Insurance broking and financial advice company CBG Group remains acquisitive after a 31 per cent pre-tax profits fall to £1.1 million.

Insurance broking and financial advice company CBG Group remains acquisitive after a 31 per cent pre-tax profits fall to £1.1 million.

The Manchester-based company, which caters mostly for small and medium-sized companies in the North West of England, says adding back exceptional expenses, share option charges and acquisition-related amortisation and goodwill produced a 17.5 per cent increase in pre-tax profits to £2.25 million last year. AIM-quoted CBG grew turnover almost 50 per cent to £11.1 million in 2008, helped by £2.6 million of revenues from companies taken over during the year.

Managing director Mike Askew says narrowing margins reflect the downturn in the second half-year and that the company has ‘budgeted more cautiously for 2009’ while looking for the benefits of recent acquisitions in the North West of England in terms of integration, office closures and other measures. He points out that CBG, which raised £1.65 million in November at 120p, has £1 million cash, bank facilities of £5.5 million and a £500,000 overdraft, is still looking for new acquisitions.

According to chairman Laurie Turnbull, the company is focusing chiefly on opportunities in insurance broking, where anticipated premium rate increases will swell broking commissions before any organic growth, rather than in independent financial advice, where lower interest rates have eroded earnings on clients’ deposits. The only stumbling block he sees is that the owners of insurance brokers are slow to recognise that they must accept lower prices than in the boom, though he argues CBG will do any deals ‘slowly and make sure they work’.

Floated at 35p six years ago, CBG shares hit 191p at the end of 2007, but have been a weaker market since then. Now 113.5p, up 5p this morning and valuing the company at £17.6 million, they should make up more lost ground over the medium term.