Glenrand predicts business upswing

3/3/2010 12:40:01 PM

GLENRAND MIB, the insurance broking and employee benefit consulting group, said yesterday the financial benefits of new business wins should start to flow in the next few months.

EDWARD WEST

Planned investments in information technology, marketing and process-related improvement initiatives were also progressing well, while progress was being made to reduce the cost base of the group, Glenrand’s management said in a regulatory filing.

Glenrand lifted broking revenue 2,5% to R258,2m during the past six months, a period of tough economic times. Interest income decreased 44% to R11,5m from R20,7m due to lower interest rates.

Headline earnings per share fell to 5c from 9,6c at the same time last year, while profit of 3,6c per share was declared last year compared with 9,1c in 2008. Continuing operations reported a profit of 3,3c per share compared with 8,8c in 2008.

The decrease in investment income amounted to 2,9c per share and an impairment of goodwill of R2,2m reduced earnings by a further 1c per share.

In the risk services operations, the commercial, specialist and corporate divisions grew revenue 3%, but there was downward pressure on margins.

In the individual insurance solutions segment, which involves business to consumer operations such as Personal Product Solutions, Finrite and the Claims Fulfilment Company, there was “pleasing” year-on-year growth in broking profit of 24,7%.

New business at Personal Product Solutions was on track and client retention was good, though the tough economy was hurting premium growth as clients shopped around for cheaper premiums or reduced cover.

New client administration contracts had been secured at Finrite and were expected to boost revenue in future — Finrite’s revenue was flat in the interim period.

Claims Fulfilment Company revenue was slightly down, but the contribution of the division was buoyed by employment cost savings, management said.

Glenrand MIB has changed its reporting date to September 30.