Randall & Quilter still growing

Restructuring of the US insurance services division continued to reduce the cost base, and while there was some delay in generating certain new business income, the previous half year's operating loss of £0.2m was turned into a profit of £3.7m - thanks to an exceptional level of credit write-backs. Total operating profits from insurance services rose from £2.78m to £6.26m.

However, profits on the insurance investments operation slid from £6.5m to £0.8m mainly because a fall in the investment return, down from 2.7 per cent to 1.2 per cent, cut investment income from £5.6m to £2.3m. It's worth noting, though, that the £1m loss in June on the portfolio was recouped last month as markets recovered and the annualised investment yield was 2.75 per cent at the period end, which offers scope for better second-half returns. In addition, profits would have been £1.5m higher but for accounting rules, which required a £1.5m gain on Alma Insurance (acquired in December) to be booked as a prior year adjustment instead of a first-half profit.

Broker Numis Securities expects full-year pre-tax profits of £10m and EPS of 14.2p (from £11.9m and 22.1p in 2012).