Claims adjuster struggles for earnings

Listed claims adjusting group Lindsey Morden Group Inc. (TSE:LM) produced a modest 1 a share profit for the third quarter of 2000, but for the full first three quarters of the year delivered its worst return of 98 a share loss.

The group’s revenue for the third quarter fell to $92 million from the previous year’s September end result of $101.7 million, largely as a result of reduced weather-related claims activity, the company states in a media statement. Despite the year-on-year drop in revenue for the quarter, Lindsey Morden lifted its operating earnings for the same period by more than one and a half times to $6.7 million (this accounts for about 66% of the group’s operating earnings for the full three quarters of 1999) from last year September’s $2.6 million. The significant jump in operating profit is attributed to cost control measures implemented by the company earlier that year in both its Canadian and U.S. offices. To date, the company has incurred $5.4 million in restructuring costs relating to “realign staffing levels” in response to the decline in claims activity.

Lindsey Morden’s revenue for the first three quarters of 2000 was down by 13.5% to $275.5 million compared with the $319.4 million reported for the comparable period the year prior. Likewise, operating earnings for the three quarters of last year came in much lower at $2.1 million against the $9.9 million made at the end of the third quarter of 1999. The impact of this produced a net loss for 2000’s three quarters of $11.6 million compared with a net loss of $3.8 million for the same period the previous year.