Half year results for the six months to 30 June 2013 Charles Taylor - - PowerPoint PPT Presentation

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Half year results for the six months to 30 June 2013 Charles Taylor - - PowerPoint PPT Presentation

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Half year results for the six months to 30 June 2013 Charles Taylor plc 30 August 2013 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013 Charles Taylor positive prospects, fundamentals in place for growth

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SLIDE 1

Half year results

for the six months to 30 June 2013

Charles Taylor plc 30 August 2013

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 2

Charles Taylor – positive prospects, fundamentals in place for growth

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

  • Reinforcing business

foundations

  • Implementing

strategic growth plan

  • Actively managing

down debt

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 3

Positive start to 2013

  • Increase in group adjusted profit before tax and statutory profit

before tax

  • Adjusted earnings per share and statutory earnings per share

increased

  • Professional Services profit up with improved trading conditions for

Adjusting Services

  • Cautious outlook for H2 with more demanding conditions for much
  • f Professional Services
  • Interim dividend of 3.25p

3 3 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 4

35% 14% 58%

Focused on delivering professional services to the global insurance market

4

Adjusting Management Insurance Support

Revenue H1 20131 Staff breakdown 20132

Management Insurance Support Adjusting

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

We have around 1,000 staff in 50 offices worldwide4

  • •
  • • •
  • • •
  • •
  • •
  • • •
  • 1

Stated before inter-segment eliminations. 2 Excludes shared services teams. 3 Excludes customer relationship intangible amortisation and non-reoccurring costs of £1.0m. 4 As at 30 June 2013.

  • 16%

28% 51%

Run-off 10%

Professional Services 90% Adjusted EPS H1 20131

  • Charles Taylor plc

Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 5

A period of continued progress Half year results 2013

£m Revenue Operating segment profit H1 2013 H1 2012 H1 2013 H1 20121 Management

19.1 18.1 2.2 2.5

Adjusting

28.3 25.4 3.6 2.6

Insurance Support

8.0 8.5 0.2 (0.0)

Professional Services 2

55.4 52.0 6.0 5.0

Run-off

2.5 2.6 0.4 0.1

Eliminations

(1.7) (1.6)

  • Group 2

56.1 53.0 6.3 5.1

5

Group H1 2013 H1 2012 Adjusted PBT (£m)

5.5 4.4

Adjusted EPS (p)

11.26 9.06

Statutory EPS (p)

8.19 7.47

Dividend per share (p)

3.25 3.25

1 Restated for IAS19R. 2. Small rounding differences arise in the total amounts above

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 6

Average net debt benefits from advance fee payment. Pension deficit shrinks

6 Debt movements £m Since 1 January 2013 Since 1 July 2012 Opening balance 29.5 34.2 Term debt repayments (1.5) (3.0) Other debt movements (8.3) (11.5) At period end 19.7 19.7 Adjusting Services working capital Months As at 30 June 2013 As at 30 June 2012 WIP 4.9 5.7 Debtors 4.6 4.6 Total working capital months 9.5 10.3

  • Advance payment in Q1
  • f annual fee by a

mutual insurance client reduces H1 net debt

  • Adjusted for this effect,

net debt is in line with June 2012

Retirement benefit obligation £m 23.2 38.8 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

  • Reduction in pension
  • bligation due to

favourable market conditions, investment returns and employer contributions

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SLIDE 7

7

Reinforce the foundations Create growth in the core Professional Services Explore strategic options

  • Investing in Adjusting claims

management system

  • Focusing on working capital

improvements

  • Driving improved business

efficiency

  • Revitalised Group finance
  • Offshoring ICT services
  • Developing new corporate

literature and revamped website

  • Acquired majority stake in

Saudi Arabia adjusting business

  • Integrated Colombia

adjusting offices

  • Continued to build

property & casualty adjusting capability in Jakarta

  • Launched Standard Hull

insurance product

  • Appointed by managing

agent for Taylored Claims Management

  • Established and

developing onshore US captive manager

Enhanced operations Extended reach Broadened product

  • ffering and service

Business strategy advanced across all business lines

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 8

H1: Improved claims experience H2: Will not benefit from a repeat of the substantial cash release seen in 2012

Positive start to 2013 - more cautious H2

  • utlook

8 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

Professional Services

Management Services Adjusting Services Insurance Support Services

H1: Margin impacted partly due to a increase in people costs H2: Outlook remains positive

Insurers in Run-off

H1: Benefited from upturn in claims activity, H2: Cautious outlook: some staff movement; investment in offices, people and claims system H1: New services taking time to gain traction H2: Continued slow progress; driving promising initiatives, but taking time to come to fruition

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

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SLIDE 9

Appendices

9 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 10

Clients

Good 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 of the companies’ operations from the marketing and the management of underwriting and claims, to the provision of regulatory, accounting and administrative

  • perations

Growth opportunities

  • Grow mutual membership
  • Introduce new products and services
  • Identify opportunities for new

insurance collectives H1 2013 key points

  • Continued positive performance from

mutual insurance company clients

  • Negotiated new Signal fee arrangement

from Q4

  • Launched Standard Hull insurance

product

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 11

Key business lines

  • Adjusting Services benefited from improved

claims volumes

11

Adjusting Services profile

  • Provides loss adjusting services across

four main sectors: energy, marine, aviation and non marine 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

H1 2013 key points

  • Benefited from upturn in claims activity
  • Experienced some staff movement
  • Stepped-up recruitment programme
  • Acquired majority stake in Saudi Arabia

business

  • Integrated Colombia offices
  • Extended P&C adjusting in Jakarta
  • Continued to focus on working capital
  • Investing to transform claims

management system

Energy Aviation P&C Marine

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 12

Key business lines

Insurance Support Services steady

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
  • Develop coverholder services
  • Develop MGA services
  • Secure more run-off servicing
  • Extend US captive management
  • Explore niche opportunities

Managed claims services Coverholder services Financial reporting service Run-off servicing Investment Management Alternative risk services

H1 2013 key points

  • Slowing demand for mature services and

slower take-up of new services

  • Secured key TCM contract
  • Exploring life servicing opportunities
  • Launched onshore US captive manager
  • Strengthened investment management

team

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 13

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 H1 2013 key points

  • Life
  • Integrating GLA
  • Exploring acquisition opportunities
  • Non Life
  • Improved claims experience
  • Considering options

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

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 14

H1 2013 Results

14 Six months to 30 June 2013 Professional Services Insurers in Run-off Eliminations/other Total Revenue (£m)

55.4 2.5 (1.7) 56.1

Operating segment profit (£m)

6.0 0.4

  • 6.3

Finance costs/other (£m)

  • (0.7)

(0.7)

Non-controlling interests before tax (£m)

(0.1) 0.1

  • (0.1)

Adjusted profit before tax (£m)

5.8 0.4 (0.7) 5.5

Tax (£m)

(1.0)

  • (1.0)

Tax on non-controlling interests (£m)

0.0

  • 0.0

Adjusted earnings (£m)

4.8 0.4 (0.7) 4.6

Adjusted earnings per share (p)

11.89 1.10 (1.73) 11.26

Six months to 30 June 2012 Professional Services Insurers in Run-off Eliminations/other Total Revenue (£m)

52.0 2.6 (1.6) 53.0

Operating segment profit (£m)

5.2 0.1

  • 5.3

Finance costs/other (£m)

  • (0.9)

(0.9)

Non-controlling interests before tax (£m)

(0.2) 0.4

  • 0.3

Adjusted profit before tax (£m)

4.8 0.5 (0.9) 4.4

Tax (£m)

(0.8) 0.0

  • (0.8)

Tax on non-controlling interests (£m)

0.0 (0.0)

  • (0.0)

Adjusted earnings (£m)

4.0 0.5 (0.9) 3.6

Adjusted earnings per share (p)

10.03 1.25 (2.22) 9.06 Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 15

Analysis of adjusted profit before tax

15

H1 2013 £m H1 2012 £m Statutory profit before tax 4.1 3.5 Customer relationships amortisation 0.5 0.6 Non-recurring items – reorganisation costs 1.0

  • Non-controlling interests before tax

(0.1) 0.3 Adjusted profit before tax 5.5 4.4

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 16

Segmental results

16

£m Professional Services Run-off Other Group

Six month to 30 June 3013

Management Services Adjusting Services Insurance Support Unallocated Total Insurers in Run-off Eliminations Total Revenue from external clients 19.1 28.3 6.2 0.0 53.6 2.5

  • 56.1

Revenue from other operating segments

  • 1.7
  • 1.7
  • (1.7)
  • Total revenue

19.1 28.3 8.0 0.0 55.4 2.5 (1.7) 56.1 Depreciation and amortisation (0.5) (0.7) (0.3)

  • (1.4)

(0.3)

  • (1.7)

Other expenses (16.5) (24.0) (7.5) (0.0) (48.0) (1.9) 1.7 (48.1) Operating segment profit 2.2 3.6 0.2 (0.0) 6.0 0.4

  • 6.3

Finance costs / other (0.7) Non-controlling interests before tax (0.1) Profit before tax – adjusted 5.5 Amortisation of customer relationship intangibles (0.5) Non-recurring costs (1.0) Non-controlling interests before tax 0.1 Profit before tax - statutory 4.1

Note: Small rounding differences arise in the total amounts above

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 17

Free cash flow

17 17

£m H1 2013 H1 2012 Net cash from operating activities Movement in client funds 16.4 (2.9) 7.4 (0.9) Net cash before movement in client funds Acquisition of tangible fixed assets Acquisition of intangible fixed assets Proceeds on disposal of tangible fixed assets 13.5 (0.5) (0.7) 0.1 6.5 (0.4) (0.7) 0.1 Net capital expenditure Deferred consideration payments to third parties Interest received (1.2)

  • 0.0

(1.0) (2.0) 0.0 Free cash flow 12.4 3.6

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 18

£m H1 2013 H1 2012

Revenue Expenses

56.1 (49.8) 53.0 (47.9)

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

6.3 (0.7) (0.1) 5.1 (1.0) 0.3

Adjusted profit before tax

5.5 4.4

Tax Tax on non-recurring costs Tax on non-controlling interests

(0.8) (0.2) 0.0 (0.8)

  • (0.0)

Adjusted earnings

4.6 3.6

Adjusted earnings per share (p)

11.26 9.06

Income statement

18 18 Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 19

Segmental balance sheet

19 £m June 2013 June 2012 Professional Services Run-off Group Professional Services Run-off Group Management Services 4.3

  • 4.3

0.9

  • 0.9

Adjusting Services 103.0

  • 103.0

96.0

  • 96.0

Insurance Support Services 29.4

  • 29.4

31.8

  • 31.8

Unallocated and eliminations 25.5

  • 25.5

31.1

  • 31.1

Insurance Companies Run-off

  • 344.3

344.3

  • 320.8

320.8 Total assets 162.2 344.3 506.5

159.8 320.8 480.6

– Non-current assets 58.1 3.2 61.3 63.6 3.7 67.3 – Current assets 104.1 341.1 445.2 96.2 317.1 413.3 Total assets 162.2 344.3 506.5

159.8 320.8 480.6

Current liabilities (88.0) (303.2) (391.2) (72.5) (267.0) (339.5) Deferred consideration

  • (5.3)

(5.3)

  • Net current assets

16.1 32.6 48.7

23.7 50.1 73.8

Non-current liabilities (37.7) (0.1) (37.8) (61.7) (0.2) (61.9) Deferred consideration

  • (7.3)

(7.3)

  • (14.5)

(14.5) Total liabilities (125.7) (315.9) (441.6)

(134.2) (281.7) (415.9)

Net assets 36.5 28.4 64.9

25.6 39.1 64.7

Non-controlling interests (1.2) (21.0) (22.2) (1.2) (35.0) (36.2) Equity attributable to owners

  • f the Company

35.3 7.4 42.7

24.4 4.1 28.5

Charles Taylor plc Investor presentation Half Year Results 2013 30 August 2013

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SLIDE 20

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 Half Year Results 2013 30 August 2013