The business faced an extremely tough trading environment again in 2010/11. As a result, headline performance was behind the previous year. The key measurement of a “buy and build” advisory business, such as Oval, is EBITDA (Earnings before interest, tax, depreciation and amortisation) and our pre-exceptional EBITDA declined from £16.5 million to £15.3 million. Pre-exceptional operating profit remained steady at £4.1 million.

Much of the reduction in pre-exceptional EBITDA can be attributed to two factors – a continuation of the trend of falling premiums on renewal seen in recent years, with average renewal premiums down 5% in 2010/11, and the impact of difficulties in some sectors of the economy, particularly construction, on offices reliant on those sectors. In spite of those headwinds, gross turnover increased from £96.0 million to £97.5 million, although lower interest rates have led to a decline in investment income on cash deposits of £2.1m over the last 3 years.

Our Insurance Broking business has seen record levels of new business and client retention and we have put the building blocks in place to support our strategy in this division. Within our Financial Services business, our Pensions Services and Discretionary Fund Management businesses have continued to grow and we have seen outstanding performance from some of our consultants. Our support functions have been restructured and associated costs have been reduced.

I would like to go through the business by division. Within the Financial Services division, Employee Benefits has had a very good year and the order pipeline for 2011/12 is extremely strong. We have established a team with huge expertise in this division, and our client base is “blue-chip”. Similarly, Wealth Management has expanded substantially and we now deliver a truly bespoke service to our Private Clients. Our Financial Services business is now ready for the huge changes that will result from the instigation of the Retail Distribution Review at the end of 2012.

Oval Healthcare fell £0.3 million short of budgeted profit, but this is still a high margin business, run by first class traders.

Our Insurance Broking division, which accounts for around 80% of our turnover, has had the most challenges having undergone 8 years of declining rates and 3 years of economic malaise. Despite these two major challenges, the team has continued to win more and more new business and its client retention rates are again truly market-leading in the retail sector. This demonstrates both the level of service and expertise which is enshrined in Oval’s culture.

We have spent much of the last two years integrating all of our businesses under one culture and one ethos. Underlying this, Oval tries to allow regional diversity and individual entrepreneurship. This is now helped by the development of Insurance Broking specialisms such as Property, Construction, Professions, Media and Technology. Our penetration of these sectors is increasing daily, and further specialisms are being marketed through our Underwriting Agency, Vela. This too, is growing very quickly.

The environment is tough and will continue to stay tough. Like many organisations, we have had to improve the efficiency of our business support functions, reducing headcount and the costs of doing business.

The result is a core of just under 1200 people committed to taking Oval on the next step of its journey. The business generated £18.4 million of cash from operating activities in 2010/11. Whilst we continue to pay down debt at a significant rate in order to make the business stronger and more valuable, we still consider selective acquisitions which will boost the 26 strong office network around the UK as well as enhancing our growing specialisms.

We have a robust plan for growth and we intend to deliver these targets over the next 24 and 36 months. Our aim is to make Oval an even better recognised name in the National Broker pantheon.

Finally, I would like to add my thanks to those of the Chairman to our retiring directors Oliver Stocken, Simon Shaw and John May, all of whom have been very influential in the development of Oval.

The leaders of our company, Patrick O’Connell, Jeff Herdman, Steven Mitchell and Peter Blanc, together with the Regional Managing Directors, FS Regional Directors and the Office Heads have all demonstrated leadership and tenacity in fulfilling their roles during the past 12 months. These have been very difficult and extraordinary times for advisory businesses. The stability of Oval during this period is due entirely to the hard work, commitment and talent of our staff across the whole UK. A big thank you must go to them. They have shown remarkable fortitude.

Given the strength of our Regional Directors, Office Heads and Divisional Directors, I am confident that this team can take Oval to the next stage in its development.