Ebitda grows to £23.1m as investor report reveals book acquisitions and legacy costs of £2.5m.
Ardonagh Group has reported a £14.1m loss for the first quarter of 2018 according to its report to investors.
However this was still an improvement on the £21.3m losses in Q1 2017.
Ebitda grew to £23.1m in the three months from £787,000 in the same period last year.
Total reported income went up to £127.8m (Q1:2017: £77.9m) with Ardonagh stating that this was driven by acquisitions over the past three quarters and continued progress within its Towergate transformation plan.
The business continued to spend on the transformation plan which it said was 85% complete and expected to finish ahead of plan.
Some £2.2m was spent on ongoing finance transformation, £700,000 on redundancy costs and £500,00 on integration.
Additionally £600,000 was paid for the roll out of the Acturis system across the business.
The numbers follow on from Ardonagh’s first set of full year results which showed increasing income but losses of £261m.
Deals
The investor report also highlighted that Ardonagh, which comprises six segments – Autonet and Carole Nash; Paymentshield; Insurance Broking; Schemes and Programmes; MGA; and – Wholesale made three acquisitions in the quarter.
It bought books of business from Haven Insurance Brokers and The Trust Insurance Group for a total consideration of £1m.
The third deal was the previously reported £7m agreement with Ageas Retail to pick up renewal rights.
The report also stated that the business incurred £2.5m of legacy which it described as “significant”. This included spend on “retention payments for existing staff, costs from external reviews and process improvements in cash and liquidity reporting as well as costs associated with remediation work in certain areas of the finance function”.
The business also loaned £800,000 to key management and directors to cover their personal tax liabilities arising on issuance of shares.
Performance
Ardonagh also issued a separate statement which hailed a “strong operating performance”.
These results, showed income of £131.7m (Q1 2017: £123.4m) and adjusted Ebitda of £28m (Q1 2017: £24.9m), a 12% increase.
It noted organic growth across all segments apart from its MGA and revealed £5.2m had been spent on key hires during the period.
CEO David Ross said: “We have had a strong start to the year with underlying organic growth supported by strategic investments.
“With three small acquisitions completed in the quarter and several key hires, we continue to invest in businesses and people that want to become part of a disruptive and dynamic force in the market.”
Turning back to the investor report, it revealed the distribution segment of Ardonagh, which includes digital, retail broking and advisory, grew in terms of income Ebitda and profit.
Income went up to £84.5m (Q1 2017: £61.9m) while adjusted Ebitda increased to £21.6m from £11.7m. Profits hit £9.2m from £208,000 in the same period last year.
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