After 2014's bumper payout it was always unlikely that Lancashire Holdings (LRE) would be able to replicate that level of special dividend in 2015. The Lloyd's insurer's performance has been dogged by overcapacity in reinsurance and speciality underwriting markets. But it could be argued that the year ended on a cautiously optimistic note with a fourth quarter combined ratio - that is, claims to income - of 67.1 per cent, set against 72.1 per cent for the year as a whole. Profits for the quarter were 19 per cent in advance of the consensus and it's also worth noting that the fall-away in gross premiums wasn't so pronounced in the fourth quarter relative to the full-year decline.
Premium rates were flat due to the absence of major losses through 2015. Although there were some mid-size claims during the year, losses associated with ordinary reinsurance operations were relatively low.
It was also announced that Martin Thomas, Lancashire's chairman since 2007, will step down at May's AGM. He will be replaced by non-executive Peter Clarke, the former chief executive of Man Group.
Analysts at Numis are forecasting adjusted EPS of 55p a share for 2016, falling to 49.3p in 2017.
| LANCASHIRE HOLDINGS (LRE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 636p | MARKET VALUE: | £1.27bn | |
| TOUCH: | 636-638p | 12-MONTH HIGH: | 708p | LOW: 552p |
| DIVIDEND YIELD*: | 1.7% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 612¢ | COMBINED RATIO: | 72% | |
| Year to 31 Dec | Gross premiums ($m) | Pre-tax profit ($m) | Investment income (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 632 | 219 | 43.2 | 15 |
| 2012 | 724 | 237 | 32.5 | 15 |
| 2013 | 680 | 218 | 25.4 | 15 |
| 2014 | 908 | 227 | 28.6 | 15 |
| 2015 | 641 | 172 | 29.8 | 15 |
| % change | -29 | -24 | +4 | - |
Ex-div: 25 Feb Payment: 23 Mar £1=$1.43 *Excludes special dividend of 95¢ in 2015 (170¢ in 2014) | ||||
