Hyperion announces 2017 full year financial results

Finance

Financial highlights - Financial performance reflects continued positive momentum driven by significant ongoing investment in people, operations and technology, and despite challenging market conditions.

On a bank reported basis:

  • Revenue grew from £444m in 2016 to £535m in 2017, an increase of 20%.
  • EBITDA, the Group’s preferred measure of profitability, increased by 24% from £123m to £152m in 2017.
  • The EBITDA margin was 28% in 2017 (28% in 2016). 
  • Organic revenue growth was 8% (2016: 8%), which the Board regards as a strong result in a highly competitive operating environment.

Operational highlights

In 2017 Hyperion launched Howden One, its international retail broking network, enabling the Group to provide global solutions for its retail clients.  This network brings together Howden’s own offices and those of trusted, like-minded partner brokers, and spans 75 territories with over 5,000 insurance professionals who operate under one set of standards. 

RKH built out its international infrastructure to deliver specialty expertise and product knowledge from the world’s key insurance markets and provide world-class solutions to its international clients. As part of this reorganisation, marine broking specialist, FP Marine, and wholesale broker, Howden Miami, have transferred into RKH Specialty.

DUAL’s regional management board, formed at the beginning of the financial year, has brought the management of each regional business closer to their carriers, brokers and clients. Increased investment in DUAL’s operational resilience and scalability has also created a strong platform for future growth. 

Strategic expansion Hyperion continues to seek strategic partnerships, to make acquisitions, and to launch operations where likeminded businesses and people bring specialist expertise to the Group, deliver geographic reach in key territories, and make a positive difference to clients. 

In addition to increasing its shareholding in a number of partly-owned subsidiaries, the Group made a series of focused acquisitions and launched new operations strengthening its product and distribution capabilities both geographically and in terms of specialist market positions.

  • In July 2017 the Group expanded its Iberoamerican operations with the acquisition of automotive, ports and logistics specialist Bergé y Asociados Correduría de Seguros in Spain, bringing niche expertise across Howden’s Spanish and Portuguese speaking markets.
  • In July 2017 the Group expanded its retail broking operations in Asia with the acquisition of Singapore-headquartered Sterling Knight, strengthening existing specie capabilities and combining employee benefits businesses to create a strong proposition in the region.
  • In August 2017 the Group expanded its retail broking operations in the United Arab Emirates with the launch of Howden Abu Dhabi.

In addition to the acquisitions that took place during the 2017 financial year, in November 2017 Hyperion acquired a majority stake in Omani broker New Generation Insurance Services LLC and, in December 2017, Howden signed an agreement to acquire a majority interest in top five Mexican broker, Grupo Ordás.

David Howden, Chief Executive Officer, commented: “2017 was another milestone year for us as we passed the £500m revenue mark and launched our international retail broking network, Howden One.  The impressive results delivered by each of our businesses contributed to the Group once again achieving market-leading organic growth and a strong profit margin, both critical factors in our long-term success.  

Our employee-ownership model continues to attract and retain talented individuals, and to sustain the entrepreneurial culture, that make our group unique.  Following the completion of our fourth employee share offer, more than 20% of employees now own shares in Hyperion and its subsidiaries.  

The value of our business was reinforced by our ability to attract another leading investment partner in Caisse de dépôt et placement du Québec (CDPQ).  CDPQ’s investment, and additional funds from our debt refinancing, will provide us with significant additional capital to fund future growth. 

 In an ever-changing market, we recognise that we must be at the forefront of innovation using data and technology to enable the efficient and effective distribution of the right products to our clients at the right price.  Our investment in technology-led initiatives will be a key focus in the coming year.”

Dominic Collins, Chairman, said: “The combined efforts of all of our businesses have resulted in another year of strong financial performance.  I extend my sincere thanks to each of the 3,800 employees involved in this achievement.  We enter 2018 with a new high-quality, long-term investor in CDPQ to join us, alongside General Atlantic, on our next phase of growth.”