Resources In Insurance Group PLC Trading Update: Change to Financial Year End (8287H)

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RNS Number : 8287H

Resources In Insurance Group PLC

25 June 2013

25 June 2013

RESOURCES IN INSURANCE GROUP PLC

("RiIG", the "Group" or the "Company")

Trading Update: Change to Financial Year End

The Board of RiIG, a leading provider of claims management and consultancy solutions to the UK insurance profession, is pleased to provide the market with a trading update as well as confirmation of a change to its financial year end.

Key Points:

   --     Change in financial year end to 31 March 
   --     Trading for the 15 months to 31 March 2013 has continued to be disappointing 

-- Additional working capital secured via Executive Chairman, John French and significant shareholder, Bob Morton

Since the year end:

   --     Non-weatherrelated services are having a positive impact on performance 
   --     Strong new business in-flow and GBP760,000 contract extension 

The audited results for the 15 months period to 31 March 2013 will be published no later than 30 August 2013.

Whilst continuing to deal with weather related claims, new services now dominate current and on-going trading. Reflecting the changing pattern of the business, the Board has therefore decided to amend the financial year end from December to March.

Having seen a positive trend over the last 4 years with losses decreasing from GBP1.3m in the year to 31 December 2008 to a loss of GBP174,445 for 2011, the 15 months to 31 March 2013 was disappointing in terms of overall result. This was principally due to the very low volume of weather related claims experienced by the insurance sector as a whole during late 2011 and early 2012. The lack of activity in Property / Weather related services in H1 2012 seriously impacted our position with losses of GBP696,581 as previously reported. This was an industry wide issue and the Group sought to realign quickly. Whilst recognising and adapting the proven model and entering the wider financial services sector the second half of 2012 saw some recovery and gave the Group the foundation to build into 2013, although losses in the 9 months to 31 March 2013 are expected to be slightly less than in the 6 months to 31 June 2012.

To support the uplift in trading primarily through new business, the Board has secured additional working capital via the provision of loan capital from the Company's Executive Chairman, John French and through a significant shareholder, Bob Morton. Through Spread Trustee Company Limited, and on behalf of The French Settlement, John French has made GBP221,500 of loan capital available and Bob Morton has made some GBP135,000 available as loan capital via Hawk Investment Holdings Limited. The interest on the loans is 1 per cent per month, payable monthly with an expiry date of 2 January 2014. As Hawk Investment Holdings Limited is connected to Bob Morton, a substantial shareholder and John French is a director of the Company, the loans are considered to be related party transactions pursuant to Rule 13 of the AIM Rules for Companies. The Company's directors, having consulted with the Company's nominated adviser, Zeus Capital, consider that the terms of the loans are fair and reasonable insofar as the Company's shareholders are concerned.

2013 has started strongly. The Group has seen an increased volume of business wins within the traditional General Insurance sector that has benefited all operating divisions. Whilst the general market remains flat with regards to outsourced claims management solutions the model of insourcing resource and solutions has seen positive responses. In addition the move into the wider Financial Services market in H2 2012 has enabled the Group to build and expand on offerings not just to the retail banks in the PPI space but also to large Financial services organisations handling complex and non- complex customer complaints. The model is proving extremely popular.

Highlights for 2013 include:

-- Contract with Global Recruitment Operation - 12 Months - valued GBP1.4m to provide complaints handlers to Financial Services organisation.

-- Extension of current PPI contract with leading Global Retail Bank - Impacting July to December 2013 - valued circa GBP760,000.

-- Negotiations well advanced for the further provision of PPI complaints handlers to major UK retail bank value circa GBP760,000.

-- General Insurance contracts with a number of UK and Global insurers for the provision of managed teams of Personal Injury, Property and Motor handlers.

-- The Placement business division - APT handling the majority of the Group's own recruitment needs improving the balance sheet and now handling volume placement requirements for a number of organisations.

-- Signing of a contract to provide Surge (increased work flow) support via the Verify division to one of the largest Global Loss Adjusting and Claims Management operations. This strategic alliance is further being developed.

-- Growing interest in consulting services including Audit and Review of Supply Chains as insurers seek to understand and minimize frictional costs. A number of Audit programmes have been secured and will impact in H2 2013.

Additional new business proposals are being generated across all areas of the business. The Group also continues to actively explore the creation of relationships with other companies serving the sector with compatible services to its own with a view to collaborating on areas of mutual interest. In this respect exploratory discussions are taking place with a number of potential parties.

Commenting, Executive Chairman John French, said:

"The freak break in the traditional weather pattern for late 2011 and early 2012 resulted in a negative impact on our overall recovery following the positive changes introduced in previous years. However, we are now benefiting from the positive impact of our expanding and more recently developed services. We are also seeing a steady improvement in trading with revenues beginning to rise as a result of new business from existing and new clients and we fully expect this to continue as the year progresses."

For further information:

 
Resources in Insurance Group plc 
 John French, Executive Chairman 
 www.riig.co.uk 
 
 Nominated Adviser/Joint Broker      [phone] 
Zeus Capital Limited 
Ross Andrews / Andrew Jones        [phone] 
 
 

Joint Broker

Peterhouse Corporate Finance Limited

   Jon Levinson                                                      [phone] 

Financial PR

Yellow Jersey PR Limited

Dominic Barretto/Anna Legge [phone] / [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

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