Arthur Lok Jack, chairman of Guardian Holdings Limited, says the insurance group anticipates even better profits in 2008. - File

F ortune smiled on Guardian Holdings Limited in its final December quarter, delivering to the regional insurance company net profits of TT$200 million on the back of strong growth in fee and commission income as well as premium revenues within the three-month period.

That profit outcome was less than the near half-a-billion the company made in the same quarter of 2006.

But it was enough to erase the near TT$70 million of losses that dogged the company up to September, nine months into its 2007 financial year, in the face of a 'costly restructuring' to shape its United Kingdom-based operations into a lean, money-making machine.

"This recovery was achieved across the group with all divisions returning profit well ahead of those achieved in 2006," said chairman Arthur Lok Jack in a statement to shareholders.

Performed excellently

"Our investments in associated companies also performed excellently with attributable profits 300 per cent above last year's level."

The associates - which in Jamaica includes Guardian Life, run by Earl Moore, and the Lisa Gomes-managed Guardian Asset Management - contributed a combined TT$98 million to group profit, compared to TT$24 million the previous year.

The company will, as a result of the turnaround, double dividends to shareholders this year, with a payment of 25 cents per unit to be made April 18.

The 201.7 million GHL stock units listed on the Jamaica Stock Exchange values that payment at about $50.4 million.

It brings total returns to shareholders from 2007 profits to 30 cents per share, compared to 15 cents per share in 2006.

Grew 13 per cent

Guardian Holdings during the year grew 13 per cent to become a TT$23 billion company by assets, with a capital base of TT$3.76 billion.

The company ended the year with a more than four-fold growth in operating profit, from TT$97 million to TT$413 million, carved from the TT$5.99 billion of revenues.

But a poor performing investment portfolio arising, Lok Jack said, from "sluggish regional equity markets", which forced a write-off of TT$128 million, plus finance charges of TT$168 million, helped to thin the company's bottom line profit to TT$130 million or $0.61 earnings per share at year end.

Guardian Holdings is currently under the leadership of Peter Gentaume, who was pulled from retirement to pilot the company while the Lok Jack-led board searched for a new chief executive officer to replace Rory O'Brien.

O'Brien had a very bad year in 2006, when the company lost a restated TT$214 million or -TT$1.07 per share, but he has left Guardian — his resignation took effect December 31 — in the black.

Lok Jack anticipates that with the transformation of UK subsidiaries Link and Zenith now wrapped up, group profit will perform even better in 2008.

He also signalled to shareholders that the company expected to eke greater value from investments held.

"I am optimistic," said the chairman, "of opportunities in the near future for rebalancing the investment portfolios of our life insurance subsidiaries to remove volatility and enhance their competitiveness."

business@gleanerjm.com