Lancashire Share Discussion Threads

[undervalued companies] 07/10/2013 14:07

So does Neil woodford big buyer of lre Edinburgh trust adding read June 2013 article

[ursus] 07/10/2013 13:59

I reckon they'll hold the special div for this yr - guess that they had to say so to the subscribers for the new shares.

[salpara111] 07/10/2013 10:45

I am seriously hoping that I am proved wrong! but if there is a special divi then I would expect the share price to have recovered to the 850 level by now.
As long as Cathedral was a good acquisition then I don't think that they overpaid. There is always a premium to be paid to take outright ownership control of a business, when one company acquires another listed company they tend to pay a premium of 40-60% of the pre announced share price so that would make the premium to acquire Cathedral reasonable.
While I am underwater here and the share price trend has been downward for a while I am not overly concerned and will add next month if the RNS reassures.

[undervalued companies] 07/10/2013 10:21

One last point note the PE just over 8 hiscox is 11.5 from memory, as are most in the sector. Lre is known to be the best in the sector and normally has a much higher PE which is caused by a one off buy of cathedral reducing cash in 2013 only.

The sale will not last forever but as these are for the wife it's an excellent long term safe investment.

[undervalued companies] 07/10/2013 10:07

Sal well I explained the balance sheet we are both grown up about it so let's see what the nov rns brings. Even if your worse case came true strong div growth forecast 2014 I bet you have not included the cash from cathedral in your sums. As mentioned before lre could have just about bought cathedral without an issue hence why they have sufficient cash.

I have spoken to someone close in the industry and he expects a specal div from lre.

Going forward lre gone into side cars, capital management and the cathedral deal was to gain lloyds exposure plus cutting costs at the same time, moreover gain exposure in lines lre was poor ie property at low risk end.

This exposure will also let them grow in latin countries growth area soon through lloyds syndicate which could not be gained pre buyout.

The only complaint was they should have bought cathedral last year at a cheaper price but time will show this was a good deal.

[salpara111] 07/10/2013 08:39

UU sadly I think you are wrong.
I re read the last results and they basically said that they had excess capital which could be returned IF they didn't find another use for it.....well they spent £130M cash on half the Cathedral acquisition so as far as I can see they no longer have cash for a distribution.
They needed to make the acquisition as their core business was coming under serious pressure from the global wall of money looking for yield.
In the longer term I don't doubt that this will play out well but the share price will remain under pressure until they can demonstrate that the acquisition was one of choice and not necessity.

[undervalued companies] 07/10/2013 07:05

Salp based on the numbers balance sheet and dividend policy ! Will know how much early nov RNS

[dennisten] 06/10/2013 12:16

As you say this is a well run company - so I would expect a special divi to be paid this year.

[salpara111] 05/10/2013 14:31

UU can you tell me where in an RNS they have said they are paying a special divi this year because I cant see it!
As an underwater holder clearly I hope that I am wrong!

[undervalued companies] 04/10/2013 13:49

se post262 answers your points yes there will be a special dividend

[salpara111] 04/10/2013 11:55

Bought into this one at 815 back in April so not happy that the long term uptrend has been smashed in the last 6 months (lower highs and lower lows) just after I took a stake!
I am assuming that part of the share price reduction is down to the fact that they used the £120M that would have paid a special divi on the acquisition.
I do believe that this is a well run company and as such I can only assume that the acquisition will be good for the business in the longer term but clearly there will be no special divi this year and I guess that will hold the share price back for at least 6 months.

[undervalued companies] 04/10/2013 09:25

Looks heading back down anyone alive on this thread no others posted in two weeks ?

[undervalued companies] 03/10/2013 10:34

looks like its bottomed but could be in for nasties till us sorted.

[undervalued companies] 16/9/2013 15:32

Turning that ship up makes us and me more wonga huge div again

[undervalued companies] 10/9/2013 07:38

Bring in the wonga making loads on lre over the years nice

[salpara111] 05/9/2013 08:43

Talk about a vigorous turnaround!

[undervalued companies] 04/9/2013 08:33

Lre different it pays special dividends each year not one offs

[undervalued companies] 31/8/2013 07:07

I think 1 to 2 years is pushing it special divi will be paid this year the debate is at what level. I have not done the sums but I think the funds could have all come from internal $413 cash but the issue was half.

Personal think it will effect this year but not next.

The whole point of the acquisition was to gain Market share increase profits cut costs.

My belief is the share down because they paid top dollar for cathedral PE of 15 which is rich in today's Market at bottom insurance sector.

However something made the move to do with lloyds name wait and see now.

I for one based on balance sheet expect a special div in dec

[salpara111] 30/8/2013 12:01

Having thought about this some more.
I suspect that it has less to do with the acquisition but rather to do with the fact that there wont be the money for a special divi for the next 1-2 years, they paid for half the acquisition in cash meaning that there is no cash left for a special divi.

[undervalued companies] 29/8/2013 21:16

True it's one to hold for better times and live off the special dividends, I guess this year may be lower due to funding costs of recent acquisition but with a history of 10% plus dividends and rock bottom PE it's a hold.

Don't forget cost savings and combined profits going forward plus lloyds name very big jump forward.

[salpara111] 29/8/2013 09:35

Fundamentals look fine but clearly the city didn't take kindly to the acquisition so we will have to wait a while for them to be proved either right or wrong.
I am tempted to set a limit order to double up at 700p which is about the 2 year low support....never thought it would be back there but the company seems to be well run so I will stick with it for the moment

[undervalued companies] 29/8/2013 07:12

Mmm why so low around 7pe ? Large dividends ?

Seems city funds messing around post placing

[salpara111] 28/8/2013 11:26

Now in freefall damnit!
At a loss to understand but now well underwater so not at all happy!