Company Snapshot: Allstate Northern Ireland Ltd
Allstate Northern Ireland is a wholly owned subsidiary of the Allstate Corporation in the USA. In Northern Ireland the local company was renamed four years ago. It formerly traded as Northbrook Technology.
Allstate earns revenue through the provision of information technology and business process solutions for its parent company and for other subsidiaries in the same group. Turnover has increased year by year in the last two years following a sharp fall from 2006 into 2007.
The main performance indicators of turnover and employment reveal that 2009 was probably the most successful year of the past decade.
Interpreting the profitability of the local company is made more complex because of the adjustments for fair value applied to the operating profit figures.
The fair value adjustment on the financial derivative portfolio introduced a deduction from operating profits of £11.98m in 2008. More recently, in 2009, the adjustment added £14.53m.
If these fair value adjustments are excluded from the calculation, operating profits in 2008 would have been £2.8m and in 2009 would have fallen to £0.6m, although there would still have been a positive operating profit.
With this amended way of assessing profitability, the overall conclusion excluding any fair value adjustment for derivatives would be that profit margins have been reducing in the last three years.
Reflecting on trading conditions this year, the company reports that it expects to continue to expand while balancing profitability with competitiveness.
In terms of financial assurance, the assessment made by the company is that it does not expect to require any funding from the parent company or other sources in the foreseeable future.
In the event of an adverse exchange rate movement with the US dollar, an arrangement is in place to exercise a loan facility of up to $30m to provide collateral payments on derivative contracts.