KILN CONFIRMS SYNDICATE 510 PROFIT OF 2.5% IN 2001, HIT BY DOLLAR

Lloyd’s managing agency Kiln has posted a profit of 2.5% of £266m capacity at its main syndicate 510 for year of account 2001. Kiln noted that the level of profit had not changed significantly since its first assessment of the impact of the September 11 terrorist attacks, made on October 17 that year. Syndicate 557 posted a loss of 34% of £31m. Non-marine syndicate 807 posted a 5.8% profit on capacity of £45m, and small syndicate 308 made 8.2% on capacity of £3m. Kiln left most of its forecasts for the 2002 year of account roughly unchanged. Its first, “preliminary only”, assessment for 2003 put the range for syndicate 510 at between 17.5% and 10%. For syndicate 557 the range was 35% to 20%, for syndicate 807 it was between 18.5% and 11%, while for syndicate 308 the range was 3.5% to minus 1.5%. Kiln admitted that the recent weakening of the US dollar could have an impact on Kiln in the future. It has protected its 2002 earnings by selling about $30m forward at a rate of $1.69:£1. The company has not hedged its 2003 year of account earnings because only 50% of the account was earned at year-end and because any dollar profits from the 2003 year of account will not be received until June 2006. Kiln has also entered into a revolving credit facility with Lloyds TSB bank for £15m. The company’s share price rose 1.5% to 101.5p in early trading.