Abbey Protection Share Discussion Threads

[masurenguy] 27/3/2012 07:28

Another solid year of growth. Trailing PER is currently 10.1 at yesterdays closing price and net cash of £17.6m constitutes 23% of the shareprice.

RNS Number : 1150A
Abbey Protection PLC
27 March 2012

Preliminary Results

Highlights

· 5% growth in pre-tax profits to £10.1m

· Total revenue up 4% to £36.2m

· 4% increase in EBITDA to £10.7m

· Claims ratio steady at 65.2% (2010: 62.6%)

· Cash and financial investment balances of £39.4m

· Shareholders' funds up 13% to £29.0m

· Total dividend for the year up 10% at 4.4p per share (2010: 4.0p)

· Outlook positive, with significant opportunities for specialist legal & tax services

Colin Davison, Chief Executive Officer, commented: "Against the prevailing economic conditions in the UK, our business model has once again proved resilient. We are pleased to announce another year of sustained revenue and profit growth, with a particularly robust performance from the group's principal trading divisions. We are aware of the continued challenges facing the group in 2012, but are confident that we are well positioned to expand our range of consultancy and specialist services and have the financial strength to take advantage of the opportunities afforded by the deregulation of the Legal Services Act."

Tony Shearer, Chairman, commented: "The group's disciplined underwriting approach and leading product and service offering continues to provide shareholders with long-term, sustainable growth throughout a challenging market environment. The second interim dividend which is payable on 28 March 2012 makes a total distribution in respect of 2011 of 4.4p a share, representing an increase of 10% over 2010."

[masurenguy] 16/3/2012 09:13

Results are due a week on Tuesday (March 27). It will be very interesting to see whether they have made progress on any potential legal services company acquisition. If not, then there is always the possibility of
a special dividend to return some of their surplus cash - currently circa £17.5m - to existing shareholders !

[the other kevin] 02/3/2012 08:20

Thanks for the xd reminder, M. I was concerned at the fall yesterday, but no more. Interesting Citywire read, which I had also missed. Thanks for that too. Must try to keep up!

[masurenguy] 22/2/2012 07:59

Second and final dividend of 2.5p making a total dividend of 4.4p for the year. Dividend increase of 10% and yield of 5.5% at the current shareprice. Ex-dividend date is March 2nd with payment on March 28th.

[masurenguy] 10/2/2012 12:15

You are correct grahamburn - my apologies, I was looking at the previous interim dividend announcement and have now amended the above post accordingly. Abbey have yet to announce the amount of the second dividend payment but they will do so prior to the XD date of Feb 29th.

[grahamburn] 10/2/2012 12:07

Where do you get the amount of the second interim dividend from? The RNS on 10 January only gave the TIMETABLE for the payment, NOT the amount.

[masurenguy] 10/2/2012 11:39

Just a reminder that the shares will go XD for the second interim dividend on Feb 29th and the final results are due before the end of next month.

[masurenguy] 03/2/2012 13:45

Looks like there could be a strong ramp up in Abbey insurance premiums during 2012 !
Full year results for 2011 are due out toward the end of next month.

A rise in PCG member claims
02 February 2012

What a start to 2012! Our claims' advisers, Abbey Tax Protection, have reported a 40% increase in tax investigations insurance claims of all types across their client base when compared with January 2011 with the number of claims in January 2012 reaching 100% up on January two years ago. But this is not a flash in the pan, because claims for the whole of 2011 were 37% higher than in 2010.

[jbtrend2] 10/1/2012 21:20

Abbey Protection sees 'constrained growth'
10/01/2012
GROWTH COMPANY

[masurenguy] 11/12/2011 10:41

Could Admiral, or some other large insurer, become a potential predator for ABB at some future point ?

Admiral eyes legal sector to replace referral fee profits

The Cardiff-based group is exploring plans either to set up its own personal injury law firm where it could potentially direct customers with claims or become a majority backer in one, following the implementation of the Legal Services Act in October. This so-called "Tesco law" has widened the provision of legal services to new sources including retailers, banks, insurers and outsourcing companies. The plans are believed to be at an early stage and are one of several being considered.

However, the news is likely to raise eyebrows across the City with Admiral's shares having fallen heavily in recent months. Industry insiders have warned the company must move quickly to replace the loss of income from the fees paid by lawyers to insurers for information of potential personal injury claimants. The Ministry of Justice has said it would abolish the controversial payments in order to stem the rising tide of personal injury claims, which have been blamed for a 40% increase in the cost of car insurance over the past year. According to Admiral about 5.6% of its overall profits come from these fees. The group posted pre-tax profits of £160.6m during the first half of the year.

Admiral declined to comment yesterday. However, speaking after the referral fee ban was announced in September, the company said: "Admiral does not sell customer data; if one of our policyholders has a non-fault accident, suffers a bodily injury and they require assistance, we will put them in touch with a personal injury lawyer." Admiral would not be the first insurer to push into the legal industry. Axa owns Knight Legal Services, a defendant law firm. It has always denied it refers its customers to Knight Legal Services and says it has no plans to start doing so.

[masurenguy] 28/11/2011 13:05

Very interesting to see that ABB is the largest individual stock holding (@13%) within TMF Deputy Editors (Maynard Paton) own personal portfolio. It is designated as his third largest investment behind an All Share Tracker (34%) & Cash (26%). His portfolio currently contains 8 stocks with Abbey Protection representing almost one third of his investment in individual shares.

3. Abbey Protection (LSE: ABB) 13%
Abbey Protection makes up a huge chunk of Maynard's investments. He likes the legal and professional fees insurance provider's conservative board, decent track record, solid balance sheet & modest valuation. Maynard sees Abbey as benefitting from niche selling policies that cover tax investigations. At 81p, the brokers' expectations for 2012 place Abbey's shares on a forward P/E of 9.6, with a yield of almost 6%.

[masurenguy] 22/11/2011 15:15

From the results RNS dated 24th March 2011: "Although over 50% of the shareholding in Abbey Protection plc lies with senior management, we are committed to expanding the shareholder base."

Yesterdays announcement of the appointment of Shore Capital as their Nomad looks like a further move toward their objective of expanding the shareholder base.

[masurenguy] 17/10/2011 09:51

Some good insight on the benefits of the government tax crack down for Abbey Protection !

Small-Cap Set To Profit From £8bn Tax Crackdown

This growing company will get an added boost from two new tax initiatives.

In the government's quest to reduce the national deficit, public spending cuts usually grab the headlines. But keeping taxes rolling in is also important. One small firm is set to profit from two initiatives designed to boost the government's tax take.

Taxing matters

Around 8% of tax, or £35bn, went uncollected in the last financial year. The two government initiatives are targeting £8bn of this so-called 'tax gap'. HM Revenue and Customs (HMRC) has been rolling out the Business Record Checks (BRC) scheme, which investigates the adequacy of business record-keeping by small and medium-sized enterprises (SMEs). It estimates 40% of the country's five million SMEs 'fail to take reasonable care' of their accounts, leading to a £4bn tax underpayment. HMRC plans to complete 12,000 BRCs this financial year, with 20,000 provisionally planned for 2012/13. Meanwhile, more than 2,000 tax inspectors are being recruited to crackdown on tax evasion, which costs the government another £4bn a year. They'll be investigating the tax affairs of the UK's richest 350,000 residents, who each have wealth in excess of £2.5m.

UK leader

The government's tax crackdown is good news for insurance firm Abbey Protection (LSE: ABB). One of Abbey's two core divisions supplies specialised insurance policies that cover the cost of professional fees arising from tax investigations. In fact, Abbey is the UK's leading supplier of such insurance to ... wait for it, SMEs. It also services the needs of -- go on, take a wild guess ... that's right, high net worth individuals. Abbey's chief executive, Colin Davison, describes increasing tax investigations as "a very good thing" for his business. HMRC's well-publicised tax drives and increasing staff numbers are sure to raise interest in Abbey's products from SMEs and wealthy individuals -- as well as raising insurance premiums.

Growth and income

Abbey isn't a firm that actually needs any extra boost. Founded in 1992, it's grown its revenue, profit and dividend every year since floating on the Alternative Investment Market (AIM) in 2007. Abbey may be a small cap -- it's valued at £80m -- but it's a real proper business, unlike some of the dubious enterprises listed on AIM. The directors own a significant number of shares, closely aligning their interests with other shareholders. The business is run conservatively, and the balance sheet is bursting with cash. The shares are trading at 81p, around 10 times current-year forecast earnings, while the expected full-year dividend gives a yield of over 5%. Abbey looks a great little growth and income stock to me. I expect the taxman will want more tax from this company -- but only because of growing profits!

[masurenguy] 04/10/2011 16:20

Still rock solid - one of the very few stocks that hasn't fallen in price over the past 8 weeks !

[masurenguy] 26/9/2011 15:32

LOL - the resident ADVFN nutter has now even found his way here too. Yep, this stock has really been hyped - 90 posts in 30 months - that's less posts than restassured often makes in a couple of days !

[restassured] 26/9/2011 15:28

Another hyped up stock

[masurenguy] 26/9/2011 09:02

GCI currently rates Abbey Protection as a solid Hold following the publication of the H1 results at the begining of this month. To date the ABB shareprice has remained virtually unchanged since the current market volatility commenced at the begining of August.

Abbey Protection: HOLD
Robert Tyerman

Legal and professional fees insurance and consultancy specialist Abbey Protection (ABB) is pondering future legal acquisitions after upping interim profits 6.5% to £5m pre-tax. The City of London-based company, which caters primarily for small to medium sized concerns, lifted revenues 5.7% to £18.3m in the six months to June and, having pushed up earnings 10% to 3.79p a share, is increasing the interim dividend 12% to 1.9p a share.

Abbey, steered by chief executive officer Colin Davison, says its core legal protection and services divisions hoisted first-half pre-tax profits some 25% to £1.2m, helped by affinity group business initiated in the second half of 2010. Net premiums at the company's Ibex reinsurance arm rose 9% to £7.4m, but a higher claims ratio kept its profit contribution static at £2.1m. Accountax, Abbey's tax and accountancy consulting arm, saw an 18% fall to £900,000 in the first half year, compared with the previous first half, which had been boosted by successful no win/no fee cases. 'After the event' insurance revenues eased slightly to £600,000 and the company says this business will taper away altogether after impending legal changes preventing succesful claimants from recovering fees and premiums from defendants.

The big change Davison and his colleagues at Abbey are waiting for is de-regulation of legal services, allowing outsiders to take over law firms. Implementation of the changes has been deferred from October to January, but Abbey, which ended June with £17.1m cash and wants to increase the non-insurance part of its business from a third to a half in three years, is building up its in-house legal team and scouting for potential acquisitions among smaller specialist law firms. Analysts see Abbey increasing pre-tax profits by a modest £500,000 to £10m for the full year, though a move in the legal field could accelerate progress. First recommended by Growth Company Investor at 61.5p in 2009, the company's tightly-held shares now trade at 81.25p, where they sport an encouraging prospective yield of 5.4%. Hold on.

[masurenguy] 05/9/2011 15:41

ED is projecting this years pretax at £10.2m and PAT at £7.67m with an eps of 7.67p and a 4.5p dividend, producing a yield of 5.5%. If ABB achieve that result, it would represent a 7% in pretax and a 10% increase in eps (presumably due to a marginal lower tax charge). With a net cash balance (after claim provisions) of circa £18m, the EV is currently £63.5m and the prospective P/EV ratio is therefore only 8.3

Quite a feasible projection in my view but if they were to achieve eps of 7.67p then I think that the dividend would be 4.4p which would represent a yield of 5.4% and a 10% increase over last year.

[hannahc] 05/9/2011 14:58

Please click on the link below to access our latest research note on Abbey Protection:



Kind Regards,

The Equity Development Team

[hannahc] 05/9/2011 14:58

Please click on the link below to access our latest research note on Abbey Protection:



Kind Regards,

The Equity Development Team

[masurenguy] 01/9/2011 07:14

Another good set of results !

RNS Number : 3642N
Abbey Protection PLC
01 September 2011

Results for the six months ended 30 June 2011

Highlights

· 6% increase in pre-tax profits to £5.0m

· Revenue in principal trading divisions up 9% to £16.5m

· Earnings per share up 10% to 3.79p

· Steady and profitable underwriting results with a claims ratio of 65.2%

· Shareholders' funds up to £26.9m

· 12% increase in half year dividend to 1.9p (H1 2010: 1.7p)

· Outlook encouraging, with ongoing demand for services and continued opportunities for both legal and specialist tax services

Colin Davison, Chief Executive Officer, commented: "The results reflect the progress the Group has made during the first six months of the year, against an increasingly volatile economic backdrop. The Group has produced another period of sustained growth in revenues and profits, driven by a continued demand for our core services and products, together with an increasing appetite for our specialist consultancy services. The Group and its resilient business models are well positioned to overcome the challenges ahead and we're confident that we can take advantage of the many opportunities arising from the rapidly evolving legal and specialist tax services market."

Financial Highlights

6 months ended 30 June 2011
6 months ended 30 June 2010
Year ended 31 December 2010

Revenue
£18.3m
£17.3m
£34.9m

EBITDA
£5.4m
£5.1m
£10.2m

Profit before tax
£5.0m
£4.7m
£9.6m

Profit after tax
£3.8m
£3.4m
£6.9m

Basic earnings per share
3.79p
3.44p
6.97p

Dividend Per Share
1.9p
1.7p
4.0p

Summary

A 6% increase in pre tax profits to £5.0m (2010: £4.7m) in challenging trading conditions is a very pleasing result and with revenues up 6% too at £18.3m (2010: £17.3m), we are delighted that there remains strong demand for our services. After tax, profits grew by 10% to £3.8m (2010: £3.4m) and earnings per share also grew 10% to 3.8 pence per ordinary share (2010: 3.4 pence per ordinary share) reflecting the lower tax rate regime that the UK government has begun to implement. The principal trading divisions (Abbey Legal, Abbey Tax and Ibex) demonstrated again the resilience of our core business models, with revenues increasing by 9% to £16.5m (2010: £15.1m) and profits up 12% to £4.9m (2010: £4.4m).

Current trading - principal trading divisions

Abbey Legal, comprising Abbey Legal Protection and Abbey Legal Services, produced a strong performance in the period with profit before tax up over a quarter at £1.2m, in part buoyed by revenues emanating from affinity schemes business incepting in the latter half of 2010. Call volumes in our Legal Services Centre have stabilised and fee income from employment related services increased by 12% in the first half of the year to £1.2m. Abbey Tax Protection ("ATP") delivered excellent results with profit before tax for the period increasing by 19% to £1.6m. Sales in our core fee protection product remained strong, notwithstanding continuing price competition. Sales from our various consultancy products including tax planning insurance, capital allowances and tax advisory increased by 27.5% to £1.7m. Gross premiums at Ibex, our reinsurance subsidiary for ALP and ATP were higher in 2010 due to a change in the way that premiums were ceded to the Company. Net earned premiums increased by 9% to £7.4m in the period. A slight increase in the claims ratio to 65.2% (2010: 63.3%), coupled with continued low investment yields, meant that the overall profit contribution from Ibex for the first six months of 2011 was static at £2.1m.

Current trading - other trading divisions

Although revenue at Accountax was down by £0.2m to £0.9m for the period, this was largely a factor of a reduced number of successful no win/no fee cases in the consultancy division which boosted income in 2010. However, the underlying consultancy business is much stronger with an increased number of retainer customers which has reduced the reliance on one off assignments. The marketing side of Accountax suffered in the first part of the year due to pressures in the accountancy market, but pleasingly, sales are beginning to revive and we expect a better second half of the year. Revenue within the After the Event ("ATE") division fell marginally to £0.6m and profit before tax was also slightly down at £0.1m. The division faces its own challenges, particularly with the Law Society's Accident Line insurance product suffering wholesale reductions in road traffic accident premiums and the forthcoming implementation of the Jackson reforms. On the positive side, Commercial After the Event insurance sales continued to progress well, with gross premiums written for insurers reaching £0.8m for the period. A good performance from Abbey HR ("AHR") increased divisional revenue by 22% in the period to £0.3m, with a break even profit contribution.

Cash flow and investment income

Whilst cash flow remained strong for the first half of the year, operational cash flow was some £1.1m lower than the comparative period. The principal cause was an increase in paid claims of some £0.8m at the insurance subsidiary, Ibex, reflecting the settlement of a large claim in the period, account growth and the slight worsening of the claims ratio reported above. We remain committed to paying trade suppliers within contractual terms whilst providing flexible terms for our customers where possible and appropriate. Although investment returns remain stubbornly low, we continue to follow our low risk investment strategy of investing in cash, short term deposits and certificates of deposit.

Dividend

The board is delighted to approve an increase of 12% in the interim dividend to 1.9p per share (2010: 1.7p per share), payable on 7 October 2011 to all shareholders on the register at 9 September 2011.

Outlook

Although there remain challenges ahead, we are confident of the resilience of our business models - and with our ongoing commitment to the highest of service standards, we believe we are well placed to maintain our pre-eminent position as the market leader in the supply of legal expenses and professional fees insurance to UK SMEs. The Jackson reforms will undoubtedly impact the ATE market, but our exposure (via the Law Society's Accident Line scheme) is significantly less than a number of our competitors and we are already well advanced in our plans to replace this income through commercial ATE sales and other ancillary income streams. Whilst the organic growth potential remains in our core legal and professional fees insurance markets, we are well positioned to take advantage of the opportunities in specialist consultancy services in the tax market and the deregulation of legal services (delayed until the end of 2011).

[masurenguy] 26/8/2011 14:41

Couple of 30,000 Buys today at the full offer of 80.5p shows some confidence in the midst of continued market volatility and ahead of the interim results that are due for publication next Thursday.

[masurenguy] 04/8/2011 11:45

Over the past 4 weeks the FTSE has gone down by 11% and the AIM All Share (AXX) is down 12%.
However so far ABB has remained reassuringly unchanged throughout all of the market turmoil !

[masurenguy] 21/7/2011 15:54

H1 results to the end of June will be published on Thursday September 1st.