The decision to base its headquarters in Bermuda and use Malta as its European hub has worked out well for insurance services specialist Randall & Quilter (RQIH). While it couldn't have predicted there would be a referendum on the UK's EU membership when it decided to move to the Caribbean in 2013, chairman and chief executive Ken Randall said it "avoids the potential uncertainty faced by UK-based insurance groups". He added the group might eventually consolidate its UK legacy portfolio, while retaining its Maltese operation for dealings linked to the European Economic Area.
Operationally it was a strong first half, especially given returns are second-half weighted in terms of income. The insurance division saw operating profits hit £8.9m, compared with a £3.3m loss for the equivalent period in 2015, helped by the £6.2m in net reserve releases (money it had set aside for claims which have since been dropped or reduced in value) from its run-off portfolios, which are closed books of insurance. Insurance services revenue was down, but profits doubled thanks partly to headcount reduction. And although losses doubled at the underwriting management business, the Accredited purchase in the US has expanded nationwide reach across the pond. All the bad debts linked to agent contracts for the US entity have now been fully accounted for - presumably that means no new provisions in the second half.
Analysts at Numis expect net tangible assets of 86p for the year to December 2016, up from 83.6p in 2015.
| RANDALL & QUILTER (RQIH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 112p | MARKET VALUE: | £81m | |
| TOUCH: | 109-114 | 12-MONTH HIGH: | 112p | LOW: 76p |
| DIVIDEND YIELD: | 7.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 121p* | NET CASH: | £52.2m† | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 13.6 | -4.5 | -4.7 | 3.4 |
| 2016 | 21.1 | 1.2 | 1.5 | 3.4 |
| % change | +55 | - | - | |
Ex-div:** Payment: 3 Nov *Includes intangible assets of £28.2m, or 39.1p a share **Shareholder distribution is via issue of W shares on 6 October 2016 prior to repurchase †Includes £4.9m restricted cash | ||||
