Loyalist reports nine-month results

Just two days after the Toronto Stock Exchange issued a temporary cease trade order on Ontario’s The Loyalist Insurance Group Ltd. citing the company’s failures to meet reporting requirements, the company has released results for the nine months ended September 30, 2004.The results, which have not yet been certified by an external auditor, show earnings of $453,861 (earnings of $0.02 per share) for the first three quarters of 2004, compared to profit of $254,498 (translating to a loss per share of $0.02) for the same period last year.Revenue was down for the nine-month period, reflecting the company’s withdrawal from lines and business and reduction of its stake in insurer Loyalist Group Ltd., which meant the company no longer reports net earned premiums (compared to net earned premiums of $759,680 in the first three quarters last year).Brokerage commissions were $1.47 million, down from $2.11 million a year ago, while investment income and management fees were $1.18 million, up from $613,135 a year prior the company reduced its interest in Loyalist Group to 44%, and therefore reports gains made from that operation on an equity bases. Overall revenue was down to $2.64 million thus far this year, from $3.46 million for the same period in 2003.Expenses dropped significantly with the removal of claims expenses related to Loyalist Group Ltd. which totaled $201,836 last year at the same point. Overall expenses year-to-date are $2.20 million, well reduced from the $3.0 million reported for the same period last year.The company says its future plans include seeking partnerships with asset managers to produce Canadian mutual funds for its All-Canadian Management Inc. operation. “The company is also in negotiations with other minority shareholders of All-Canadian regarding the purchase and sale of the company’s share holdings which may include possible arbitration,” notes management discussion accompanying the earnings release.”Overall, the Company has maintained a profitable position in 2004. With the diminished exposure to non-strategic lines of business and a focus on higher margin products we hope to reduce the volatility of earnings and be consistently profitable going forward.”