Hastings (HSTG) has come a long way since last October when the general insurer floated on the London Stock Exchange. In the six months to June this year gross written premiums were up by more than a quarter, and adjusted operating profits jumped a fifth to £70.8m.
Much of this explosive growth has come through increased penetration into price comparison websites, which account for 90 per cent of all new business. Customer numbers reached 2.2m from 1.9m a year earlier, and Hastings has set a target to achieve 2.5m customers by the end of 2017. Private car insurance made up the biggest part of the business, and the value of written premiums here rose by 27 per cent to £343.3m, assisted by higher premium rates.
Crucially, at 74 per cent, the loss ratio (of claims to premium income) remained below the targeted range of 75-79 per cent. And while claims inflation rose by 5 per cent, this was more than offset by a rise in average earned premiums of 11 per cent.
Finances have also improved, notably interest costs, with a refinancing last year cutting interest payments from £35.8m to £5.4m. Most of the savings came from the redemption of £417m of senior secured notes.
Prior to these numbers JP Morgan Cazenove were forecasting adjusted earnings per share of 16.1p for the year to December 2016, rising to 18.2p in 2017.
| HASTINGS (HSTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 213.4p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 212.5-213.4p | 12-MONTH HIGH: | 224p | LOW: 145p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 82p* | LOSS RATIO: | 74% | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 283 | 9.3 | 3.0 | nil |
| 2016 | 361 | 51.4 | 2.9 | 3.3 |
| % change | +28 | +453 | -3 | - |
Ex-div: 6 Oct Payment: 4 Nov *Includes intangible assets of £570m, or 87p a share | ||||
