South African insurance-broking and risk-consulting services company Glenrand MIB (GMB) has returned to profitability with diluted headline earnings per share of 11,5 cents for the year ended June 2009 after a loss per share of 38,9 cents a year ago.
Broking revenue was up 7,9% to R502,9-million from R466-million, while profit for the year rose to R48,6-million from a loss of R79,9-million a year ago. Investment income was up 10,7% to R54-million following increased premium flows and improved treasury management activities.
The company said the significant turnaround in profit was achieved due to the solid performance from the short-term broking and risk advisory business, as well as from the non-recurrence of losses from Benefit Services.
A final liquidation order for the winding up of Benefit Services was granted on June 2 2009.
Profit before tax from continuing operations increased to R57,1-million from R26,7-million in 2008. Revenues were impacted by the economic downturn during the second half of the year, but the focus on retention of key strategic accounts and quality service contributed to the overall good result.
Costs remain a key focus area with cost reduction initiatives not yet fully realised. The company is restructuring most of the property leases in addressing the fixed cost base.
During the past year the company realigned its operations to increase customer focus and thus enhance revenue-earning opportunities. The operating model has been streamlined to two business units, being Risk Services for all the non-personal clients, and Individual Insurance Solutions for all the personal clients and the associated administrative functions. Key senior executive appointments have recently been made in response to this restructuring.
CEO Andrew Chislett said the company’s restructuring has resulted in a greater focus on the needs of its clients, which should enhance revenues in the future.
“Additionally, we continue to address the fixed cost base to enhance profitability. We are committed to ensuring Glenrand maintains its status as a market-leading insurance-broking and risk-advisory business and stays on the path to sustained profitability,” he said.
Glenrand continues to invest in client-facing channels, one being the implementation of a new contact centre in March 2009. This also reduces service costs.
The company will be changing its financial reporting date to September 30, with effect from next year. Interim results will still be announced next year for the period to December 31 2009. — I-Net Bridge