British insurance acquisition specialist Resolution said today it would jettison its complex board structure as it reported lower-than-expected half-year profit, held back by a weaker performance at its international units.
Resolution, created to buy underperforming life insurers and merge them into a profitable whole, said its founder Clive Cowdery would join the company's board under the reorganisation, aimed at ensuring the group keeps its premium listing on the London Stock Exchange.
Britain's financial regulator proposed in January that companies such as Resolution, which outsource key management functions to an external company, should not qualify for a premium listing, as they allow key decision-makers to avoid shareholder scrutiny.
A loss of Resolution's premium listing would force investment funds that track the equity market to sell their shares in the group, putting added pressure on a stock that has lost 12 per cent of its value since the start of the year.
The time is right "to move to a more conventional governance and operating structure for the company," Resolution chairman Mike Biggs said in a statement.
Resolution said it made a pre-tax operating profit of £163m in the first six months of the year, down from £390m a year earlier.
City A.M. Reporter