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CBL annual profit falls 14pc

NZ Newswire logoNZ Newswire 24/02/2017 Tina Morrison

CBL Corp, the NZX-listed company that sells credit surety and financial risk insurance, posted a 14 per cent drop in annual profit, missing its prospectus forecast, due to costs associated with its expansion.

Profit fell to $30.7 million in the 2016 calendar year, from $35.5m a year earlier, the Auckland-based company said in a statement, citing the costs of finance, raising capital, business acquisitions, and foreign exchange impacts.

The profit fell short of the $40.4m forecast in its prospectus. Revenue rose 36 per cent to $333.5m, ahead of the $304.7m prospectus forecast. The shares fell 4 per cent to $3.56.

CBL listed on the NZX in 2015, raising $90m to help fund the acquisition of Australia's largest surety bond insurer Assetinsure, and has since acquired UK tax investigation insurance provider Professional Fee Protection, and France's largest specialist producer of construction-sector insurance Securities and Financial Solutions Europe SA, continuing an international expansion strategy begun in 2000.

Its debt increased to $96.9m at the end of 2016, from $65.2m in 2015, and it signalled that growth through acquisitions was likely to slow this year.

"After a busy few years with the IPO, major acquisitions and capital raising, 2017 is about refocusing on business development opportunities across the group and consolidating acquisitions," the company said in presentation notes accompanying the earnings release.

"Current levels of capital, together with earnings development, (are) expected to be sufficient to fund growth, and small acquisitions in the foreseeable future."

This year, the company plans to develop emerging programmes and markets in Europe (France, Italy, Romania, and Spain), Latin America (Mexico), Australia, South East Asia (Philippines, Vietnam), and India.

"As a result, CBL expects 2017 to be a strong year with a developing pipeline of new business," the company said.

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