The Oval group Financial Results For The Year Ended 31 May 2009

Insurance broking and financial services company have challenging year, but weather the storm

National insurance broking, risk management and financial services group Oval Limited (Oval) has released its annual results.
 
In the year ending 31st May 2009, turnover increased by 16% from £90.5m to £104.6m and earnings before interest payable, tax, depreciation, amortisation and exceptional costs (“EBITDA”) rose 7% from £17.4m to £18.7m.  Whilst turnover growth was lower than original expectations due to the inevitable impact on clients of the recession, these results represent a strong performance against the economic backdrop.

Oval has also implemented a process of streamlining which has reduced the annualised cost base by more than £5m. So, despite the continued poor economy and soft insurance market, these actions, together with new business wins, have ensured that the first 4 months of the new financial year are in line with expectation.

Due to one off exceptional costs of restructuring and a combination of increased amortisation and funding costs supplemented by lower interest income, Oval declared a loss before tax of £0.4m compared to a profit of £4.6m in 2008.

Chairman Oliver Stocken said:

“For most of us in the business community, the last 12 months have been probably the most difficult any of us have encountered in our careers.

While it will probably be another 12 months before we see the UK economy growing again, during the past year we have been able to supplement our resources with £15m of new capital from our existing shareholders.  This has allowed us to both reduce debt and invest in future opportunities.

I have no doubt that the resources in place, combined with the team we have built, leaves Oval well placed to share in the economic recovery when it comes and as a result create value for shareholders.”

Chief Executive Officer Phillip Hodson said:

“2008/9 was a tough year for Oval, as it was for many advisory businesses.  As a corporate Insurance Broker, the company felt the effects of client downsizing and, in a few instances, outright liquidations.  As a financial services advisor, it suffered from the collapse in confidence in investment markets in 2008.

In such a recession, as we have experienced, any company is as good as the quality of its people.  In this regard, we are very fortunate to have some of the best people in the industry.  They know that the key to success is two-fold – high retention rates and a successful new business strategy.  Oval has some of the best results in the broking sector in both these areas, and we are determined to do even better in the months and years to come.

I am sure that Oval will emerge stronger from the recession and will be in a strong position to take advantage of the economic upturn when it occurs.”