Adjusted earnings per share (p)

20.05 18.33

Income statement

18 18

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Segmental balance sheet

19 £m December 2013 December 2012 Professional Services Insurers in Run-off Group Professional Services Insurers in Run-off Group Management Services 2.0

  • 2.0

3.5

  • 3.5

Adjusting Services 109.5

  • 109.5

103.1

  • 103.1

Insurance Support Services 31.3

  • 31.3

32.8

  • 32.8

Unallocated and eliminations 20.1

  • 20.1

20.4

  • 20.4

Insurers in Run-off

  • 322.2

322.2

  • 352.8

352.8 Total assets 162.9 322.2 485.1 159.8 352.8 512.6 – Non-current assets 60.3 3.0 63.3 60.8 3.5 64.3 – Current assets 102.6 319.2 421.8 99.0 349.3 448.3 Total assets 162.9 322.2 485.1 159.8 352.8 512.6 Current liabilities (67.0) (281.0) (348.0) (75.8) (312.9) (388.7) Deferred consideration (0.1) (4.2) (4.3)

  • (5.3)

(5.3) Net current assets 35.5 34.0 69.5 23.2 31.1 54.3 Non-current liabilities (62.4)

  • (62.4)

(52.9) (0.1) (53.0) Deferred consideration (1.0) (8.7) (9.7)

  • (9.0)

(9.0) Total liabilities (130.5) (293.9) (424.4) (128.7) (327.3) (456.0) Net assets 32.4 28.3 60.7 31.1 25.5 56.6 Non-controlling interests (1.1) (20.8) (21.9) (1.0) (21.1) (22.1) Equity attributable to owners

  • f the Company

31.3 7.5 38.8 30.1 4.4 34.5 Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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Disclaimer

This presentation contains certain forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including demand and pricing,

  • perational problems, general economic conditions, political stability

and economic growth in relevant areas of the world, changes in laws and governmental regulations, exchange rate fluctuations and other changes in business conditions, the actions of competitors and other factors.

20 Charles Taylor plc Investor Presentation 2013 Results 19 March 2014

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A year of positive achievement

Annual Results for the year to 31 December 2013

Charles Taylor plc 19 March 2014

Charles Taylor plc Investor Presentation 2013 Results 19 March 2014