Last year's performance at insurance services specialist Randall & Quilter (RQIH) was spoiled by weakness at its US reinsurance business. Profits there were hit by significant legal expenses associated with a large life settlement claim in the former Syndicate 102, and a need to increase provisions against asbestos claims.
And while revenue grew strongly in the insurance investments division, last year's £10.3m operating profit was turned into a loss of £4.4m, partly as a result of lower claims releases from previous years, and a fall in investment income. The group's own Syndicate 1991 continued to expand, albeit at a slow pace, as R&Q maintained underwriting discipline in the face of softer premiums.
By contrast, the UK side of the business performed strongly, boosted by a solid performance from run-off services, where the company buys and runs down insurance assets. Underwriting management, where the company earns fees for underwriting business at Lloyd's on behalf of third parties, turned the previous year's £0.2m operating loss into a profit of £2.8m. However, these numbers were flattered by £2.5m of positive goodwill on the acquisition of US broker Accredited.
Analysts at Shore Capital downgraded 2015 full-year forecasts from £11.9m to £11m, and expect net tangible assets of around 95p a share.
| RANDALL & QUILTER (RQIH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 122.5p | MARKET VALUE: | £88m | |
| TOUCH: | 120-125p | 12-MONTH HIGH: | 158p | LOW: 102p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 121p* | |||
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.0 | 7.5 | 12.2 | 7.35 |
| 2011 | 2.3 | -4.7 | -0.9 | 8.1 |
| 2012 | 6.2 | 16.8 | 22.4 | 8.4 |
| 2013 | 9.1 | 11.3 | 11.9 | 8.4 |
| 2014 | 24.8 | -2.3 | -6.3 | 8.4 |
| % change | +171 | - | - | |
Ex-div: 27 Jul Payment: 10 Aug *Includes intangible assets of £23m, or 32p a share | ||||
