Insurance broker Brightside, which only floated in June 2008, reported another robust earnings hike with these full-year figures – helping the share to rise 7 per cent on the day the figures were released. That decent growth profile suggests more upside ahead, too – especially given the relatively low share price rating.
As a broker, Brightside carries no underwriting risk – that's for the insurers on its underwriting panel, which includes Aviva, Ageas and Axa, with other underwriters to join soon. Brightside has also been successful in overcoming underwriters' resistance to online-generated business – due to the high rate of fraudulent applications – by applying its own strict fraud screening and policy validation techniques. That's important given that over half of all business is now generated online. And, while cancellation rates were running at over 20 per cent, reflecting that fraud crackdown, policy sales still rose 30.7 per cent in the period to 444,189. Brightside also acquired ESystems, an online platform through which its products are sold and administered, as well as software specialist eDevelopments.
Edison Investment Research expects adjusted pre-tax profits of £19.4m, giving EPS of 2.99p (£16.5m and 2.51p in 2011).
| BRIGHTSIDE (BRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 20p | MARKET VALUE: | £91m | |
| TOUCH: | 19-20p | 12-MONTH HIGH: | 35p | LOW: 16p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 15p* | NET DEBT: | 23% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 44.7 | 6.70 | 1.41 | nil |
| 2010 | 66.2 | 10.1 | 1.48 | nil |
| 2011 | 80.4 | 13.6 | 2.05 | nil |
| % change | +21 | +35 | +39 | - |
Ex-div:- Payment:- *Includes intangible assets of £65m, or 14p a share | ||||
