Insurance services group Randall & Quilter delivered a sharp improvement in first-half profits - driven by improved performances at all four of its operating units. Add that to the hefty dividend yield and the shares retain their attractions.
Much of the improvement came in the insurance investments division, where operating profit doubled to £6.47m - reflecting a strong contribution from the two managed run-off syndicates at Lloyd's. Moreover, the £208m investment portfolio - most of which is invested in asset-backed securities and bonds - delivered a reasonable 2.7 per cent return.
Operating profits from insurance services, comprising portfolio management fees and broker services, rose 18.5 per cent to £2.3m - despite further restructuring charges and bonus payments. The captives business, where the group manages third-party insurance schemes, pushed operating profits up from £93,000 to £497,000, too. However, strong fee income in the underwriting division was offset by closure costs relating to the Canadian management services operation, as well as Solvency II compliance costs. Even so, operating losses here shrank from £1.53m to £979,000.
Numis Securities forecasts full-year pre-tax profit of £9.2m and EPS of 13.4p (from a 0.9p loss per share in 2011).
RANDALL & QUILTER INVESTMENT HOLDINGS (RQIH) | ||||
---|---|---|---|---|
ORD PRICE: | 109p | MARKET VALUE: | £53.8m | |
TOUCH: | 107-111p | 12-MONTH HIGH: | 109p | LOW: 86p |
DIVIDEND YIELD: | 7.6% | PE RATIO: | 50 | |
NET ASSET VALUE: | 139p* |
Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2011 | 1.03 | 2.98 | 5.80 | 3.20 |
2012 | 3.48 | 8.55 | 8.90 | 3.40† |
% change | +238 | +187 | +53 | +6 |
Ex-div: 9 Oct Payment: 7 Nov *Includes intangible assets of £16m, or 32p a share †Payable through a share scheme |