Loyalist Insurance Group announces 2008 year-end results



    ANCASTER, ON, April 30 /CNW/ - The Loyalist Insurance Group Limited (TSX
Venture Exchange - NEX symbol: LOY.H) today announced results for the year
ended December 31, 2008.
    The Company's ordinary revenues for the year ending December 31, 2008
were $301,522 from $1,755,472 in 2007.
    In February 2008, the Company received payment for the sale of Loyalist
Insurance Brokers Limited (referred to herein as "LIBL") assets in the amount
of $4,703,536. The company eliminated the goodwill pertaining to its
investment in LIBL offsetting the income from sale of the assets to the third
party.
    The Company's expenses for the year were $694,300 compared to $2,287,339
in 2007. The reduction in expenses was primarily due to the elimination of
costs associated with the operations of LIBL.
    The Company had an income of $2,353,709 compared to a loss of $249,241 in
the prior year.
    In 2008 the Company's net income was affected by a negative income tax
recovery of $421,750.
    In March 2008, the Company received contingent commissions of
approximately $191,055 ($188,000 - 2007). Revenue earned for contingent
commissions during 2007 was recorded in 2008 when received.
    The Company purchased a total of 180,000 shares in the last quarter of
2008 at an average price of $0.05 per share pursuant to its Normal Course
Issuer Bid effective May 7, 2008 to May 6, 2009.
    As at December 31, 2008, the Company had $US 200,000 in short term money
market investments. On October 24, 2008 the Company hedged its currency
exposure to the US Dollar forward to April 30, 2009 at a rate of USD/CAD
1.2635. The Company's unrealized gain on the forward contract was
approximately $9,500. The unrealized gain on the investment on the foreign
currency exchange was $40,360.
    Cash balances were $6,307 as at December 31, 2008 ($344,730 - December
31, 2007). Included in these amounts, cash held in trust was $1,264 as at
December 31, 2008 ($431,375 - December 31, 2007).
    On January 30, 2008, the Company held a Special Meeting of Shareholders
that included both common and preferred shareholders. The Shareholders voted
99.84% in favour of the sale of the customer lists of Loyalist Insurance
Brokers Limited pursuant to an asset purchase agreement, which was
disseminated to all shareholders and filed with regulators via www.sedar.com.
On January 31, 2008, final regulatory approval was received.
    The purchase price payable by the purchaser under the agreement for the
purchased assets was equal to three times the base commission revenue received
by LIBL for the 2007 calendar year subject to a retention clause whereby the
Company was liable to repay the purchaser three times the base commission,
after allowing for any new business, for any reduction in the base commission
for the fiscal year ending December 31, 2008. Any bonus or contingent profit
commission for the 2007 year was paid in 2008 and was not included in the
calculation to determine the purchase price. The purchaser paid $4,703,536.
Approximately $470,000 was held in trust until December 2008 subject to the
retention clause in the asset purchase agreement.
    A lawsuit was filed against the Company by a former shareholder of a
subsidiary of the corporation which the company sold in 2004. The lawsuit
arose over a dispute of fees to be paid to the former shareholder and the
right to charge the fees. On July 8, 2008, mediation took place and all
parties to all actions were settled subject to final documentations and
releases. The Company's contribution towards the settlement was $40,000. On
January 16, 2009 the Company's directors and officers liability insurer agreed
to reimburse the Company 50% of all monies paid in relation to this claim
including the company's contribution towards settlement. On January 30, 2009,
the Company received $99,494.

    
    Consolidated Financial Highlights

    -------------------------------------------------------------------------
     As at                              December 31, 2008  December 31, 2007
    -------------------------------------------------------------------------
     Assets                                     1,809,785          2,608,250
     Cash, trust cash and short term
      investments                                   6,307            344,730
     Shareholders' equity (deficit)             1,463,781           (840,060)

    -------------------------------------------------------------------------
     Year ended                         December 31, 2008  December 31, 2007
    -------------------------------------------------------------------------
     Revenue                                      301,522          1,755,472
     Net earnings (Loss)                        2,353,709           (249,241)
     Net earnings (Loss) per share                   0.13              (0.01)
    -------------------------------------------------------------------------

    The Loyalist Insurance Group Limited is an investment holding company.

    The TSX Venture Exchange - NEX has neither approved nor disapproved of
    the information contained herein.
    

    %SEDAR: 00009147E




For further information:

For further information: Mr. Donald Coons, President & CEO, The Loyalist
Insurance Group Limited, Tel: (905) 648-8637 x 247

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Loyalist Group Limited

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