PWS merger forces dividend cut

THE LLOYD'S insurance broker PWS Holdings has been forced to cut its interim dividend by two-thirds after deciding to merge its main UK businesses into one, writes Paul Durman.

Benjamin Habib, finance director, has resigned to pursue other interests, but will remain as a non-executive director and consultant. It is thought the scale of PWS's ambitions did not justify his remaining.

The reorganisation and the discontinuation of a business cost PWS pounds 1m in the six months to 31 March. This pushed the company to an interim pre-tax loss of pounds 400,000, a reverse from a pounds 2.1m profit last year.

PWS said the merger would produce substantial savings. About pounds 700,000 of the reorganisation costs arise from the write-off of an office lease.

Lord Pearson of Rannock said the reorganisation costs made it prudent to cut the interim dividend from 1.5p to 0.5p a share, but he hoped to review the payout 'somewhat more favourably at the year-end'. The changing profile of PWS's business meant the broker could look forward to a better second half, and he expected to report a healthy outcome for the year.

PWS made an operating profit of pounds 1.1m against pounds 2m last year. The income of the continuing business fell from pounds 7.7m to pounds 6.9m.