A rise in the average value of professional indemnity insurance (PII) claims and a slow year for investment venture Sinfonia Asset Management contributed to a £1.6m loss for Tenet Group in 2010.
The £1.59m loss for the 12 months to 30 September came from revenues of £79m, compared to a profit of £0.38m from £76.3m turnover the previous year.
Sinfonia, launched in 2008, recorded operating losses of £1.3m, compared to £1.38m in 2009, while the group also had to write down the goodwill valuation attributed to Premier Partnerships by £0.74m.
Although it recorded a pre-tax profit of £0.38m, up from £0.3m in 2009, the group's subsidiary PII arm, Paragon, added £0.6m in costs due to the impact of stock market volatility on the value of claims reserved and settled.
Simon Hudson, chief executive at Tenet Group, says: "The economic climate has presented particular challenges to some of Tenet's businesses which are believed to be transitory in nature.
"These are quite diverse but the most notable are that the volatility of the stock market has led to an elevated in the average value of PII claims.
"In addition, Sinfonia, whilst having gained a lot of momentum, has not yet attracted sufficient funds under management to break even as retail investors seem to have favoured longer established asset managers."
The company believes it is still well-placed in the market and points to its net assets of £33m, including £27.8m of cash at bank, as signs of its health.
Group chairman Lord Hodgson says: "Tenet continued to battle headwinds during the financial year under review - headwinds resulting from both adverse general economic conditions as well as operating losses in those of out businesses which are still in their development phase.
"As a result I have to report figures which are disappointing - particularly given the strenuous efforts put in during the year by all members of the Tenet team."
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