Almost 10-fold increase in first quarter net profit
Caribbean Assurance Brokers has seen an almost 10-fold increase in its net profit for the March quarter, indicative of the fact that its revenue diversification strategy is working, and working well.
During the quarter the insurance brokerage firm saw revenues climbing to J$101.86 million, up from J$90.60 million for the comparable period in 2022, reflecting a 12 per cent increase. The increase in revenue is due to the International Department, which inched up 1 per cent year-over-year while Individual Life saw a reduction of 23 per cent.
The management reports that “these results are reflective of our revenue diversification strategy. The General and Employee benefits divisions have grown at a faster pace than the International Division- our largest revenue earner to date.”
Marginal reduction in expenses
Strict management led to operating expenses closing at J$95.41 million, representing a reduction of 6 per cent relative to the J$101.46 million recorded last year. The first quarter expenses included the hiring of professionals in the areas of Risk Management, Internal Audit and Data Protection in order to ensure that the company is compliant with its regulatory requirements by November 30.
This cumulatively resulted in an increase of J$4.7 million in hiring expenses. Operating profit amounted to J$18.57 million relative to J$3.52 million in 2022.
Finance cost went down 45 per cent to total J$593,176 (2022: J$1.07 million), mainly due to a reduction in interest charges on lease liability.
Consequently, profit before taxation amounted to J$17.97 million compared to J$2.45 million in 2022. After incurring tax charges of J$938,591 (2022: J$634,920), net profit amounted to J$17.03 million, compared to a J$1.81 million in 2022, an almost 10-fold increase.
Earnings per share (EPS) closed the period at J$0.06 relative to EPS of J$0.01 the prior year. Caribbean Assurance Brokers closed trading last week at J$2.88 with a corresponding P/E of 8.11x.
In the area of value-added services to clients, the insurance brokerage firm have partnered with Island Legal Wills, a company that provides a convenient online platform for clients to create their own professional, legally binding wills. This service is available through CAB Loyalty Programme.
As at March 31, the company’s assets totalled J$832.45 million (2022: J$683.89 million), 22 per cent more than its value as at March 31, 2022. This was due to a 35 per cent increase in ‘Cash and bank balances’ which amounted to J$384.83 million (2022: J$285.89 million).
Total Shareholders’ Equity totalled J$480.20 million (2022: J$390.35 million), which translated to a book value of J$1.83 (2022: J$1.49).
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