Results backup the bullish commentary in the annual report which is good. If i read the numbers correctly, then if they simply duplicate the H1 results in H2, then this will give an outcome for the year just ahead of market expectations of 127m USD profit after tax, but with the outlook and progress you'd expect them to do better, bodes well. |
Very good results |
 From CityWire today ...
Berenberg predicts inflection point for Conduit
Specialist property and casualty reinsurer Conduit (CRE) has had a better start to the year than its peers and its fundamentals have improved, says Berenberg.
Analyst Tryfonas Spyrou retained his ‘buy’ recommendation and increased the target price from 595p to 600p on the Citywire Elite Companies AAA-rated stock, which climbed 2.2%, or 10p, to 470p on Thursday.
‘Conduit has – in relative terms – had a better start to the year than its London-listed peers Beazley (BEZ), Hiscox (HSX) and Lancashire (LRE), with the shares up 7.3% year-to-date versus peers that are down 7.5% on average,’ Spyrou said.
‘On the other hand, the shares continue to trade close to one times net asset value – structurally lower than its wider reinsurance peer group.’
Spyrou said the low multiple is ‘partly a function of the broader subdued appetite for UK shares and Conduit’s lack of a track record’. However, he believes that the ‘fundamentals for the industry and for Conduit have improved significantly over the past 12 months’.
‘As we have previously discussed, 2023 will be an inflection year for the company. We expect Conduit to post its first ever net profit of $55m,’ he said. |
Another purchase from the CEO yesterday. As the old saying goes, there are many reasons why insiders sell, but only one reason why they buy...! |
The forecast dividend that I am expecting is 36c so another 18c or 15p or so?? i much prefer your forecast though. |
Tipped today in Mail on Sunday.
Link : |
Let's hope so. |
Thesis playing out here. Renewals update confirmed that market backdrop very strong and looks likely to continue to be so for a while yet given trends and lack of capital. Conduit particularly well placed - as a new business it can benefit from increased pricing without having incurred the claims driving it. In spite of c50% rise in the last few months, the shares still look cheap on perhaps 8x this year's earnings, falling to c5.5x next with a 6.5% yield. Still lots more to come I think... |
This morning ... Berenberg raises Conduit Holdings price target to 590 (570) pence - 'buy' |
Very strong update |
Given the incredibly bullish management comments, I am hoping for a strong update |
Comment by Berenberg ...
Analysts at Berenberg have commented that the outcome of the January renewals looks to be “strong” for reinsurers, but say that it remains uncertain how long hard market conditions will persist.
Berenberg expected the reinsurance market to remain hard at least through 2023 due to broad-brush inflation, consecutive years of high natural catastrophes and the unwinding of near-zero interest rates ... etc
&
It also highlighted SCOR and Conduit Re as reinsurers with potential to perform well this year, suggesting they are “ripe for a turnaround in 2023” with hard market exposure, after lagging in 2022.
Link : |
We should hear shortly how Conduit performed during the 1/1 renewals ... should be very good.
A couple of articles re 1/1 renewals ...
Renewals mark return to reinsurers driving primary behaviour: Gallagher Re’s Vickers
4th January 2023 - Author: Matt Sheehan
The recent January 1 renewals period marked a return to a historical market dynamic in which reinsurers are the drivers of behaviour in the primary markets, James Vickers of Gallagher Re has asserted.
james-vickers-willis-reSpeaking to Reinsurance News alongside the release of Gallagher Re’s 1st View report, Vickers explained that reinsurers “are finally saying they’ve had enough” after years of unsatisfactory results ... etc
Link :
Reinsurers make “significant strides” at Jan renewals: Berenberg
4th January 2023 - Author: Matt Sheehan
Analysts at investment bank Berenberg have reported that the reinsurance market made “significant strides to improve profitability” at the recent January 1 renewals, particularly in underperforming property natural catastrophe business... etc
Link : |
Nice uptick today. |
Bullish read-across from Lancashire's Q3 update today. Rates environment continues to be very hard. Looking ahead, this should bode well for Conduit's margins in 2023. Expect Conduit to enjoy pretty strong growth next year and it's well-diversified approach should mean that it is well-placed to absorb volatility across its lines. Finally, higher investment income should further boost the bottom line. Given all this, stock looks crazy cheap trading well below book and expect it to re-rate strong upwards in the next 12 to 18 months. |
The spread on this is ridiculous. |
It was never likely to be the case that earnings covered the dividend in the early years. This is a startup company. |
Another downgrade today for this years numbers . About 22p EPS now. Doesn’t cover the forecast dividend of nearly 30p .Really disappointing but as its involved in insurance it requires a lot of luck. |
Yes, 37p EPS forecast I think. Short-term its a bit disappointing. Hopefully, H2 starts to improve as they start hitting critical mass. |
CRE dont announce downgrades/upgrades themselves. They do it through their broker but it costs to see these notes.I get any changes to the forecasts delivered every morning to my inbox. The cost is worth getting updated forecasts. Profits for this year were forecast at $100m only 4 months ago. They have been downgraded 4 times now to $79m.
I still think its a decent business hence why I am still a shareholder.
cheers |
Four profit downgrades? Where? In their February preliminary results they said:
"In our Trading Update on 19 January, we reported a strong start to 2022 with $268.2 million of estimated ultimate premiums written, an increase of 74% from 2021. Net rate increases (including the impact of claims inflation, changes in exposure and other relevant terms and conditions) in the 1 January portfolio were +5%. Pricing and terms and conditions continue to improve across our core classes which we expect this to continue throughout 2022. Management believes that Conduit Re remains on track to deliver on its five-year business plan."
I've not seen any subsequent annoucments from CRE to suggest any downgrades |
the profits for the coming year have been downgraded 4 times in quick succession. I have a decent holding here and feel it wont be rated correctly until it has proven growth in next year or so. Early days but director buys always welcome. |
What? No postings for Conduit (CRE); someone's got to know something about this? And why it's not doing so well? In spite of those director buy's. To say the least. Any info or analysis would be more than welcome! |
And huge previous buys by the FD, ex Lancashire. |
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