Loyalist loss narrows; brokerage revenues up

The Loyalist Insurance Group (TSX Venture: LOY) is reporting a loss of $338,067 for the first half of the year ending June 30, 2003, less than half the loss reported in first-half 2002, at $707,151. This amounts to a net loss of $0.017 per share for the first half of this year, versus a loss of $0.036 a year earlier.The loss margin in the first six months of this year was heavily impacted by a one-time loss on share dilution from the company’s reduced ownership of Loyalist Group Ltd., totaling $281,757. The company made the decision to sell off $1.4 million in Loyalist Group shares in March, reducing its ownership stake to 44% from 88%. Loyalist Group, and its subsidiary The Loyalist Insurance Co., is now reported using the equity method. Nonetheless, the 44% investment in the insurance company netted a $478,000 loss for Loyalist in the first-half, largely on reserve strengthening for personal lines and surety as well as the share dilution’s effect. The insurance company intends to focus on personal lines moving forward.Loyalist did see increased revenue from its Loyalist Insurance Brokers operation, to $1.3 million in first-half 2003 from $965,000 a year earlier. Net income for the brokerage operation was $264,000 in first-half 2003, versus $126,000 in first-half 2002.The company’s mutual fund management operation, All-Canadian Management Inc., of which it owns 60%, posted a loss of $100,000 during the first half of this year.As of the end of June, 2003, the company’s assets are $5.2 million, versus $25.5 million at the end of June, 2002, largely the result of accounting changes relative to the reduction in ownership of Loyalist Group.