Loyalist Insurance Group reports 2004 net earnings loss

The Loyalist Insurance Group Limited is reporting a net earnings loss of $56,359 in 2004, as compared to net earnings gain of $184,829 reported in 2003.
The company also reported a decline of revenues by almost half from $3.67 million in 2003 to $1.81 million in 2004.
The Loyalist Insurance Group Limited is a financial services holding company involved through its subsidiaries in the retail insurance brokerage business.
In September 2003, a subsidiary of The Loyalist Insurance Group Limited (“LIGL” or the “company”), Loyalist Insurance Brokers Limited, sold its assets pertaining to the St. Catharine’s operation for proceeds of $325,000 including a note receivable for $100,000, due Oct. 15, 2006, resulting in a gain on sale of $167,850. Revenues at Loyalist Insurance Brokers Limited declined to $1.7 million from $2.3 million in 2003 due to the sale of the Hagersville and St. Catharines sections of the brokerage operations. Expenses also declined to $1.8 million from $2.2 million.
Loss from operations was $41,288 versus an income of $61,899 in the prior year. After including a gain on disposal of assets of $94,249 and the effect of income taxes, this entity had a net income for the year of $72,261 versus $158,749 in the prior year.
In March 2003, another subsidiary of the company, The Loyalist Group Limited (“LGL”), issued additional common shares for $1.4 million, reducing the company’s ownership in LGL to 44% from 87%. The proceeds were then invested into its wholly owned subsidiary, The Loyalist Insurance Company. This transaction resulted in a dilution loss of $318,468.
In addition, the Company disposed of its majority interest in All-Canadian Management Inc. at the end of 2004.
The Loyalist Insurance Group Limited has reported making structural changes to its investments in subsidiary companies. “This allows the company to focus completely on its profitable core operations and to reduce the burden of excessive regulatory requirements,” the company reported in a press release. “The company has attempted to eliminate operations that have to date had negative cash flow or are capital intensive with a historic low return on equity. Our management resources can be better utilized pursuing known profitable businesses.”