Direct Line Insurance Share Discussion Threads

[porsche1945] 16/3/2021 10:31

@linton

It’s under 310 so are you buying “ truckloads “. Poorly received results and the buyback bad news for the shares, would have been better to return it to shareholders directly. These not even for trading at the moment, seem to be re rating to around 3 quid not 3.30 as before, pity. Ftse 350, avoid, buy the S&P.

[t 34] 16/3/2021 07:55

yeah , and pay commission on all these trades.

[linton5] 16/3/2021 07:21

When a company like dlg is buying there own shares why don’t they just do it in 1 or 2 transactions daily instead of this constant 118:;500;40;350and so on etc

[manusb1] 14/3/2021 20:02

I’m trying to work out what reducing the capital ratio from 192% to say 180% will mean for the dividend. Toiling with the balance sheet. Does anyone know?

[energeticbacker] 12/3/2021 09:56

With an ordinary dividend yield of 7%, cash returns available from Direct Line shares are significantly ahead of most alternatives.

This company's position in Investor's Champion's Income Boosters portfolio remains safe.

[woodhawk] 10/3/2021 11:29

Thanks for that, jrpheonixw2.

NB "potential for additional return of capital as it reduces its capital levels from 191% back to within its targeted range of 140-180%’."

[jrphoenixw2] 10/3/2021 11:06

Here's a brief recap of the results, in clear language, focusing on many of the aspects that matter to us, div, buy-back, capital reserves/releases and so on.

[linton5] 10/3/2021 10:19

Come on guys keep bringing her down 310 and I’ll buy the truckload

[sufc555] 08/3/2021 19:10

Perfect analysis - what I would say is that they have made good progress on pcw with Darwin and Churchill - I have some sympathy with ceo - what would it look like if they declared profit of 800m on back of covid

[scobak] 08/3/2021 15:46

WBA1 Nice to see you back.

[porsche1945] 08/3/2021 10:30

God not much good news re anything listed on dog of the world brexit covid basket index U.K., lacklustre results, stick to trading it.

[dope007] 08/3/2021 10:28

Share buyback is tiny and won't affect the stock price in my view. the yield is juicy and these look more like a buy and sit back collecting divis story and not much more.

Nothing here suggests they won't continue to trend in a range bound fashion whilst paying decent divis

SO you have 2 options. Buy/hold and collect divis or buy on the morning of X divi and sell the rebound a couple of months later, wash & repeat

[wba1] 08/3/2021 10:09

The reserving shows the same pattern as seen in Zurich and Aviva numbers. A substantial reduction in prior year releases in order to keep declared profits at the preferred level (not to be seen profiting from pandemic). If it were one company doing this you would assume it may be a local fluctuation, but the reductions in prior year releases are too big and too consistent across companies to be other than profit smoothing. This means that they have kept some profit back for future release. This is not the only way this has been achieved. In the Aviva numbers there was a big jump in IBNR for no obvious reason, which is another way of tucking away profit for future release. The same can be seen in the DL net numbers, albeit on a lesser scale, although it is harder to be sure due to a material change in RI provision.

Manipulating reserves is the classic and easy method for CEOs to declare whatever profit they wish, at least over a few years. It used to be a formal process with profit smoothing reserves recognised in accounts, but that was outlawed about 15-20 years ago, so now they just pad the case reserves and IBNR.

[fenners66] 08/3/2021 09:35

I read the decline in profit and was about to make a comment then saw this bit:-

Operating profit 522.1 546.9
======================================
Of which:
Current-year operating profit(1) 348.3 252.4
Prior-year reserve releases 173.8 294.5


Just shows how difficult the results are to interpret.

Its really , what profit do you want ?

As for anyone saying but those reserve releases are audited..... yeah right.
Auditors are not going to argue with a coherent argument put forward.


As for the buyback , I read that as management holding up a white flag running out of ideas on how to improve profits so they are settling for the artificial increase in EPS

[wba1] 08/3/2021 09:15

sufc555; apologies, only just picked up your comment about solvency from 24 Feb. A 200% ratio does not imply they have twice the necessary. The regulators will put any company with less than 150% under scrutiny, so that is better seen as the threshold. Most companies would be happy with 165-170%. So they have plenty of headroom for a return of capital, just not half of their current capital.

[city1911] 08/3/2021 09:15

When would the buyback be executed and is it usually done in one hit?

[thepopeofchillitown] 08/3/2021 08:29

Indeed. It does after all apply to all insurers and I very much doubt someone is going to decide not to insure the house because IPT is up 2 or 3%

[scepticalinvestor] 08/3/2021 07:30

I agree that IPT could very well be raised - it has been several times over the last few years and will not raise many eyebrows

[city1911] 08/3/2021 07:29

Yeah plus I get another £350 in free shares too!!

[p winky] 08/3/2021 07:24

I like that.

[sufc555] 24/2/2021 21:49

I’m not sure how relevant your point is re solvency capital ratio since dlg’s current rating is about double that required by ‘tedious’; regulations ie solvency 2 - last August it was 192% - possibly will now exceed 200% given the current low level of new rta claims. This excess capital is dlg’s choice in exceptional circumstances - hopefully those who hold and then sell pre ex divi will be burnt either by a takeover or significant buy backs

An increase in IPt will have zero negative affect upon share price - the last significant increase in this tax 33% increase in 2015 actually resulted in an increase in the share price - and was in fact one of the best years for dlg

However we shall see

[porsche1945] 24/2/2021 14:13

@sufc

I’m alluding to capital buffers etc you idiot.

On another point, I own 40k of these to trade out as usual about 1.36 just before ex dividend, would buy more but worried Sunak will raise insurance premium tax, country is utterly bankrupt low productivity, they will have to raise revenue somewhere. Will wait until after 3rd March.

[speedsgh] 24/2/2021 13:55

At the finals last year they announced a £150m share buyback (equivalent to 10.9p per share) instead of a special dividend.

The 14.40p 'special' announced in the interims in Aug 2020 (paid Sept) was of course merely the delayed payment of the previously announced FY19 final dividend which had been cancelled in the wake of the emergence of the Covid-19 crisis.

Will be interesting to see if they opt for share buyback or a special this time. The latter would certainly be preferable from a personal viewpoint.

[speedsgh] 24/2/2021 12:04

Notice of 2020 Preliminary Results -

Direct Line Insurance Group plc ("Direct Line Group") will release its 2020 preliminary results on Monday 8 March 2021 at 7.00am (GMT).

Management will host a live webcast for investors and analysts at 11.00am (GMT) on 8 March 2021. Joining details will be provided on the Direct Line Group website.