Abbey Protection Share Discussion Threads

[masurenguy] 29/1/2010 15:19

Looks like the Seller is finished since there is a price recovery of 6% today on a modest volume so far of circa 65,000.

[masurenguy] 29/1/2010 07:51

Extract from the Trading Update issued 3 weeks ago on January 8th.

Abbey Protection Plc announces that its results for the year ended 31 December 2009 will show an increase in profits in line with market expectations, notwithstanding a substantial fall in investment income, the direct result of the Group maintaining a conservative investment philosophy. Group CEO, Colin Davison, said that this was particularly pleasing against the backdrop of an economy in recession, as it showed the resilience of the underlying business models.

Last years PTP/PAT was £8.3m and £6.0m respectively and PTP at the end of H1 in June this year was 10% ahead of last year. The company also had more than £20m in shareholders funds and a positive net cash inflow that roughly correlated with PAT.

[masurenguy] 28/1/2010 15:51

Well 8 insiders hold 58% of the shares and there are also 3 institutions (Numis, Invesco and Rensburg) who hold 22%. Therefore there are only circa 20m or 20% of the shares in other hands which are all below the notable 3% threshold.

Todays sale will not be from an insider since the company is in a close period. Therefore it is either a reduction in holding from one of the three main institutional holders (if this is the case it should trigger an RNS over the next week) or it is a sale from the rest of the 20m float which won't be a notifiable transaction.

The last two occasions when there was a significant volume of shares traded in a single day was 11m on July 2nd last year (see post #6)and 1.3m on September 4th (see post #13). On both occasions there was virtually no change in the share price so these were clearly orchestrated transfers between existing holders.

Todays sell of 2.4m resulted in a 14% drop in the share price this morning which suggests that it was a distressed sale requiring an attractive price to tempt one or more purchasers. Since there has not been any real subsequent rebound in the price, the seller may not yet have finished and there could be some further parcels of stock still looking for a buyer. If that is the case then any balance should be washed through over the next few days. I would then expect to see a rebound in the share price on the run into the year end results in March.

[grahamburn] 28/1/2010 14:59

Effectively 2.4% of the share capital, so IF - and it's not necessarily the case - it's a single holder, then the sale should trigger a holdings RNS. That would, of course, only occur if it's one of the listed holdings in excess of 3%:

Davison, Colin 15.7
Ward, Chris 15.7
Numis Corporation 13.1
E Grace 10.6
M Fairclough 6.73
INVESCO Perpetual 4.66
Rensburg Fund Mgmt 4.55
Note: Total includes 1 that are not displayed.

It could, of course, be a holder who only had 2.4% in the first place, so that wouldn't have been notifiable anyway!

[intgom] 28/1/2010 14:42

Thanks for the update Masurenguy. I know this is fairly illequid equity but 60p is an awfully low price even for 2.4m shares, which appear to have been sold off in chunks. Let's see if the price rebounds before getting (more) concerned.

[masurenguy] 28/1/2010 13:37

There is no company news and there is absolutely no indication that anything has changed in the 3 weeks since their very positive trading update was issued. There is a seller in the market who has been trying to off load a significant chunk of shares and I've just seen that 2.4m shares @60p have now been sold over the last 15 minutes. The MM has obviously spent the morning looking for a buyer and it would appear that he has now found one.

A good opportunity to add at this depressed price which I have done !

[abc125] 28/1/2010 11:21

Why the drop?

Can't see any news.

[masurenguy] 15/1/2010 00:38

Solid and progressive year end trading update last week.

RNS Number : 2254F
Abbey Protection PLC
08 January 2010

Trading Update

Abbey Protection Plc ("Abbey Protection" or "the Group"), the specialist
supplier of legal and professional fees insurance and services products, today
announces that its results for the year ended 31 December 2009 will show an
increase in profits in line with market expectations, notwithstanding a
substantial fall in investment income, the direct result of the Group
maintaining a conservative investment philosophy.

Commenting, the Group CEO, Colin Davison, said that this was particularly
pleasing against the backdrop of an economy in recession, as it showed the
resilience of the underlying business models. It also demonstrated the
importance of applying strong risk management controls, particularly in
mitigating its exposure to employment claims from its SME clients as
unemployment levels have continued to rise.

Abbey Protection will announce its results for the year ended 31 December 2009
on Wednesday 24 March 2010.

[masurenguy] 12/11/2009 15:49

The broker quoted Offer has suddenly moved up from 73p to 76p in the last 30 minutes without any trades having been executed at all on either AIM or Plus this afternoon. Could there be an interesting Buy looking to be filled in the background !

[abc125] 10/11/2009 16:13

mas

I suspect LIN directors did not have much option but to back the bid given that £1.4m of the loan note holders had refused to rollover their debt or convert to equity.

I note ABB paid £4.4m for Accountax with a further £1.85m payable at the end of 2009. This acquisition added 300k profit at the interims.

ABB could still pick up LIN pretty cheaply, for £6m or £7m say. LIN are expected to turn in PTP of £3m+ in the current FY.

edit: I forgot to add that LIN have £3m+ cash and cash equivalents on their balance sheet!

[masurenguy] 09/11/2009 16:39

abc125 - LIN could have been a synergetic acquisition but it looks like an MBO will prevail with a subsequently delisting.

Don't have any direct email addresses for the directors here but have spoken to Adrian Green (the FD) in the past and found him to be a very straightforward and approachable guy. You can reach him on 0845 217 8293

[abc125] 06/11/2009 19:03

mas

Looks like it was an inside job at LIN. I too thought ABB would be the bidder. Been looking this company over and i think i may make an investment when my LIN money comes through - it looks like a quality outfit.

My money would have been better off here from the start!

BTW, do you have the email address for the CEO or FD of ABB?

[masurenguy] 06/11/2009 17:34

Do you have anything informative or relevant to contribute here ?

[mrfigure] 06/11/2009 17:23

Is this thread called 'Masurenguy' ?

[masurenguy] 03/10/2009 12:57

RNS Number : 6018Z
LitComp Plc
24 September 2009

The Board of Litcomp notes the recent rise in the Company's share price and
announces that the Company is in advanced discussions with a potential offeror
regarding a possible offer for the Company at 33 pence per share in cash. No final agreement has been reached and so there can be no certainty as to whether an offer for the Company will or will not be made. This anouncement is being made without the approval of the potential offeror. A further announcement will be made in due course.

Pure speculation on my part but I wonder if Abbey could be the potential acquisitor.

Litcomp are a specialist After The Event insurer and they have recently published a very good set of results. With a current year eps of circa 10p they are trading at a PER of just over 3.

However they are short of cash and need to redeem or convert Loan Notes valued at £2.55m by the end of this month and do not appear to be able to raise the necessary debt financing from the banks to facilitate this. The value of the Loan Notes is 20% higher than their current market cap which could be the reason for this.

As at 31 March 2009 there were GBP2.55m of 10% Secured Convertible Loan Notes ("Loan Notes") outstanding. As announced on 24 September 2009 the Company is in advanced discussions with a potential offeror regarding a possible offer for the Company at a price of 33p per share in cash which includes arrangements for potential funding of the redemption of the Loan Notes.

They also appear to be facing some significant ATE claims plus some uncertainties surrounding the ATE market in the future which is their core business!

The Directors are pleased with the performance of the Company across all sectors of the business and are able to look forward with confidence. However there is a degree of uncertainty in the ATE market pending a governmental review by Sir Rupert Jackson into Civil Justice Costs process and changes to the conduct of low value Road Traffic accident cases, which are not yet finalised and due to come into force in April 2010. The potential impact of these changes is not presently known. Elite has been notified of a number of significant ATE claims after the year end, all of these are fully provided in the audited accounts to 31 March 2009.

Abbey commented in their recent interims: "We will continue to pursue a strong organic growth strategy with continued investment in our legal and consultancy operations. We are also working in new areas such as the Commercial ATE and Tax Indemnities markets. In addition, we continue to investigate suitable and complementary acquisition targets. In this respect, our healthy, debt free balance sheet provides us with considerable flexibility should an appropriate target become available."

Litcomp could potentially be a very synergetic acquisition and their current cash requirements and the uncertainties surrounding possible future changes within the ATE sub sector might just have provided Abbey with the opportunity to pick up this company at a very attractive price. Cash is king in the financial services sector at the moment and Abbey is debt free with circa £8m to spend ! At 33p a share, plus £2.55m in loan redemption liabilities, Litcomp would only cost circa £4.65m !

[masurenguy] 16/9/2009 14:52

Topped up this morning but it is showing as a Sell.

[masurenguy] 09/9/2009 12:03

This scenario could provide ABB with some real opportunities !

Small law firms threatened by soaring insurance costs

Thousands of Britain's high street solicitors are facing devastating increases of about 20% in the cost of their annual insurance premiums because of the threat of negligence cases arising from the recession. The increases, which in some cases could be higher still, have led to a cashflow squeeze at many small law firms that are already suffering from a sharp fall in revenue and greatly reduced access to short-term finance.

Insurance brokers expect chaos over the next three weeks as small firms scramble to pay for their compulsory professional indemnity cover by October 1. The British Insurance Brokers' Association warned that some would fail to find cover on the open market and be forced into a backstop facility underwritten by the Law Society. This so-called "assigned risk pool" charges punitive fees of 27.5% of turnover. One firm was charged £200,000 for its annual cover, up from £80,000 two years ago.

Chris Milnes, of the professional services practice at Heath Lambert, an insurance broker, said: "There have been some horror stories in the market. Last year saw some of the larger [insurance providers] shed practices they saw as higher risk by quoting over five times above the average market rates. We expect to see this trend continue this year." Sole practitioners, who account for 38% of the UK's 10,979 law firms, according to the Solicitors Regulation Authority, are likely to be worst affected.

[masurenguy] 08/9/2009 12:42

Good spot - key points:

*Cash-rich Abbey Protection is eyeing 'two or three' takeovers and new products after lifting interim pre-tax profits 10% to £4.3m.

*The AIM-quoted company increased revenue 13% to £16.4m in H1, helped by income from the Federation of Small Businesses. Revenues at Abbey's legal protection side grew 9% to £4.3m with litigation and consultancy business up 30% to £900,000.

*Accountax, a £4.4m acquisition from 2008, swelled group profits & revenue by £300K and £1.1m respectively and is on track to contribute £2.25m for the full year.

*Low interest rates lopped £600,000 off first-half net investment income to £301,000.

*Abbey plans to introduce new products, including after-event insurance and capital allowances service, which could generate full-year fees of £350,000.

*The company yields an historic 5.3% and has upped the interim dividend by 0.1p to 1.6p a share.

[investinggarden] 08/9/2009 11:53

Hold recommendation from Growth Company Investor

[masurenguy] 04/9/2009 17:10

Some solid institutional or insider buying today - nearly 1.3m shares traded.

[masurenguy] 01/9/2009 20:03

Nice steady climb in the share price over the past 10 days. Results due on Thursday.

[masurenguy] 04/8/2009 09:29

Cheers and well spotted investinggarden. I thought that these points from the GCI commentary were of particular interest.

Abbey, which is currently debt free and has £8 million of surplus capital, is relatively well placed to make an acquisitive move, even though present low interest rates will dent its investment income. Moreover, the company is determined to maintain a 'robust' dividend policy, says managing director Chris Ward, which should afford some comfort to yield-starved investors.

Reinsurance revenue comes through a carefully worded and annually renewed quota share binding authority granted to the fully listed BRIT insurance group and administered by Abbey. Ward says the reinsurance side, Ibex, moved into writing cover itself, rather than using Lloyd's syndicates, because the rates and returns sought by the syndicates tended to be uncomfortably volatile, sometimes moving up or down by 30 to 40% in a year. Abbey's reinsurance arm contributed nearly 55% of last year's profits.

Claiming Abbey is a leader in many of its fields and able to charge above-average fees as a result, Ward says the company derives more than £5 million a year from the Federation of Small Businesses, through membership subscriptions coming in automatically with no marketing effort or expense. As well as organic growth and acquisitions in the potentially lucrative minefield of health and safety, he explains a longer-term ambition is to use its 70-strong legal team to exploit the 2007 Legal Services Act. Soon to come into force, this for the first time allows the external ownership of law firms. Ward argues that this could enable Abbey, with its expertise and contacts, to provide its corporate clients with legal services on health and safety, county court issues, tribunals, licence applications and other matters, as a legal adviser as well as an insurer.