Novae (NVA) delivered a polished performance in 2015, which was all the more impressive given the downward pressure on premiums and volatile investment markets. Underwriting profits rose to a record level, while at constant exchange rates gross premiums written rose to the highest level ever.
In the property division, which accounts for nearly half the group's business, written premiums grew by 39.8 per cent to £363m, driven by a strong performance in US property, while in the casualty division gross premiums written grew by 20 per cent, with significant growth in policies insuring against business interruption, cyber terrorism and identity theft. Preserving margins at the expense of volume meant that the claims ratio improved from 49 per cent to 48 per cent, the best since 2006.
The only real blot on the landscape was the investment return, where a move to derisk the investment portfolio led to a drop in net investment income from £14.3m to £6.8m. That means that the return on assets invested was halved to just 0.6 per cent.
Analysts at Canaccord Genuity are forecasting net tangible assets of 595p at the end of December 2016, from 551p a year earlier.
| NOVAE (NVA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 818p | MARKET VALUE: | £526m | |
| TOUCH: | 813-818p | 12-MONTH HIGH: | 910p | LOW: 598p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 544p | COMBINED RATIO: | 90.8% | |
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Investment income (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 606 | -6.3 | 21.0 | 18 |
| 2012 | 612 | 39.9 | 25.8 | 18 |
| 2013 | 590 | 42.8 | 11.1 | 22.5* |
| 2014 | 639 | 62.6 | 14.3 | 24.8* |
| 2015 | 787 | 55.4 | 6.8 | 27.3* |
| % change | +23 | -12 | -52 | +10 |
Ex-div: 21 Apr Payment: 20 May *Excludes 20p special dividend in 2013, 20p in 2014 and 22.5p in 2015 Capacity owned: 100 per cent | ||||
