R&q Insurance Share Discussion Threads

[speedsgh] 28/2/2017 10:18

Hmm. I was going to comment on the recent weakness yesterday but no need now. Looks like it's been walked down prior to placing. A small 2.9% discount to yesterday's closing price maybe but 16% discount to the share price in Nov. Can't say I'm surprised as we've seen it so many times before, particularly on AIM.

Don't think it's necessarily material but I did note the following in the Trading Update further down the announcement:

"The process of simplifying the Group continues with interest shown by several potential purchasers of certain non-core business units. If these lead to an eventual transaction or series of transactions then the proceeds are likely to be at a significantly higher value than the current carrying value of such units which would result in a material one-off gain for the Group. The Board would stress that any such disposals are subject to significant further negotiation with no certainty they will occur at such values or at all."

[fenners66] 28/2/2017 09:59

WJ capital ratio or Tier 1 ratio its the cash which is providing the buffer; I get the argument that with a higher ratio they are able to approach different markets , however I ask if they had retained $7m of cash would they need to raise the equity?
Is that 9p full year EPS? That would be 7.5p second half and 1.5p first half?

[wjccghcc] 28/2/2017 09:44

Forecasts were for 9.0p and they say they're at least in line with that, so dividend is covered by earnings. NAV is also up 10%.

Capital ratios aren't cash reserves - insurers have cash coming out of their ears. It's the Tier 1 solvency requirement to allow them to increase their books of business - for the US to get them onto approved brokers lists, and in Malta to allow them to issue comparable subordinated Tier 2 notes to maintain solvency after the recent acquisitions.

Looks sensible to me.

[fenners66] 28/2/2017 09:26

So it aims to pay a dividend of 8.6p per share - based upon first half - this would not be covered by earnings and amounts to £6.2m. Says that there are more acquisition opportunities in 2017 but then gives details of $7m+ improvement in capital ratios, i.e. needs more cash reserves. Of the rest of the gross funds raised 3.5% is fees.

Shares issued at a small discount (standard) but a 20% dilution.

This looks from the outside as if they have been paying too high a dividend and overly reducing cash reserves thus having to either borrow or raise more equity.

This then looks like raising equity to pay dividends ....

[jonwig] 28/2/2017 07:21

February share price weakness explained?

... is pleased to announce that it has conditionally raised gross proceeds of up to approximately £16.9 million through a placing of new ordinary shares with certain institutional shareholders and Directors.

A total of 14,423,591 new ordinary shares in the Company have been placed by Numis Securities Limited ("Numis") at a price of 117 pence per Placing Share, raising total gross proceeds of approximately £16.9 million. The Placing Shares represent approximately 20 per cent of the issued ordinary share capital of R&Q prior to the Placing.

A detailed trading statement follows, which ought to give us a boost, one-off gains from hoped-for sale of non-core assets plus profits at least matching expectations.

Nobody asked me to take part in the placing!

[topvest] 12/2/2017 18:38

Yes, much too big.

[jonwig] 08/2/2017 08:29

When you first mentioned it I thought it was a reasonable size, but now I think it looks too large for us.

[hybrasil] 08/2/2017 08:11

So r&q didn't pick up the rsa legacy business. I suppose a premium payment £750m was too high

[speedsgh] 20/1/2017 11:10

RQIH have certainly been a lot more active on the news front in the past 6-12 months. Let's hope it translates into increased profits, capital returns & share price appreciation!

[jonwig] 20/1/2017 07:20

Issue of $20m USD subordinated notes:



Confirms that they expect further business expansion this year.

[maffs1] 06/1/2017 14:42

The market seems to have finally responded. I agree that the comment is significant...R&Q aren't known for their hyperbole!

[jonwig] 06/1/2017 07:32

Prescient of you, maffs, number eight:



And a more upbeat comment then usual:

"This novation caps off a fantastic year of legacy transactions for R&Q, with prospects for 2017 looking even brighter"

[maffs1] 05/1/2017 15:44

Yes, jonwig, there does seem to be a lot of business going on at the moment. Assuming they are all good deals, then this could be a transformational time for Randall. Companies simply want rid of these old insurance vehicles and I suspect there is not a lot of competition to buy them, so R&Q will hopefully be picking up some bargains.
We'll see!

[jonwig] 05/1/2017 15:15

Another acquisition announced, that's seven in the past two months (though they aren't all called acquisitions).

This ought, in good time, impact bottom line and balance sheet.

[jonwig] 03/11/2016 07:21

Interesting. I've just looked back to the H1 stage:

Our UK Legacy portfolio comprises exposure to asbestos and other long term liabilities arising from Employers’ and Public Liability policies written over the past 50 years. The UK Legacy underwriting result for H1 2016 was a loss of £5m (H1 2015: £14m loss) primarily reflecting operating expenses incurred.

So it's actually quite a small division. A reasonable size for us to swallow.

[hybrasil] 03/11/2016 07:12

See this mornings statement from rsa. We continue to explore transactions concerning our legacy liabilities.
Up rqihs alley.

[stemis] 02/11/2016 13:30

Still yields 6.25% in a market hungry for yield

[jonwig] 01/11/2016 15:02

With a book value of about 96.7p (adjusted for payout due) and not much in terms of forex gains since last accounting date (30/06) this is getting a bit ahead of events, maybe?

(I'm not complaining!)

[jonwig] 27/10/2016 05:39

It might actually benefit from a global slowdown (which I think quite possible). Companies will want to get rid of their captive insurers on the cheap to free capital and people. And the Malta operations will be EU-based.

The problems it faces will be purely around the insurance industry, as with the US business a couple of years ago.

[hybrasil] 27/10/2016 04:55

Nearly up to its price when it floated 9 years ago. Based on what it is paying out now as opposed to then then share price should be £2.50

[jonwig] 28/9/2016 17:14

Still a way to go before the name change to QRIH.

[speedsgh] 28/9/2016 14:45

Director/PDMR Shareholding -

The Company has been notified that on 28 September 2016 Kenneth Randall, the Company's Chairman and Chief Executive, sold 200,000 of his holding of 2p ordinary shares in the Company to Alan Quilter, the Company's Chief Operating Officer, at the rate of GBP 1.225 per share. Mr Randall now holds 16,035,446 ordinary shares which represents 22.25% of the Company's issued share capital. Mr Quilter holds 4,246,456 ordinary shares, representing 5.89% of the Company's issued share capital.