The big surprise accompanying a workmanlike performance from Amlin (AML) was a special dividend worth 15p a share. Together with the regular dividend, this equates to a mouth-watering yield of 8.3 per cent.
Like the other Lloyd's insurers, Amlin last year faced increased competition from an influx of fresh capital from insurance-linked securities. From a minimal presence five years ago, these funds now provide around 11 per cent of global catastrophe reinsurance capacity. This inevitably put downward pressure on premiums as less disciplined underwriters fought to maintain their market share.
Amlin has warned that the business is unlikely to see any significant growth in the short term. Pricing pressure saw renewal rates fall 3.6 per cent on average, with reinsurance lines experiencing a 7 per cent decline, partly offset by gains in the UK commercial motor business.
Profits were also dented by reserve releases, which at £89.6m were £43.9m lower than last year. And while an investment return of 2.7 per cent delivered £118.5m, this was down from £160.4m in 2013, when the return was 3.6 per cent.
For 2015, the analysts at Peel Hunt are forecasting adjusted EPS of 44.1p and year-end net tangible assets per share of 325.5p.
| AMLIN (AML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 509p | MARKET VALUE: | £2.55bn | |
| TOUCH: | 508-509p | 12-MONTH HIGH: | 531p | LOW: 418p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 356p | COMBINED RATIO: | 89% | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 2.00 | 259 | 175 | 23 |
| 2011 | 2.22 | -194 | 41 | 23 |
| 2012 | 2.32 | 264 | 149 | 24 |
| 2013 | 2.44 | 326 | 143 | 26 |
| 2014 | 2.48 | 259 | 101 | 27* |
| % change | +1 | -21 | -29 | +4 |
Ex-div: 16 Apr Payment: 28 May *Excludes special dividend of 15p a share. Capacity owned 100 per cent | ||||
