Brightside (BRT) delivered its tenth successive year of growth in 2012 - having floated on the Alternative Investment Market (Aim) just four years ago. And the specialist insurance broker has also rewarded shareholders with a maiden final dividend.
The core business model involves providing underwriters with a reliable source of business centred primarily on motor vehicle insurance. The group has also developed a reputation for providing a quality service by using its own screening process to eliminate fraudulent applications. Total policy sales last year rose by 4.8 per cent to 465,726, of which annual policy sales rose 12 per cent to 400,210. Brightside also provides premium finance to allow customers to pay premiums spread out over the year, and the number of loans processed rose by 23.9 per cent to 269,603.
Chief executive Martyn Holman conceded that a softer premium environment this year will result in lower broker commissions. But he also pointed out that, when premiums fall, customers tend to shop around less for the cheapest quotation, while new business customers are more easily converted from a quotation to a sale. Moreover, Brightside has added substantial underwriting capacity to allow for greater volumes as the market softens.
Broker Cenkos expects adjusted pre-tax profit of £20.7m for 2013, giving EPS of 3.4p (2012: £18.6m/3.1p).
| BRIGHTSIDE (BRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25p | MARKET VALUE: | £114m | |
| TOUCH: | 24.5-25.5p | 12-MONTH HIGH: | 26p | LOW: 18.5p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 18p* | NET DEBT: | 13% | |
| 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 |
| 2012 | 91.2 | 17.5 | 2.78 | 0.50 |
| % change | +13 | +29 | +36 | - |
Ex-div: tba Payment: tba *Includes intangible assets of £67m, or 15p a share | ||||
