13th May 2020 14:25
(Alliance News) - Watchstone Group PLC on Wednesday reported a significantly narrowed annual loss as the firm's administrative expenses fell.
In 2019, the insurance broker recorded a pretax loss of GBP6.6 million, narrowed from a GBP18.6 million loss in 2018.
Revenue was down 6.4% year-on-year in 2019 to GBP7.3 million from GBP7.8 million.
Watchstone's administrative expenses reduced sharply to GBP8.1 million from GBP22.5 million in 2018.
"2019 was an important year for the group as we continue along the path of resolving the outstanding legacy issues of the group and the divesting of our operating businesses. Once again, we reduced costs and the size of our central overhead with board changes, the closure of our central office and further reduction of other such costs," Chair Richard Rose said.
He continued: "We remain on track with the execution of our plan to prepare our businesses for future disposal and to do so when appropriate. In September 2019, an agreement was reached to dispose of our Canadian physiotherapy clinic and technology business, ptHealth, and the transaction completed in February 2020 after regulatory approval. We believe this represents good value for our shareholders and I would like to thank the Healthcare Services team for their hard work during the group's ownership of the business. We wish them well under their new ownership".
Watchstone is looking to return GBP50.5 million to shareholders before the end of June, following the disposal.
Rose noted that its insurance business, Ingenie, has been "inevitably" hit by the Covid-19 outbreak.
Looking ahead, Watchstone said it will continue to fight the legal challenges arising from the Slater & Gordon case, despite that suit being dropped.
Rose said: "Whilst we understand that the previously threatened class action litigation first announced in September 2015 has been abandoned, a firm purporting to act for a group of twelve individuals (some of whom participated in the original threatened litigation) submitted a 'notice of intended claim' to the company in November 2019.
"However, it provides no information to support the validity or valuation of the individual prospective claimants' claims, which they would be required to prove in due course in any litigation. We responded fully to this correspondence, outlining our view that the purported claim had no legal merit, because the legal tests for bringing a claim of this sort were not satisfied. The company will vigorously defend all such claims if so brought."
Shares in Watchstone Group were down 1.6% in London on Wednesday afternoon at 155.00 pence each.
By Paul McGowan; [email protected]
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