UK – Broking revenues for Towergate remain flat despite 19 acquisitions

Towergate’s core retail broking division posted flat revenue growth in the first nine months of 2012 despite the consolidator making 19 acquisitions in the period. 

The position was an improvement over the two percent decline seen at the half-year stage and profitability at the division continued to improve, with earnings before interest, tax, depreciation, amortisation and exceptional items (EBITDAE) increasing six percent. 

Towergate’s retail division, which makes up 59 percent of its revenues, reported nine-month 2012 revenue of GBP 194.6 million, almost unchanged from the GBP 194.9 million it reported in the same period of 2011. 

Following on from the 19 acquisitions made in the year to 31 September, Towergate has continued to snap up smaller brokers. The total for the year to date is 24, including the most recent acquisition of Northern Ireland-based Dawson Whyte. 

Towergate chief executive Mark Hodges said that under Towergate’s business model, it typically takes between 18 months and two years for the company to see the full benefit of acquisitions. 

He said: “The bigger uptick from the deals we have done in 2012 will be in 2013. Then the challenge is if we can repeat this kind of level in 2013, which will help us build into 2014.” 

MARK HODGES , TOWERGATE CHIEF EXECUTIVE