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I do not think the share price fell back because people who bought shares yesterday then read past RNSs and then decided to sell them the same day. They were traders.
A year without any news was not that helpful to the share price and no doubt some shareholders had lost patience and sold too. Not rosy if you look in terms of the past but it is the future which should add a speculative dimension to these shares and more regular newsflow. The market cap reflects the past performance but we'll see what the future holds.|
|loverat: I've got a feeling that the directors don't put alot of effort into growing this company. I will have a dig around sometime but I suspect the directors here are probably involved in lots of companies and this is just a sideline.
For example, no trading update last year to tell us that trading was not going that brilliantly in the weather related stuff. No contract announcements and then we have a few at once, all mixed up which had a negative effect on the share price. These announcements would have been better released in a timely fashion and separately. Is it any wonder the share price is where it is when there is no news for 9 months?
As for the business, the contracts sound good but again are announced 9 months after the last results when people would have invested on the expectation there would be some regular news. The PPI stuff is interesting and I am going to dig around on that. I understand that some of these contracts are for banks/insurers to deal with complaint handling. That is massive at the moment and banks are absolutely overwelmed with work at present. In theory as long as they have the capacity to invest and staff this, potentially alot of business can be created. Why they have not made more of this, I do not know.
As for the PPI calls I did not think this is what they do but I am going to make some enquiries. If part of the business is the CMC related stuff (e.g cold calls) that seems like a conflict with some of the above work I mentioned and I do not think makes as much profit because I have seen the poor way some CMCs run their business.
Personally I think this company probably needs more investment and time and effort. The way the statement reads to me is that this business is a hobby or a sideline. I wonder if JF just woke up this morning and wrote it in half an hour. Anyway - that said, the share price is far lower than it should be and I am expecting regular announcements from now on.|
|loverat: After seeing another 50% fall over two separate trading sessions this month one would at least hope that JF and the others would buy some shares in the market. The share price is completely clapped out and bears no relation to the contracts announced.|
|loverat: I suppose the results have to be published by the end of June. I think it is usually 6 months after the last day of the period.
Leaving it late I see and the lack of news has decimated the share price. If we are to go by their last statement then the expectation was that H2 was improving and the introducing of contracts was going to keep them busy through that and into this year. So, any deviation from that expectation would have been reported to the market.
The PR from this company seems absolutely hopeless though. I really don't know why some of these companies bother listing.|
|loverat: Yes - must be the biggest volume day since the last announcement. Given the silence and how far this has fallen one would think an RNS simply stating there is still a pulse would double the share price. Any reasonable results and/or new contracts might do alot alot more.|
|jimmy12345: was thinking this might be worth a punt.
i believe this company sold out the loss adjusting side wrongly, nice how it was a board member that bought it.i bet that that side of the buisness has gone from strength to strengh, odd they only had a turnover in this of 150k heck thats just 4 or 5 domestic house floods.
there trying to become another belfor instead of a quality loss adjuster. knowing this buisness i can tell you that the loss adjusting buisness is a fantastic cash generative buisness.
its funny but ive never heard of this company are they even members of the bdma? the share price is also so low that basically any other company involved in insurance claim management is bigger than these. do we know who they are handling claims for?, there are a couple of players in this field and the market is very closed, they are attempting to break into a billion dollar closed shop with peanuts, dont get me wrong if they succeded this company would be a 50 bagger, but i think claims management clients should have been in place before this company went public, or we are just buying a wing and a prayer.
for that im out, hell a 1000 fire and flood restorers in the uk have a bigger turnover than this lot and they are working on around 70% margins, dyor|
|dicko80: some anaylst coverage but only have it in PDF...
Copy and paste below
Resources in Insurance (RiIG) upturn helps support FY11
28th April 2011
Ravi Lockyer MSc Llb
Collins Sarri Statham Investments Ltd
Stock Rating: BUY
52 week ... 1.07p/0.275p
Shares o/s ....... 317.5m
Market Cap ...... £2.44m
Avg Daily Vol...... 3.9m
Dividend Yield ......... NA
Fiscal Year ... 31st Dec 10
We are impressed at the stabilisation and evidence of recovery in core operations at Resources in Insurance (RiIG) over 2010.
This is evident from the FY10 prelims reduction in loss per share to -0.25p from -0.4p and recent trading announcements (7th April 2011) detailing client wins and a profitable Q1 2011.
The FY2010 loss included a non cash share option expense (£52,746).
We estimate that over FY10 RiIG had 1 or 2 profitable months, whilst Q1 2011 has been in the black.
During H1 2011 RiIG should have 4 profitable months moving up to 10 over FY2011. Operating improvements and client wins should deliver a positive result in H1 2011 and positive earnings in FY11.
The former "Claims People" business is in a recovery phase that started with board room changes in mid 2008 which resulted in the sale of the loss adjusting division in April 2009.
To recap, the 2009 transformation saw RiIG ditch loss making claims adjusting and re-focus on core divisions; "iteam" (insource/ outsource claims management), "Verify" (independent inspection services in property, motor and creditor), "Consult" (claims specific consultancy) and recently "RiIG Surety Claims" (credit hire audit / handling).
The board is starting to see cross-selling opportunities and increased inquiries from the existing client base for other group services.
RiIG is seeing improved demand for its experienced claims management staff via "iteam" that specialises in handling claims backlogs and achieving settlement.
We would highlight the following as relevant to RiIG recovery in 2011:-
The restructuring has improved focus on underlying operations/ client retention delivering a more consistent revenue line. FY10 revenues gained 45% to £2.13m we expect this growth momentum to continue in FY11 with revenues rising 40% to £3m. Our revenue growth forecast for 2011 reflects a) increase in clients with significant contracts (two to four) b) expected client extensions and roll-over business but not pipeline business c) no client losses.
Owing to the uncertain timing of conversion of pipeline to contract wins, due to the lengthy decision making process in the insurance sector, the FY11 revenue forecast does not include RiIG's opportunity pipeline, which could impact H2 2011. We estimate that the pipeline (circa £3m) could add around £600k of revenues over FY11-FY12 though this is not in the revenue forecasts. The team are confident in pipeline opportunities which include 2 large EU insurers.
Decreasing client and revenue variability is important (in FY2010 approx 85% of RiIG's revenues were attributable to two major clients). In 2011 to date, the client list has expanded to include six major insurers, mainly in the auto insurance sub-sector. A key positive has been increased client willingness to roll contracts into new business opportunities, either via adding to the contract length or moving the contract to different group offices. Contract extensions and longer client lists reduces the cost of shedding staff, a problem experienced at RiIG in the past when contracts concluded. RiIG is able to "flex"
RESOURCES IN INSURANCE - BUY
Resources in Insurance (RiIG) is a provider of independent and innovative claims services for the insurance industry
Key Risks Factors
1. RiIG is listed on the AIM market. Its ability to raise new funds will be affected by liquidity conditions and investment appetite for AIM companies.
2. Demand for RiIG insurance services are by their nature subject to long lead times making revenue timing uncertain.
3. RiIG is dependent on key staff meeting sales and client targets
Please also note the risk warnings on the last page of this document relating to companies listed on AIM.
it temporary/ part time staff levels to meet demand, due to its extensive network of claims management staff without incurring redundancy costs.
The conversion of £300k 12% RiIG loan stock to RiIG equity has removed the burden of the high yield loan note and left RiIG debt free. Whilst RiIG has not arranged overdraft facilities yet, some move to put in place contingent financing during H2 2011 is possible if expansion delivers increased working capital needs. The board envisages recent new hires of 15 in iteam/ consult to be sufficient for now and involve an increase in administrative expenses to £2.9m over FY11 possibly increasing working capital pressures.
A new business division "RiIG Surety Claims" has been formed to provide auditing/ training services for the UK credit hire market. This new area is small scale and could take to mid 2011 for meaningful revenues.
Diverse service offering/ cross sell/ scalable opportunities
RiIG's major objective over 2011 is to improve scalability, joining up existing/ new clients with the expanded service offering. Typically client/ service additions would change the average contract, from £300k with a 5% operating margin to £500k with a smaller 4% margin ( if an iteam client added Verify). RiIG's ability to scale the product offering to an increased client base is the results driver over the next 24 months.
Valuation move to P/E from P/B will help transparency
A transition is taking place at RiIG and a key benefit will be shareholders ability to value in the business in a more transparent manner than has so far been possible.
At the present time due to the legacy losses and FY 2010 losses, holders basis for valuation consist of book value (P/B) (end 2010 shareholder's equity £143.8k) and price to revenues (P/S). On P/B the valuation at 17.3x book value is of limited guidance for investors and reflects the legacy of losses/ capital depletion. On P/S the valuation at 1.14x revenues appears reasonable though this also suffers from the RiIG high historic variability in the revenue line.
Our FY11 pre-tax profit of £100k/ EPS forecast of 0.0315p puts RiIG on a forward P/E of 25.4x a high "recovery" multiple that suggests RiIG is in the early stages of profit recovery. As earnings delivery continues it is entirely possible that RiIG would see P/E multiple expansion over FY11-FY12 as investors re-rate the stock on the basis of earnings growth and the diminishing prospect of stock dilution/ issuance.
Core business experiencing improved market recognition hence 15 new hires in FY11. Revenues, margin and net income gains expected in FY11 the expectation is iteam will still account for >95% of group results in FY11.
Following test marketing in 2010, the board see the opportunity to cross-sell Verify's anti fraud/ spurious claims solutions to iteam clients. Verify has 2 small clients.
A spin-off service from iteam is early stage but cross-sell opportunities exist. Clients have expressed interest in division's training, mentoring, operational efficiency solutions. Has 1 small client but scope for expansion.
New in 2011; objective is to build clients in credit hire handling and audit. Not included in FY11 projections.
The arrival of a P/E will also make RiIG easier to value from the viewpoint of its support services peer group and encourage comparisons. The UK peers include some outstanding UK companies with overlapping businesses. The addition of retained earnings would also help the balance sheet and reduce price/ book multiples.
The shareholder list is concentrated with surprisingly high institutional interest (approx 53%) given RiIG's £2.5m market cap. A further 9.7% of the shares are held by the board. The institutional following suggests RiIG does have open to it more innovative funding methods and alternatives (an example was the £300k of convertible loan stock/ now converted) to a straight placing which it may employ in the event of acquisitions or a significant increase in business beyond levels currently envisaged.
The board's proactive approach to shareholder communications, RiIG attended both the Growth Company Investor Show in September 2010 and the Master Investor Show in March 2011 has encouraged a strong retail shareholder following that in our view would respond well to positive earnings and a steadier revenue path.
Board of Directors
*John French, Chairman Experienced AIM and PLUS executive at both executive and non executive level having led numerous IPO and M&A transactions. Moved from non executive Chairman to Executive Chairman in 2008 to lead the restructure of the Group.
*Robert Mitchell; Non-Executive Founded Bluehone Investors LLP after a career at F&C where he helped launch the AiM Trust and the Discovery Trust. Mr Mitchell is a chairman of the Audit Committee and a member of the Remuneration Committee at RiIG.
*Gordon Vater; Managing Director Responsible for Group operations and Business Development, with over 20 years claims experience mainly in the loss adjusting and claims management sectors.
*Dominic Boyce; Finance Director/ Company Secretary, former founding partner of an accounting firm in Trinidad & Tobago and subsequently Finance Manager at Alwen Hough Johnson Ltd reinsurance brokers in the UK.
*Barry Whyte; Non Executive Director; founded the Claims People Group post a successful career as MD of Miller Knight Ltd. Mr Whyte is chairman of the Remuneration Committee and a member of the Audit Committee.
CSS forecasts FY2008-FY2011F
FY 31st Dec (£m)
Share Option expense
Profit before Tax
Loss from discontinued operations
A: actual E: estimate; Source: CSS Investments Ltd
The recovery story at RiIG is gathering pace, and if the board can convert the service offering to revenues then revenue growth (40%-50%) could be strong over FY11 and FY12.
Given the constraints on personnel requirements (>80% total expenses) our expectation is the group would require revenues to exceed £3.5m before deriving significant efficiency gains. However investors should focus on trading and the revenue upside that the service expansion should deliver.
The shares have factored in some of the recent trading improvement, but there would be further appreciation in the event of positive H1 and FY earnings.
Longer-term RiIG would make an excellent fit for a larger acquisitive support services group (>£100m mkt cap) looking to quickly build up an expertise in insurance claims handling.
Whilst a merger/ takeover approach is not likely in the short-term an offeror might be encouraged by RiIG's high shareholder concentrations.|
|beginner3: Definitely David,longterm, share price in double digits|
|imabastard: msufi .... think with PMG it was news of an acquisition that set the share price on fire and as often the case, many large buys happen (and volume spikes) just before a significant piece of news emerges. Too many parties interested suddenly (lifting their shareholding) here for there not to be a significant development .... so, will be interesting to see what it ends up being.|
|loafingchard: Imo the share price could easily double , triple or more given continued sounds of improved trading and further evidence the restructure etc is really delivering its goals .
So far so good , slow admiitedly , but savings etc are being made . Business is being won lets see them keep it moving . Time will tell of course .
Any other thoughts ?|
Resources In Insurance Group share price data is direct from the London Stock Exchange