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NVA Novae Grp

714.00
0.00 (0.00%)
18 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Stock Type
Novae Grp NVA London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.00 0.00% 714.00 00:00:00
Open Price Low Price High Price Close Price Previous Close
714.00 714.00
more quote information »

Novae NVA Dividends History

No dividends issued between 19 Mar 2014 and 19 Mar 2024

Top Dividend Posts

Top Posts
Posted at 25/8/2017 06:47 by spob
715p increased offer
Posted at 06/7/2017 20:40 by spob
FT Alphaville today


11:23 am
BE

And still on M&A, Novae! Finally!
BE

After being speculated for approximately as long as any of our lifetimes, Novae becomes the latest Lloyds insurer to be taken out.
11:24 am
BE

Axis the buyer. Announcement at 10.30pm last night, for no apparent reason other than to mess with our lives.

PM

Presumably that announcement in response to a checking call from a journalist...
PM

(But leads us back down that path we didn't want to go)
11:25 am
BE

Possibly, I guess, but didn't look that way.
PM

(tl;dr -- if regulation forces companies to screw over journalists checking stories, the result will be unchecked stories getting published...)
BE

Anyway, price looks reasonable rather than generous.
11:26 am
BE

Here's Peel Hunt.
BE

AXIS, a leading Bermudian (re)insurer, has announced it is
acquiring Novae for 700p per share in cash equivalent to 1.4x our
2017e TNAV (1.5x fully diluted). The deal offers a compelling
strategic rationale and allows AXIS to strengthen its position
within Lloyd’s. It also allows Novae to continue to invest and
grow its Lloyd’s specialty insurance business backed by a strong
capital base. The deal creates a diversified Top 10 specialty
insurer within Lloyd’s and is financially attractive for AXIS,
providing both top-line growth and cost synergies. The purchase
price offers a 20% premium to NVA shareholders at a multiple
(1.4x P/TNAV vs NVA 1.2x at yesterday’s close) that seems
justified given the transition the company is going through and
the returns we expect the company to generate in the next few
years, and it is c5% above our TP. We believe the deal should be
welcomed as AXIS provides deal certainty and offers Novae the
opportunity to continue its growth strategy where it is
complementary to AXIS.


BE

The multiple to TNAV compares to an average 1.4x TNAV (1.5x fully diluted) paid for Bermudian insurers and 1.6x on average for Lloyd’s insurers (excluding the MS Amlin deal). We believe the multiple is justified given the return outlook for NVA from 2018 onwards in soft market conditions.


11:27 am
BE

The combination of AXIS ($5bn premiums) and Novae ($1.2bn premium income) lifts AXIS into the Top 10 insurers at Lloyd’s with a combined premium volume of $1.5bn within Lloyd’s and a total group premium income of $6.2bn. It accelerates AXIS’s international growth plans and allows for further investment in Novae’s strategy to build out its ‘invest underwriting classes’. It also shifts AXIS business mix away from reinsurance (currently 45% of GWP) towards specialty lines with Novae’s portfolio providing many new underwriting classes and a complementary book in other areas. Hence, there seems to be minimal overlap and a solid strategic rationale to expand the Lloyd’s specialty operations. AXIS highlights the deal will create meaningful top-line synergies and $50m of pre-tax cost synergies. AXIS states the transaction is accretive to EPS in year 1 excluding synergies, sees high single digit accretion in year 2, is accretive to operating RoE and has a minimal impact on AXIS TNAV. We estimate the initial RoI on the deal, excluding synergies, is 7.5% assuming £35m of Novae 2018e net profit and 11% RoI in year 2. Hence the deal looks attractive for AXIS shareholders providing deal certainty.


BE

And KBW from the perspective of the buyer.

BE

Although there’s definitely some scarcity value to the few remaining Lloyd’s insurers, the price seems a little high to us given Novae’s May 10, 2017, guidance of a 2017 underwriting loss and a 97-98% 2018 combined ratio. We'd previously viewed AXIS more as a buyer than a seller, and this announcement makes a sale of AXIS even less likely, which should remove most of any takeout premium embedded in the shares. (It does make a bigger and riskier transformative deal less likely.) Second, we think this deal makes strategic sense for AXIS – specialty insurers are increasingly competing on the bases of scale and diversification – although persistently adverse pricing (Novae reported an overall 2% decrease in May) will probably exacerbate the employee distraction and premium spillage risks inherent in almost all P&C M&A.

11:28 am
BE

So ........ who's left?
Lancashire Holdings Ltd (LRE:LSE): Last: 736.50, up 26 (+3.66%), High: 741.00, Low: 716.50, Volume: 256.74k

Beazley PLC (BEZ:LSE): Last: 511.85, up 6.85 (+1.36%), High: 515.50, Low: 502.50, Volume: 457.75k
11:30 am
Hiscox Ltd (HSX:LSE): Last: 1,291, up 9 (+0.70%), High: 1,294, Low: 1,279, Volume: 93.96k
BE

Was about to say Amlin, but that went in 2015 (and was one of ours I think).
BE

Are there any others?
11:31 am
PM

There's enough to be getting on with
BE

Note, by the way, that Neptune (15% holder) is on the wires arguing that it wants more money.

BE

(Well, yes. Of course it does.)

11:33 am
BE

Note also that it's post Novae's profit warning in December so could plausibly be seen as opportunistic if you ignore the reasons for that profit warning and the rebasing of forecasts that followed.

BE

Still, perhaps Neptune can cause trouble here. Wouldn't be wildly surprised to see the likes of Elliot get involved either, given this is their kind of position.
11:34 am
Posted at 08/12/2016 14:10 by soundbuy
Such is non-life, nature of the beast.....down 13% overall which hurts a tad.

Having had time to reflect, have decided to add at some stage. Will watch a day or two.

Bizarrely, reckon this doesn't diminish the attractiveness of NVA as a takeover target, perhaps the opposite, easier prey when 'wounded'.....(that's the end of my glass half-full for the day)
Posted at 08/12/2016 12:48 by spob
RBC and Canaccord are brokers to Novae


RBC

As a result of the change to guidance we increase our combined ratio forecast to 99.5% for 2016 from our previous 97.3% estimate. The company also commented that despite the incidence of larger risk losses and catastrophe losses increasing, the attritional loss ratio has remained steady despite pricing pressures.

Although increasing bond yields are positive for insurers, with the Lloyd's insurers, the decline in the value of the bonds is recognised through earnings. As a result, the near 30% increase in 2 year government bond yields since the US election has led to a significant reduction in investment income for Novae in 2016. As a result we reduce our 2016E investment income expectation by 17.5% to £31m.

Following a review of the company’s accounting policies, Novae has amended its accounting treatment for deferred acquisition costs, which is subjective in nature as it is based on a number of factors including the expected earnings pattern of insurance contracts. This has resulted in a write-down of c.£17m deferred acquisition costs (relating to a period in the region of ten years) to the 2016 opening balance sheet. For the same reason, the deferred acquisition cost charge for 2016 will increase by c. £5m (reflected within the new combined ratio guidance by c.80bps based on our estimates).

Following on from the trading statement, we make a reduction to our 2016E profit before tax of 26%. In addition, we reduce our 2017-18E earnings by 4% on average reflecting higher combined ratios and lower growth than we had previously expected. As a result of the changes to our estimates, we reduce our price target to 900p from 925p.



Canaccord

Novae warned on Thursday morning that elevated levels of large risk and catastrophe losses flagged at Q3 had continued into Q4. It now expects a full year combined ratio in the range of 98-100%, against 96.1% at H1 and our 96.4% FY forecast. £5m of this impact is to come from an accounting reappraisal of treatment of deferred acquisition cost policy. A bigger £17m hit from this accounting will also be taken to the opening 2016 NAV, obviously impacting forecasts for closing NAV, but with no impact on cashflow or economic capital. There will also be an additional hit to profits from the sharp rise in bond yields since Trump’s election – US government yields in the three to five year range have risen c.30%. This also should not impact economic capital negatively.

Confluence of large losses, higher yields and DAC hit
Management said that the additional cost of large risk losses did not relate to a single new event – Hurricane Matthew is now looking at the top end of the £10-15m range given, while Novae has incurred losses from the New Zealand earthquake, and other losses have also moved against the group. The statement makes the point that the attritional loss ratio has not deteriorated, and we note also that none of the risk losses have come from new initiatives by class that have driven top-line growth. We expect peers to have had comparable experience. The same will be true of the investment income hit, albeit Novae is slightly longer duration in liabilities than its quoted peers. The DAC issue came to light as part of a regular accounting review and relates in part to some items that should not have been treated as acquisition costs (eg some professional fees and claims handling costs) and some bona fide costs that had been deferred for too long (ie into year three when policy earns in years one and two).

Material cuts to 2016E EPS and tangible NAV
We have made a material cut to 2016E EPS of 40%, based on a 99.5% combined ratio – c.one-third of the cut is due to lower investment income (this could still move materially by year-end). While management has said that 2016 large losses will not impact on underwriting strategy going forward, we have assumed a 0.5% higher loss ratio going forward. This impact has been partly offset by higher yields going forward, for a 3% cut to 2017E and 2018E EPS. With the dividend over 2x covered, we leave DPS forecasts unchanged. Note also the 11% cut to tangible NAV per share, of which c.4% is due to the £17m DAC writedown to book.

Time will be needed to rebuild performance; downgrade to HOLD, TP to 800p
We are disappointed the 9m performance has worsened in the final quarter. We believe it has been a bad, but not exceptional, year for large losses at an industry level. NVA is likely more exposed than quoted Lloyd’s peers due to its narrower scope of business.
On a material cut to NAV, and modestly lowered earnings, we see limited positive catalysts until full year results at the earliest. On an unchanged target multiple of 1.45x 2016E tangible NAV per share (versus peers on 1.7-1.8x, albeit consensus NAVs do likely need to come down for higher bond yields), we lower our price target from 900p to 800p, and our recommendation to HOLD (Buy). Our new price target equates to 12x 2017E EPS from 13x versus peers trading on 12-14x, for a 4% yield, with peers yielding under 3%.
Posted at 08/12/2016 12:05 by soundbuy
Canaccord (H/T FT AV)

Novae warned on Thursday morning that elevated levels of large risk and catastrophe losses flagged at Q3 had continued into Q4. It now expects a full year combined ratio in the range of 98-100%, against 96.1% at H1 and our 96.4% FY forecast. £5m of this impact is to come from an accounting reappraisal of treatment of deferred acquisition cost policy. A bigger £17m hit from this accounting will also be taken to the opening 2016 NAV, obviously impacting forecasts for closing NAV, but with no impact on cashflow or economic capital. There will also be an additional hit to profits from the sharp rise in bond yields since Trump’s election – US government yields in the three to five year range have risen c.30%. This also should not impact economic capital negatively.

Confluence of large losses, higher yields and DAC hit
Management said that the additional cost of large risk losses did not relate to a single new event – Hurricane Matthew is now looking at the top end of the £10-15m range given, while Novae has incurred losses from the New Zealand earthquake, and other losses have also moved against the group. The statement makes the point that the attritional loss ratio has not deteriorated, and we note also that none of the risk losses have come from new initiatives by class that have driven top-line growth. We expect peers to have had comparable experience. The same will be true of the investment income hit, albeit Novae is slightly longer duration in liabilities than its quoted peers. The DAC issue came to light as part of a regular accounting review and relates in part to some items that should not have been treated as acquisition costs (eg some professional fees and claims handling costs) and some bona fide costs that had been deferred for too long (ie into year three when policy earns in years one and two).

Material cuts to 2016E EPS and tangible NAV
We have made a material cut to 2016E EPS of 40%, based on a 99.5% combined ratio – c.one-third of the cut is due to lower investment income (this could still move materially by year-end). While management has said that 2016 large losses will not impact on underwriting strategy going forward, we have assumed a 0.5% higher loss ratio going forward. This impact has been partly offset by higher yields going forward, for a 3% cut to 2017E and 2018E EPS. With the dividend over 2x covered, we leave DPS forecasts unchanged. Note also the 11% cut to tangible NAV per share, of which c.4% is due to the £17m DAC writedown to book.

Time will be needed to rebuild performance; downgrade to HOLD, TP to 800p
We are disappointed the 9m performance has worsened in the final quarter. We believe it has been a bad, but not exceptional, year for large losses at an industry level. NVA is likely more exposed than quoted Lloyd’s peers due to its narrower scope of business.
On a material cut to NAV, and modestly lowered earnings, we see limited positive catalysts until full year results at the earliest. On an unchanged target multiple of 1.45x 2016E tangible NAV per share (versus peers on 1.7-1.8x, albeit consensus NAVs do likely need to come down for higher bond yields), we lower our price target from 900p to 800p, and our recommendation to HOLD (Buy). Our new price target equates to 12x 2017E EPS from 13x versus peers trading on 12-14x, for a 4% yield, with peers yielding under 3%.
Posted at 23/9/2016 15:08 by hawaly
Yes they have a good yield but the next ex dividend date is at the end of April next year - who knows how the BREXIT negotiations will be progressing by then and there's the US election before that.... just my thoughts.
Posted at 23/9/2016 13:40 by janeann
but even without a possible bid the dividend is pretty decent at nearly 5% including special so on that basis alone one would have thought they were desirable! Perhaps too far off the radar of most?
Posted at 03/8/2016 07:25 by janeann
The share price action always seems surprising on NVA but the complete lack of response to what seems like a decent set of results is quite unbelievable.
Posted at 20/7/2016 03:57 by tintin82
Apologies for waking this thread from its slumber! Anyone any views on how Brexit will affect nva. Or the drop in Sterling? Must be a seriously attractive takeover target these days?
Posted at 14/4/2016 14:38 by crazycoops
Very good write-up on NVA by Roland Head on Stockopedia:



I'm long NVA and yes hawaly, it's nice to have a quiet thread - a positive indicator that I am beginning to pay more and more attention to.

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