Brightside

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19/09/2011 Miles Nolan

Fast-growing insurance products distributor Brightside (BRT) has reported better-than-expected interim results, a position that leaves it poised to consider a dividend payment at the full year.

Brightside sells insurance and ancillary services of third parties without carrying the underwriting risk, so the key to further success is its ability to push more products through the existing infrastructure. Current insurance policies sold include those for vans, cars, taxis, homes and businesses.

In the six months to June it achieved a 50% hike in sales to £39.8m, as pre-tax profits rocketed 80% to £7.2m. Policy numbers increased 98% to 240,665, but this was entirely due to the benefit of acquiring eCar and eBike insurance last year. Brightside is also working hard to step up membership of its eCar panel, which will broaden its product range still further.

The shift in buying patterns from the high street to online insurance policies and call centres is further vindication of the Brightside model. Speaking to Growth Company Investor, co-founder Paul Chase-Gardener said, 'We are now seeing the benefits of past investment and have the strongest balance sheet we have ever had.'

Premium finance remains a very profitable business. Here the total number of loans processed jumped 40% to 109,302. The loans represent £67.3m of finance, with a large chunk funded by its own internal loan book – this has been helped by a £30m facility provided by Clydesdale Bank.

Aggregator technology specialist Quote Exchange was acquired earlier this year. It provides 65m price comparison quotes a month, but Brightside is keen to pick up more partners to leverage its technology. Some £20m in deferred consideration relating to past acquisitions is due over the next couple of years, a situation that Brightside reckons it can fund from cash flow.

Evolution predicts 2011 pre-tax profits of £15m and EPS of 2.38p. The shares were recommended in Growth Company Investor at 21.5p in 2009, due to its market position and ability to grow. There is more to go – add.