Direct Line Insurance Share Discussion Threads

[eaaxs06] 20/2/2015 14:19

The results, due early March, will be very interesting.

Not least, for news of the European division sale, which (hopefully) will lead to a tasty special dividend.

I suspect there are a few income funds steadily accumulating more shares, before that announcement on March 3rd. Lets hope it continues.

[deanowls] 18/2/2015 13:02

You can say that again.

[barry276] 18/2/2015 09:17

DLG slowly grinding 2 £4.00.solid income stock.

[barry276] 18/2/2015 09:16

DLG slowly grinding 2 £4.00.solid income stock.

[barry276] 18/2/2015 09:16

DLG slowly grinding 2 £4.00.solid income stock.

[stemis] 14/10/2014 11:09

I can't see why DLG should be trading at such a high multiple of tNAV. Isn't that out of kilter with other insurance companies? Excluding special dividends, yield isn't that special either, surely?

[shauney2] 26/9/2014 15:11

Time will tell how much shareholders will get but if you add next years dividends with a minimum 8p from the sale proceeds that equates to a 7% yield at todays price.

Tempus in the Times is positive
The decision of insurer Direct Line to sell its European businesses was expected, but not so the price it fetched for them. It came in ahead of all expectations. The company will raise £430.5m in proceeds versus the between £225m and £300m which different analysts had been anticipating. Once heavy one-off claims in Germany are excluded, its operations in both Italy and Germany are being hived off for 37 times earnings to Spanish rival Mapfre. Given that at least one analyst described them as "strategically challenged", this comes as a pleasant surprise. Just as important, Direct Line is now left as a purely UK-focused outfit comitted to returning excess capital to shareholders. Given the company's high capital coverage ratio, the entire proceeds from the sale may be funnelled back to investors. There is also scope for cost savings above and beyond what was expected at the time of the float. "Direct Line shares offer a yield of 4.4% on their ordinary dividends alone. This seems all the reason investors should need to hold them," says The Times's Tempus.

[shauney2] 25/9/2014 09:37

Shore Capital reckon about 8p per share.

From todays Telegraph market report

Ben Martin: Here's Shore Capital on the disposal:

This is a good outcome for shareholders in our view, with the International units strategically challenged and operating in tough markets. The return of capital, assuming a 25% tax charge could equate to c8p per share (yielding c2.7% at current prices). As ever, we applaud such returns, demonstrating a commendable focus on capital discipline by management and we expect the market to respond favourably to this news this morning.

Ben Martin: But the broker still doesn't recommend buying....

However, trading at c1.9x our 2014F NTAV of 156p (upgraded by said 8p) reducing to c1.8x for 2015F (vs 168p) and c12x our 2014F EPS (of c25p) we view the stock rating as much too high given the still relatively low forecast RoEs (c12%) from the group and the considerable uncertainty surrounding DLG's core UK motor and household markets. We reiterate our SELL recommendation on Direct Line.

[nicksoj] 25/9/2014 09:01

I love you Direct Line :)

[shauney2] 25/9/2014 08:42

Only had a quick glance first thing.So even better eaaxs.
Could be 25p.Time will tell.

Nice little update too.
"Meanwhile, our UK personal and commercial lines businesses are continuing to implement the many initiatives we have under way to deliver our strategic priorities."

The Group will release its third quarter 2014 Interim Management Statement on 31 October 2014.

[eaaxs06] 25/9/2014 08:35

The press release talks of 'all of the net proceeds will be returned to shareholders' shauney2, so could be nearer the sale figure of £430m, than the actually gain of £160m?

Either way, its more good news and should help the share price move further forward.

In all my years of share trading, I've never had a share that pay's so much (and so many) dividends.

[clarkrob] 25/9/2014 08:23

3% up so far this morning. This share is certainly going against overall market conditions.

[shauney2] 25/9/2014 07:59

Sale of International operations and return of capital

25 September 2014

Direct Line Insurance Group plc ("Direct Line Group" or the "Group") announces that it has reached a binding agreement with Mapfre, S.A. ("Mapfre") for the sale of the Group's International division, which comprises its Italian and German operations. The sale concludes the strategic review initiated earlier in 2014.

Total cash sale proceeds of EUR550.0 million (GBP430.5(1) million) represent 1.9 times 2013 net asset value(2) and 36.9 times 2013 normalised earnings(3) . The Group is expecting to recognise a pre-tax gain on disposal of approximately GBP160 million. The sale agreement includes certain transitional arrangements including a licence to use the Direct Line brand in Italy and Germany for three years. The transaction is conditional on the approvals of relevant regulatory authorities which are expected to take approximately three to four months.


So about 10p per share.

[tiptv1] 04/9/2014 08:56

Reasons why to BUY and HOLD Direct Line (DLG), - See more at:

[bill hunt] 03/9/2014 18:42

Headlines on main advfn page

[morti1] 03/9/2014 18:03

Has direct line been promoted to the FTSE 100. Where can you confirm which companies have been promoted. Does anyone know?

[eaaxs06] 01/9/2014 13:45

..... or 43p since 28th Feb 2013.

Not a bad return for the 175p IPO, doubled money in under 2 years.

[shauney2] 30/8/2014 14:27

From todays Daily Mail market report.

With promotion to blue chip status expected to be confirmed next week, Churchill insurance firm Direct Line got an additional lift from a broker upgrade on expectations that shareholders will continue to be rewarded by special dividends.

Nomura upped its rating for Direct Line to buy from neutral in a sector review, naming it as its preferred stock to gain exposure to the special dividends currently being offered by UK non-life insurers.

The broker said it also expects Direct Line’s exposure to an upturn in UK motor insurance premium rates to be a catalyst to potential further outperformance by the stock, albeit with the shares having already booked the strongest performance among UK insurers in the year to date.

In terms of sector valuation, Nomura said non-life peer RSA Insurance screens relatively better, however its preference is with Direct Line owing to its exposure to UK motor rates.

The broker pointed that while blue-chip Admiral is the most exposed insurer to a potential turn in UK motor rates, it believes that in the near term, a lower reserve release and investment in its US operations will be a headwind to its earnings.


Nomura downgraded its rating for Admiral to neutral, and its shares declined 4p to 1335p. Direct Line shares were up 9.7p to 298.9p helping fuel expectations that the insurer, which was spun out of Royal Bank of Scotland in October 2012, is on course to win its place in the FTSE 100 when the latest quarterly index reshuffle takes place on September 3.


Direct Line could enter the blue chip index at the expense of either drink can manufacturer Rexam, up 1p to 507p, or housebuilder Barratt Developments, down 1.5p to 369.9p.

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DLG have declared total of 35p in dividends since FEB 2013.

[eaaxs06] 29/8/2014 14:52

Good spot, shauney, an upgrade from 242p to 344p.

Upgrades/downgrades move shares far more that re-iterations.

[shauney2] 29/8/2014 14:47

Don't know what took them so long.

Nomura have upgraded with a target price of 344p

[nicksoj] 29/8/2014 10:29

This baby is flying. Happiest of days.Hopefully one day it'll take on the market cap might of AV. DLG has all the ammunition at its disposal to be a UKX safe haven for many many many years.Today the day is a good day to be in the day today...

[eaaxs06] 29/8/2014 09:27

It certainly hasn't taken long to recover from yesterdays' profit taking.

I'm guessing a few fund managers are thinking ahead, so hopefully the share price will be healthy next week as well.

[bigmike100] 22/8/2014 22:53

I agree with that eaax we have been above the auto entry position for some time now.

[eaaxs06] 22/8/2014 10:36

I'm not sure why any broker covering the stock would issue a target significantly below the current price, then issue a 'hold' recommendation?

As for the FTSE100, any share placed 90th or below gets automatic entry into the index.

DLG is currently 83rd in the list, so it's looking good so far.

[nigelmoat] 15/8/2014 15:14

Berenberg today raises target price for Direct Line Group from 254p to 261p retaining a hold recommendation.