Royal Liver ‘ready to face the tough challenges’

Aug 30 2008 by Alistair Houghton, Liverpool Daily Post

ROYAL Liver Assurance is warning of tough times ahead despite defying the credit crunch in the first half of the year.

The mutual society posted an operating surplus of £2.4m for the six months to June 30, compared to an over-run of £400,000 for the same period in 2007.

But despite a strong first six months, chief executive Steve Burnett has warned that as the economic slowdown tightens its grip on the country, Royal Liver can expect a tough time in the second half of the year.

He said that thanks to the society’s recently completed turnaround plan which successfully took it back into the black, Royal Liver was well-placed to meet the credit crunch challenge.

Mr Burnett said: “The first half of 2008 has seen admirable performances across Royal Liver’s businesses in the face of difficult market conditions. Our people’s ability to implement our modernisation strategy has contributed markedly to this success. We continue to develop our businesses while carefully managing our operational expenditure.

“Having said that, like everyone in our sector, the outlook for the group is dominated by the worsening economic climate in both the UK and Republic of Ireland and the likely impact on our customers’ spending patterns. Resilience will be our watch word.

“What was a tough job has just got a whole lot tougher.”

The society has £3.5bn assets under management, compared to £3.7bn in June last year. The fall is due to falls in the stockmarket.

Mr Burnett, who joined Royal Liver in 2002, launched the company’s “good to great by 2008” plan to stem its high administration costs. The strategy included axing Royal Liver’s direct sales force and instead buying independent financial adviser chain Park Row, reducing the group’s headcount by half to around 1,200 people.

In the first half of the year, Park Row made an operating loss of £1.6m, but Mr Burnett said the division was set to become profitable by 2010.

A full interview with Royal Liver chief executive Steve Burnett can be read in the latest edition of LDP Business magazine, which is available throughout Merseyside.

ROYAL Liver’s finance director, George McGregor, is one of the guests on tomorrow’s LDP Business Week radio show from 11am. The show, presented by DP business editor Bill Gleeson, is broadcast on CityTalk 105.9fm.

alistairhoughton