HUB: Soft Market Spreading To Canada
By Mark E. Ruquet
NU Online News Service, July 29, 4:11 p.m. EDT?The movement to a soft market is spreading, with Canada beginning to turn in that direction, Hub's chief executive said.[@@]
During a conference call reporting on the firm's second-quarter results, executives said that the Canadian market, which Hub International Limited has a presence in, is beginning to follow the U.S. and is softening.
For the second quarter of this year, Hub reported net income increased more than 15 percent, or $1.5 million, going from $10.1 million, or 31 cents a share, to $11.6 million, or 35 cents a share. Revenues were up 11 percent, or $8.1 million, going from less than $74.2 million to more than $82.2 million.
Executives said that the Canadian market normally lags a year behind the U.S. and they expected it to mirror the softening the U.S. market is now in the middle of.
The Canadian market contributed more than $62 million in revenue of the firm's $161.6 million it reported for the first six months of 2004.
Martin P. Hughes, chairman and chief executive officer for Hub, said the firm is expecting moderate increases for the rest of the year from that market.
Generally, Mr. Hughes said the firm expects the market to continue softening for the remainder of the year, but Hub is confident about its continued growth through acquisition and organically.
The acquisition of Talbot Financial Corporation from Safeco in July that will add another 3-to-5 cents to the firm's earnings per share, he said, help complete the company's "U.S. footprint." The revised earnings-per-share guidance now stands at between 80-to-84 cents a share, with the only change coming from Talbot.
"The insurance marketplace continues to soften, and this means we must be vigilant in our efforts to ensure that our clients receive the best combination of price, coverage and service," declared Mr. Hughes.
"We must be focused externally on our clients and our opportunities, but we must also distinguish ourselves on new business production. We can begin to capture new market share in this environment, and we are going to do that."
During the six months, net income increased more than 12 percent, or $2.2 million, going from $19 million, or 59 cents a share, to $21.2 million, or 64 cents a share. Revenues grew 13 percent, or $18.55 million, going from more than $143 million to $161.6 million.
The Chicago-based broker declared a quarterly dividend of 5 cents a share, payable on Sept. 30 to shareholders of record as of Sept. 15.
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