Novae Share Discussion Threads

[18bt] 15/10/2010 18:08

Tipped in IC this morning. Kiss of death?

[asagi] 12/7/2010 23:13

interims due August 5th.

Asagi (long NVA)

[jancarl1] 07/3/2010 11:58

I say they look like an easy takeover target trading more than 30% below net tangible assets which basically tells me that the 60m excess cash are not valued at all at this point. A competitor could come in offering a sizeable premium to the current SP, say 400p, still get the business below NTA with no own equity injection required. Easy money. I hold and will add more.

[topvest] 06/3/2010 09:45

They are backed by Caledonia Investments; that also inspires confidence.

[18bt] 06/3/2010 09:32

Results were an awful lot better than expected after the first half. An I was only expecting about breakeven.

It looks pretty well set now for a big increase in business in 2010.

They provide the most amazing detail in the results announcement which should give shareholders a lot of confidence in the management team.

[topvest] 06/3/2010 08:54

Looks solid enough to me, given the losses at the interim stage. A return of capital is elluded to as well as a potential sale of the troublesome run-off business.

May buy some more on weakness.

[sceptic1] 05/3/2010 09:01

A combined ratio of 104% against industry returns in the mid 80's offers a stark comparison.

[effortless cool] 04/3/2010 16:01

Asagi,

I'd be interested to understand why you think these results are good - they look very poor to me.

Everyone else in the sector seems to have made massive underwriting profits, but NVA made an underwriting loss. If they can't make an underwriting profit in a year with no major insured catastrophes, how are they going to cope in a normal year in a softening market?

As to a potential capital return, they raised the capital a few years ago, put it in an insurance company that wrote small volumes of unprofitable business and will be releasing the capital by rolling that business back into the Lloyd's syndicate. I'd call it a strategic failure, rather than a management triumph.

EC

[asagi] 04/3/2010 12:30

I am also long NVA.

[asagi] 04/3/2010 11:22

what a poor reaction to what looked a very solid set of results this morning.

profitable on the year with NTAV nearly 50% higher than the current share price.
Dividend up 10%. Substantial talk of a capital return.

Regards, Asagi (long TND)

[18bt] 06/12/2009 19:11

Let's hope this report in the Sun Telegraph is confirmed:


Novae set to merge Novae Insurance with Novae Syndicates
Lloyd's of London insurer Novae Group is set to carry out a major restructuring that involves a merger of its two main divisions.


By Ben Harrington
Published: 6:48PM GMT 06 Dec 2009

Novae is expected to announce this morning that it will fold Novae Insurance, which provides cover to small and medium-sized businesses, into Novae Syndicates.

Novae Syndicates underwrites through Lloyd's in areas such as property reinsurance, medical malpractice and political risk.

The move is designed to free up about £60m of spare capital that is not being actively used by Novae Insurance.

According to people familiar with the matter, the cash could be given back to shareholders or be used to for further insurance underwriting purposes.

The restructuring process, though, is expected to take at least six months.

Novae was formed from the underwriting group known as SVB, which suffered heavy claims after the bursting of the dotcom bubble.

However, it was refinanced and reinvigorated under the leadership of Matthew Fosh, who has a strong following in the insurance market despite his background being in fixed income and equity derivatives. Mr Fosh co-founded derivatives broker Seagray Fosh in 1989, which he then sold in 2002 to inter-dealer broker Icap, which is run by the Conservative Party treasurer Michael Spencer.

This November, Mr Fosh said Novae is "absolutely determined" to increase Novae's return on equity (ROE). It is hoped the restructuring should improve ROE over the next twelve months.

Earlier this year, Novae made a takeover offer for rival Chaucer in attempt to improve its returns on capital. However, the takeover was aborted after both management teams failed to agree on terms.

Mr Fosh subsequently set up Novae Re, a reinsurance unit focused on Europe and the Far East that should start underwriting in time for the January 1 renewal season. Indeed, Novae has already hired over ten experienced underwriters for its new resinsurance unit.

Sources said that if the latest restructuring move helps boost Novae's share price the company could look at further acquisitions as the management is keen to participate in the consolidation of the sector.

Novae, which has a market capitalisation of £202m, declined to comment.

[asagi] 13/11/2009 10:38

Any suggestions why there is so little volume in this share compared with, say, Chaucer?

[18bt] 11/11/2009 08:24

I think it implies closer to breakeven with a wing and a prayer.

[asagi] 11/11/2009 07:41

"we can counter the disappointments of the first half" (Fosh)
does that mean the £18.5m pre-tax loss of the first half may be reversed, giving break-even for FY 2009? Market is expecting an approx £7.5m loss for the FY.

Asagi

[asagi] 11/11/2009 07:26

Well spotted BT. I am happy with my holding this morning. IMS here:

[18bt] 11/11/2009 07:23

Positive IMS this morning going some way to dispell the first half. Looks well positioned for 2010. In the right classes - those with premiums rising and claims likely to reduce.

[gilston] 22/9/2009 17:42

The insurance sector appears to be awash with surplus capital at present. Rates do not seem to gone up as much as the market hoped. Any hurricanes out there?

[investinggarden] 30/7/2009 13:04

Novae loses interim £18.5m

[jancarl1] 07/7/2009 09:18

A bit early to move into the sector. If you follow the charts, it is usually best to get in end October to mid-November (after the hurricane season) to sell mid April to mid May. Otherwise I agree, the sector is dirt cheap.

[topvest] 06/7/2009 19:48

Yes, they will be booking some nice profits on buying debt back that cheaply; it's certainly a smart way of funding the business. I bought some of these today as looks a well run business trading at below NAV. Caledonia Investments are a major holder which is also normally a good sign.

Quite like Lloyds insurance participants at the moment; bought some Amlin and Hiscox as well today.

[jancarl1] 11/5/2009 16:52

I also like the fact, that NVA continues to buy back those 2017 notes at 62.5% with 30 m already in the bag and 70m still to go. Apart form the direct accounting profit it also reduces interest charges significantly. Probably the most profitable business area currently.

[18bt] 29/4/2009 07:19

IMS today looks fairly positive. IMHO the slight negatives on the aviation account were offset by more positive noises on the PI account. The claims development number looks very low and this isn't well explained. However, too early in the year to draw many conclusions, except that management credibility goes up another notch for me for smart decisions on PI in 2007.

[yorkey2] 25/4/2009 11:59

NEXT WEEKS MULTI BAGGER



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That should start an auction because the stock is worth 5p-plus. The company owns the largest gold mine in Fiji which contains just under $800million of gold reserves."




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