R&q Insurance Share Discussion Threads

[wjccghcc] 12/5/2017 08:26

By finessing the reinsurance market, they lock in a profitable turn on the business with no risk.

[jonwig] 12/5/2017 08:03

So it's clearly not an "efficient market"!

[wjccghcc] 12/5/2017 07:44

By finessing the reinsurance market, they lock in a profitable turn on the business with no risk.

[jonwig] 12/5/2017 07:33

Today:

Randall & Quilter Investment Holdings Ltd. ("R&Q") is pleased to announce its wholly owned 'A-' A.M. Best-rated, US-admitted insurer Accredited Surety and Casualty ("Accredited") has entered into an agreement to provide a Blanket Vehicle Single Interest Insurance Policy. Accredited will offer and administer the BVSI Policy together with certain subsidiaries of a US financial corporation. Accredited has no net exposure as the transaction is fully reinsured.

A naive question, I suppose, but if you fully reinsure your book, how do you make money?

[jonwig] 10/5/2017 13:53

Can't help, speeds! Though a big insurance merger (involving Lloyd's) is happening:



... insurance is always speculating about mergers, etc.

From my reading, we're "xd" on 1 June and paid around 15 June: 5.2p.

[speedsgh] 10/5/2017 13:20

Definitely something up but can't find any reason out there. Most welcome nonetheless. Somebody seems to be taking advantage of the current strength to offload some which is keeping a lid on the price.

No indications as to the reason for the rise from any of your sources, jon?

[jonwig] 08/5/2017 19:59

Summat's up!

[lord gnome] 20/4/2017 08:50

Good set of numbers, good outlook, a divi increase on a high yield, a positive market reaction this morning, what's not to like. Very happy to hold.

[this_is_me] 20/4/2017 08:06

Yes it depends on your tax position whether you want income or capital gains. Mine are in my ISA so it doesn't matter. The business model has produced lumpy cash gains. I made a lot of money here a few years ago and then sold. I bought a smaller holding last summer. It seems that they are developing another area with a more 'normal' business model which should steady the returns somewhat.

[this_is_me] 20/4/2017 07:35

Very impressive results.

[jonwig] 20/4/2017 07:18

FY results - excellent, as signalled:

as indicated in the recent placing announcement, the Group traded very well in the second half of 2016 with full year profits ahead of Board expectations and significantly higher than the prior year.
...
This profitable trading means that proposed distributions per share have been increased for the first time since 2012 to 8.6p for the full year, a demonstration of the board's confidence in the Group's trading and prospects.
...
The Board has a positive outlook for the current year and was delighted with the support it received from the Group's shareholders in the recent placing to help fund our growth.
...


I'd expect some cash drag in H1 (to end-June) as the placing monies get utilised, and this will affect per-share earnings. H2 should show some improvement.

[lord gnome] 06/3/2017 10:19

In for a few this morning. Mainly for yield, although I think this could just be the right time to buy. Back to 140 on finals if the outlook is as positive as I would hope for.

[wjccghcc] 28/2/2017 10:23

fenners - correct on the EPS.

Fair enough - yes if they didn't pay a dividend they could put that cash towards increased solvency to support the acquisitions - but you could say that about any company which does a placing or rights issue to pay for an acquisition and yet doesn't forego its dividend.

[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